The afternoon deal: Testing the IPO waters

Climate activists Lesley Butler and Rob Bell (R) "sunbathe" on the edge of a frozen fjord in the Norwegian Arctic town of Longyearbyen April 25, 2007. REUTERS/Francois Lenoir   IPOs have been described as a company’s coming-out party but these days it’s more like a “testing the waters” event – which may or may not happen depending on the temperature. Find the latest IPO news below.

CBOE files for $300 million IPO (Reuters)
“The Chicago Board Options Exchange will pay a special dividend of $113 million before the IPO to its current stakeholders, and annual dividends of 20 to 30 percent of prior-year net income to shareholders after the IPO, the company said in filings with the Securities and Exchange Commission.”

Kabel Deutschland IPO – ambitious play or cunning ploy?
“Kabel Deutschland’s premium pricing for its $1 billion IPO could invite a similar fate to other recent failed private equity-led offerings, and some still think it’s a ploy to smoke out trade buyers.”

Samsung Life gets bourse nod for record $4 billion IPO (Reuters)
“Fund managers and analysts are cautious in predicting demand for Samsung Life, ranked 14th among global life insurers in premiums received, but said the IPO would attract developing market-focused funds.”

Sensata Rises on Stock Debut (WSJ)
“If Netherlands-based Sensata Technologies Holding B.V. can hang on to its gains for the entire session, it would be the first time a new stock priced within range and rose on the first day of trading in the U.S. since January.” – WSJ

UK clean tech to try luck in uncertain IPO market (Reuters)
“British companies involved in the waste and energy efficiency sectors are considering flotations to raise funds for growth even as the IPO market remains uncertain.”

DealZone Daily

American International Group could learn the fate of the stalled $2.2 billion sale of its Taiwan unit Nan Shan Life Insurance as early as Thursday, when Taiwan’s parliament will review a report on the deal from the top financial regulator.  Read the Reuters story here.

A clutch of private equity firms have bid up to 400 million pounds for British greetings card retailer Card Factory, sources familiar with the process told Reuters. Here is the story.

And in news reported by other media on Wednesday:

Barclays is looking to buy a retail bank in the US to extend its presence after buying Lehman Brothers, reports the Wall Street Journal. Barclays is not in talks and no deals are imminent, but has designated an internal team to assess possible targets.

Can AIG become small enough to fail?

What if AIG sold everything it had? How big a hole in the ground would be left? Perhaps something less than a crater but certainly more than a gopher hole, now that it has agreed to sell its Asian life insurance arm to Prudential of the UK for $35.5 billion. AIG CEO Robert Benmosche, who has been focused on getting as much as he can for the assets that once made up the AIG colossus, must have figured the deal was more lucrative than the Hong Kong IPO that had been in the works.

AIG is busy repaying a $182.3 billion government bailout it received at the height of the financial crisis. First to be paid back are a $16 billion special purpose vehicle and $25 billion taken out of a credit facility taxpayers set up for AIG. The Prudential deal won’t cover those debts, but next up is the pending sale of American Life Insurance Co, or Alico, to MetLife in a $15 billion deal held up by a tax question.

Earlier this month, Benmosche said AIG would shed enough assets to remain a global property-casualty and U.S. life and annuity operation at its core. AIG would become “not too big to fail,” he said in an interview with Contact. But having already been saved once, and with taxpayers now owning the company, the question of success or failure seems almost pointless.

The afternoon deal: When to go to market

GERMANYRunning the gamut from “bloodied” private equity firms to an oversubscribed Man Infra initial public offering, stories from today show the IPO market is on shaky ground and, as always, finding the right valuation is vitally important.

IPO stories from the Web:

Bloodied buyout firms sit tight for IPO return (Reuters)
“Private equity firms are putting flotation candidates back in the box after receiving knock backs from angry fund managers, and will try again in a couple of years when they hope the market will be more receptive,” reports Reuters.

Mega IPO of AIG’s AIA unit faces headwinds (Reuters)
“For handlers of AIG’s massive IPO of its Asian life insurance unit, getting investors to recognize the name and the size of the business is the easy part,” reports Reuters

DealZone Daily

British fashion retailer New Look scrapped its planned flotation. Blackstone dramatically pulled two IPOs this week, blaming weak markets. There has been a string of scrapped IPOs across Europe, involving Belgian, British and German companies.

Motorola wants to split into two companies in the first quarter of next year, one to focus on cellphones and TV set-top boxes, the other on enterprise networking. The plan should give it more focus in the two markets.

Camargo Correa buys an additional 6.5 percent of shares in Portuguese cement-maker Cimpor. It already had a 22 percent stake.  In Portugal, a company must make a takeover bid if it holds 33 percent or more in another company.

The afternoon deal: IPO gloom


Few like to hear words like “softening” or “plateauing” but they’ve been thrown around today after Travelport axed its planned $1.8 billion IPO. A cautious eye is now being cast upon planned sales of travel firm Amadeus and retailer New Look.

Of the 62 IPOs launched globally since December 1, 2009, 32 were shelved — 15 in the U.S., 7 in Europe and 10 in Asia.

“The market remains open for good companies with good prospects that have a sensible raison d’etre for listing, but as a dumping ground for private equity? No, thank you,” says a UK fund manager.

DealZone Daily

U.S. industrial gas supplier Air Products and Chemicals Inc launches a hostile bid to buy rival Airgas Inc for about $60 per
share in cash, in a deal valued at about $7 billion including assumed debt.

Deutsche Telekom is considering an initial public offering or spinoff of its U.S. wireless service T-Mobile USA, the Wall Street Journal reports, citing people familiar with the matter. T-Mobile USA could have an equity value of around $20 billion, the Journal says.

There’s plenty of other M&A and corporate finance news reported by Reuters and other media on Friday. Highlights include:

The afternoon deal: Shanghai IPOs

CHINAIs China First Heavy setting its $1.67 billion Shanghai IPO price below the top of its range a sign of growing realism as markets weaken and regulators demand more rational pricing?

Reuters’ Samuel Shen and Edmund Klamann report mainland IPOs are confronting a market that is sagging under the weight of heavy share supplies, fed by authorities who have approved a steady stream of new share issues to keep the market cool and avert asset price bubbles.

The FT has a story on Bejing possibly putting a clamp on “irresponsible” IPO pricing.  See the FT’s blog on the issue as well.

Keeping score: BRIC flotations

Initial public offerings (IPOs) of companies from the so-called BRIC nations — Brazil, Russia, India and China — enjoyed their best-ever start to the year, according to Thomson Reuters data:

• BRIC IPO volumes for the beginning of 2010 are at their largest level, in terms of both value and number of issues, for any January on record.

• Asian IPO issuance for January 2010 to date has reached a similar record, in terms of value, being the largest January on record.

The afternoon deal

JORDAN/Clarity is in short supply today when it comes to IPOs.  Two companies filed for inital public offerings worth $100 million and $300 million on Monday, underscoring an impression of  investors growing more comfortable with companies they may have deemed too risky in 2009.

Following the upbeat tone is aluminum giant UC RUSAL securing some heavy-weight  investors –a member of the Rothschild family as well as one of southeast Asia’s richest men– in an IPO now bumped up in value to possibly $27 billion.

But wait, not all is rosy. A top China train maker, CNR, limped in its market debut after its $2 billion IPO in Shanghai. Valued at 49 times its 2008 earnings, investors tolerance was tested and the stock closed up a weaker-than-expected 2.34 percent.