On March 23, Liberty Lane Acquisition (AMEX: tba), a Hampton, New Hampshire-based “blank check” company, filed for an IPO to offer 35 million units at $10 each to raise $350 million. It joins the ranks of 83 “blank check” offerings in the IPO pipeline looking to raise nearly $14.3 billion.
Goldman Sachs was named the lead manager. If the deal gets out the door, it will be the first “blank check” deal underwritten by Goldman Sachs, according to SEC filings.
Consider this: Since Feb. 13, 2004, bankers have priced 145 “blank check” offerings and this is Goldman Sachs’ first.
The Liberty Lane unit offering consists of one share of common stock and one-half (1/2) warrant. If the deal gets out the door, it will be the first “blank check” deal to offer half a warrant, according to SEC filings.
That raised an eyebrow or two in Wall Street’s syndicate world. From all reports, others have tried to float “blank check” deals consisting of half a warrant. In each case, the deal failed. The feedback was that institutions didn’t like dealing with half a warrant.
But this is Goldman Sachs.
Dutch Treat
On April 25, Rackspace (NYSE: RAX proposed), a San Antonio, Texas-based provider of IT hosting services, filed for an IPO to raise $400 million. Rackspace’s clients offer enterprise-level managed services to businesses of all sizes and kinds around the world.
This is Rackspace’s second attempt to go public.
On March 28, 2000, during the height of the IPO dot-com bubble, a company calling itself Rackspace.com — naturally — filed for an IPO to raise $65 million. The managing underwriters were Deutsche Banc Alex. Brown, Bear Stearns and Thomas Weisel Partners. The Nasdaq Composite Index had closed the day before at 4,958.56. The stock market had already started skidding.
On May 11, 2000, Rackspace.com set terms to offer 3.8 million shares at $12 to $14 each. But the deal never reached the IPO calendar with a pricing date. The Nasdaq Composite Index had closed the day before at 3,384.74.
On June 22, 2000, the proposed terms were cut to 3.2 million shares at $11 to $13 each. The Nasdaq Composite had closed that day at 3,364.21.
On March 19, 2001, Rackspace.com withdrew its plans to go public. The Nasdaq Composite Index closed that day at 1,951.18.
And now Rackspace — not Rackspace.com — is back to the IPO well. This time, the dot.com has been dropped as well as the underwriting team of eight years ago. Its new underwriters are Goldman Sachs, Credit Suisse and Merrill Lynch as joint-lead managers. And the co-manager gave a tip that the new Rackspace IPO is going to be different. It is WR Hambrecht + Co, the Dutch auction specialist.
The first IPO Dutch auction priced in the United States was on April 4, 1999. It was RavensWood Winery. WR Hambrecht was the lead manager.
The last IPO Dutch auction priced in the United States was on May 24, 2007. It was Clean Energy Fuels (Nasdaq: CLNE). WR Hambrecht was the joint-lead manager.
All told, there have been 20 U.S. IPO Dutch auctions since 1999. WR Hambrecht has been the lead or joint manager for 19. The one jewel missing from its crown was the Aug. 18, 2004, Dutch auction offering of Google (Nasdaq: GOOG).
Google used Morgan Stanley and Credit Suisse First Boston as its joint-lead managers. Nevertheless, WR Hambrecht was a co-manager along with Goldman Sachs.
And now Goldman Sachs will soon step up to the IPO plate with its own Dutch auction. At press time, no pricing date has been set.