First Republic Bank, the former Bank of America Corp. unit backed by Colony Capital LLC and General Atlantic LLC, advanced 9.5 percent after raising $281 million in its U.S. initial public offering.
The San Francisco-based private bank gained $2.42 to $27.92 in New York Stock Exchange trading. The company sold 11 million shares for $25.50 apiece after offering them at $24 to $27, according to a statement. Separately, Beijing-based Bona Film Group Ltd., China’s largest privately owned film distributor, posted the biggest first-day drop in three years for a U.S. IPO.
First Republic’s sale was the second this week backed by private equity funds after buyout firms reduced their U.S. IPOs by 17 percent on average this year, data compiled by Bloomberg show. Targa Resources Corp., the Houston-based natural-gas pipeline company controlled by Warburg Pincus LLC, increased the size of its offering by 25 percent on Dec. 6.
“It’s a positive note the fact that it was actually able to price in the middle of the range,” said Josef Schuster, the Chicago-based founder of IPOX Capital Management LLC, which oversees $3 billion. “Not every private equity-backed deal may be a bad deal.”
Bank of America in Charlotte, North Carolina, and Morgan Stanley and JPMorgan Chase & Co. of New York arranged First Republic’s offering, the prospectus showed.
Private Equity Profits
Colony Capital and General Atlantic led a group that invested $1.86 billion of equity capital in First Republic at midyear. They each planned to sell about 1.67 million shares in the IPO and retain 19.8 percent stakes, according to the filing.
The private equity firms bought their shares for an average of $15 each, giving them a profit of about 70 percent from the shares they sold in the IPO, according to the prospectus and data compiled by Bloomberg.
Bank of America, which received $45 billion in U.S. rescue funds, inherited First Republic when it acquired Merrill Lynch & Co. in 2008 and then opted to sell the bank after determining it wasn’t a core business. First Republic has been profitable for 25 years since its founding, according to its filings.
The initial sales by First Republic and Targa Resources were the first backed by private equity firms since Las Vegas- based Harrah’s Entertainment Inc. pulled its $531 million offering last month, data compiled by Bloomberg show.
SemiLEDs, Bona Film
SemiLEDs Corp., the manufacturer of light emitting diode chips in Hsinchu, Taiwan, sold 5.25 million shares at $17 each yesterday after offering them for $14.50 to $16.50 apiece, data compiled by Bloomberg show. The stock surged 52 percent to $25.76 in Nasdaq Stock Market trading.
Bona Film fell 22 percent to $6.60, the biggest first-day retreat on U.S. exchanges since Beijing-based Agria Corp. slid 27 percent on Nov. 7, 2007, data compiled by Bloomberg show.
The company sold 11.7 million American depositary receipts for $8.50 each after offering them for $7 to $9, according to data compiled by Bloomberg and an SEC filing. The offering was the third of five Chinese IPOs scheduled in New York this week, according to data compiled by Bloomberg.
Youku.com Inc. of Beijing, China’s largest online video company, yesterday posted the biggest gain for a U.S. IPO since Beijing-based Baidu Inc. five years ago. E-Commerce China Dangdang Inc. in Beijing, the nation’s biggest book retailer, almost doubled in its New York debut yesterday.
“Yesterday’s deals are in a sweet spot, the center of attention nowadays,” IPOX’s Schuster said. Bona is “a film company. They do distribution. It’s more like an old economy theme priced at a new economy type of value, and there’s a lack of enthusiasm toward the value,” he said.
Lentuo International Inc. and Sky-mobi Ltd. will attempt to sell shares today, according to data compiled by Bloomberg. Lentuo is based in Beijing, while Sky-mobi is located in Hangzhou city in China’s Zhejiang province.
The sales scheduled for this week would bring the number of mainland IPOs in New York to 39 this year, surpassing the record of 37 in 2007, the data show.