UTS Library

State Government’s $1 Billion Public Offer


Queensland Government

PR Company: 

The Phillips Group

Award Category: 

Award Type: 

Call Number: 

1999 F 6



Executive Summary: 

In September 1998, the Queensland Government announced its intention to sell its 45% shareholding in SUNCORP-METWAY through an Initial Public Offer to raise more than  $1 billion.  The Offer was one of the ten largest ever conducted in <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Australia. 

The Phillips Group developed and implemented an investment marketing strategy aimed at communicating the details of the Offer to retail investors, ensuring the Issue was fully subscribed.  In just four weeks we prepared for and marketed the Offer and our communication strategy successfully:

  • Considered the diverse communication needs of more than a million investors;
  • Addressed the Offers complexities;
  • Managed issues;
  • Marketed the Notes;
  • Managed the advertising campaign; and
  • Achieved full subscription of the Offer.

Targeted primarily at Queenslanders, with a secondary focus on the national investment market, the program clarified how shareholder groups could participate in the Offer and explained the rights attached to the Notes.  While the investment vehicle was inherently complex, the communication was simple enough to encourage these audiences to view the Offer as a suitable investment opportunity.

The Offer raised $1.012 billion and closed 2.5 times oversubscribed with more than 60%  of the available Notes going to Mum and Dad investors in Queensland.

During the offer period, no political debate was generated and media coverage was overwhelmingly positive.

Situation Analysis: 

In September 1998, the Queensland Government decided to sell its 45% shareholding in <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Queenslands largest financial institution, SUNCORP-METWAY, through an Initial Public Offer.  The nature of the Governments holding meant the Offer would be Exchanging Instalment Notes that paid interest for the first three years, converting to shares after this period.  The Offer was one of the ten largest ever conducted in Australia, raising over $1 billion. 

The Context

The merger of the building society (SUNCORP), bank (Metway Bank) and rural lender (QIDC) had occurred 18 months earlier amid market sceptisim and political opposition.  The decision to sell down the Governments remaining holding in the merged group was expected to be controversial.  Some local commentators perceived that the change to the Groups share registry would leave it vulnerable to takeover by a national or international bank, resulting in rationalisation and job losses for Queenslanders.

The Problem

The Phillips Groups brief was to develop and implement an investment marketing strategy to communicate the details of the Offer to retail investors, ensuring the Issue was fully subscribed.  Given the complexities of the political and investment issues impacting on the potential success of the Offer, the strategy had to be comprehensive and owned by all members of the investment marketing committee which was made up of members of Treasury, the Underwriters, legal and Ministerial advisors.

The Issues

The nature of the Offer and the capital structure of SUNCORP~METWAY were both highly complex.  Exchanging Instalment Notes was an unfamiliar concept for many investors confused by the debt and equity characteristics of the Notes. 

Adding to this complexity, SUNCORP~METWAY had six different types of shares and notes in its capital structure and, as a result, a variety of shareholders with different rights.  The communication program had to clarify the ability of these different shareholder groups to participate in the new Offer, as well as explain the rights attached to the issue of the Exchanging Instalment Notes.  The communication had to be simple enough to encourage other Queensland residents to view the Offer as a suitable investment opportunity.

In addition, the sell down was to occur at a time when the national and international economies were extremely volatile and an upcoming Federal Election was dominating the media.  Several other national offers were competing for the attention of investors.  These factors, combined with the size of the Offer, created market sceptisim about its success.


The Phillips Group have worked with Queensland Treasury since the initial SUNCORP~METWAY merger announcement in 1996.  As a result, we had access to valuable historical resources. 

However, additional research was conducted prior to the launch of the Offer including:

  • Media analysis;
  • A review of all issues and the development of an issues matrix;
  • A performance analysis of SUNCORP~METWAY, based on broker reports, annual results and share price fluctuations;
  • Extensive stakeholder analysis; and
  • Research into political comment regarding the Group made since the announcement to merge the three organisations.

Target Policies: 

As such the program was targeted at:

  • Residents of <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Queensland;
  • Customers and shareholders of SUNCORP~METWAY;
  • Other potential shareholders;
  • Financial community;
  • Media Queensland metropolitan and regional media as the priority, national press as secondary;
  • Government and regulatory authorities; and
  • Members of Parliament in Queensland.

Communication Strategy: 


To achieve the projects goal of supporting the Underwriters in ensuring the Offer was fully subscribed, The Phillips Groups strategy was to position the Offer as an opportunity for Mum and Dad investors to participate in the success of Queenslands largest financial institution, SUNCORP~METWAY. 

The outstanding success of the Group since the merger and its future potential became the foundation of the campaign.

Comprehensive investment marketing and media programs were the vehicles for this strategy and were supported by an issues management program that identified and addressed issues before they reached the public arena.

The media program, primarily targeting key financial and business writers in <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Queenslands daily newspapers and TV, was designed to proactively support the investment marketing efforts of the Underwriters.

Key messages

Key messages developed as part of the campaign focused on financial factors of importance to our key target audience - security, return and potential for capital gain. Messages were carefully crafted to consider political and market issues and to promote the benefits of the Offer.

The complex nature of the security on offer was explained in simple terms by comparing its features with other financial products more familiar to the residents of Queensland.  The debt characteristics of the Notes were compared to fixed-term bank deposits, while the equity features were compared to ordinary shares.

