Another "Solid" IPO In China.......

I think this kind of number is called "solid" in China.......

Das nennt man nach chinesischen Maßstäben wohl "solide".....

China Shipping Stock Sale Oversubscribed, People Say
Dec. 6 (Bloomberg) -- China Shipping Container Lines Co., Asia's second-largest container line, attracted 2.6 trillion yuan ($351 billion) worth of orders for its Shanghai stock sale, said three people familiar with the offering.

The Shanghai-based shipping line has said it aims to sell as much as 15.5 billion yuan in stock. The people asked not to be identified before an official announcement.

The sale drew bids for about 170 times the stock on offer, as demand for new shares withstands the worst monthly fall in Shanghai's stock market in at least 12 years. The proceeds will help China Shipping expand its fleet and add routes to compete with larger rival China Cosco Holdings Ltd.

``In the current volatile market, investors prefer new share sales as they are seen as less risky,'' said Roslyn Ji, an analyst at Core Pacific-Yamaichi International Ltd. in Hong Kong.

``Large companies named after `China' are particularly favored.''

China Railway Group Ltd., Asia's biggest construction company, drew 150 times the stock on offer for its 22.4 billion yuan Shanghai share sale last month. PetroChina Co.'s October sale had $441 billion of bids, or about 50 times the stock on offer. The company became the world's largest by market capitalization after the sale.

Plundered Fortress / pump and dump at its best / hall of fame !

make sure you read this one. to me this feels like the mania in 1999/2000. it is just unbelievable that this ipo from fortress was such a success. it´s a wonder that they have the to file for an ipo......congratulations to the top 5 that made a fortune. but the rational from buyers of this modern "pets.com" is beyond me.........

i think they will someday wake up and see/feel like "emperor´s with new cloth"

das teil kann ich jedem wärmstens empfehlen. wenn das keine erinnerungen an das jahr 1999/2000 hervorruft.....ein wunder das dieses ipo ein erfolg geworden ist. alle achtung das die überghaupt den mumm hatten so etwas als ipo zu wagen.....glückwunsch an die 5 top leute die mrd gemacht haben. aber was die käufer dieser modernen "pets.com" denken entzieht sich meiner vorstellungskraft.

erinnert mich stark an "des kaisers neue kleider"......

thanks to txchick57 http://thehousingbubbleblog.com/?p=2413#comments and brett arends from http://www.thestreet.com/ ( looks there is at least one smart writer besides kass)

When it comes to hedge fund company Fortress Investments , one thing's for sure: Chief executive Wesley Edens and the other principals didn't get where they are today by leaving money on the table.

Fortress went public two weeks ago and doubled in price on the first day. But what investors may not realize is that the five principals pretty much stripped the company clean just before the IPO.

I don't mean they cleaned up the balance sheet. I mean they cleaned out the vault. Page five of the prospectus shows they withdrew $446.9 million from the company in "cash distributions" last year.

Plus another $409 million in January.

They collected a further $888 million on Jan. 17 by selling a small stake to Japanese bank Nomura. Oh yes, and they pocketed a further $22.8 million in the final weeks before this month's IPO.

A table buried on page 94 of the prospectus shows the remarkable facts. ( at least they have printed it in english...../immerhin ist das prospekt in english....)

Between January 2005 and this month's IPO, the five principals of Fortress -- Edens, Peter Briger, Robert Kauffman, Randal Nardone and Michael Novogratz -- cashed out $1.04 billion. "That does not include the Nomura transaction," adds company spokeswoman Lilly Donohue.

Total withdrawn in the two years before they took it public: $1.9 billion. Most of that was in the final few months.

This isn't just every penny that the company earned over that period -- it's a lot more.

By the time the owners opened the doors to the investing public this month, the company wasn't just out of cash -- it had negative book value. Liabilities actually exceeded assets by $507 million. / compared to fortress pets.com looked like a solid investment... :-) i know that this is not comparing apples to apples but i couldn´t resist........ damit sieht sogar pets.com rückblickend solide aus....:-) mir ist schon klar das man hier äpfel mit birnen vergleicht. konnte der versuchung aber nicht widersetehn.....

In other words, the owners didn't just clean out the vault. They left a pile of IOUs -- and used the new money to balance the books.

When the overallotment is finally calculated, ordinary investors will probably have put in $685 million.

Let's be clear. Edens and his partners have done nothing illegal. Let's even go as far as saying they did nothing unethical.

They sold a stake in the company to the investing public on an "as is" basis. And all this was disclosed in the prospectus. (So, too, by the way, is the company helicopter).

Caveat emptor.

....The emptying of the vault isn't the only interesting thing the prospectus turns up. There are, for example, various obligations that the newly public company still owes to the five principals.

For example, Fortress Investments has indemnified them for up to $283 million in investment management fees they may not have earned.

Those are performance fees that the principals have already pocketed from Fortress' private-equity and hedge funds, based on forecast returns. If the funds fall short of those forecasts, the principals may have to give some or all of that money back.

