Good evening,

Friday saw the four underwriters for electronic property settlements group PEXA’s $1.177 billion initial public offering knocked over in the rush after launching an institutional bookbuild pegged at $17.13 a security.

Demand, the size of the deal and some early support from Link Group and Commonwealth Bank of Australia meant the IPO route won over a highly respectable $3.1 billion bid from private equity giant KKR and ASX-listed Domain Group.

Link, which is PEXA’s biggest shareholder, will claim a victory. Its shares are sure to rocket, thanks to a clear see-through valuation on its PEXA stake.

The question is whether it’s a short-lived win. All eyes will be on PEXA’s share price from June 24, which is when it is slated to list (pending approval from the ASX).

For now, Link Group shareholders may thank chairman Michael Carapiet if he opts for an in-specie distribution further down the track because it will save massively on tax versus if it had been sold.

On the other hand, it’s hard not to get a sense of deja vu. Back in 2018, the then Macquarie Capital-backed PEXAlooked certain to head to the ASX boards, before equity markets tanked on its bookbuild day.

Link, also a PEXA shareholder, tipped its stake into the bookbuild late in the process, to increase the offer size and ultimately helped kill the IPO. Link then spearheaded a trade bid to claim the prize.

Now it’s done it again - albeit killing a trade bid with its IPO alternative.

Happy reading,
Sarah Thompson, Anthony Macdonald and Tim Boyd
Street Talk Editors