Summit Hotel Properties Inc., the real estate investment trust that owns upscale and mid-market hotels in the U.S., raised $254 million in an initial public offering after reducing the size by 12 percent.
The Sioux Falls, South Dakota-based REIT sold 26 million shares at $9.75 apiece after offering 23 million at $10.50 to $12.50 each, according to a filing with the Securities and Exchange Commission and data compiled by Bloomberg.
Summit Hotel is one of 11 companies trying to raise $3.2 billion after two deals were postponed this week and only six of 12 scheduled offerings priced in the five days through Feb. 4, according to data compiled by Bloomberg. With the Standard & Poor’s 500 Index yesterday closing at its highest level since June 2008, some investors may be concerned about a possible correction, said Jason Brady, a managing director at Thornburg Investment Management.
“IPO volumes are pretty well correlated with folks’ desire to take risk, and that’s probably come off somewhat,” said Brady, whose Santa Fe, New Mexico-based firm oversees $77 billion. “It would seem people are somewhat cautious” about a possible correction in stocks.
Summit Hotel fell 0.6 percent to close at $9.69, after advancing as much as 2.3 percent in trading on the New York Stock Exchange. Deutsche Bank AG of Frankfurt, Robert W. Baird & Co. in Milwaukee and Toronto-based Royal Bank of Canada led Summit Inn’s offering.
The hotel owner also planned a private placement of as much as $12.5 million in stock to Denham, England-based InterContinental Hotels Group Plc, the filing said. Summit Hotel’s 65 hotels in 19 states use brands owned by InterContinental, Hilton Worldwide Inc. of Mclean, Virginia, and Bethesda, Maryland-based Marriott International Inc., it said.
Summit Hotel reported a net loss of $700,000 in the first nine months of 2010 and a further $15 million in 2009 after booking positive net income for the previous four years, the SEC filing showed.
Gevo Inc. advanced as much as 16.9 percent after the developer of biofuels backed by billionaires Vinod Khosla and Richard Branson raised $107 million yesterday in its U.S. IPO, pricing its shares at the high end of the forecast range.
The Englewood, Colorado-based company sold 7.15 million shares at $15 each after offering them at $13 to $15 apiece, according to data compiled by Bloomberg. Proceeds will be used to buy and equip ethanol production facilities, the filing said.
Gevo, 38 percent-owned by Khosla Ventures, the Menlo Park, California-based firm founded by Khosla, has had net losses totaling about $77 million since 2005, according to its SEC filing. Virgin Green Fund, backed by Branson, owns 15 percent of Gevo, the filing shows. Gevo sold all the shares in the offering.
AcelRx Pharmaceuticals Inc., the developer of treatment therapies for post-operative pain, slashed the amount it plans to raise in its IPO this week by 51 percent, according to an SEC filing and data compiled by Bloomberg.
The Redwood City, California-based company now plans to sell 8 million shares at $5 apiece after previously offering 5.8 million shares for as much as $14, according to the filing.
AcelRx’s offering is being arranged by Minneapolis-based Piper Jaffray Cos.
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