Intelsat IPO disappoints market

When the books were closed at the end of April 17, it was revealed that Intelsat’s Initial Public Offering was very poorly supported. Even though the price range set by the company was for shares to be bought in the $21-$25 range, the actual price achieved was a disappointing $18.

Intelsat sold just 19.3 million shares (originally 21.7 million were on offer), and thus raised $347.8 million in terms of Common Shares, more or less enough to buy one satellite. When added to the sale of three million $50-a-share Series A preferred stock the total amount raised, after costs, will total some $471.7 million. The cash raised will actually be used to pay down debt. A year ago, Intelsat’s president talked about raising as much as $1.75 billion in the stock offering.

The stock started trading April 18 on the New York Stock Exchange and immediately fell back 4.5 per cent to $17.19 and as low as $16.90 at one point. However, that price recovered and “I” closed the day at $19.25. Giles Thorne, an analyst at Jefferies LLC in London, quoted by Bloomberg said Intelsat is “not growing as fast as its European peers and at the same time is highly levered. Compared to its peers in Europe Intelsat is not that compelling.”

 

 

 

Intelsat staffers said the IPO took place in a challenging week in the US markets, but that this was a major “next step” for the company.

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