Firmus exposes ASX floating backwards
The float of the decade was priced, repriced and pulled on a document the public never saw.
Last week's Firmus mess could have been avoided if the ASX had handled the float like any sensible capital markets operator should in these circumstances: have the prospectus lodged first, then take the money.
Instead, institutional investors were handed a draft, the bookbuild was put together on a wink and a nudge, and retail investors were asked to bid into the offer with none of the information required to assess whether the price was right.
If it all fell through, scapegoats were available in the form of bankers and the financial press. Or that appeared to be the plan anyway.
As everyone now knows, Firmus, the $43.7 billion float of the decade, was pulled on Friday after crucial demand among key institutional investors in Australia and the United States dried up. The board, "having considered recent market volatility and prevailing market conditions", had an epiphany, and determined the terms "would not appropriately reflect the strength of the company's business and long-term growth outlook".
Credit where credit is due to Oliver Curtis and the Firmus brains trust. Pulling a deal is the right thing to do when the price support isn't there. The alternative is ramming an IPO down the throats of mum and dad investors at a number the professionals have already rejected. Nobody in this saga has done anything the rules don't allow. And that's precisely the problem.
