Indicating a recovery in the economy, the much discussed initial public offerings, or IPOs, of Spanish bank Banco Santander SA's (STD) Brazilian unit and insurance data provider Verisk Analytics Inc. (VRSK) received a warm reception from investors.
Banco Santander SA's Brazilian unit, Banco Santander (Brasil) SA (BSBR), on Tuesday priced the shares of its initial public offering within the expected range at 23.5 reais each. In what is so far Brazil's biggest IPO, the bank sold 600 million units to raise 14.1 billion reais, or about $8.05 billion. The stock will be listed on the New York Stock Exchange as well as in Sao Paulo.
The company intends to use 70% of the net proceeds from the offering to expand its physical infrastructure, including opening new branches and installing additional ATMs, and to fund increased credit transactions in its Commercial Banking and Global Wholesale Banking segments more efficiently. About 20% of the net proceeds will be used to improve its funding structure and the remaining 10% will be used to increase its capital base, improving the Basel capital adequacy ratio.
Verisk reportedly raised $1.88 billion from its IPO, which priced shares at a higher-than-expected $22.
The company had expected to sell 85.25 million shares for $19-$21 per share and the expected net proceeds from the sale were about $2.0 billion. The stock will be listed on Nasdaq under the symbol "VRSK".
All the shares in the IPO were sold by Verisk's existing shareholders including American International Group (AIG), Hartford Financial Services Group (HIG) and ACE Group Holdings (ACE). Warren Buffett's Berkshire Hathaway Inc. (BRK-A, BRK-B) did not sell its stake in the company.
For comments and feedback: editorial@rttnews.com