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Blackstone Group, one of the world's biggest private equity firms, said it seeks to raise up to $4 billion in a highly anticipated initial public offering.
The New York-based firm, known for multibillion dollar takeovers like February's $23 billion buyout of Equity Office Properties, announced its intentions to go public in a filing with the Securities and Exchange Commission. The firm plans to list on the New York Stock Exchange.
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Mat Szwajkos / Getty Images Blackstone CEO Stephen Schwarzman. |
Blackstone's plans to go public were first reported last Friday by CNBC's David Faber.
The IPO will not produce common stock, but common units, Faber said. The firm "will be structured as a Master Limited Partnership, very similar to Fortress," he added. Fortress Investment Group's successful public offering last month "emboldened" rivals to make similar moves, Faber said.
"The MLP structure won't obligate the firm to certain things" as a common share structure would, Faber explained. Common unit holders will have "limited voting rights"--they will "not have the right to elect the general partner nor can they vote for the director," Faber said.
The IPO money is being raised "to seed other businesses," not to take other firms private, Faber reported. Blackstone will "continue to raise other funds for that."
Blackstone was founded in 1985 by former Lehman Brothers Holdings bankers Stephen Schwarzman and Pete Peterson.
Schwarzman--the single biggest owner--will take his current ownership stake, "transfer it into the MLP structure," then "vest into it over four years," Faber said.
The filing said that Schwarzman and other top management plan to keep control of the company and the collection of companies Blackstone has acquired.
Morgan Stanley, Citigroup, Merrill Lynch, Credit Suisse Group, Lehman Brothers and Deutsche Bank Securities are listed as underwriters for the offering.
Schwarzman himself would stand to score a financial windfall from an IPO. The executive is believed to own about 40% of the firm. In addition, his current annual salary from Blackstone is estimated at more than $500 million.
Last month, Blackstone won a protracted bidding war for Equity Office Properties Trust, paying $39 billion for the office buildings landlord. Just this week, Blackstone and General Electric's GE Capital Solutions Unit said they will jointly acquire mortgage and vehicle fleet management company PHH for $1.8 billion in cash.
Banking and legal sources told Faber last week that Apollo, KKR and Carlyle Group are all exploring public offerings that could take place this year or next.
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Largest Blackstone Acquisitions: Blackstone has either individually acquired or teamed with other acquirers in at least 11 deals worth more than $4 billion since 2002.
| Acquisition | Value (in billions) | Date Announced |
Equity Office Properties | $37.71 | 11/19/2006 |
| Freescale Semiconductor | $17.45 | 9/15/2006 |
| Biomet | $10.97 | 12/18/2006 |
| SunGard Data Systems | $10.84 | 3/28/2005 |
| TDC | $10.62 | 11/30/2005 |
| Michaels Stores | $5.60 | 6/30/2006 |
| CarrAmerica Realty | $4.80 | 3/6/2006 |
| Trizec Properties | $4.75 | 6/5/2006 |
| TRW Automotive | $4.72 | 11/17/2002 |
| Travelport | $4.30 | 6/30/2006 |
| Scottish & Newcastle | $4.17 | 10/6/2003 |
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