The challenge of Australian dual tracks

Author: | Published: 18 Sep 2014

Strong equity markets have prompted sellers to consider dual tracks. But running two deals at once prompts legal challenges for both buyers and sellers

During the past 12 months the number and size of Australian initial public offerings (IPOs) launching successfully has surged. The continuing strength of the IPO market has in turn supported a resurgence in dual track sale processes. Selling a business is a high stakes poker game; sellers of Australian businesses in 2014 can keep calling trade buyers, knowing their IPO hand is strong.

A traditional dual track sale process involves a seller running a trade sale process and preparing for an IPO at the same time. Other sale processes or transactions can be run competitively. The recent Healthscope process, for example, involved potential trade sales of the whole of the business, part of the business, an IPO and a sale and leaseback option. UGL's recent sale...