24/7 Wall St. » TBBK

Secondary Offerings Run At Market Flood Rates (MPEL, GSIC, AWK, GLDD, YSI, TBBK, HMPR, SBCF, CADE, UMPQ)

247wallst — Thu, 13 Aug 2009 15:52:16 +0000

It is one thing that we had two fairly large IPOs this week. But the flood of public secondary stock offerings is almost running at alarming levels when you consider that these share sales are after such a large run-up in the markets. Melco Crown Entertainment Ltd. (NASDAQ: MPEL) $200 million and GSI Commerce Inc. (NASDAQ: GSIC) (and holders) sold about $201 million in secondary offerings this morning. Other stocks in offerings are scheduled from American Water Works Co. (NYSE: AWK), Great Lakes Dredge & Dock Corp. (NASDAQ: GLDD), and U-Store-It Trust (NYSE: YSI). Then there is the flood of regional and community banks selling stock.

Details are as follows:

American Water Works Co. (NYSE: AWK) is on deck with German-parent RWE selling another 30 million shares via Bank of America Merrill Lynch, Citigroup and Goldman Sachs. With shares close to $19.00 today, this generates a $570 million estimates take.

Great Lakes Dredge & Dock Corp. (NASDAQ: GLDD) is on deck with some 12.5 million shares being sold through Barclays Capital and Bank of America Merrill Lynch. This should come to roughly $75 million being raised based on today’s price.

U-Store-It Trust (NYSE: YSI) is set to sell 22 million shares through Bank of America Merrill Lynch and Wells Fargo and this deal is expected to raise close to $110 million based on today’s price.

Then there are the regional and community banks that we have seen from Dandler O’Neill. The Bancorp Bank (NASDAQ: TBBK) is on deck to sell roughly $50 million worth of shares through Sandler O’Neill. Hampton Roads Bancshares Inc. (NASDAQ: HMPR) is expected to sell some 32 million shares through Sandler O’Neill and should raise roughly $140 million based on today’s price. Seacoast Banking Corp. of Florida (NASDAQ: SBCF) is expected to sell about 28 million shares also through Sandler O’Neill and will bring in close to $70 million based on today’s prices.

Two more banking deals are also on deck that will either come tonight or perhaps next week. Cadence Financial Corp. (NASDAQ: CADE) is expected to sell 31.5 million shares through FBR Capital Markets in an effort to raise roughly $55 million based upon today’s price. Be advised, Cadence is extremely think trading volume. Umpqua Holdings Corp. (NASDAQ: UMPQ) is expected to sell some $175 million in common stock via JPMorgan and others including KBW.

When we tally all of this up, it comes to more than $1.6 billion in secondary offerings just between today and what may come tomorrow. That cash has to come from somewhere and generally has to stay in the stock for at least a little bit of time.

You can join our open email distribution list if you like to hear about secondary offerings, IPOs, Warren Buffett and other guru activities, mergers, key daily analyst reports, and other top trading and investing issues.

JON C. OGG
AUGUST 13, 2009

Posted in Secondary Offering Tagged: AWK, CADE, GLDD, GSIC, HMPR, MPEL, SBCF, TBBK, UMPQ, YSI

Citigroup (C) Humiliated By New Management Review

247wallst — Thu, 13 Aug 2009 09:29:06 +0000

Citigroup’s (C) board does not even get to decide who should run the bank. This is the same board of “blue chip bankers” recruited by Chairman Richard Parsons. Regulators have decided to humiliate the group by forcing Citi to bring in outside consultants to decide whether the current management team has the ability to turn the bank around.

According to the FT, “People close to the situation said Citi had retained Egon Zehnder, a headhunter and board advisory consultancy, to carry out an in-depth management review requested by the government after stress tests on banks in May.” The certainly implies that, in the government’s mind, the Citigroup board is not capable of doing the work themselves. Jerry Grundhofer, the former CEO of US Bancorp (TBBK) and William Thompson, former head of Pimco, have been added to the board. The head of Ripplewood and a former superintendent of the New York State Banking Department have also joined.

The government plans to exert its control over Citi whenever and wherever it pleases. It is a puzzle why it would encourage the bank to re-build its board with experts and then undermine them in their most essential task which is evaluating and deciding the fate of senior management.

Citi also has a number of public shareholders outside the government. They elect the directors under the assumption that the governance of the company is in the directors’ hands. That has turned out not to be the case.

Douglas A. McIntyre

Posted in Banking, Corporate Governance Tagged: C, TBBK

SPAC IPO FILING: Fintech Acquisition Corp. (TBBK)

247wallst — Mon, 31 Mar 2008 11:59:32 +0000

Fintech Acquisition Corp., a SPAC, or special purpose acquisition company, has filed to come public via an IPO. The filing shows a target of $100 million. Each $10 unit will consist of unit of one unit of common stock and a warrant with a $7.50 strike price. The sole underwriter is UBS Investment Bank. The company has applied to trade on The American Stock Exchange.

Fintech was organized by TBBK Acquisitions, a wholly-owned subsidiary of The Bancorp, Inc. (NASDAQ: TBBK), a financial holding company. As an indirect subsidiary of a financial holding company, Fintech is limited to financial activities. Their target will consist of established financial technology business companies that provide data processing, storage and transmission services, databases and payment and payment processing services in support of businesses in the financial services industry and are in need of redirection.

Fintech will utilize the experience of Chairman and CEO, Betsy Cohen and President, Frank Mastrangelo. Betsy Cohen has 37 years of experience and current acts as CEO of Bancorp.

We cover issues regarding SPAC’s and other IPO’s, back door plays into IPO’s, restructurings, spin-offs and more on our open email distribution list.

Rachel Lopez
March 31, 2008