Now, thanks to the IPO, the money will come from the public company.

The obligations don't end there.

Even after the IPO, the principals will still own somewhere between 68% and 78% of the business, in the form of special units in the operating company. When the principals exchange these units in the future for ordinary shares, Fortress ought to get a tax benefit. The new shares, after all, will have a much higher tax-cost basis.

But according to the prospectus, whenever an exchange occurs, Fortress Investments has to hand over 85% of any tax benefit to the principal.

In cash.

As no one knows the value that shares will have when this occurs, you can't put a number on that obligation right now. But a fascinating footnote reveals just how big it may be.

The Nomura transaction alone, on a pro forma basis, raised the cost basis by $945 million. And that involved exchanging units for just 55 million new shares.

The amount of equity still to be exchanged: six times as much.

All of which is great news for people at the top of the company. The five principals own stock that is today valued at around $10 billion. There's another 51 million shares being handed out to key employees in the IPO. Value today: another $1.6 billion.

thanks to ggg bear for this link "Fortress execs hit $10 billion jackpot" http://money.cnn.com/2007/02/09/markets/ipo/fortress/index.htm

Should You Buy When Private Equity Sells? / NYT

who will buy this stuff? the hertz ipo in 2006 with $1.3 billion was one of the largest exits in the us last year. and almost 50% of all ipo´s where exits from pe.
sounds good..... but when you compare this just to the biggest deals done recently (eop and hca) with combined more than $60 billion one can imagine that it will be difficult to unload billions of stock in the next years to come.

this sums it up: As the manager of a traditional fund puts it:
“I fail to understand why it's a good idea for clients to take money away from me and give it to private-equity groups who charge higher fees for buying quoted shares at a 20% premium.” (and you should buy at even higher prices with higher debt etc. at an ipo?)

thanks to http://www.itulip.com/

wer wird pe den ganzen kram wieder abkaufen? das hertz ipo in den usa war mit 1,3 mrd$ in 2006 einer der größten pe ausstiege. 50% aller ipo´s waren von pe.

soweit so gut.....wenn man aber alleine die letzten 2 megadeals (eop und hca) mit zusammen über 60 mrd$ nimmt kann man erahnen das es in den nächsten jahren schwerer wird den ausstieg zu proben.

PRIVATE equity firms seem to be snapping up everything in sight — but they’re also selling stakes in many of the companies they have acquired.





Last year, almost half of the more than 150 initial public offerings in the United States involved such sales by buyout firms, a higher share than ever before ( see my opening comment..)

Generally, however, the returns were nothing to brag about. On average, shares in such sales, known as buyout I.P.O.’s, performed far worse last year than both the overall market and other companies that made their public debuts....

Indeed, four of the biggest, mostly closely followed sales — involving shares of Sealy (backed by Kohlberg Kravis Roberts), Warner Chilcott (Bain Capital), Magellan Midstream Holdings (the Carlyle Group) and Goodman Global (Apollo Management) — dropped sharply after they went public and have only recently recovered to the vicinity of their initial trading levels.


Hertz Global Holdings, which has gained substantially since its public offering in November, may be more the exception than the rule. .....The public sale represented 28 percent of the shares.

that´s the result that htz has to lower the ipo range. they wanted to sell at 16-18$ and had to sell at 15$. pe bought this think only 11 month ago. flipping!http://immobilienblasen.blogspot.com/2006/11/another-private-equity-pos-ipo-hertz.html

Since buying Hertz, the Clayton Dubilier ownership group has raised debt by $3.4 billion and shaved cash and cash equivalents almost in half.

The group also arranged new debt and refinanced existing debt at higher interest rates. Total debt increased 32 percent to $14 billion. Interest expense almost doubled to $672.6 million. Betsy Snyder, a fixed-income analyst with Standard & Poor's in New York, said the company paid higher rates on the new debt. ( what a refinance.....)



Still, automatically ruling out any investment in buyout I.P.O.’s may prove short-sighted. .....beating the market over the long run. In one study, .. found that buyout offerings from 1980 to 2002 returned 43 percent, on ....., versus just 26 percent for the Standard & Poor’s 500-stock index...( well back in the old days they bought at reasonable prices. the latest deals look very risky / dieser erfolge basieren auf günstigen einstiegkursen. kann man von den letzten deals nicht unbedingt sagen...)

The more involved the firm has been, the more likely that the I.P.O.’s returns will beat the market, he said. With that in mind, investors should consider how long a private equity firm owned a company before taking it public. Many private equity firms have recently been flipping their holdings — acquiring a company by using mainly borrowed money, then doing little more than bringing the company to market as quickly as possible. This can result in fat profits for the private equity firm, with the newly marketed company struggling under a mountain of debt.

The study by Professor Lerner and Mr. Cao showed that companies bought by private equity firms and then sold to the public in a year or less underperformed the market by 5 percent over three years. Sealy, Warner Chilcott, Magellan Midstream Holdings and Goodman were all relatively short-term holdings before the private equity firms brought them to market — roughly two years, compared with an average of seven for all the companies in the study.

