As recently as midday on Tuesday,the lead managers for the IPO,Goldman Sachs,Macquarie Group and UBS,sent a message to brokers expressing their confidence that buyers had been found for the billion dollars worth of shares on offer to investors valuing the consumer finance group at $3.2 billion.
It has been a rough ride for the consumer finance group which was sold by its former parent GE in 2015 to private equity firms KKR,Varde Partners,and Deutsche Bank. The three investors would have still owned more than half of the Latitude business after the float.
During the past few days there have been several analysts talking down the float opportunity. On Monday James Greenhalgh from Intelligent Investors called it"one of the most unappealing large IPOs we have ever seen".
Latitude Group hired former Australia Post chief executive Mr Fahour last year after its attempt at a $5 billion IPO failed.
The company announced its latest attempt to float last month with a share price of up to $2.25,which would have valued the company at up to $4 billion.
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On Friday,the float's managers confirmed an offer price of $2 a share. On Monday this was discounted to $1.78.
Latitude,formerly known as GE Money,makes about half its operating income from instalment loans,with most of the remainder coming from personal loans,auto loans and credit cards. Its business includes credit cards and point of sale finance at stores such as Harvey Norman,Apple and JB Hi-Fi.
In other news,Latitude continued its drip feed of merchant signings for its new buy-now,pay-later product announcing on Tuesday that Virgin Australia will be using the new service next year.
It was hoped that its aggressive push into this Afterpay-dominated market would help boost the company's valuation.
Virgin customers will be able to use the interest-free instalment payment service,LatitudePay,for purchases of up to $1000 in the first half of 2020. A service for purchases of more than $1000 will be available later next year.
"This partnership will provide greater payments flexibility for Virgin Australia's customers,who now have the choice to'fly now,pay later'when they book a domestic or international flight,"said Mr Fahour.