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American Water Works Co. (NYSE: AWK) is coming back on the US market.  The deal has priced this evening and will trade on the NYSE on Wednesday morning.  A trader has noted that the IPO went from warm, to cool, and now it is pricing under the range. 

Gross proceeds are roughly $1.25 Billion.  This IPO will now be 58 million shares at a price of $21.50 per share.  Unfortunately, that isn’t exactly off to a great start.  This is lower than the original share price indication terms and under the expected number of shares being sold.  Just a few weeks ago the largest US water utility was going to sell 64 million shares at a range of $24.00 to $26.00 per share.

It seems that if we are in the midst of a housing crisis, maybe being the water utility has more nuances than you’d imagine. Considering how there are not enough water instruments for US investors currently, this is a huge disappointment for what could have been one of the largest IPO’s of 2008.

Goldman Sachs, Citigroup, and Merrill Lynch are the lead managers; and co-managers are Credit Suisse, JPMorgan, Morgan Stanley, UBS, Edward Jones, Janney Montgomery Scott, Societe Generale, Wachovia Securities, Boenning & Scattergood, HSBC, The Stanford Group and Williams Capital Group were listed as the underwriters.

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We have made our calls around for syndicate desks and traders that could still be reached, and this is coming from more than one group on the pricing and share count. 

Elsewhere in water, we covered a desalination play.

Jon C. Ogg
April 22, 2008

Jon Ogg is a producer of and editor for both the Special Situations newsletter and the "10 Stocks Under $10" weekly newsletter for 247WallSt.com; he can be reached at [email protected] and he does not own securities in the companies he covers.