Groupon Said to Choose Goldman Sachs, Morgan Stanley as IPO Underwriters
Groupon Inc. is close to retaining Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) as the lead underwriters for a planned initial public offering later this year, according to a person familiar with the matter.
The banks, which haven’t yet been formally hired by Groupon, would help handle an IPO that’s likely to take place before October, said the person, who asked not to be named because the talks were private. Groupon has discussed terms that would value the company between $15 billion and $25 billion, two people familiar with the matter said last month.
Groupon, the top provider of online daily discounts, has drawn growing interest from Wall Street since December, when it decided to consider an IPO instead of accepting a $6 billion takeover bid from Google Inc. (GOOG) The company has been holding discussions with Goldman Sachs, Morgan Stanley and other banks since January, including a meeting with Goldman Sachs Chief Executive Officer Lloyd Blankfein at Groupon’s Chicago headquarters, a person familiar said at the time.
Julie Mossler, a spokeswoman for Groupon, declined to comment, as did Andrea Rachman, a spokeswoman for New York-based Goldman Sachs, and Pen Pendleton, a spokesman for Morgan Stanley in New York.
Groupon offers discounts of as much as 90 percent from local businesses, such as restaurants, nail salons and clothing stores. It then keeps a portion of the revenue.
While Groupon leads the daily-deal market, it faces mounting competition from rivals such as LivingSocial. That company recently raised $400 million in funding, two people familiar with the matter said earlier this month.
Groupon’s valuation in private-market trading rose to $5.6 billion in the first quarter of this year, up 19 percent over the fourth quarter of last year, according to New York-based research firm Nyppex LLC. That valuation is based on transactions among institutional investors.
The Wall Street Journal reported earlier that Groupon was expected to hire the banks for its IPO.
To contact the reporters on this story: Douglas MacMillan in San Francisco at dmacmillan3@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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