Blackstone Top Ticks Market Again, As Second IPO Pulled
The IPO window has closed. Just like in 2007, Blackstone once again times the exit opportunity perfectly (too bad you can't IPO twice), while firms like AEI and now Aviv REIT end up having to pull their initial public offerings. And this one happens to be the triple whammy of not just an IPO, and not just a REIT, but one lead managed by REIT reverse-interest expert (and short interest terminator) Bank of Countrywide Lynch. If Merrill was unable to find enough interest, then look out below.
The real-estate investment trust that operates nursing
homes in 21 U.S. states pulled its 16.6 million share IPO after
seeking $17 to $19 apiece, according to data compiled by
Bloomberg. The company planned to use proceeds to repay debt and
redeem stakes in an operating unit held by Chairman and Chief
Executive Officer Craig Bernfield and co-founder Zev Karkomi’s
estate, according a regulatory filing.
“It wasn’t meeting investors’ expectations in pricing,”
said Joseph Betlej, vice president of St. Paul, Minnesota-based
Advantus Capital Management, which oversees $18 billion. Betlej
said he was approached about participating in the deal.
What a difference a month makes. It was one short month ago that Blackstone raised over $7 billion selling comparable crap to witless idiots:
While sellers such as Blackstone Group LP reaped $7.4
billion in September and October unloading shares into a stock-
market rally that’s lifted the Standard & Poor’s 500 Index by
more than 50 percent from its 12-year low in March, profits for
IPO buyers have deteriorated as the stock measure fell for the
first time in eight months.
We wish the Merrill REIT underwriting juggernaut better IPO luck in the future after this dismal failure. And if all else fails, there are still at least 20 utterly horrendous REITs that Merrill should have a direct line to Cohen and Steers to presell at least 80% of the offering. However, with short levels a shadow of their March selves, at this point in time a follow offering would likely promptly result in a 50% drop in any given stock price. Which we think the principals of C&S would likely not be too happy with at this very sensitive time.