U.S. initial public offerings are set to raise the most in six months in November as Delphi Automotive Plc and Angie’s List Inc. take advantage of the biggest rebound in the Standard & Poor’s 500 Index in 20 years.
IPOs may raise as much as $3.6 billion, the most since May, when companies sold $6.2 billion in stock, according to data compiled by Bloomberg. At least seven offerings have already been completed this month, with 10 more scheduled, surpassing the total of the three previous months, the data show.
The share sales are trimming the biggest IPO backlog in at least a decade after the S&P 500 rallied 11 percent in October, snapping five months of losses. Angie’s List and Delphi shareholder John Paulson are attempting to follow Groupon Inc.’s Nov. 3 share sale in what could be the busiest week for U.S. IPOs in almost a year. Groupon’s stock has gained 20 percent since going public, while more than 60 percent of companies that completed U.S. sales this year are trading below their initial offer price.
“The market strength we saw in October has acted as an accelerant for the IPO market,” said Lawrence Creatura, a Rochester, New York-based fund manager at Federated Investors Inc., which oversees $350 billion. “Firms are moving quickly to take advantage of the window that’s open this month.”
Angie’s List, Delphi
Angie’s List, the consumer-review website, is seeking to raise as much as $114 million and will use net proceeds for advertising after marketing costs almost doubled during the first nine months of this year. The Indianapolis-based company is offering 8.8 million shares for $11 to $13 apiece tomorrow, according to regulatory filings and data compiled by Bloomberg, and will start trading the next day. The midpoint values the company at $667 million, or about 8.5 times sales in the year through September. Groupon trades at about 12 times sales.
Cheryl Reed, a spokeswoman for Angie’s List, didn’t respond to requests for comment.
Delphi, the former parts unit of General Motors Co., is planning a $578 million IPO tomorrow, selling 24 million shares for $22 to $24 each. More than 80 percent of the shares in that offering are being sold by hedge fund Paulson & Co., which is facing withdrawal orders from clients totaling about $2.4 billion. The midpoint of the range would value Delphi at a discount to rival Visteon Corp.
Lindsey Williams, a spokesman for Troy, Michigan-based Delphi, declined to comment.
Stock Market Swings
The U.S. economy has shown signs of improving since August, when equity markets fell to the lowest level in more than a year and stock volatility surged to the highest since 2009. U.S. gross domestic product grew 2.5 percent last quarter, the fastest pace in a year, and unemployment in October fell to the lowest level in seven months.
The S&P 500 has held on to its gains from last month and is little changed for November. While stock-market swings have stabilized since the beginning of October, the measure of volatility known as the VIX is still about 73 percent above its average level during the first six months of this year.
“There are some positive signs, but we’ll continue to see some choppiness,” said Herb Engert, Ernst & Young LLP’s strategic growth markets leader for the Americas, who advises companies on offerings and mergers and acquisitions. “Companies will continue to look for opportunities as they present themselves.”
LaShou Group Inc., the Chinese operator of a daily-deal website, postponed its initial public offering in the U.S. last week. The Beijing-based company was seeking to raise as much as $80.4 million on the heels of Groupon’s IPO, in which the top daily-deals site raised 30 percent more than it sought.
Europe IPO Drought
In Western Europe, four IPOs have raised less than $60 million this month, compared with 14 deals that raised $2.3 billion in the same period a year earlier, Bloomberg data show.
Companies are putting share sales on hold as the region battles a debt crisis that so far has cost five leaders their jobs, including Italian Prime Minister Silvio Berlusconi. Berlusconi’s fall came after Greek Prime Minister George Papandreou resigned to make way for a coalition government with broader support to implement austerity measures.
In Asia, at least four companies are attempting to raise as much as $1.5 billion in Hong Kong in November, the most since July, data compiled by Bloomberg show. PCCW Ltd., the biggest phone carrier in Hong Kong, plans to list its telecommunications trust at the end of November. At the midpoint of the marketed price range, the proceeds may be HK$10.2 billion ($1.3 billion), according to a regulatory filing.
Zynga, Party City
More companies are planning to seek U.S. listings before the end of the year. Zynga Inc., the maker of online games for Facebook, plans its offering after the U.S. Thanksgiving holiday on Nov. 24, people with knowledge of the situation said this month. The San Francisco-based company filed in July to raise as much as $1 billion in an IPO. Party City Holdings Inc., which filed for a $350 million initial share sale in April, also may complete the IPO by the end of the year, people familiar with the matter said in October.
“I’m encouraged by what I see between now and Thanksgiving,” said Robert McCooey, senior vice president of new listings and capital markets at Nasdaq OMX. “If the markets are receptive to the IPOs that are on the road now, you could see a very robust timeframe for IPOs in the two weeks after Thanksgiving before Christmas.”
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