The IPO Buzz: Summer’s IPO Finale

The restaurant chains are Bloomin’ Brands (BLMN – proposed) doing business as Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill, Fleming’s Prime Steakhouse and Wine Bar and Roy’s, and CKE (CK  – proposed) doing business as Carl’s Jr. and Hardee’s.

 

Both are hoping to follow the recently priced Chuy’s Holdings’ (CHUY) path down the yellow brick road to riches. On July 23, Chuy’s priced its IPO of 5.8 million shares at $13 each. It closed on Friday, Aug. 3, at $18.30, UP 40.8 percent from its initial offering price.

 

Bloomin’ Brands plans to price 21.4 million shares at $13 to $15 each on Tuesday evening. The IPO is expected to start trading on Wednesday morning on the NASDAQ Global Market under the proposed symbol “BLMN.” The joint-lead managers are BofA Merrill Lynch, Morgan Stanley, J.P. Morgan, Deutsche Bank Securities and Goldman Sachs. The co-managers are Jefferies, William Blair, Raymond James, Wells Fargo Securities and The Williams Capital Group.

 

Based in Tampa, Florida, Bloomin’ Brands owns and operates 1,248 restaurants. It has another 195 restaurants operating under franchise or joint venture arrangements in 49 states and 21 countries and territories. Bloomin’ Brands, formed in 1987, has about 86,000 employees.

 

Bloomin’ Brands plans to sell about 10.7 million shares and selling shareholders plan to sell about 10.7 million shares. The company expects to have about 117.6 million shares outstanding after the offering.

Now let’s turn to its preliminary prospectus:

Bain Capital and related funds will be selling about 7.1 million shares and still own about 63 million shares, or 53.6 percent, of Bloomin’ Brands after the offering. (Prospectus – page 167)

 

On March 31, 2012, Bloomin’ Brands reported long-term debt of $1.7 billion and an accumulated deficit of $773 million. (Prospectus – page 42)

 

CKE plans to price 13.3 million shares at $14 to $16 each on Thursday evening. The IPO is expected to start trading on Friday morning on the New York Stock Exchange under the proposed symbol “CK.” The joint-lead managers are Morgan Stanley, Citigroup and Goldman Sachs. The co-managers are Barclays, Credit Suisse, RBC Capital Markets, Apollo Global Securities, Cowen and KeyBanc Capital Markets.

 

Based in Carpinteria, California, the company got its start in 1941 when Margaret and Carl Karcher borrowed money to buy a hot-dog cart. Fast forward 70 years: The company is known for its Carl, Jr.’s restaurants, whose menu features the Six Dollar Burger, and it includes the Hardee’s fast-food hamburger chain. CKE believes it is one of the world’s largest operators and franchisors of quick- service restaurants with 3,243 owned or franchised locations in 42 states and 25 foreign countries. Formed in 1978, CKE has about 30,300 employees.

 

CKE plans to sell about 6.67 million shares and selling shareholders plan to sell about 6.67 million shares. The company expects to have about 55.9 million shares outstanding after the offering.

Now let’s turn to its preliminary prospectus:

Apollo CKE Holdings will be selling about 6.67 million shares and still own about 38.2 million shares, or 68.4 percent, of CKE after the offering. (Prospectus – page 144)

 

On May 21, 2012, CKE reported long-term debt of $738.5 million and an accumulated deficit of $230.7 million. (Prospectus – page F-53)

 

Manchester United plans to price 16.7 million Class A ordinary shares at $16 to $20 each on Thursday evening. The IPO is expected to start trading on Friday morning on the New York Stock Exchange under the proposed symbol “MANU.” The joint-lead managers are Jefferies, Credit Suisse, J.P. Morgan, BofA Merrill Lynch and Deutsche Bank Securities. The co-managers are Aon Benfield Securities, Banco Santander, BNP PARIBAS, BOCI Asia, CIMB Securities (Singapore) Pte, DBS Bank, Nomura and Raymond James.

 

Based in Old Trafford, Manchester, United Kingdom, Manchester believes it is one of the most popular and successful sports teams in the world, playing one of the most popular spectator sports on earth (football worldwide/soccer in the U.S.). Through its 134-year history, Manchester has won 60 trophies and believes it has a global following of 659 million people. Formed in 1878, Manchester United has about 710 employees.

 

Manchester United plans to sell about 8.3 million Class A ordinary shares and selling shareholders plan to sell about 8.3 million Class A ordinary shares. The company expects to have about 39.7 million Class A ordinary shares and 124 million Class B ordinary shares outstanding after the offering.

 

Now let’s turn to its preliminary prospectus:

Unlike some in the United States, the company reported financial estimates in its prospectus:

“Preliminary estimates of our results of operations that we expect to report for our fiscal year ended June 30, 2012” are:

 

“Our total revenue is expected to be approximately £315 million to £320 million, representing a decrease of 5% to 3% when compared to £331.4 million for the year ended June 30, 2011.

 

“In addition, although we preliminarily estimate that our profit from continuing operations for our fiscal year ended June 30, 2012 was approximately £21 million to £23 million, such amount includes a tax credit estimated to be approximately £27 million to £29 million. Net of that tax credit, we expect that we would have realized a loss from continuing operations for our fiscal year ended June 30, 2012. See  — Recent Developments.” (Prospectus – Pages 4 and 5)

 

“As of March 31, 2012, we had total indebtedness of £423.3 million (US$660.5 million) – (Prospectus – page 29)

 

However, Manchester will not be the first major league sports team to go public in the U.S. capital markets.

 

Cleveland Indians Baseball priced its IPO of 4 million shares at $15 each on June 3, 1998. The stock closed its opening day at $14.75 and headed south, sharply south. There are no available records, but it was believed the shares sank into the mid-single digits. The joke among Wall Street traders was Cleveland was first in war, first in peace, first in the American League, and struck out on Wall Street.

 

Nevertheless, its shareholders had a happy ending. In February 2000, the company went private and the shareholders got about $22.61 per share.

 

There are other stories in this week’s calendar, but the above should get the most attention.

 

Stay tuned.