{"id":123722,"title":"Virgin Australia’s $685m IPO Cleared for Take-Off Ahead of June 24 ASX Listing","publisher":"Share Talk","author":"sharetalk","published":"2025-06-15T11:23:40+00:00","modified":"2025-06-15T11:23:40+00:00","canonical_url":"https://www.share-talk.com/virgin-australias-685m-ipo-cleared-for-take-off-ahead-of-june-24-asx-listing/","markdown_url":"https://www.share-talk.com/virgin-australias-685m-ipo-cleared-for-take-off-ahead-of-june-24-asx-listing.md","json_url":"https://www.share-talk.com/virgin-australias-685m-ipo-cleared-for-take-off-ahead-of-june-24-asx-listing.json","category":"Automobiles, Parts & Engineering","categories":["Automobiles, Parts & Engineering","Business & Support Services","IPO","Technology","Technology, Media & Telecoms"],"tags":["ASX","Australian Securities Exchange","bookbuild","Guzman y Gomez","initial public offering","Qantas","Retail investors","Virgin","Virgin Australia"],"featured_image":"https://i0.wp.com/www.share-talk.com/wp-content/uploads/2025/06/426610d3-71ca-46b2-91ae-bef1125e66f1.webp?fit=1200%2C800&ssl=1","format":"news","language":"en-GB","content":"Virgin Australia, the country’s second-largest airline, is set to make its return to public markets with a **$685 million initial public offering**, aiming for a **June 24 listing on the Australian Securities Exchange (ASX)**. The IPO will value the business at **$2.3 billion**, and the fast-paced timetable reflects a strategy rooted in market timing.\n\n#### **Why the Rush?**\n\nInstitutional backing is already locked in, and the **bookbuild closed by Thursday, June 5**. Advisers **Barrenjoey, Goldman Sachs**, and **UBS** are moving quickly to avoid any potential downturn in **Qantas’ share price**, which could weaken Virgin’s value proposition.\n\n**Qantas shares have surged 73% over the past year**, fuelled in part by the collapse of regional rival **Rex**. If Qantas’ valuation were to fall, Virgin’s offer—priced at **$2.90 per share**—would no longer appear to carry the **30% discount** currently being marketed as attractive relative to its larger peer.\n\nAt current pricing, Virgin’s IPO reflects a **valuation of seven times its forecast net profit of $331 million**, putting it on par with US airline peers, but below **Qantas’ 10x earnings multiple**.\n\n#### **Retail and Strategic Participation**\n\n**Wilsons** has also joined the advisory team, seeking to raise **$100–125 million** from retail investors. The public component of the offering opens **June 6**, following the lodging of the prospectus. Broker bids will be accepted between **June 16 and 19**.\n\nVirgin’s private equity owner, **Bain Capital**, which acquired the airline for **$700 million in 2020** after it collapsed under **$5.15 billion in debt**, will reduce its holding to **40%**. As part of the float:\n\n-\n**30%** of the business will be sold to the public,\n\n-\n**Qatar Airways** will retain its **23% stake**, acquired for $750 million last year,\n\n-\n**Virgin staff and management** will hold **7.8%**.\n\nBain’s remaining stake is **locked up until FY26 results**, after which it may begin phased sell-downs.\n\n#### **Valuation and Financial Metrics**\n\nIncluding **$1.3 billion in net debt**, Virgin will carry an enterprise value of around **$3.6 billion**. This equates to **3.4x forecast EBITDA** of **$1.06 billion** for the current financial year.\n\nThe IPO structure mirrors the successful **Guzman y Gomez listing** of 2023, which also featured locked-in cornerstone investors and a lean, retail-friendly float.\n\n#### **Cautionary Notes**\n\nWhile the deal appears well-structured, history offers a cautionary tale. The **Adore Beauty IPO**, launched at a $635 million valuation during the pandemic, has since shrunk to just **$66 million**, illustrating the risks of buying at perceived peaks.\n\nSome analysts warn that **the days of IPOs offering steep 20–30% discounts to listed peers may be fading**, particularly as **private capital has become more selective** and weighed down by leveraged portfolios. Yet with fewer competing listings and reduced private equity buying power, **public equity investors may once again have the upper hand**—for now."}