Myer seeks $2.34bn in initial public offer of $3.90 to $4.90 a share

In its prospectus, Myer said it planned to sell 479.3 million to 499.5 million shares though the offer at $3.90 to $4.90 a share.

The share sale will raise at least $1.94bn, Myer said, and give it a total market capitalisation of $2.28bn to $2.77bn.

Private equity firms are taking advantage of improved market conditions to exit from their investments globally but the Myer IPO is one of the first such moves in Australia.

TPG and Blum Capital own 84.2 per cent of Myer, with management and the Myer family also holding stakes.

Myer was taken private for $1.4bn in 2006 by a consortium led by TPG.

If the group raises $2.34bn, the float will be the biggest in Australia since Boart Longyear raised $2.3bn through an IPO in 2007.

Credit Suisse, Goldman Sachs JBWere and Macquarie Capital Advisers are joint lead managers of the offer.

Like most markets, Australia’s IPO market has been significantly constrained by a lack of investor appetite amid the global financial crisis.

But a six-month rally in Australian equities and improving confidence in the global economic outlook is expected to prompt further IPOs in coming months.

Private equity-owned outdoor equipment retailer Kathmandu is among those that are expected to look at listing soon.

Myer said it expects to record a net profit of $160 million for the fiscal 2010, off total sales of $3.36bn, up from a net profit of $109m and sales of $3.26bn in fiscal 2009.

The department store operator expects to declare dividends totalling 20.5 cents to 21.5c a share in the 2010 financial year, which represents an annualised forecast yield of 4.3 per cent to 5.3 per cent based on the indicative offer price.

Retail sales have held up well in recent months as Australians continue to shop, with government handouts filling cash registers nationwide.

Consumer confidence is also improving, and although the nation’s unemployment rate is expected to continue to climb, retailers say they are cautiously optimistic about the outlook.

Rival department store chain David Jones said last week it was well positioned for growth amid expectations of a pick-up in conditions for the sector.