November GM, LPL Investment IPO Pricings Could Top New Issue Capital Raised

Includes: ARX, CZR, GM, LPLA
by: Renaissance Capital IPO Research

General Motors and LPL Investment Holdings represented the 127th and 128th IPOs to price so far in this year, which is more than double the 63 IPOs that were completed for all of 2009. The U.S. IPO market has raised $17.9 billion so far in the month of November, more than doubling the $17 billion raised in the first ten months of 2010 combined.

General Motors (NYSE:GM) raised $15.8 billion on Wednesday by selling 478 million shares at $33 per share, at the high end of the $32-$33 proposed range. All told, the deal was 57% larger than originally proposed; the company had initially planned to offer 365 million shares at $26-$29. Excluding the overallotment, the common stock offering is the third largest ever on a US exchange behind Visa (NYSE:V) (2008; $17.8 billion) and ENEL SpA (EN) (1999; $16.5 billion). The company also raised $4.35 billion in a larger-than-expected sale of mandatory convertible preferred stock, which pays a 4.75% dividend. Overallotments on both the common and preferred deals could bring the total capital raise over $23 billion. With a 31% more shares sold than originally expected, the US Treasury's ownership falls below 30%. Morgan Stanley (NYSE:MS), J.P. Morgan (NYSE:JPM), BofA Merrill Lynch (NYSE:BAC) and Citi (NYSE:C) were the lead underwriters on the deal. The stock will begin trading Thursday on the NYSE under the symbol GM, and on the TSX under the symbol GMM.

LPL Investment Holdings (NASDAQ:LPLA), the largest independent broker/dealer in the US supporting 12,000 financial advisors, raised $468 million by offering 15,614,723 shares at $30, which was a the high end of its proposed range of $27 to $30. The Boston, MA-based company, which was founded in 1989 and is backed by private equity firms Hellman & Friedman and TPG Partners, generated over $360 million in operating cash flow on more than $3 billion in total revenue for the twelve months ended September 30, 2010. LPL Investment Holdings will begin trading on the NASDAQ on Thursday under the symbol LPLA. Goldman, Sachs & Co. (NYSE:GS), Morgan Stanley, BofA Merrill Lynch and J.P. Morgan acted as lead managers on the deal.

Another six IPOs representing upwards of $1 billion capital to be raised are set to price by week's end, including a $500 million proposed offering from casino operator Caesar's Entertainment (NASDAQ:CZR) and a $250 million IPO from microelectronics and test equipment maker Aeroflex (NYSE:ARX). Even if half of this amount is completed, November 2010 could represent the largest dollar value of new issue equity capital raised in the U.S. in a single month (eclipsing the $18 billion raised in March 2008 when Visa completed the largest U.S. IPO on record).