Not Going Public After All
Fender Musical Instrument Corp (FMIC) filed with the SEC in March to carry out an initial public stock offering (IPO). Four months later all was set to take place today, Friday, July 20, 2012, but on the eve of the IPO being launched they decided against moving forward.
All this week news was filtering out about the expected $13 to $15 a share stock price and the quantity of share included in the IPO was pegged at 10.7 million shares. The company planned to sell 7.1 million shares of it’s own shares, while private equity firm Weston Presidio planned to sell 3.5 million shares. Weston Presidio owns 43 percent of Fender currently. But then Thursday evening, FMIC CEO Larry Thomas called the whole thing off and announced, “Current market conditions and concerns about economic conditions in Europe do not support completing an initial public offering at what we believe to be an appropriate valuation at this time.”
According to a filing this month with the Securities and Exchange Commission, Fender planned to have a total of about 26.4 million shares outstanding after going public, which would have valued the company at around $395 million. J.P. Morgan, William Blair, Baird, Stifel Nicolaus Weisel and Wells Fargo Securities were to underwrite the offering.
In general, the entire IPO market has been effected not only by the World Economy but most recently by the troublesome Facebook IPO and the backlash against problems that arose during and immediately after Facebook went public. Several companies have withdrawn their IPO filings in recent months, as volatile markets make it difficult to pitch and price the debuts.
Fender, which had net sales of $700.6 million in the fiscal year ended Jan. 1, planned to list on the Nasdaq under the symbol “FNDR.”