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Blackstone files for IPO worth up to $4 billion

March 23, 2007|From Reuters

Blackstone Group, an investment firm known for taking huge public companies into private ownership, filed Thursday to bring part of the firm public in an offering worth as much as $4 billion.

Investors who buy into the deal would get a piece of the management company. They wouldn't be participating directly in the company's potentially lucrative buyout funds.

New York-based Blackstone said a public stock offering would give the firm flexibility in moving into new business ventures and in providing financial incentives to employees.

By selling stock, Blackstone is opening its finances to public view. The company said its net gains from investment activities totaled $7.6 billion last year, and that net income was $2.27 billion.

A $4-billion stock sale would rank Blackstone's offering among the 10 largest initial public offerings ever by a U.S. company, according to Dealogic.

Blackstone was founded in 1985 by Peter Peterson and Stephen Schwarzman with $400,000 in seed money. Peterson had been chief executive of brokerage Lehman Bros., and Schwarzman head of Lehman's mergers-and-acquisitions group.

News of the offering from Blackstone, whose recent deals include the $23-billion purchase of Equity Office Properties Trust and the $17.6-billion buyout of Freescale Semiconductor Inc., surfaced last week.

Fortress Investment Group Inc., another big player in private equity, went public in February at $18.50 a share. The stock closed Thursday at $27.96.

Blackstone's offering would be units of a master limited partnership, which functions differently from most publicly traded companies. The firm did not disclose how many units it planned to sell.

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