Hong Kong IPO For China Railway: $2bil

China Railway Signal Prepares for $2 Billion Hong Kong IPO
State-owned China Railway Signal & Communication, which makes the signal systems used by China’s train network, plans to start taking orders for an up to $2 billion Hong Kong initial public offering next week in the biggest float by a mainland company since the Chinese markets’ rout.

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Broker-Dealers and Bankers Bolster Use of Uber In Pre-IPO Lobbying

The current over-bubbly Silicon Valley “Unicorn” wave, which advances the notion of ‘stay private’ and eliminates the need to take a company public when there is an over-abundance of private equity cash available to prop up the so-called enterprise value, has led to a dearth of IPO deals and by extension, has crimped the wallets of brokerdealers and investment bankers who garnish big fees and commissions from the initial public offering process. Have no fear, to win over ride-sharing whale Uber in advance of their ultimate IPO, Bankers are pulling out the stops.

Wall Street bankers and broker-dealers are notorious for climbing over walls to win over whales in advance of the ultimate monetization event. In the case of Uber, the biggest Unicorn of them all, with a private market valuation of more than $50billion, JP Morgan, Goldman Sachs and other major investment banks have launched a pre-IPO lobbying campaign by banning the ubiquitous line-up of black car services esconsed outside  their palatial Wall Street homes, and instead, they are offering their brokers special compensation to embrace the use of Uber so as to win over the senior executives who will decide on this decade’s potentially biggest initial public offering mandate for investment bankers.

f7622be21d3caa14_rolls_eyes.xxxlargeIn a July 10  NYT story by Nathaniel Popper, which has been re-purposed by tens of dozens of media outlets, we give credit where credit is due and share the following excerpt from Popper’s column:

“..The latest reminder came this week when JPMorgan Chase announced that it would reimburse all of its employees for rides taken with Uber — offering access to “Uber’s expanding presence and seamless experience,” the company said in a news release.

JPMorgan made its decision long after other parts of corporate America were already hailing cars through the California start-up. But banks have recently shown a fondness for the service — with Goldman making the company part of its official travel policy in late May and Morgan Stanley putting out its own news release about its Uber use late last year.

Bank experts were quick to note that these moves come as the banks are jockeying to win a coveted spot managing Uber’s initial public offering — one that is not yet scheduled but that is assumed to be coming in the not-too-distant future. The I.P.O. for Uber, whose fund-raising so far has pegged its valuation at $50 billion, will most likely be the blockbuster I.P.O. in whatever year it takes place.

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A spokeswoman for JPMorgan said that the Uber news release this week had nothing to do with an I.P.O. and was instead part of the bank’s broader business relationship with the company. It does, though, fit squarely within a hallowed tradition of banks going to sometimes amusing lengths to secure a prized initial offering and the significant fees and reputational lift that it can provide.

“On the margin, sometimes the little incremental thing will make the difference,” said Lise Buyer, who advises start-ups looking at initial offerings. “Anything that a bank can do on the margin to improve their odds will probably be useful.”

The softer side of the sales pitch has taken on many forms over the years. When Amazon.com was going public, Ms. Buyer said that banks presented their pitch books to the company in the form of bound books, to celebrate Amazon’s book-selling roots. Other bankers have made humorous videos about the company they were proposing to bring to the stock market.

One of the most storied practitioners of the hard and soft sell of potential clients was the JPMorgan banker Jimmy Lee, who died unexpectedly last month.

Mr. Lee placed a G.M. car in the lobby of JPMorgan’s headquarters on Park Avenue when General Motors executives came in to consider whether to use the bank for the carmaker’s return to the public markets after the financial crisis. (JPMorgan participated.)

A few years later, Mr. Lee was in a custom-made Facebook hoodie — a sharp departure from his normal pinstripe suit — when Mark Zuckerberg visited JPMorgan before his company’s initial offering. (The bank took part in that one, too.)

These sorts of efforts have a well-grounded logic for the companies shopping for a bank. A banker taking a company public has to sell the shares of the company to investors — and thus needs to show an understanding of what the company does.

For the full story at the NY Times, click here

Planet Fitness Sprints to Stock Markets


Brokerdealer.com updates that Planet Fitness began a sprint toward the stock markets on Monday, filing for an initial public offering roughly two years after allying itself with a private equity firm.

Planet Fitness Inc. filed for an initial public offering to raise up to $100 million. With its filing, Planet Fitness, a low-cost gym chain, aims to become a publicly traded company in two months or so.

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Founded in its current form in 1992, the company was a pioneer in opening low-cost gyms meant to be friendlier to the average consumer rather than catering to hard-core fitness enthusiasts.Such was the company’s success that it eventually drew in as a partner the private equity firm TSG Consumer Partners, a specialist in consumer brands.

Last year, Planet Fitness reported $37.3 million in profit on $279.8 million in revenue, both up from a year earlier. In the prospectus, Planet Fitness listed a preliminary $100 million fund-raising target, a figure meant to determine listing fees.

It will eventually trade on the New York Stock Exchange under the ticker symbol PLNT.

Hong Kong Now Top 2 in IPOs


The current hot market for IPOs (initial public offerings) now finds Hong Kong surpassing New York, and merely a few ticks below front-runner Shanghai for being the hottest centers for companies selling shares in new issue underwritings, according to the WSJ.

Red Star Macalline Group Corp priced its IPO in Hong Kong at the top of the range on June 19, raising HK$7.22bn ($931.34m) for the furniture retailer-cum-shopping mall owner that has been dubbed China’s answer to Ikea.

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The offering continues Hong Kong’s strong run as an IPO venue thanks to a stock-market boom. So far this year, Hong Kong ranks second globally as a venue for IPOs by value, behind Shanghai and ahead of New York, according to data from Dealogic.

The company secured US$330 million in orders from cornerstone investors, who agreed to buy and hold the shares for six months, including New York-based hedge fund Falcon Edge Capital, household appliances maker Gree Electric Appliances Inc., Shandong state-owned Asset Investment Holdings, China National Building Material and hedge fund BosValen Asset Management. It is scheduled to begin trading in Hong Kong on June 26.

If Legend’s listing takes place, it would be the year’s third-largest in Hong Kong after a US$4.5 billion listing by Chinese brokerage firm HTSC, better known as Huatai Securities, in May, and a US$4.1 billion IPO by GF Securities Co. in March.

To read the full article, click here. 



French BrokerDealers In Drivers Seat With Europcar IPO


Brokerdealer.com profiles that Europcar, a French rental car company, said on Monday that it planned to sell 854.5 million euros, or about $963 million, in shares in an initial public offering in Paris this month.

Europcar said it hoped to price its shares between €11.50 and €15 and to begin unrestricted trading on the Euronext exchange on June 26. The company announced in May that it was seeking permission from regulators to pursue an I.P.O.

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Europcar expects to sell shares to institutional investors internationally and in France, and to retail investors in France. If there is sufficient interest, a minimum of 10 percent of the offering will be sold to retail investors, it said.

Deutsche Bank AG, Goldman Sachs Group Inc. and Societe Generale SA are among the banks managing the IPO.

To find out more, read this Bloomberg article.