The IPO Buzz: Quiet Opening

Yes, gang, an IPO got priced and traded during September’s opening week. It was a SPAC or “blank check” company.
InterAmerican Acquisition Group (OTCBB: IAQGU), a San Diego-based company formed to acquire a business operating in Mexico and/or Latin America, priced 5 million units at $8 each on Sept. 4. It closed the week at $8.05, up a nickel — sharply higher than the underlying stock market.
For the week, the Nasdaq Composite Index lost 1.18 percent, the S&P 500 fell 1.4 percent and the Dow Jones Industrial Average dropped 1.9 percent. And that set the stage for this week’s new-issues calendar.
By Land and By Sea
Bankers have two deals waiting to go public this week. They are Encore Energy Partners LP (NYSE: ENP proposed) and another special purpose acquisition company or SPAC, Seanergy Maritime, of Athens, Greece. This “blank check” company, which was formed to acquire a maritime shipping business, is a carryover from past weeks.
Encore Energy Partners is a Fort Worth, Texas-based limited partnership formed on Feb. 13, 2007, by Encore Acquisition Company (NYSE: EAC) to acquire, exploit and develop oil and natural gas properties and to acquire, own and operate related assets. The limited partnership plans to make quarterly cash distributions of 35 cents or $1.40 per common unit to yield 6.67 percent at the mid-point of its proposed offering price.
Encore Energy plans to price 9 million common units at $20 to $22 each to raise $189 million. The IPO is to start trading on Wednesday, Sept. 12, 2007.
Underwriters: UBS Investment Bank and Lehman Brothers are the joint-lead managers. Acting as co-managers are AG Edwards, Credit Suisse, Raymond James and RBC Capital Markets.
The last limited partnership to make its debut was Quicksilver Gas Services (NYSE: KGS), also based in Fort Worth. Quicksilver Gas is a midstream master limited partnership engaged in the business of gathering and processing natural gas. It priced its IPO of 5 million common units at $21 each on Aug. 6. The partnership plans to make quarterly cash distributions of 30 cents per common unit. On an annual basis, that’s $1.20 per year per common unit -– or a yield 5.7 percent of its offering price. On Sept. 7, 2007, Quicksilver closed at $22.65, UP 7.86 percent from its initial offering price.
Some Labor Day Stats
The earliest post-Labor Day IPO debut occurred last year, according to U.S. Securities and Exchange Commission filings.
New Orient Education & Technology Group (NYSE: EDU), a Beijing-based provider of educational programs, services and products, priced its IPO of 7.5 million shares at $15 each on Sept. 6, 2006. The IPO closed its opening day at $20.88. A year later, on Sept. 7, 2007, New Orient’s stock ended at $53.93 — UP 259.5 percent from its IPO price.
At the Labor Day break last year, bankers had priced 133 IPOs, SEC records showed. They raised $24.96 billion. These figures include all unit offerings. By the end of 2006, bankers had priced another 107 IPOs that raised $20.8 billion. But the wind was at its back. The Nasdaq Composite Index gained 10.6 percent from Aug. 31 to Dec. 31, 2006.
At the Labor Day break this year, bankers had priced 176 IPOs. They raised $37.96 billion. Now, it’s up to the stock market to put some favorable numbers on the board for the IPO market to have a good a run to the end of 2007.
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