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CNBC ON DIGG

Biggest IPO of Year Prices

Published: Wednesday, 7 Oct 2009 | 10:00 AM ET

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By: Bob Pisani
Reporter

Banco Santander Brazil [BSBR Loading... () ] (BSBR) priced its IPO this morning in the middle of the range, raising $8.05 billion, in the biggest IPO on a U.S. exchange in 18 months.

The company priced 600 million units at 23.5 reals each, the middle of the price range. The U.S. traded shares will begin trading at $13.50 at the NYSE and will be dual listed here and in Brazil.

In an unusual offering, Santander will offer its shares in the form of units, with each unit comprising 55 common shares and 50 preferred shares of Banco Santander Brazil.

That amounts to about 15 percent of Santander Brazil. The goal is to give the Spanish bank more opportunity to expand into Latin America.

Other well-known brand names may also go public soon, including Hyatt Hotels, currently controlled by the Pritzker family in Chicago.

Officials from Santander Brazil will be ringing the opening bell at the NYSE, but have declined requests for interviews.

Elsewhere:

1) Family Dollar [FDO Loading... () ] is up 4 percent after beating estimates ($0.43 vs. $0.41 est.) on stronger margins and improved customer traffic.

The discount retailer sees earnings guidance for the current quarter between $0.45 and $0.50 (vs. $0.47 est.) on an expected 3 percent to 5 percent rise same-store sales.

2) Yum! Brands [YUM Loading... () ] is up 1% after reporting better-than-expected earnings ($0.70 vs. $0.58 est.) as a result of falling commodity costs and a lower tax rate. Sales for the fast-food operator were weak though, as same-store sales fell 6 percent in the U.S. while remaining flat internationally.

The company also raises full-year guidance to $2.10-$2.14 vs. $2.13 est.

3) Sunoco [ Loading... () ] is down 2 percent pre-open after announcing it will halve its divided to $0.15 and close a major New Jersey oil refinery.

4) Everybody likes B of A: today Wells Fargo upgraded Bank of America [BAC Loading... () ], saying that it trades at the deepest discount to normalized earnings of any big bank in their universe (though they reduce earnings estimates for Q3); yesterday Buckingham upgraded it; on Monday Goldman Sachs upgraded the whole big cap bank sector.

5) Additional offerings: AirTran [AAI Loading... () ] down 12 percent pre-open as it plans to sell $75 million in convertible senior notes and 9 million shares (no interest rate announced yet), while Avis Budget [CAR Loading... () ] also down 9 percent as it plans to sell $250 million in debt and enter into a warrant transaction to purchase a hedge against the convertible notes (a warrant gives the holder the right to purchase its securities at a stipulated price in the future).

6) A little bit better news on housing: the Mortgage Bankers Association (MBA) said purchases were up 13.2 percent last week (refis were up 18.2 percent) as the average 30-year rate fell to 4.89 percent, the lowest rates since late May.

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Topics:Wall Street | Investment Strategy | Stock Market