Blackstone units jump 20% in market bow
EmptyNEW YORK -- Units of private equity giant Blackstone Group LP, which holds investments in media and entertainment companies, jumped more than 20% in their stock market debut Friday as more of the firm's peers are understood to be considering initial public offerings.
PE groups have become a big force in acquisitions, including in the media and entertainment sector, in recent years, and the Blackstone IPO and the recent market debut of Fortress are putting a further spotlight on the PE sector.
Kohlberg Kravis Roberts and other Blackstone peers are understood to be looking at IPOs already.
However, Wall Street observers said Friday that they expect no real impact from such IPOs on the media companies the PE groups own or potential dealmaking in the entertainment space.
After pricing at $31 per unit, Blackstone's stock rose as high as $38 in intraday trading on the New York Stock Exchange before closing up 13.1% at $35.06.
The $4.23 billion initial public offering was the largest U.S. float in five years and the sixth-biggest of all time.
Blackstone's media investments include the Nielsen Co., the parent of The Hollywood Reporter and radio station group Cumulus Media Partners, among others.
"I doubt that PE firms going public will have any important effect on media and entertainment acquisitions," said Hal Vogel, president of Vogel Capital Management and a longtime media industry analyst. "Everything that's available is already known, and there is plenty of money (these guys have) even without public offerings."
Miller Tabak + Co. analyst David Joyce said, "The PE firms going public will typically be allowing investors to participate in their specific firms' operations," they will not be disclosing operational or financial metrics of the companies in their investment funds, "so there is no impact on information on the media companies that will come out of this PE IPO phase."
However, the PE firms are going public to have access to additional long-term, stable capital, according to Wall Street observers.