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RHI forced to cut IPO price

June 18, 2008|Tom Petruno | Times Staff Writer

No Emmy for this deal: TV-miniseries kingpin RHI Entertainment Inc. priced its initial public stock offering late Tuesday at $14 a share, below the $16-to-$18 range the company had hoped to get.

RHI, based in New York, is the production house of the Halmi family -- legendary producer Robert Halmi Sr. and son Robert Jr.

RHI was a public firm in the early 1990s until it was bought out by Hallmark Cards in 1994. The Halmis stayed on board under Hallmark's wing, producing a slew of content for the Hallmark Channel and for other outlets.

They and other investors then bought the firm back from Hallmark in a leveraged buyout in January 2006, with Robert Jr. running the newly independent business. The buyout set the scene for the stock IPO: The Halmis needed capital to pare back the debt from the leveraged buyout.

But debt-reduction IPOs often fail to get investors excited. RHI had to settle for less than it wanted.

The company had hoped to raise as much as $225 million by selling 12.5 million shares at $18. Instead, the underwriters of the deal had to cut the price to $14, although the number of shares sold was boosted to 13.5 million. Gross proceeds: $189 million.

This is no Oscar mill, but RHI claimed nearly half the market of TV mini-series from 2000 to 2007, including "Arabian Nights," "Dinotopia" and last year's "Tin Man" on the Sci-Fi channel. Its made-for-TV flicks have included "Moby Dick" and "Killer Wave."

The stock is expected to begin trading today under the ticker symbol RHIE.

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On latimes.com

Money & Co.

Tom Petruno blogs on what's moving the markets and how it affects your investments at latimes.com/moneyandco.

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