Groupon's IPO pricing values company at $12 bn

Groupon Inc could price shares in its initial public offering $1 or $2 above the current range of $16 to $18 per share, according to two investors who said they spoke with the lead underwriters on Wednesday.

Groupon is on file with the US Securities and Exchange Commission to sell 30 million shares in the IPO, equivalent to a 4.7 percent stake. Books are expected to close later on Wednesday afternoon, with trading on the Nasdaq to begin on Friday.

If the IPO prices at $19 per share, that would value Groupon at $12.02 billion. If it prices at $20 per share, that would value the company at $12.7 billion.

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No further information was immediately available. A spokesman for Groupon declined comment. The lead underwriters, Morgan Stanley, Goldman Sachs and Credit Suisse, declined to comment.

Scott Sweet of research firm IPO Boutique said earlier on Wednesday that underwriters were closing their books today and orders from investors were coming in above the current $16 to $18 price range.

[caption id=“attachment_122025” align=“alignleft” width=“380” caption=“Groupon Inc could price shares in its initial public offering $1 or $2 above the current range of $16 to $18 per share, according to two investors who said they spoke with the lead underwriters on Wednesday.Reuters.”]  [/caption]

“It is many multiple times subscribed,” Sweet added. “There is a strong likelihood that Groupon will price above the prevailing $16 to $18 range.”

Groupon’s IPO is one of the most closely watched offerings in recent years. However, the company’s business - selling discounts on local products and services and sharing the revenue with merchants - has been questioned by some investors. Groupon has also changed its accounting at least twice.

The company scaled back the size of the offering last month and is planning to sell less than 5 percent of the company, one of the smallest floats in the past decade.

The move may have added some scarcity value to Groupon’s IPO. The company’s road show, which started in late October, has been well attended and some investors expressed concern the small float would mean there might not be enough to go around.

Reuters