AVC has announced it has postponed its IPO, as Sydney flares and the Woolworths-backed ALH takes another step on its run to the ASX.
Australian Venue Co, majority owned by New York investment bankers KKR, formally announced a halt to its move toward listing yesterday, stopping the formal book-build process planned for this week.
The group reports it found strong demand from “many high-quality investors”, but notes the rapid change in sentiment toward the end of last week, following recent cases of COVID-19 in Sydney attributed to community transmission and a return to restrictions.
The business remains well capitalized, and KKR planned to retain its shares and a 49 per cent stake in the company, so the delay basically means a return to the high-paced acquisition strategy AVC has taken in the past 12 months.
“The AVC team are continuing to put 100 per cent focus into building the business and capitalising on the immediate opportunity in front of us,” offered a spokesperson.
A strong rebound and ongoing growth have seen the group enjoy April revenue up double digits on the same period in 2019, driven by strong performances in large venues outside the CBDs.
It boasts no less than 10 upcoming acquisitions in the pipeline, and more than $200 million on hand to deploy on further opportunities, and does not rule out the float in due course.
“We will continue to consult with advisors to assess the company’s future capital structure, including the potential for an IPO.”
AVC’s decision preceded the release today of initial information on the proposed $10 billion demerger of Endeavour Group from national grocer Woolworths (ASX:WOW).
The split would see Endeavour, comprising over 1,630 liquor stores branded Dan Murphy’s and BWS, join ALH Group, operating over 330 pubs around Australia, to form their own ASX-listed vehicle.
Woolworths plans to retain 14.6 per cent of Endeavour, while investors would receive an additional one new share in Endeavour for every WOW share they already hold.
The deal could return up to $2 billion to WOW shareholders if it goes ahead. They will consider the split at a general meeting on 18 June.
In FY20 Endeavour reported $10.6 billion in sales and nearly $700 million in earnings.
A plan to spin off Endeavour was first broached in 2019, and although put on hold for 2020 due to COVID-19 documents detailing the offer have now been distributed to investors for the first time.
The news saw WOW shares close today at $40.50 – up 4.54 per cent on a low for 2021 of $38.74, in March.
