Ally Financial, HCA Pushing Forward With IPO Plans

Buoyed by the recent investor enthusiasm for new issues, Ally Financial and HCA Holdings are moving forward with their respective IPO plans, say people familiar with the matter.

NYSE Traders
Oliver Quilla for
NYSE Traders

Ally, the former GMAC auto-financing unit, will hold a "bake-off" on Thursday in New York for prospective investment bankers to make their pitch to handle the deal, say two of these people. While the details remain to be determined, Ally’s offer could be sized at between $5 billion and $10 billion, one of these people said. A company spokeswoman wouldn’t comment on potential IPO plans.

At the same time HCA, the Nashville, Tenn. hospital operator, is pressing ahead with plans to go public as early as the beginning of March, say two other people familiar with the matter. HCA’s road show could launch on or around Feb. 22, said one of these people, although the specifics are still being hammered out. An HCA spokesman said the company “will continue to assess the timing” of its IPO, taking market conditions and other factors into account.

Both companies stand to benefit from the successful debut of Nielsen Holdings, the Dutch media research company The shares priced above its originally-intended level and traded up in the aftermarket. Underwriters and sponsors have been waiting to see if the current, hospitable stock market conditions would persist. With eight IPOs scheduled for this week and the Dow Jones Industrial Average's having hit the 12,000 point milestone, they are encouraged, say market participants.

Ally Financial
Ally Financial

HCA filed its initial offering documents with the SEC last May, only to see its plans scuttled by weak market conditions. HCA was the largest buyout ever back in 2006. It was bought by a consortium including Bain Capital Partners and Kohlberg, Kravis, Roberts & Co., for more than $30 billion.

Now the company may make capital-markets history again. Its planned $4.6 billion new issue—which people familiar with the matter say could morph in size in the coming weeks—would stand to be the largest sponsor-led IPO ever.

Ally’s planned IPO could mark yet another astonishing comeback for a company that was nearly felled by the financial recession. Late in 2008 and in 2009 Ally, then known as GMAC, was rescued from failure on three different occasions by U.S. government assistance. Those infusions paved the way for the U.S. Treasury’s current 74 percent stake in Ally. (General Motors owns a 4 percent stake, and other minority shareholders, including the buyout firm Cerberus, own the rest).

Since then, Ally has changed its name, embarked on a splashy ad campaign, and added new products and services, including online banking.