US financial giant Blackstone to close IPO deal with China
22/6/2007 16:12
The Blackstone Group will sell part of its shares to China's state
foreign exchange investment company at its initial public offering (IPO)
scheduled for Friday, the group announced yesterday.
Blackstone, one of the
largest private equity firms in the US, announced the IPO of 133,333,334 common
units priced at US$31 each, with a total value of US$4.1 billion. Its common
units are slated to begin trading today on the New York Stock Exchange, marking
the biggest US IPO in five years.
For such general corporate purposes as
purchasing interests in its business from its existing owners, to repay
short-term borrowings, to provide capital to invest in its existing businesses
and to expand into new and complementary businesses, Blackstone said it is to
implement the agreement with China's state foreign exchange investment company
by selling its non-voting common units worth US$3 billion to the
latter.
Blackstone and China's state foreign exchange investment company, the
latter still in process of establishment, reached an agreement on May
20.
Under the agreement, the Chinese company will buy the shares at 95.5
percent of Blackstone's IPO price and hold them for at least four years while
the deal will be closed concurrently with Blackstone's IPO.
Although the deal
has been widely welcomed by Wall Street, some US lawmakers, in a throwback to
the Cold War, urged the US Security and Exchange Commission (SEC), the
Department of Treasury and the Department of Homeland Security to delay
Blackstone's IPO due to what they called national security reasons.
In a
letter to the SEC and the other two departments, Democratic senator Jim Webb
said "in making this request, I express my concern regarding the enormity of
this public offering and the large investment from a foreign
government."
However, the SEC ignored his proposal and approved Blackstone's
IPO, saying an IPO may be delayed only if a company had issued "material
misstatements or omissions."
The Blackstone Group, a leading global
alternative asset manager and provider of financial advisory services, deals
with such businesses as the management of corporate private equity funds, real
estate opportunity funds, hedge funds, mezzanine funds, senior debt funds,
proprietary hedge funds and closed-end mutual funds.
It also provides
financial advisory services on mergers and
acquisitions, restructuring,
reorganization and fund placement services.
Xinhua
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