GO
Loading...

Blackstone to Price IPO on Thursday, Earlier Than Expected

Blackstone Group, which manages the world's second-largest private equity fund, will set the price of its much-anticipated initial public offering on Thursday--roughly a week earlier than expected.

The New York-based buyout shop, which controls names like Madame Tussauds wax museums and real estate company Equity Office Properties Trust, could become a public company on the New York Stock Exchange by the end of the week.

Blackstone originally planned to float a 12.3% stake in its management division the week of June 25, but underwriter Morgan Stanley confirmed the change on Tuesday. It did not disclose a reason why.

There had been some concern that Blackstone Chief Executive Stephen Schwarzman would pull the offering due to potential changes in the tax laws. The firm warned investors last week a bill before Congress could reduce its earnings substantially in coming years.

Blackstone opposes efforts to tax it as a financial company rather than a partnership. But, if the proposed legislation in the Senate is passed, it would more than double the firm's taxes after a five-year grace period.

Blackstone, and other firms, have been able to take advantage of a two-decade old provision that allows investors in publicly traded partnerships to pay capital-gains taxes of 15 percent on their share of the firm's income. Corporations are currently taxed as much as 35 percent.

Regardless of the tax hit in five years, though, this week's offering could transform the company into one with a market value of about $32 billion.

As the terms currently stand, the deal is expected to raise between $3.87 billion and $4.14 billion, with shares expected to price between $29 to $31. If the underwriters exercise their option for extra shares in full, the total IPO would be worth $4.75 billion.

Also holding major stakes in Blackstone will be China's government, which in May invested $3 billion in the buyout shop. The company's senior executives will hold more than 70 percent of the newly floated management division.

A spokesman for Blackstone would not comment. The company will trade with the ticker symbol "BX" on the NYSE.

Featured

  • The Marriner S. Eccles Federal Reserve building in Washington.

    CNBC's Fed Survey shows market pros aren't very confident the Fed can end its easy money polices without a market crash, a recession or bad inflation.

  • Merck employees walk past a Merck sign in front of the company's building in Summit, New Jersey.

    Merck reported better-than-expected results, with sales of newer drugs offsetting declining sales of drugs facing generic competition.

  • Pfizer reported higher-than-expected second-quarter earnings, helped by growing sales of its cancer medicines.

  • An attendee is silhouetted against a Microsoft poster at the Microsoft Developers Build Conference in San Francisco, April 2, 2014.

    An agency that enforces antimonopoly laws visited company offices in four cities, as the country more closely scrutinizes multinational companies.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Don't Miss

U.S. Video

  • NBC News' Martin Fletcher reports Israelis say they have found about 32 tunnels, some of them digging right into Israeli territory.

  • CNBC's Michelle Caruso-Cabrera reports the European Union will limit access to EU capital markets for state-owned banks among its sanctions against Russia.

  • Argentina is refusing to negotiate with a small group of bond investors who are owed billions of dollars dating from debt they purchased from before the country's last default in 2001, with CNBC's Kate Kelly.