Commentaries
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A “Wynning” strategy of betting on VIPs
Top-tier casino operator Wynn has always bet on VIP gamblers. Now it is adopting the same approach with its stock market flotation. Wynn is trying to trump half a dozen recent poor Hong Kong market debuts by shunning fickle retail investors and handpicking money managers who are likely to stay the distance. It remains to be seen whether this strategy can help justify its valuation premium.
Most Hong Kong retail investors sell their shares on the first day of trading for a quick profit. By putting 90 percent of the shares in the hands of institutional buyers, Wynn is aiming to avoid the hit when its shares start trading on Friday.
That’s probably why the stock has not fallen in grey market trading, even though it was priced at HK$10.08, at the top end of the HK$8.52-$10.08 range.
Wynn has specifically obtained a waiver from the Hong Kong stock market to prevent retail investors from holding more than 30 percent of the total shares offered. But this effort turned out to be unnecessary, as private investors are simply not interested.
China might keep the weakest bank all to itself
Faced with a backlash against foreign investors, Beijing may
be tempted to offer shares in the last of its big four banks to
a domestic audience.
That decision may reflect China’s new found confidence in
the wake of the credit crisis. But it also means Chinese investors
will retain full responsibility for the country’s weakest bank.
Chocolate-coated IPO to tempt Dubai investors?
Listings in Dubai have been few and far between — despite the best efforts of the emirate’s rulers to encourage foreign companies to float there.
There has only been one IPO completed on the Dubai Financial Market in the past 14 months and that was for construction contractor Drake & Scull in July last year.
Killing two birds with a partial IPO
Banks and insurers are looking for ways to bolster their capital, while having the flexibility to strike if there are acquisitions to be had on the cheap. To achieve these twin goals, Spain’s Santander and now British insurer Aviva intend to float minority stakes in subsidiaries.
Aviva’s chief executive Andrew Moss, who cut the insurer’s dividend with its first-half result on Thursday, argued that it must be ready to take advantage of acquisition opportunities. Moss plans to float 25-30 percent of Delta Lloyd so that Aviva’s 92 percent owned Dutch insurance unit can take part in the restructuring of the Benelux insurance market.
Branson alert: not another IPO
Is there anything less plausible than the idea of an IPO of Virgin Galactic, the space tourism venture that is the latest jewel in Richard Branson’s crown?
A Virgin Group spokesman mooted the idea after the bearded one sold a 32 percent stake to an Abu Dhabi-based investment company called Aabar, which clearly wants to appear first in the local phone book.
from Alexander Smith:
Santander wins with Brazil float
   Buying ABN AMRO may have bankrupted Royal Bank of Scotland and Fortis, but it has proved another coup for Spain's Santander whose chairman Emilio Botin has shown his eye for a bargain.
   After flipping Italy's Banca Antonveneta for an impressive profit before the ink was even dry on the contract to take it over from ABN, Botin is now looking to float Banco Santander Brasil, including another former ABN asset, Banco Real, once part of the Dutch bank's Latin American empire.
   With Brazilian valuations riding high and the IPO market flourishing, Citigroup reckons BSB could be worth as much as $30 billion. If so, the partial sale would again demonstrate Botin's ability to spot a good deal.
   Brazil is far too important to Santander -- it accounted for 18 percent of the bank's first half profits of 4.5 billion euros -- for Botin to give up control. But a flotation of 15 percent of the Brazilian bank could raise $4.5 billion of scarce capital while giving Botin another currency for shopping in South America. lt is already Brazil's third-largest bank by assets.
   Santander has been able to keep buying through the financial crisis, becoming the biggest bank in the euro zone as a result. Botin has also picked up Sovereign Bancorp in the U.S. and Alliance & Leicester, along with the remains of failed former building society Bradford & Bingley, in Britain.
   Floating the Brazilian business would crystallise its value. It might also boost Santander's own share price, but risks investors taking the view that a global roll-out of the bank's name and brand means the parent is becoming a conglomerate rather than an integrated group.
   The possibility of attracting a conglomerate discount won't have escaped Botin, whose family still owns nearly 2.5 percent of the $115 billion bank.
   Unlike his colleagues in the banks which have failed, Botin has his family fortune tied up in the business he runs. This, surely, is a powerful reason why Santander has avoided plunging into areas where the risk was far greater than the executives knew or cared. The bank has the strength to take advantage of the fashion for things Brazilian, and he can reflect that the acquisition which sunk RBS has done him no harm at all.
Don’t hold your breath for European flotations
A web-based survey of more than 40 European institutional investors by investment bank Jefferies shows most – 83 percent of those who responded – are not expecting a re-opening of the IPO market in the UK and Continental Europe before the middle of 2010.
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Only 23 percent of the analysts, portfolio managers and dealers surveyed reckon the IPO market will re-open by the end of this year.
IPO.not
The optimist will take this bit of IPO news as a sign the equity markets really are springing back to life.
FindItAll.com, a fledgling online shopping website with $8,540 in cash on hand, just filed a prospectus to sell shares. And what a bargain it is. The Nevada-based company, run by Corie Weisblum out of a location in suburban New Jersey, is registering to sell 100 million shares for 50 cents each.
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The Wall
