Shares of Friedman, Billings, Ramsey Group Inc. (NYSE: FBR) were trading up 27 cents per share to $5.78 per share on volume of about 1.8 million shares. The company announced today that FBR Capital Markets Corporation, a taxable REIT subsidiary of the company, plans an initial public offering (IPO).
The company announced that FBR Capital Markets has filed a registration statement on form S-1 with the Securities and Exchange Commission (SEC) in connection with a planned IPO pursuant to which the company proposes to offer and sell up to 13,512,500 shares of common stock of FBR Capital Markets that the company beneficially owns, including shares that may be sold by the company upon exercise by the underwriters of their over-allotment option to sell up to an additional 1,762,500 shares.
After completion of the offering, the company will own approximately 53 percent of the outstanding shares of FBR Capital Markets or approximately 50.3 percent of the outstanding shares if the underwriters exercise their over-allotment option in full.
“FBR seems to have structured this deal as best they could. With 53% ownership remaining in FBR Capital Markets after the street buys in, and 50.3% left after the over allotment option, they remain the controlling interest in the new shares,” says Mike Willingham of Microsreport.
The proposed initial public offering will be made only by means of a prospectus. Friedman, Billings, Ramsey & Co., Inc. is serving as a lead managing underwriter for the offering. The company has applied to list on the Nasdaq Global Market under the ticker symbol “FBCM.” The company will not receive any proceeds from the stock sale.
Willingham continues, “In addition, they also are the lead underwriter on the deal ensuring they not only stand to gain for the sale of the shares to the street, but also will benefit from the transactional income from representing the offering.”
A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet been declared effective. These securities may not be sold nor may offers to buy be accepted prior to the time that the registration statement becomes effective.
Market News First contacted the company to comment on the IPO, but their media relations representative said they have no further comment besides what is already in the press release and registration statement.
The company provides investment banking, merger and acquisition advisory services, institutional brokerage, asset management and private wealth services through majority ownership of FBR Capital Markets.
FBR Capital Markets focuses capital and financial expertise on eight industry sectors: consumer, diversified industrials, energy & natural resources, financial institutions, healthcare, insurance, real estate, and technology, media & telecommunications.