After an unusually muted start to the year, equity capital markets fired into action this week with the $305 million Spark exit from Duet followed by New Zealand Super’s $NZ290m ($270m) selldown on Z Energy, a deal handled by UBS.

As first reported by The Australian’s BusinessNow blog yesterday evening, UBS out-muscled rivals First NZ, Credit Suisse’s New Zealand affiliate, and Goldman Sachs to secure the lucrative mandate. The deal was priced at $NZ8.01, a 2.2 per cent discount to the close.

NZ Super’s decision to sell followed public declarations from the superannuation fund, which held a 10 per cent stake in the company, that it was “happy” to remain a holder of shares in Z Energy. Its comments came in the wake of a report by this column that a block trade was looming.

NZ Super held close to 44 million shares in the company and its decision to sell followed the company’s $NZ785m acquisition of Chevron’s service station network in the country, a deal that was settled yesterday after receiving the green light from the Kiwi competition watchdog, the New Zealand Commerce Commission.

Goldman Sachs had initially planned to launch a rights issue to fund that deal but the company opted to finance the purchase from debt facilities.

According to sources, many Kiwi fund managers are overweight Z Energy and so much of the appetite for the stock was soaked up by Australian long-only investors from across the ditch.

The company’s shares closed down 2.15 per cent to $NZ8.19. The stock is also listed on the Australian Securities Exchange.

Infratil and the Super Fund invested in Z Energy ahead of its listing in 2013. Infratil exited the investment when it sold its remaining 20 per cent holding in September last year. The Super Fund sold a 9.73 per cent stake at the same time, reducing its holding to just over 10 per cent.

Extracted in full from The Australian.

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