The Initial Public Offering market remains red hot with the much anticipated offering of Facebook (FB) just weeks away and equity markets trading around four-year highs. This week I will review the initial public offerings for the week of 2 April till 6 April 2012.
Last week's IPO's
Although there were only four trading days in the trading week before the long Eastern holiday it was slightly disappointing to see only one company going public vs. 8 companies last week.
Retail Properties of America (RPAI) took the jump and got their listing over the last week.
Retail Properties of America
Retail Properties offered to sell 31.8 million shares at $8 per share, thereby floating some 40% of the company. The $255 million raised in the primary offering will be predominantly used to pay down debt. Shares closed their first trading day 9.4% higher at $8.75 valuing the company a little over $700 million. While the offering went well, it is still slightly disappointing given that the company and its underwriters were trying to sell the shares for $10-$12 a few weeks earlier. Weak demand prompted lead underwriters JP Morgan (JPM), Citigroup (C) and Deutsche Bank (DB) to lower the offering price to $8
Diversified Retail Operations
Investors believing in the recovery of the US consumer can easily place their bet by investing in Retail Properties at a $8.75 price.
The company has finally been able to raise rents and increase occupancy after dismal years following the severe recession.
The company is very diversified having over 1,500 occupants including BestBuy (BBY), Walmart (WMT) and Bed Bath & Beyond (BBBY). Its occupancy rate across its 259 properties increased to little over 90% by the end of 2011.
The initial public offering market started the second quarter on a weak notice with merely one company decided to go public. It is obviously too early to announce the end of the window of opportunity to go public given the recent strength of the market and the high anticipations for Facebook's rumored $10 billion offering.