Former burger flipper, Peter "Maccas" Bush, knows how to deliver on the fast-food front, so it should be no surprise the revised IPO of the Ingham chicken processing business was not the disaster everyone had been predicting.
Having been discounted to a final IPO price of $3.15 – from a prospectus pricing range of $3.57 to $4.14 – it was certainly looking like a safer bet ahead of its Monday debut which finished the day at $3.22 after an underwhelming start.
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The two strikes rule, introduced in 2011, allows shareholders at an AGM to hold a company board accountable for the pay of their top executives.
It probably helped that Bush – a former McDonald's boss, who has parachuted in as chairman by private equity owners TPG – actually went to the trouble of picking up shares ahead of the big day.
According to the prospectus documents, Bush picked up 129,702 shares ahead of its stock market debut – including $200,000 worth of stock that he received free of charge.
![Peter Bush decided to buy some shares before Ingham's IPO.](/web/20161108041419im_/http://www.smh.com.au/content/dam/images/g/k/n/9/m/g/image.related.articleLeadwide.620x349.gsjnw8.png/1478523140385.jpg)
This is significant as Bush – despite his hefty portfolio of directorships – has not always bothered to ensure he has "skin in the game".
He did not pick up any shares in Nine Entertainment ahead of its IPO, which is a great vote of confidence given he was chairman right up until its ASX debut.
And it took him years to buy shares in Mantra Group which he also chairs.
But there may have been a change in heart by Bush, who recently acquired shares in another company he chairs (he's a busy man our Bush), Southern Cross Media.
![Peter Bush is a cut above the rest. <i>Illustration: John Shakespeare</i>](/web/20161108041419im_/http://www.smh.com.au/content/dam/images/g/g/z/9/b/l/image.related.articleLeadwide.620x349.gsjnw8.png/1478523140385.jpg)
But it might take a bit more than Bush's interest to keep Ingham safe from the market foxes.
Not everyone is predicting a smooth future for our famous chicken processor, with many fearing it could get put through the proverbial meat grinder by a concentrated group of customers led by Woolies and Coles.
![Graham Norton's plonk has won two gold medals at the 37th Sydney International Wine Competition.](/web/20161108041419im_/http://www.smh.com.au/content/dam/images/g/r/l/l/q/6/image.related.articleLeadwide.620x349.gsjnw8.png/1478523140385.jpg)
Motley Fool's Sean O'Neill warned that a calm debut may merely disguise the rocky path ahead.
"If previous practice is anything to go by, TPG will sell its shares as they exit escrow. I'm uncomfortable with owning the kind of business where a 20 per cent rise in the share price is a potential signal for a major shareholder to sell one-third of their shares. That's not investing," said O'Neill last week.
The down-scaled IPO means 47 per cent of the stock will now be in TPG's hands post-float, which now means a bigger overhang for other investors.
"If the experience of some of the other IPOs we've seen in recent years is any guide, Ingham Group might start to nosedive around 18 months from now, once its top five customers [which account for more than 50 per cent of sales] start talking pricing and competitors ... start talking market share. As Ingham's revealed in its sensitivity analysis, just a 1 per cent decline in the average selling price of its chicken would result in a whopping $16.7 million [approximately 17 per cent] decline in Ingham's profits," said O'Neill.
Milking it
A2 has not been hit with the dairy trouble afflicting other high profile ventures like Bega Cheese, Murray Goulburn – and even Bellamy's which has suffered from a deflating share price.
A2's stock is still trading at near double the level it was at this time last year.
So it is the perfect time for the board to seek a hefty ramp up in their fee pool from $NZ600,000 to $NZ950,000 "to be paid an allocated amongst the non-executive directors as the board considers appropriate", said the AGM notice lodged with the ASX on Monday.
In the pink
Ireland's historic win against the All Blacks may have dented Kiwi pride a little, but denizens of the two island nations still have a few things they both can cheer about.
A collaboration between Irish and TV celebrity Graham Norton and Kiwi group, Invivo Wines, has produced a gold medal result for his debut Kiwi rosé and another for his South Australian shiraz in the 37th Sydney International Wine Competition.
Both wines have been launched in Australia and New Zealand, and the shiraz will be available in Britain from November with the rosé being launched in time for the northern summer.
Norton's wine debut in 2015 also went well. An Irishman by the name of Alan Joyce even chose it for business class passengers on his Aussie airline.
Got a tip? ckruger@fairfaxmedia.com.au
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