Power Company IPO's:
Sunday August 27, 1:47 pm Eastern Time
IPO VIEW-Energy firms power into new-issues market
By Denise Duclaux
NEW YORK, Aug 27 (Reuters) - Energy companies are powering their way into the new-issues market as Wall Street sees money to be made off of the skyrocketing electricity and oil prices.
Investors are already homing in on companies that power the booming digital economy. Indeed, shares of O2Micro International Ltd. (NasdaqNM:OIIM - news), which helps laptop computers, cell phones and other devices run longer on battery power, more than doubled from their $9 offering price in their first trading day last week.
Active Power Inc. (NasdaqNM:ACPW - news), whose products are sold to Internet service providers, semiconductor makers and others who need reliable backup power, closed at 47-3/4 on Friday, almost three times its $17 offering price in early August. Power generator company Capstone Turbine Corp. (NasdaqNM:CPST - news), which priced its shares at $16 each in late June, closed at $82 on Friday.
``I see no sign of it letting up, the demand on electricity is just going to go up as people continue to move to areas that are going to require more air conditioning and buy more and more devices,'' said Kenan Pollack, money editor at Hoover's Online.
Energy companies that have long been public are also seeing their shares swell as consumers pay eye-popping bills. AES Corp. (NYSE:AES - news), Calpine Corp. (NYSE:CPN - news), NRG Energy Inc. (NYSE:NRG - news), Exxon Mobil Corp. (NYSE:XOM - news) and Schlumberger Ltd. (NYSE:SLB - news) are all trading near their one-year highs.
``There will be more and more energy companies going public, because the country needs more power and Wall Street is going to support companies that are going to deliver that power,'' said Fred Mutalibov, energy analyst at Southwest Securities.
Indeed, some San Diego consumers have seen their monthly electricity bills triple in recent months as a result of a supply shortage in California, which drove wholesale prices sharply higher. Since California's electricity market was restructured two years ago, power suppliers have not built the new generating facilities that were expected.
``That brings favourable dynamics to the power-generation industry when demand by far outstrips supply,'' Mutalibov said.
Private power companies are already filing their plans for an initial public offering with the Securities and Exchange Commission amid the rosy investor sentiment. TNPC Inc., formed by Enron Corp. (NYSE:ENE - news) to target the rapidly restructuring residential and small commercial markets for electricity and natural gas, could net $370 million in proceeds from its initial public offering first filed in July.
Orion Power Holdings Inc., which has spent $3 billion acquiring power plants over the past two years, filed its plan for an initial public offering in mid-August. Orion, which did not disclose the terms for the offering, plans to use the proceeds for additional power plant acquisitions.
Oil services companies are following suit as the oil market is buoyed by falls in U.S. stockpiles of crude close to 24-year lows. The Saudi-dominated Organisation of the Petroleum Exporting Countries has continued to curb production, raising concerns that the northern hemisphere countries may face a shortfall of heating oil this winter.
Energy Partners Ltd., an oil and natural gas exploration and production company, filed in early August to raise about $125 million in an initial public offering. Westport Resources Corp., an energy company that explores for oil and natural gas, filed in late June to raise as much as $100 million.
Hydril Co., which makes tube connectors and pressure control products for oil and gas drilling and production, said in late July that it hopes to sell 7.5 million shares in a price range of $14 to $18 each.
``Investors have been getting increasingly interested in oil services companies for the last 18 months,'' said James Stone, an analyst at PaineWebber. ``This has been one of the best performing sectors of the stock market...and continues to be a place where people are putting their money to work.''
This week, no companies are scheduled to begin trading as the new-issues market continues its slumber ahead of the Labour Day holiday weekend.
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