Casual-clothing retailer J. Crew Group Inc. leads a $1.3-billion wave of nine initial public offerings this week that may decide whether last week's 11 cancellations marked the start of a slump or just a hiccup for the busiest IPO market since 2000.
"The summer is going to be an important test," said Larry Wieseneck, co-head of global finance at Lehman Bros. Holdings Inc. Other companies scheduled to go public may delay their debuts until September if this week's deals miss targets, Wieseneck said. "They'll start stacking up," he said. "You don't want to launch and have to pull back if you can avoid it."
The Bloomberg IPO index, which tracks new stocks in their first year of trading, has fallen 9% since May 9. The Standard & Poor's 500 index dropped 6% in the same period. This year 630 companies worldwide have gone public, the most for any comparable period in six years.
Some companies, including Purchase, N.Y.-based MasterCard Inc.; Golfsmith International Holdings Inc. of Austin, Texas; and Rancho Cordova, Calif.-based Volcano Corp., a maker of medical devices for heart disease, failed to raise as much as they had sought after pushing ahead with IPOs in the last five weeks. Hexion Specialty Chemicals Inc. was among the would-be sellers to cancel $4.3 billion of deals last week, citing market volatility.
Columbus, Ohio-based Hexion, which makes thermosetting resins, which don't melt when exposed to heat, had planned to sell $532 million of stock.
New York-based J. Crew, which is majority owned by Texas Pacific Group, plans to raise as much as $319.6 million, excluding shares the underwriters may sell, in an IPO scheduled for today. Aventine Renewable Energy Holdings Inc., a Pekin, Ill.-based ethanol producer, is seeking $317.8 million Wednesday, and Gordon Biersch Brewery Restaurant Group Inc., a restaurant chain based in Chattanooga, Tenn., expects to sell $54.2 million of stock today.
Other scheduled offerings this week include PGT Inc., a maker of impact-resistant windows and doors in North Venice, Fla., and Internet retailer Bidz.com Inc. of Culver City.
Several European companies canceled deals last week, citing weak demand, including Medica, a French retirement-home operator. The company, based in a Paris suburb and owned by Bridgepoint Capital, a British private equity firm, planned to raise $748 million.
