Blackstone moves up IPO date
By: Aaron Elstein
Published: June 19, 2007
Blackstone Group plans to go public earlier than initially planned, in an effort to get its deal done before investors and Congress raise too many more questions about it.
The Manhattan-based private equity giant now expects to price its widely-anticipated initial public offering on Thursday night, according to the Web site of Morgan Stanley, its lead investment banker on the deal. The calendar change suggests a growing sense of urgency to complete the IPO, which had been scheduled for next week.
Last week, key members of Congress said they would explore raising taxes on private equity firms, reducing their profitability. In effect, Congress would switch to taxing these firms’ profits as ordinary income, rather than at the lower capital-gains rate.
“It would represent a huge change,” observed David N. Deutsch, chief executive at investment bank David N. Deutsch & Co., at a breakfast Tuesday sponsored by Crain’s.
While the outlook for Blackstone’s profitability is in some doubt, investor interest for its IPO still seems robust. The firm, which has hired no fewer than 17 Wall Street banks to market its IPO, expects to price its deal between $29 and $31 per partnership unit, and that price range hasn’t change since last week’s news from Washington, D.C.
The firm still expects to raise about $4.8 billion and if the deal gets done at those terms, 22-year-old Blackstone would have a market value of about $30 billion, or halfway between Lehman Brothers and Bear Stearns.
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