"BackWeb will be the premiere deal of the week and then drkoop.com is a good follower," -- See Below:
NEW YORK, June 7 (Reuters) - Investors in the initial public offerings market will be able to rest their Internet-wary eyes on non-Internet related deals from convenience store chain operator Pantry and shoemaker Skechers when they debut Tuesday.
Recent gyrations among Internet stocks has erased a chunk of Internet IPOs' gains in the aftermarket, burning some of the investors that clamored for the Internet deals.
The recent move, however, has spelled good news for non-Internet related deals, which hope that investors will take a second look at them now that ".com" no longer guarantees 100 to 200 percent gains.
Pantry plans to offer 6.25 million shares in a range of $15 to $17 through Merrill Lynch while Skechers will offer 10.71 million shares in a range of $13 to $15 through lead underwriter BT Alex Brown.
Of the two deals, Skechers, which makes contemporary and active footwear, is seen as the hot one even though recent consolidation in the shoe industry has created some uneasiness.
"Skechers is very much the 'it' brand at the moment. It's very hot, very trendy," said Jennifer McBrien, an analyst at Renaissance Capital Corp.'s IPO Plus Aftermarket Fund . "A lot of their management is from LA Gear so they have experience, especially with a hot brand. It may have some appeal because it is not (an) Internet deal."
Pantry is the third largest independently owned convenience store chain in the country and it has $1.7 billion in revenues but a net loss. It will offer 34.5 percent of its company to the public in the offering.
After the offering, affiliated investment funds of Freeman Spogli will own 9.35 million shares while Chase Capital and its affiliates will own about 2.3 million shares, or 12.7% of the outstanding shares.
Although non-Internet related deals will get a chance this week, the menu of offerings is not void of Internet deals. Internet software firm BackWeb Technologies, whose expected price range for its 5.5 million IPO was raised to $10 to $12, from $8 to $10, is seen as a hot deal, given its presence in the Internet infrastructure arena.
Former U.S. Surgeon General C. Everett Koop's drkoop.com, an online healthcare network, plans to offer 9.4 million shares in a range of $7 to $9 through lead underwriter Bear Stearns.
The site, which offers eight interactive communities dispensing information on areas such as addiction and kids' health, has several pacts including a recent agreement with Yahoo Inc..
"The attraction is Koop, but they are very young and very unproven. It is a big market, but part of it is having the widespread appeal. They will have to show that they can market themselves well," said Steve Lacey, of the IPO Reporter. "BackWeb will be the premiere deal of the week and then drkoop.com is a good follower," said Vincent Slavin, an analyst at Cantor Fitzgerald. "Skechers is not a tech deal so it is not as exciting out of the gate, but it is solid -- something people will keep."
((--Reshma Kapadia, Wall Street Desk (212) 859-1730)) |
