SYDNEY (Reuters) - U.S. private equity firm KKR & Co <KKR.N> and its partners have lowered the IPO price of their Australian non-bank lender, Latitude Financial, by at least 11% ahead of its expected listing on Friday, two sources told Reuters.
The owners will now seek to raise about A$1 billion ($678.6 million) in exchange for up to 33% of the company, down from the previously planned 35%, the sources with direct knowledge of the situation said, making it the largest IPO in Australia since July 2018, according to Refinitiv data.
The new price is about A$1.78 per share, giving the company a market valuation of about A$3.1 billion, 20.9% lower than the previous top range, the sources said, asking not to be identified because they were not allowed to talk to the media.
A spokesman for Latitude declined to comment.
It is the second attempt to list Latitude by KKR, Deutsche Bank <DBKGn.DE> and Varde Partners. The trio had filed a prospectus with the regulator last month valuing the finance company at between A$2 and A$2.25 per share.
The pricing haircut was decided on the weekend, the sources said, ahead of a two-day bookbuild process ending on Wednesday.
Although some investors had committed to buy shares at the lower end of the range, KKR and its partners believed a lower price would achieve better support. Shares in the company would also have a better chance of trading higher on Oct. 18, when they start trading under the code LFS, the sources added.
The firm, which offers easy-access loans and credit cards with minimal paperwork, expects to report 3% growth in cash earnings of about A$288 million for the 12 months ending June 2020, according to its prospectus.
KKR, Deutsche Bank and Varde Partners founded the company in 2015 when they bought GE Capital's Australian and New Zealand consumer lending arm for A$8.2 billion.
Today, it has about A$8 billion in gross loans to 2 million customers, primarily credit cards, personal loans and auto loans, and it plans to grow its digital and instalment payment business, the prospectus says.
($1 = 1.4736 Australian dollars)
(Reporting by Paulina Duran in Sydney; Editing by Muralikumar Anantharaman and Stephen Coates)
