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CALIFORNIA / News and Insight on Business in the Golden
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Del Monte Postpones IPO; Skechers USA Files for One

July 30, 1998|From Bloomberg News

Del Monte Foods Co., the largest U.S. producer of canned fruits and vegetables, this week said it has delayed its initial public offering because its owner couldn't get the price it wanted in a weak market for IPOs.

Meanwhile, Skechers USA Inc., the Manhattan Beach-based maker of casual shoes, filed papers for an IPO that the company hopes could raise as much as $115 million.

Skechers, which makes shoes under the brand names Karl Kani and Cross Colours, filed with the Securities and Exchange Commission to sell an unspecified number of shares. Proceeds from the sale will go to repay its existing line of credit and debts, the filing said.

Skechers designs and markets casual and active footwear for men, women and children, primarily in the 12- to 25-year-old age group. The company aims to be "the premier source of contemporary casual and active footwear," according to its filing. BT Alex. Brown and Prudential Securities Inc. will underwrite the offering.

For the Record
Los Angeles Times Friday July 31, 1998 Home Edition Business Part D Page 3 Financial Desk 2 inches; 48 words Type of Material: Correction
Skechers USA--Manhattan Beach-based Skechers USA Inc., which filed with the Securities and Exchange Commission for an initial public offering of stock, no longer makes shoes under the brand names Karl Kani and Cross Colours and now markets footwear exclusively under the Skechers name. This was incorrectly reported in a story Thursday.

The largest Skechers shareholder is Robert Greenberg, who controls 65% of the company's common shares. His son Michael Greenberg, 35, president and director, controls 10% of the company's common shares.

Del Monte owner Texas Pacific Group, which owns 76% of the food processor, said it decided to postpone its offering because it wouldn't have sold in the expected $16 to $18 range.

"Texas Pacific believes there is tremendous value in Del Monte, and that was not reflected in the market today," said Owen Blicksilver, the investment group's spokesman.

San Francisco-based Del Monte planned to raise about $250 million in its initial stock sale, which was originally scheduled for Tuesday and reset for Wednesday. The sale would have valued the company at $853.3 million, if the shares sold at the middle of the range set by lead underwriter Morgan Stanley Dean Witter & Co. Del Monte planned to sell 14.7 million shares.

Del Monte suffered from the perception that food-stock IPOs have had trouble recently, said David Menlow, president of IPO Financial Network.

Aurora Foods Inc., maker of Duncan Hines cake mixes, Van de Kamp's frozen fish and Celeste pizza, has fallen 12% since its June 25 IPO. Seagram Co.'s Tropicana Products Inc., the nation's largest juice company, scrapped its planned IPO after PepsiCo Inc. agreed to buy it for $3.3 billion in cash.

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