Could CWH be 2021’s ‘hottest’ float?

A step towards an initial public offer of Chemist Warehouse is reportedly on its way

Only days after The Australian published rumours that an IPO could be pushed to 2022, it’s now reported that the discount giant is getting ready to formally ask banks to “pitch for a role in floating the group”.

The Australian Financial Review’s Street Talk column, which in 2017 began to speculate about the pharmacy group’s potential future on the ASX, now says that banks have been alerted to the imminent arrival of a formal request for proposal.

“It would ask banks for their ideas on how to structure Chemist Warehouse for the ASX-boards, who they think may be interested in buying shares in an initial public offering and at what price,” wrote Sarah Thompson, Anthony Macdonald and Tim Boyd.

“The company is expected to have an equity value north of $5 billion and could be the biggest listing since Medibank Private debuted with a $5.7 billion market value in November 2014.”

Rothschild is reportedly overseeing the project, and is expected to remain as financial advisor while at least three banks are expected to be selected to run the IPO in what Street Talk suggests will be “the year’s hottest IPO mandate”.

“Chemist Warehouse’s float plans have been a long time coming—and it’s one all the major investment banking teams have been preparing for,” Street Talk notes. 

“It’s the sort of deal regional and offshore bosses will know about, and want their local teams to secure.”

The Motley Fool’s Brendon Lau now suggests that a Chemist Warehouse IPO “could be the hottest float on the ASX in years”.

“Chemist Warehouse is creating a buzz,” he writes.

“Interest is expected to be high given that the potential debutant is our country’s largest pharmacy chain with a turnover estimated at $5 billion.

“The fees generated from the float for the lucky chosen investment bankers will be very substantial.

“But investment bankers will have their work cut out for them. The ownership structure of the privately held Chemist Warehouse is messy even though current equity holders have undertaken a clean-up to prepare for the IPO.”

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1 Comment

  1. Paul Sapardanis

    Could someone explain to me what the last paragraph means?

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