Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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<p>Murray Goulburn (MG) plans to raise US$350m, via issuance of new units, which will have no voting rights and will only share a part of the economic interest.</p><p>The deal scores a marginal positive score on our framework, given its long track record and dominant position in the Australian Dairy industry. However, the main concern for investors&nbsp;will be the lack of any voting rights with the units,&nbsp;combined with the tepid near term outlook for dairy prices, which is reflected in falling earning for MG. In effect, the saving grace for the deal is likely to be its yield of 5.6-7.4%, which looks attractive at the low end. Thus, the deal is likely to curry favor more with retail investors rather than big institutions, in our view. We would be price sensitive for this deal and would only go in towards the low end with a 7%+ yield.</p>

Murray Goulburn (MG) plans to raise US$350m, via issuance of new units, which will have no voting rights and will only share a part of the economic interest.The deal scores a marginal positive score on our framework, given its long track record and dominant position in the Australian Dairy industry. However, the main concern for investors&nbsp;will be the lack of any voting rights with the units,&nbsp;combined with the tepid near term outlook for dairy prices, which is reflected in falling earning for MG. In effect, the saving grace for the deal is likely to be its yield of 5.6-7.4%, which looks attractive at the low end. Thus, the deal is likely to curry favor more with retail investors rather than big institutions, in our view. We would be price sensitive for this deal and would only go in towards the low end with a 7%+ yield.

Bright long term prospects but lopsided ownership  and weak milk prices could play spoilsport

Australia

MG Unit Trust operates as a special purpose entity. The Company was set up to issue notes and convertible preference shares. MG Unit serves customers worldwide.

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MG Unit Trust (MGC AU)

Bright long term prospects but lopsided ownership and weak milk prices could play spoilsport

Murray Goulburn (MG) plans to raise US$350m, via issuance of new units, which will have no voting rights and will only share a part of the economic...

Sumeet Singh

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52-week Range

Market Cap (USDm)

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