Investors Give Wotif.com A Spectacular Welcome

The Age

Saturday June 3, 2006

By REBECCA URBAN

INTERNET travel provider Wotif.com has debuted on the stock exchange at a substantial premium, after a frenzied rush for shares from institutional investors.

Strong demand for the stock continued yesterday, sending Wotif.com shares to a $3.32 close - 66 per cent higher than the $2 issue price.

The stellar debut means investors lucky enough to pick up shares in this week's heavily oversubscribed book-build have made a tidy profit.

Wotif.com, Australia's leading internet accommodation booking service, raised $172 million through the offer, with the proceeds allowing the company's six founding investors to sell part of their holdings.

The founders retained nearly 60 per cent of the company and have also made substantial profits on paper.

Managing director Graeme Wood, who founded the company six years ago with about $200,000, made $42 million through his sale of 21 million shares. The 51 million shares he kept are worth $169 million.

Non-executive director Kevin Fitzpatrick pocketed $73 million via the float and kept 10 million shares now valued at $33 million.

The founders have been joined on the register by leading institutions, including JPMorgan Chase, Citicorp and UBS.

Mr Wood said, in hindsight, the institutional book-build - which was set at an indicative range of $1.75 to $2 a share on the advice of float managers Macquarie Bank and ABN Amro Morgans - could have been set higher. The book-build reportedly took less than an hour to complete. Almost 40 million shares were traded yesterday.

Mr Wood said the institutions had been attracted by Wotif.com's profitable track record, leading market position and growth prospects.

He said the appointment of Unitab's outgoing chief executive Dick McIlwain as chairman and Robbie Cooke as chief operating officer had added further credibility with investors.

Sean Conlan, a stockbroker with Macquarie Equities, said: "In this current environment, where the market is quite volatile, this is a very, very impressive debut."

Wotif.com, which has about 36 per cent of the Australian online accommodation market, earned $12 million last financial year. It has forecast profit to jump 31 per cent to $15.7 million this year.

© 2006 The Age

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