Will Bear Deal Delay Visa Offering?
From today's New York Times:
Will JPMorgan Chase’s stunning $2 a share deal to buy Bear Stearns put a crimp in Visa’s plans to go public this week in what is expected to be the nation’s biggest initial public offering?
The answer is yes in the opinion of a financial blog, The Disciplined Investor, which says that “Visa will assuredly end up postponing their IPO.”
The blog notes that the $17 billion I.P.O. is planned for day after the Federal Reserve holds its policy meeting. A meeting, it says, that will be closely watched and may wreak more havoc on the markets and investors speculate about how much worse things can actually get.
Furthermore, it says, JPMorgan, which along with Goldman Sachs is leading the offering, may have its hands full swallowing its troubled rival.
“Unless the lead underwriters - JP Morgan and Goldman Sachs - are completely deranged and masochistic, Tuesday is not going to be the best day to attempt to bring history’s largest IPO to market,” says the blog.
“In addition, it is possible that JPM will have its hands full with a small integration matter”, the blog notes, tongue-in-cheek.
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The Wall Street Journal, however, doesn’t seem to think Visa is hostage to deranged investment banks or about to can its IPO, reporting Monday that Visa’s IPO plan is on track this week and adding that while the largest-ever US IPO is expected to be a hit with investors, it “isn’t likely to turn a moribund issuance market into a hotbed of activity”.
The offering, which is scheduled to begin trading Wednesday on the New York Stock Exchange under the symbol V, has been lauded both for the strength of the industry it operates in as well as the attractive price tag affixed to the shares. Although underwriters could boost the proposed price this week if there is strong demand, analysts unaffiliated with the deal say the current range of $37 to $42 is a bargain.
And The Financial Times’ Alphaville blog notes that Disciplined Investor is not alone.
It cites Waytoohigh.com, a self-described credit card interchange report, which says that “Based on the dire financial news reports, stock market turmoil - from Bear Stearns to soaring gold and other commodity prices and non-stop Federal Reserve interventions - we are thinking that the Visa IPO will not happen this week, or any time in the near future”