IAG won’t be happy with the way its discounted share offer went last week, with nearly $300 million of stock left on the shelf by investors last Friday.

Only $93 million of shares were taken up from the $380 million share offer announced to partly fund the insurer’s $1.86 billion purchase of Aviva’s general insurance businesses CGU and NZI.

The lack of interest from ordinary “mums and dads” shareholders meant institutional investors had to take up the remaining shares. IAG distributed the $287 million remaining to underwriters Deutsche Bank and UBS Warburg, which managed to place most of the stock with institutions.

IAG had already raised $500 million from institutional investors when the acquisition was announced. The shares haven’t traded above the $2.55 price at which they were initially bought.  IAG shares closed four cents weaker on Friday at $2.38.

CEO Michael Hawker said the lack of shareholder interest couldn’t have been anticipated and was probably due to the fact that its 1.1 million shareholders didn’t have to purchase shares in the company. “We have a very large shareholder base and it is very difficult to estimate how many of those shareholders would have liked to have invested in this company in this offering,” he said. “Many of them received shares on demutualisation, so [they] have never had to buy them.”

A leading market analyst told Sunrise Exchange News “a combination of factors” led to the poor response from ordinary shareholders. He agreed with Mr Hawker’s assessment that one reason was because many shareholders weren’t everyday investors.

It also wasn’t a great time to raise capital, with shareholders concentrating more on the holiday season and equity markets internationally and domestically performing poorly.

“It’s close to Christmas and not many people have two or three grand lying around to purchase shares with,” the analyst said. “Even I’m not jumping to put money in the equity market; it’s looking a bit shaky.”