The communication strategy used the business/financial media, call centre, advertising and direct mail as the main communication channels through which key messages were distributed.


Investment Marketing

The investment marketing campaign included an offer document, direct mail, advertising, branch promotions and a dedicated call centre.

The key marketing tool was the offer document.  It had to appeal to <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Queensland residents, SUNCORP~METWAY customers, shareholders and members of the general public.  Within a three week period The Phillips Group designed, edited, typeset and produced one million copies of the two colour, 46 page document and organised the logistics for the distribution of these copies to destinations throughout Australia.

To ensure the important Queensland audience received the document in a timely manner, copies of the document were inserted into Queenslands major newspaper, the Sunday Mail, the week following the public announcement of the Offer.  The document was also direct-mailed to existing shareholders, through bank branches and stockbrokers, and made available through the call centre.

The advertising plan utilised a mix of television and print advertisements to stimulate the target audience to get a share in SUNCORP~METWAY and benefit from the return, past and future success.  The advertisements were designed to generate consumer response by directing potential investors to the call centre toll-free number, their local SUNCORP~METWAY branch or their investment advisor.  The advertisements also built on the existing brand personalities of SUNCORP, QIDC and Metway Bank.

SUNCORP~METWAYs branch network was used to distribute timely information to customers and interested parties throughout Queensland.  In-store promotion of the Offer highlighted the investment opportunity to customers.

Point of sale posters reinforced the messages in SUNCORP~METWAY branches, and all shareholder and customer communication distributed by the Group during the Offer period incorporated the key messages. 

A professional call centre staffed between 8.00am and 10.00pm supported these marketing activities, seven days a week during the four week offer period.  The Call Centre script was tailored to ensure messages were easy to understand and it was updated daily to keep abreast of any investor issues raised.

Media Program

The media was utilised to highlight the investment benefits of the Issue to the retail market, generating support with Mum and Dad investors and residents of Queensland.  National, metropolitan and local media reports promoted the positive commercial reality of the Issue and generated strong support for the Offer.

During the course of the program several individual briefings were held with the media and two media conferences were coordinated to announce the offer and officially list the Notes on the Exchange.

As the Queensland Government was making the Offer, political debate could easily have diverted attention from the commercial fundamentals of the investment opportunity. By using the Joint Lead Managers rather than the Treasurer as spokespeople, political comment was actively discouraged.

After the third week of the Offer period The Phillips Group had generated extensive media courage.  To avoid maintaining the Offers place on the media agenda and potentially attracting comment from parties opposed to the sell-down, we recommended media relations be scaled down and other marketing tools used to promote the Offer.  This strategy was successful in containing issues.

Issues Management Program

The communication program had to manage a number of contentious issues that threatened to undermine the success of the Offer.  These were predominantly political and market factors and included:

  • Timing of the Offer, particularly given competing public offers and collapse of the Asian economy;.
  • Criticism of the Government for selling total shareholding in the States largest financial institution, leaving it open to takeover by a national or international group;
  • Pricing and allocation issues; and
  • Complexity of the Notes for Mum and Dad investors.

To ensure their ongoing support for our program and the changes implemented as part of the issues management program, our firm initiated weekly issues meetings involving the Treasurers Office, the Assistant Under Treasurer and representatives from Underwriters.

The Phillips Group developed an issues document for each member of the investment marketing committee, outlining potential issues, positioning statements and questions and answers, it was updated throughout the course of the Offer.  In addition, an issues database was established which documented all potential issues, public comment and media reports.  This database was reviewed on a daily basis.

Political issues, call centre feedback and the take-up rate of the Offer were monitored daily to ensure the investment marketing strategy remained relevant.



Results achieved and evaluation

Objective One

The Offer, which raised $1.012 billion, closed 2.5 times oversubscribed with more than 60% of the available Notes going to Mum and Dad investors. As part of the Offer, preference was given to Queenslanders as well as existing SUNCORP~METWAY shareholders and EIN Series 1 Note Holders.

More than 221,000 eligible applications were received, with almost 72% of those from Queenslanders. Every eligible applicant received an allocation.

Objective Two

More than 1.1 million copies of the offer document were distributed to households during the Offer period.  Of the 54,620 calls recorded at the call centre, 36,503 were requests for additional copies of the prospectus.  (A summary of callers responding to press, TV and radio advertising was recorded by the Call Centre and is included in the submission).

The majority of feedback received from investors at the call centre included comments on the appeal of the Offer document and the ease of completing the application forms.

Objective Three

The results of the media relations program can be summarised as:

  • 128 positive press stories out of a total 138;
  • 31 positive feature articles out of a total 35;
  • 18 positive television grabs and 60 radio interviews; and
  • 89.6% of stories contained key messages drafted by The Phillips Group and Queensland Treasury.

In all instances our key messages were used and after October 8, when the decision was made to cease proactive generation of stories, the media followed our lead with only four stories appearing between October 9 and the closure of the Offer on November 6.

Objective Four

During the Offer period, no political debate was generated in or out of Parliament by the Opposition.  The Opposition spokesmans comments accounted for less than 13 out of 173 media reports, despite the sell-down being against the conservative agenda.  By controlling the flow and quality of information being disseminated about the sell-down, The Phillips Group contained any issues or political positioning by the governments opposition.