A fund manager says the future of the Tiwai Point aluminium smelter and whether the Labour and Green Parties are able to implement their electricity policy make valuing the Meridian Energy shares difficult.
Tyndall Investment Management head of equities Rickey Ward says it's possible to come to a very bleak view of Meridian's worth for those who believe that the Labour and Green policy could be implemented.
But all things considered, he says it's possible to get a valuation quite comfortably between the range they have outlined in the prospectus.
Mr Ward says the issues will continue to be views around the long-term resolution regarding Tiwai and whether the Labour and Green policy will remain under new leadership and the chance of that being implemented.
He says there is a large amount of debate about whether the opposition policy can be implemented and the impacts of that.
Mr Ward says a key consideration for institutions will be Meridian's likely weighting within the NZX Top 50 index.
Tyndall Investment Management has about $500 million invested in New Zealand shares.
Meridian's market value set by the float will be between $3.84 - $4.6 billion which could mean it being included in the NZX's Top 10 index, even if the 51% the Government is keeping is excluded.
Even at the bottom of the range, 49% of Meridian will be worth $1.9 billion, well above the stock within the Top 10 index with the lowest market value, Infratil on $1.43 billion.