May 10 (Bloomberg) -- Kosmos Energy Ltd., the oil and gas exploration and production company owned by Warburg Pincus LLC and Blackstone Group LP, is seeking to raise as much as $540 million today in an initial public offering after oil gained 48 percent in a year to a 32-month high.
Kosmos, based in Hamilton, Bermuda, is offering 30 million shares at $16 to $18 each, according to a filing with the U.S. Securities and Exchange Commission. The company has about a 23 percent stake in Ghana’s Jubilee oilfield, the biggest offshore discovery in West Africa in a decade, according to the prospectus.
“The price of oil has certainly gone higher, and that improves the perceived value of the company,” said Hugh Johnson, who oversees about $2 billion as chairman of Albany, New York-based Hugh Johnson Advisors LLC. “Private equity folks try to be good at the timing of their exit, and I think they’re trying to do that now.”
Warburg and Blackstone may be capitalizing on the climb in crude oil and a recent spate of private equity-backed IPOs. While crude dipped amid a recent sell-off in commodities, it has rallied since its December 2008 low, increasing more than threefold as of April 11. Companies owned by leveraged buyout firms raised about $19.5 billion worldwide through IPOs in the first quarter, more than half their total for all of 2010, data compiled by Bloomberg and London-based Preqin Ltd. show.
Kosmos is one of at least 20 companies worldwide attempting to raise at least $2.85 billion in IPOs this week, according to data compiled by Bloomberg. OAO Russian Helicopters, which had been scheduled to raise as much as $500 million in a London offering, postponed the deal, according to the London Stock Exchange.
There are 10 offerings scheduled to price in the U.S., the most since December, Bloomberg data show. Jiayuan.com International Ltd., the Beijing-based online-dating company, is seeking to raise $85.2 million and FriendFinder Networks Inc., the publisher of Penthouse magazine, aims to raise as much as $60 million.
Kosmos agreed in 2009 to sell assets including the Jubilee field to Exxon Mobil Corp. for an enterprise value of about $4 billion, according to a person with knowledge of the situation. Exxon terminated the agreement last year.
Since 2009, Kosmos has further developed the Jubilee project and made more offshore discoveries in Ghana, according to the prospectus. Jubilee is expected to yield 120,000 barrels of oil per day in the third quarter of this year. The Jubilee field started production in November, and the company began to receive revenue from its share of the output early this year.
Brent crude futures traded in London reached $127.02 on April 11, the highest since August 2008. They tumbled 13 percent last week as the death of Osama bin Laden and a strengthening dollar triggered a five-day rout in commodity prices.
“The challenge for any IPO in the energy sector right now is that the sector has recently fallen out of favor, and the pricing will be challenged by that,” said Alan Gayle, senior investment strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees $48 billion. “Trying to issue an IPO in the face of a market that’s going the other way just represents one more hurdle.”
The biggest U.S. energy IPO this year was Kinder Morgan Inc., which raised $3.29 billion including an overallotment option and was the largest since Conoco Inc.’s $4.4 billion offering in 1998. The Houston-based energy-pipeline company’s shares have dropped 4.9 percent since its February IPO.
Warburg and Blackstone, both based in New York, aren’t selling shares in the IPO. Kosmos, which was founded in 2003 and started to generate revenue this year, will use proceeds to fund exploration and project development in Ghana and Cameroon, the company said. Citigroup Inc., based in New York, Barclays Plc of London and Credit Suisse Group AG of Zurich are leading the offering. The shares will trade on the New York Stock Exchange under the ticker KOS.
In other IPO news, Jiayuan.com joins Beijing-based Phoenix New Media Ltd., the TV and mobile-news provider, and China Zenix Auto International Ltd., the wheel manufacturer based in Zhangzhou, in selling shares in the U.S.
Jiayuan.com is offering 7.1 million American depositary receipts at $10 to $12 apiece. Phoenix New Media may raise as much as $178.75 million selling 13 million ADRs at $12 to $14 each, and China Zenix may raise as much as $148.4 million.
FriendFinder, the Boca Raton, Florida-based operator of websites including AdultFriendFinder.com and Cams.com, is attempting to sell 5 million shares for $10 to $12 each. The company postponed an IPO last year that sought to raise as much as $240 million, and in 2008 announced plans for an offering of as much as $460 million.
Schottenstein Realty Trust Inc., the Columbus, Ohio-based real estate investment trust, may raise as much as $426.67 million this week, and RLJ Lodging Trust, the Bethesda, Maryland-based REIT, may raise as much as $577.5 million.
========================================================= DEALS TO WATCH THIS WEEK: Company No. of Shares Price Range Date Expected or ADRs Kosmos Energy 30 million $16 to $18 May 10 Jiayuan.com 7.1 million $10 to $12 May 10 FriendFinder 5 million $10 to $12 May 10 ==========================================================
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