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Alinta offer should be a real gas

The AlintaGas float looks like popping nearly everybody’s pilot light. No less than 220,000 Western Australian’s have pre-registered for the prospectuses that will be going out on September 11.

The early birds will receive 25 per cent more than the eventual minimum allocation.

The Government has skewed the issue heavily in the favour of private investors. Institutions are being offered 22 million shares, and they will have to bid for them in an indicated range of up to $2.40.

The rest of us are being offered 66 million shares at $2.25 each, and the consensus is that is a very fair price. But how many shares are we likely to get?

Dividing 66 million shares by 220,000 applications indicates an average allocation of 300 shares. It will not quite work out like that. Nobody knows how many of the pre-registered brigade will fail to follow through on the offer, or how many late applications will come in.

Staff handling the issue will do their best to weed out multiple applications from people attempting to get more stock than they are entitled to.

They may well find curious cases like the family cocker spaniel being named as an aspiring AlintaGas holder.

Should the final average parcel of stock finish up as low as 300 shares costing $675, there will be some dissatisfaction. But it may not come to that, and there are very good reasons to subscribe to the issue.

Barring an unexpected market shakeout, AlintaGas shares should start trading at a nice premium over the $2.25 retail price.

Oliver Twist holders wanting more, can always buy extra stock after the listing, at whatever average price they are comfortable in paying for a sound utility offering an 8 per cent initial yield.

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