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Aleris IPO delay surprises market

Keywords: Tags  Aleris, IPO, aerospace, automotive, aluminum, Suzy Waite


NEW YORK — Aleris International Inc.’s planned initial public offering (IPO) has been delayed, a company spokeswoman told AMM Thursday.

"Pricing of Aleris’ IPO has been postponed," she said. She declined to comment further as the company has not withdrawn its S-1 registration with the U.S. Securities and Exchange Commission and therefore remains in a quiet period.

The Beachwood, Ohio-based aluminum company’s decision to delay its IPO launch has surprised market participants who had believed an IPO was set for this week.

Aleris said in late March it planned to offer 9.4 million shares at $15 to $17 apiece, with selling stockholders offering an additional 21.9 million shares, pricing the IPO at about $611 million (AMM, March 30). The company also sent senior executives on a roadshow in the United States last week to meet with potential investors (AMM, April 4), leading many to believe the IPO was imminent. Information posted on www.retailroadshow.com last week said it would price on or about April 11.

But the IPO has since been delayed, leaving some to speculate that Aleris did not generate the level of interest management had been looking for.

"My hunch is they went out, surveyed interest and there just wasn’t enough," a source close to the situation told AMM.

Aleris’ business was expected to be of interest due to its direct links to the booming aerospace and automotive industries, sources said.

"I thought their story was a good one. They’re in a couple of strong end-markets. They’re not a commodity play," the source close to the situation said.

"Quite frankly, it’s a little bit surprising," a second source agreed when asked about the postponement. "Alcoa (Inc. just) raised its views on aerospace global demand, and that’s a sweet spot for Aleris. I would have thought that would be supportive (for an IPO)."

On Tuesday, aluminum major Alcoa boosted its 2012 forecast for global aerospace growth by 3 percentage points to between 13 and 14 percent (AMM, April 11).

The 3.5-percent drop in the Dow Jones Industrial Average equity markets from April 2 to April 11 may have dampened some investor appetite, but it should not have been enough in itself to quash the IPO, sources added.

"Some may blame market conditions, although a little pullback in the past few days doesn’t seem like enough to nix the entire deal," the first source added.


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