Myer shares crash on market debut

By Stuart Fagg, ninemsn Money and AAP

Shares in department store Myer <MYR.AX> have plummeted by more than eight percent on their first day trading on the Australian stock market.

The stock's slump shaved more than $200 million from the department store's market capitalisation, which had been valued at $2.4 billion based on the 581 million shares issued at the original price of $4.10.

Myer shares opened at $3.88 on the Australian Securities Exchange (ASX), lower than its issue price, amid an overall weak market.

The department store's opening price was 5.4 per cent lower than its issue price of $4.10, when it began trading at 1200 AEDT.

By the end of the day's trading, the shares were down by more than eight percent.

Shares in retail rival David Jones <DJS.AX> meanwhile, fell, but not to the extent of Myer's stock.

Myer announced on Thursday that its initial public offer had been successfully completed at $4.10 a share, the lower end of the indicative price range of $3.90 to $4.90.

Myer said it will have about 581 million shares on issue, a market capitalisation of about $2.4 billion and an enterprise value of $2.8 billion.

The US-based owners, private equity groups TPG and Blum Capital, decided to sell all of their shares "to satisfy some of the excess demand at the final price of $4.10".

Some analysts have said the float was over-priced and criticised the private equity owners for being opportunistic about the timing.

Myer's float, which was heavily promoted by former Miss Universe Jennifer Hawkins, is being seen as the latest salvo in the retail giant's ongoing battle with David Jones.