IPO Focus: Ticketmaster's Name Likely To Boost Its Offering 10/29/1996 Dow Jones News Service (Copyright (c) 1996, Dow Jones & Company,
Inc.)
NEW YORK (Dow Jones)--Individual investors are likely to line up for shares of Ticketmaster Group Inc.'s planned initial public offering, but at least
one analyst is skeptical about the company's long-term prospects.
'The deal doesn't impress me,' said David Menlow, president of the IPO Financial Network in Springfield, N.J. 'The financials don't show promise
down the road. I think the deal will go to a premium, but that's based on the well-known name rather than the fundamentals of the company.'
Los Angeles-based Ticketmaster, 80%-owned by Microsoft Corp. (MSFT) co-founder Paul Allen, plans to offer 7.25 million shares at $13 to $15
each. Existing shareholders paid an average of $11.18 a share.
The planned IPO would give Ticketmaster a market capitalization of $316.4 million, assuming shares are priced at $14 each. There will be about 22.6
million shares outstanding after the deal, according to the
amended registration statement filed with the Securities and Exchange Commission.
The company said it's the leading provider of automated ticketing services in the U.S. with more than 3,500 clients, including 73 professional sports
teams. Ticketmaster sold 53.1 million tickets in fiscal 1996 and 30.4 million in the first half of fiscal 1997.
For the fiscal year ended Jan. 31, the company reported total pro-forma revenue of $223.7 million and a loss of $4.6 million. The company warned
that it has 'incurred significant amounts of debt and is highly
leveraged.' At July 31, consolidated long-term debt totaled $183.6 million. Ticketmaster plans to use net proceeds from the IPO to repay debt and for
general corporate purposes.
Steven Samblis , president of Samblis Financial Corp. in Longwood, Fla., said name recognition and image are often the key to a successful offering.
'The reality of the new-issues market is that a deal can involve a lousy company, but if people know its name and think it's good, they'll buy and the
stock will go up,' he said.
(MORE) DOW JONES NEWS 10-29-96
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