Cautious Week of IPO Deals

Yordanka
15 Oct, 2005
New York City

IPOs priced in the last week got cold shoulder from investors. Four deals were priced at the low end of the filing range and closed either at or below the deal price. One of the recent IPOs, Refco, created worldwide headlines as the firm rapidly disintegrated in the face of CEO led scandal. Chicago Board of Trade awaits warm welcome on IPO calendar.

167 initial public offerings have been priced so far this year:

- 83 are currently trading up;
- 78 are down;
- 6 are trading flat with their offer price.

A total of 4 IPOs priced and 3 new filed the week of October 10th, 2005.

There are 5 deals scheduled to price this week, hoping to raise about $450 million.

IPO PERFORMANCE

Container lessor TAL International Group ((TAL)) priced 11.5 million shares at $18 each on Thuesday evening, raising $207 million. IPO was priced at the low end of its proposed range of $18-$20.

The underwriters were granted an option to buy up to 1.7 million additional shares from selling stockholders at the IPO price to cover excess demand. The stock began trading on the NYSE on Wednesday.

CS First Boston, Deutsche Bank Securities, Jefferies and UBS Securities were the managers on the deal, while Robert Baird, Morgan Keegan and Fortis Securities were acting as co-managers.

The Purchase, NY based company is one of the world's largest lessors of intermodal freight containers with 19 offices in 12 countries and approximately 195 third party container depot facilities in 40 countries. TAL's fleet consists of over 620 thousand containers representing approximately one million twenty-foot equivalent units.

The company’s stock closed flat at $18 on the first day of trading and ended the week unchanged.

Shipping company Double Hull Tankers ((DHT)) priced 16 million shares at $12 per share on Thursday, raising $192 million. The company had originally filed for 23 million shares to be priced within $14-$16 per unit, but Wednesday revised its filing and cut the shares to 16 million. The company also reduced the price range to $12-$14 per share.

UBS Investment and Merrill Lynch were the lead underwriters on the deal. The stock is trading on the NYSE.

The Marshall Islands-based company plans to use the proceeds for seven ships it is acquiring from subsidiaries of its indirect parent company Overseas Shipholding Group Inc. ((OSG)). OSG has granted the underwriters an option to sell an over-allotment of 2.4 million additional shares.

The stock closed at $12.05 on the first day of trading and ended at $11.87 on Friday down 1.1% from the offering price.

Investors Bancorp ((ISBC)) priced 45 million shares at $10 a share on Wednesday, raising $449 million. Sandler O’Neil managed the deal.

The company’s stock closed at $10.06 on Friday, almost flat with the IPO price.

Electronic poker table developer PokerTek ((PTEK)) priced 2 million shares at $11 per share on Friday. Feltl and Co. was the lead manager for the deal.

The stock closed Friday at $10.25, down 6.8% from the IPO price.

POSTPONED

The Hong Kong-based company A-Max Technology ((AMAX)) has postponed its IPO on Friday, citing ongoing business developments and current market conditions. The company had been scheduled to sell up to 6.5 million American depository shares this week.

Golden Energy Marine ((SHIP)), a Greece-based shipping company, also postponed its IPO because it could not obtain the price range of $19-$21 it had expected.

IPO CALENDAR – week of October 17th

CBOT Holdings ((BOT)), the holding company of the Chicago Board of Trade, plans to offer 3.2 million shares, including 263 thousand shares by selling shareholders, within a price range of $45-$49 per share, in a bid to raise $179.8 million. CS First Boston, JP Morgan and Citigroup will act as the lead managers on the deal.

Portable audio player producer A-Max Technologies ((AMAX)) plans to offer 6.5 million American depositary shares within a price range of $14.50-$16.50 per unit, in a bid to raise $123.3 million. Merrill Lynch and UBS Investment Bank will be the lead managers on the deal.

Electro-Optical Sciences ((MELA)), a medical device maker, plans to offer 4.0 million shares at $5.50 a share, in a bid to raise $23 million. The company had originally filed to offer 3.0 million shares within a price range of $10-$12. Ladenburg Thalmann and the Stanford Group will be the underwriters on the deal.

Predix Pharmaceuticals ((PRDX)), a small-molecule drugs developer, plans to offer 5.0 million shares within a price range of $10-$12 per unit, in a bid to raise $69 million shares. UBS Investment Bank and Deutsche Bank will be the lead managers on the deal.

Information technology provider NCI Incorporated ((NCIT)) plans to offer 5.2 million shares within a price range of $10-$12 per unit, in a bid to raise $71.1 million. Legg Mason and Raymond James will be the lead underwriters on the deal.