TOYS-R-US Closer to $800M IPO After Amended Filing (TOYS, VNO)

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TOYS “R” US, Inc. has been a perpetual IPO candidate and remains one of our Top 17 IPOs to Watch in 2011.  The company has now filed its fifth amendment to its IPO paperwork with the SEC.  Terms are still not set in stone but the filing signals that the company will raise up to a maximum of $800 million.  Upon completion of the offering the company intends to list its shares on the NYSE under the ticker symbol “TOYS.”

As of the end of April, the company operated 1,396 stores and licensed an additional 223 stores. These stores are primarily big box stores located in 34 countries.  It also operates under the old FAO Schwarz banners.  For fiscal 2010, the retailer generated net sales of $13.9 billion and realized net earnings of $168 million.

Toys R Us has already reported in June that its net loss was about $67 million for the quarter after investing $58 million into new store opens.  Its revenues did increase slightly in that most recent quarter to $2.636 billion from $2.608 billion a year earlier. What may make or break the future in the all-important fourth quarter (calendar) is the trend of pop-up stores where Toys-R-Us was very active in that trend.

The S-1 filing lists the following concerns as book-running managers: Goldman Sachs, J.P. Morgan Securities, Merrill Lynch, Credit Suisse, Deutsche Bank Securities, Citigroup, and Wells Fargo Securities.  The filing also lists Needham Company, Mizuho Securities USA, BMO Capital Markets, and SMBC Nikko Capital.

Toys-R-Us was taken private in 2005 and it is effectively owned in near-thirds by affiliates of Bain Capital, KKR, and Vornado Realty Trust (NYSE: VNO).  For whatever this is worth, it was just last week that Vornado signaled how its quarterly loss tied to Toys “R” Us widened due to investing in opening new stores and due to technology upgrades.

The full filing can be found here.

JON C. OGG