November 7, 2016 / 4:47 AM / 9 months ago

TPG's Alinta Energy IPO held up in Australia on U.S. election jitters: source

MELBOURNE (Reuters) - A plan by TPG Capital Management to launch Australia's biggest listing this year, a sale that could value all of utility Alinta Energy at up to A$3 billion ($2.3 billion), has been delayed by at least a week, a person familiar with the matter said, citing market jitters on the outcome of the U.S. presidential election.

The decision to delay a prospectus launch originally scheduled for Monday was made before another TPG asset, Australia's biggest chicken producer, Inghams Group (ING.AX), made a tepid debut. Inghams opened 1 percent below its offer price as the Australian market rose.

TPG had halved the Inghams listing size last Friday to foster a stronger opening day amid generally weak investor sentiment towards recent Sydney initial public offerings.

"It (Alinta's IPO) has been pushed back a week till after the presidential election," the person familiar with the float said, speaking before Inghams debut. The person declined to be identified because the IPO has yet to be announced officially.

TPG declined to comment.

Global markets have been hit by worries over the potential outcome of the U.S. election on Nov. 8. The U.S. market has fallen nine sessions in a row, while the Australian market has dropped in seven out of the past eight sessions.

Money raised in Australian IPOs has dropped to $3.1 billion this year from $4.39 billion at the same time last year, according to Thomson Reuters data, with offerings led by private equity firms meeting with investor caution in light of the performance of the companies they have listed in the past few years.

"They're usually over-priced - particularly when they're coming out of private equity," said Simon Mawhinney, chief investment officer at fund manager Allan Gray. Mawhinney said he won't be looking at the Alinta offering as he never buys into IPOs.

Alinta, which owns gas-fired power stations, transmission lines, gas pipelines and energy retailing businesses in Australia and a power station in New Zealand, is expected to have earnings before interest, tax, depreciation and amortization (EBITDA) of around A$380 million in 2017, according to credit rating agency Standard & Poors.

Based on an earnings multiple of between 10 and 13 times EBITDA and debt of A$1.7 billion, that would give it a market capitalization of up to A$3.2 billion.

One fund manager said he had not yet made a decision on whether to participate in the Alinta float.

"It's a big float. It's got history. We haven't made up our minds," said Jason Beddow, Chief Executive at Argo Investments.

Alinta's history includes the near collapse of the firm's predecessor, then listed as Babcock and Brown Power, under a debt heap in the wake of the global financial crisis.

Bankers at Macquarie, UBS, and Goldman Sachs leading the planned Alinta listing declined to comment.

Reporting by Sonali Paul; Editing by Kenneth Maxwell

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