So it’s ‘jumped’ to $30 at the first trade and has been trading in a very efficient horizontal line for a couple of hours. Is the entire thing stage managed?
Guzman y Gomez co-founder Robert Hazan, and co-chiefs Hilton Brett and Steven Marks, all realised healthy paydays after the company listed on the ASX.
Guzman y Gomez founder’s wealth jumps $60m in first seconds of trade
Aaron Weinman, AFR Correspondent, Jun 20, 2024 – 5.16pm
A surge in Guzman y Gomez shares as it hit the ASX has delivered a $60 million bump to the fortune of the Mexican-themed restaurant’s founder, with Steven Marks and his family now sitting on a shareholding worth more than $225 million.
The former Wall Street hedge fund trader was not the only company insider to have their wealth skyrocket thanks to the successful IPO on Thursday. Guy Russo, the former chief executive of Kmart, Target and McDonald’s Australia, who is now Guzman y Gomez’s chairman, owns 5.6% of the company, with his holding worth $170 million.
Shares surged from the $22 offer price to $30 on the first day of trade amid strong demand from investors. Shareholders who had bought in before the IPO – including in a capital raise at a $1.76 billion valuation only two months ago – would be even more in the money. Guzman y Gomez closed with a market capitalisation of $3 billion.
Robert Hazan – who started the business with Mr Marks – has a 4.5% share in the company, which was worth about $136 million at the end of the day, while former McDonald’s executive Stephen Jermyn’s 3.8% stake popped to $114 million.
TDM Growth Partners, Aware Super and Barrenjoey’s private capital business all watched as their stakes in the company soared by hundreds of millions of dollars on Thursday after Guzman y Gomez raised $335 million through an initial public offering.
TDM’s 28% share swelled to approximately $858 million, while Barrenjoey’s roughly 10% stake popped to about $315 million and some 6% of Aware’s holding in the company was worth almost $185 million, according to an indicative statement of the largest 20 shareholders.
Barrenjoey bought an 11% stake from Magellan Financial for just $140 million two years ago. Barrenjoey executives who tipped into the firm’s private capital fund should also enjoy a windfall from the share sale.
Morgan Stanley and Barrenjoey will also share from a $9.2 million fee pool due to their roles as co-leads on the float. Lawyers Gilbert + Tobin, which advised Guzman y Gomez on the listing, earned $1.1 million, according to the company’s prospectus.
Guzman y Gomez’s shares ended $8 above its listing price, after investors piled into the biggest local float in the past three years. It is the largest float since APM Human Services hit the ASX in December 2021 with a market value of $3.3 billion.
Guzman y Gomez flagged its float plans on May 31, raising $335.1 million, with $200 million in proceeds going to the company. A week ago, Guzman y Gomez increased its offer by nearly $100 million, with its largest backer, TDM, further selling down. TDM and Barrenjoey have committed to a voluntary escrow until results next year.
Still, some market observers are wary about the company’s longer-term value. Richard Hemming, who authors the Under the Radar report, said the float was a success for the investment banking and stockbroking community.
“The fact is that they’ve been lining up to IPO for years. It’s in everyone’s interest for them to generate a 30% pop on the first day, which is what they’ve done,” Mr Hemming said.
“But it’s a long road from here at higher interest rates, which is why caution is required, certainly at current prices. How much expansion you’re paying for today.
“If you’re pricing it or valuing it expanding beyond Australia, there’s a lot of competition, and it will be compared against more mature and longer-lasting concepts. It might be that Mexican in Australia was a low-hanging avocado.
“One thing is for certain, after this IPO drought and with the amount of takeover activity, the bankers and private equity will need more floats.”
Guzman hits the ASX
- How Guzman y Gomez bungled its grand plans to be the next McDonald’s Documents filed with a California court reveal how ex-managers allege the Mexican-themed restaurant chain sent its boss to a “cult-like” life coach.
- Guzman y Gomez unveils $2.2b listing in bumper pay day for backers The Mexican-themed restaurant chain said there was “considerable demand” from pre-IPO investors, and the money would be used to supercharge growth.
- Chanticleer | The Warren Buffett question at the heart of Guzman y Gomez float The Mexican-themed restaurant chain’s founder is pitching big growth. He’s not an overnight success story, but the riches are there if he can make it work.
- Bears emerge as Guzman y Gomez’s blockbuster IPO nears Morningstar has told clients that the $22 initial public offering price is “too high” to what it considers fair value for the Mexican-themed fast-food chain.
- Investors scramble for Guzman y Gomez shares amid hot demand Sources said some investors interested in the $2.2 billion float received 10 per cent of what they had wanted, while others managed to grab 45 per cent.
- Street Talk | And the leases? Guzman y Gomez’s IPO docs may give ASIC heartburn There are plenty of questions about whether disclosures in the company’s prospectus gives investors a true picture of its outlook.
--- end of excerpt ---
