Virgin Australia targeting $685 million initial public offering as shareholder Bain rides rally

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Virgin Australia targeting $685 million initial public offering as shareholder Bain rides rally

Bain Capital-controlled airline Virgin Australia will relist in a A$685 million initial public offering, betting investors are brushing off the turmoil caused by US President Donald Trump’s trade war.

The US private equity firm is selling 30 per cent of Virgin Australia at $2.90 a share, it said in a statement Wednesday.

The price equates to about seven times the airline’s forecast earnings for the year ending June 2025, a discount to local giant Qantas Airways, which trades at around 10 times expected earnings for the same *******.

Billions of dollars’ worth of acquisitions and IPOs worldwide were put on hold globally as Trump’s trade war ripped through markets.

But Australia’s benchmark S&P/ASX 200 index has surged about 15 per cent from an April low, opening a window for Bain to push through Virgin Australia’s long-awaited return to the exchange. Qantas stock is at a record high.

Bain bought Virgin Australia in 2020 after it collapsed at the start of the Covid pandemic and has been planning for the IPO for at least two years, according to filings from the airline.

After the float, Bain will own around 40 per cent of the carrier, while Qatar Airways has a 25 per cent stake.

Virgin Australia’s first run as a publicly traded entity didn’t go well. Even before the carrier’s 2020 demise, most of the stock was locked up by a handful of airlines that were largely inert investors and unwilling to tip in additional funding to keep it going through the pandemic. Relatively few shares changed hands each day, and the stock rarely traded above its IPO price.

Bloomberg.

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