Cornerstones take more than $500m stake in Viva Energy REIT

About 70 per cent of available Viva Energy REIT shares are rumoured to have been allocated to cornerstone investors as part of the company’s $800 million initial public offering.

Viva Energy REIT, which has invested $1.7 billion in petrol stations, will list on the Australian Securities Exchange next month. The company’s portfolio includes 425 Coles-branded petrol stations.

As bookrunners Bank of America Merrill Lynch and Deutsche Bank finalised the cornerstone commitments on Wednesday, more details of the IPO were trickling out among investors.

Viva Energy REIT will seek to raise $800 million at $2.20 at share, as reported by the Financial Review. It’s understood 70 per cent of the $800 million was allocated to cornerstone investors – mostly domestic generalist funds – leaving 15 per cent for other funds entering via the institutional bookbuild and the remaining 15 per cent for retail investors.

Sources said scale-backs as part of the cornerstone process, which commenced over the weekend, as revealed by Street Talk, were in the order of 50 per cent to 70 per cent.

The cornerstone process comes after Deutsche Bank and BAML analysts spent one week marketing the company to prospective institutional investors.

Deutsche analysts Emily Smith and Stuart McLachlan put a $1.5 billion to $1.7 billion valuation on the business, reflecting a yield of 5.8 to 5.2 per cent.

The valuation also implied 1.12-times to 1.25-times the value of Viva Energy REIT’s net tangible assets.