U.S. News

CNBC's Faber Says Blackstone Told Partners It's Mulling IPO


Blackstone Group sent a letter to its limited partners last Friday that said the private equity firm is "studying the possibility" of an initial public offering, but has not made a final decision, reported CNBC's David Faber, citing people who have received the letter.

The letter, which cited CNBC'S initial report last week regarding a potential public offering, told the fund's investors it will let them know when and if that decision is reached.

While Blackstone may be trying to downplay the likelihood of going public, people working on the deal told Faber they fully expect it to happen.

Last week, CNBC's Faber reported that that Blackstone attorneys in the process of writing a prospectus and an initial public offering could be filed in the next two weeks. Wall Street sources also told Faber the company is working with investment banks Lehman Brothers and Citigroup to launch the IPO.

If the IPO does eventually come to fruition, Blackstone Chairman and CEO Stephen Schwarzman stands to make billions, as the executive is believed to own about 40% of the firm. His current annual salary from Blackstone is estimated at more than $500 million.

Banking sources put Blackstone's market value easily in excess of $20 billion, said Faber, who was first to report the story on CNBC's "Squawk on the Street" last Friday.

Last month, Blackstone won a protracted bidding war for Equity Office Properties Trust, paying $39 billion for the office buildings landlord.

The success of Fortress Investment Group's public offering last month -- shares opened trading at $35 after being priced at $18.50 -- has caught the attention of Blackstone and other big private equity firms.

Apollo Management, Kohlberg Kravis Roberts and the Carlyle Group are all reportedly exploring public offerings that could take place this year or next, Faber said.