Lineage (LINE), the world’s largest cold food storage REIT, raised $4.4 billion in the biggest IPO of 2024 so far on Wednesday night, July 24, 2024. Lineage priced its REIT IPO at $78.00 – above the $76.00 mid-point and below the $82.00 top of its range. The LINE deal was supersized at pricing to 56.88 million shares – up 21 percent from the 47.0 million shares in the IPO’s prospectus. Shares of Lineage leaped to $82.00 – up $4.00 for a 5.12 percent gain from their $78.00 IPO price – in their NASDAQ debut on Thursday, July 25, at 12:53 p.m. EDT; opening volume was about 2.81 million shares.
The market cap – or valuation – of Lineage at pricing was $19.0 billion.
Cornerstone investor Norges Bank Investment Management, a division of Norway’s Norges Bank, had indicated an interest in buying up to $900 million of stock – or about 25 percent of the IPO, based on its estimated proceeds of $3.6 billion in the prospectus.
Lineage plans to use the IPO’s proceeds to repay about $3.3 billion in debt, the prospectus says.
Morgan Stanley, Goldman Sachs, BofA Securities, J.P. Morgan and Wells Fargo Securities led the large team of book-runners.
The Lineage IPO was underwritten by 28 banks. The joint book-runners’ team included RBC Capital Markets, Rabo Securities, Scotia Capital, UBS Investment Bank, Capital One Securities, Truist Securities, Evercore ISI, Baird, KeyBanc Capital Markets, Mizuho Securities, PNC Capital Markets, Deutsche Bank Securities, HSBC, Piper Sandler and Regions Securities. The eight co-managers were Blaylock Van, Cabrera Capital Markets, C.L. King & Associates, Drexel Hamilton, Guzman & Company, Loop Capital Markets, Roberts & Ryan, and R. Seelaus & Co.
The pricing details defied the conventional view of REIT IPOs – deals designed for dividend lovers who aren’t in it for the opening-day pop. REIT IPOs typically trade in the plain vanilla zone – staying close to their IPO prices (flat to up 50 cents) on Day 1.
Pricing a big REIT IPO substantially above the mid-point – and increasing the number of shares – indicated some optimism that this deal could deliver at least a few moments of hot girl summer when it starts trading today – Thursday, July 25, 2024 – on the NASDAQ.
The Lineage IPO was said to have attracted strong interest from institutional investors and more than a few individual investors, according to the word on the Street.
For Lineage, its first day of trading comes on the heels of Wednesday’s sharp sell-off in the overall stock market when the NASDAQ and the S&P 500 had their worst day since 2022.
Stay tuned.
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