The study also found an apparent link between the size of the stake sold by buyout firms and the shares’ subsequent performance. When the firms unloaded a smaller part of their stakes — an average of 9 percent — in taking private companies public, the shares performed 30 percent better, on average, than the S.& P., the study found. When the owners sold a larger slice — an average of 23 percent of their stakes — the shares’ return was generally no better than the index’s, the study found.

read more on some of the dirty secrects from pe from business week / mehr von bw zu pe http://immobilienblasen.blogspot.com/2006/10/private-equity-excess-business-week.html

Also important was what the private equity firms did with the money raised in the I.P.O.’s. If they used the cash to pay off debt, Mr. Cao and Professor Lerner found, the stocks would gain 13 percentage points more, on average, than if they used the funds to pay the owners large dividends and advisory fees for their stewardship. ........

Robert Napoli, an analyst at Piper Jaffray, said he likes the prospects of another company, Clayton Holdings, a mortgage services business with a blue-chip Wall Street clientele. Clayton’s revenue and market share rose after its I.P.O. last March, but its earnings fell unexpectedly and the stock plummeted. Both earnings and the share price have since recovered. .....

great call......... thats what new century was also saying. our maketshare has grown... but at what cost. maybe robert should read the latest news on the mortgage business...../ toll. marktantiel u jeden preis. haben einige der potentiellen pleitekandidaten wie new century auch abgefeiert

another private equity pos ipo "hertz"

pos is probably a bit harsch. but i like to know what are buyers of this ipo thinking. they buy a debt burdened company with almost no safetynet or marin of error when things slow down or rates or riskpremiums are going up.

"stück dreck" ist sicher zu hart. aber ich frage mich wirklich was die käufer des ipo denken. sie bekommen eine kreditüberladene firma mit null sicherheitsnetz wenn die wirtschaft nachläßt oder sich kreditbedingungen verteuern (zinsen oder risikoaufschläge)

from http://immobilienblasen.blogspot.com/2006/10/buyout-firms-punish-bondholders-by.html#links
Hertz Bonds
The debt of companies owned by buyout firms has risen to the equivalent to 5.4 times their cash flow, the most ever, S&P says. ...Payouts to buyout firms were partly to blame for the lagging performance of bonds sold by Hertz Corp., Brake Bros Plc and Impress Holdings BV.

Their bonds trailed the 8 percent average return this year for securities with junk ratings, costing holders about $70 million in total,

Hertz pummeled bondholders after the rental-car company said in September 2005 it was being acquired for $15 billion. Its $175 million of 7.625 percent notes due 2012 lost as much as 10 percent of their face value. S&P cut the ratings on the Park Ridge, New Jersey-based company to BB- from BBB-.

more on private equity http://immobilienblasen.blogspot.com/2006/11/leverage-buy-outs-lbos-private-equity.html#links,http://immobilienblasen.blogspot.com/search?q=private+equity

Hertz IPO Falls Short as Some Investors Balk Over Owner Payout http://tinyurl.com/ygkjfy

Nov. 16 (Bloomberg) -- Hertz Global Holdings Inc.'s initial share sale raised less than the company planned as some investors were unwilling to reward owners who more than doubled their investment.

Hertz, the world's largest rental-car company, raised $1.32 billion by selling 88.2 million shares for $15 each, the company said today in a statement. Park Ridge, New Jersey-based Hertz intended to sell as much as $1.59 billion of shares at $16 to $18 each.

Owners Clayton Dubilier & Rice Inc., Carlyle Group and Merrill Lynch & Co., put up $2.3 billion of the $15 billion they paid for Hertz in December. The firms rattled potential investors by adding debt, raising the company's interest costs and pushing down profit.

The owners have received a dividend of $1 billion and plan to get another payout of about $420 million. Coupled with the group's remaining 72 percent stake valued at $3.46 billion, the owners more than doubled their investment. (since december 2005!!!)

The share sale represented about 28 percent of the company. ......, have an additional 13.2 million shares available to sell.

Since buying Hertz, the Clayton Dubilier ownership group has raised debt by $3.4 billion and shaved cash and cash equivalents almost in half.

In a leveraged buyout, the acquirer borrows most of the purchase price and uses the target company's cash flow to repay lenders.

The ownership group bought Hertz from Ford Motor Co., the second-largest U.S. automaker, in December for $15 billion.

Net Income Falls
For the nine months through Sept. 30, Hertz's net income slumped 77 percent to $76.1 million, or 33 cents a share, from $325.3 million, or $1.42, a year earlier. Sales rose 7.8 percent to $6.07 billion,

The group also arranged new debt and refinanced existing debt at higher interest rates. Total debt increased 32 percent to $14 billion. Interest expense almost doubled to $672.6 million. Betsy Snyder, a fixed-income analyst with Standard & Poor's in New York, said the company paid higher rates on the new debt. ( what a refinance.....)