This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Michaels Stores Are Going Public Again but Don't Tell the Hackers

NEW YORK (TheStreet) -- Michaels, the arts and crafts retailer, is going public -- again.

J.P. Morgan  (JPM), Goldman Sachs  (GS), Barclays (BCS), and Deutsche Bank  (DB) are the lead underwriters of an offering slated for later this month that will sell 27.8 million shares of common stock at a price somewhere between $17 and $19, according to a government filing. If all goes as planned, the offering will raise about $500 million. Michaels will trade on NASDAQ under the ticker MIK. 

Michaels was taken private in 2006 by Bain Capital and Blackstone Group in a transaction valued at about $6 billion. 

With more than 1,200 stores, Michaels is the largest specialty arts and crafts retailer in North America. In 2013, Michaels had $4.6 billion in sales. Michaels does not plan on paying any cash dividends in the near future and will instead use earnings to repay debt and reinvest in the company.

Along with the other generic associated risks of the offering were Michaels' concerns over their business constraints because of their considerable debt of $3.3 billion. But what really stood in the Risk Factors out was their recent data breach:

"We have recently experienced a data breach and such data breach and any future failure to adequately maintain security and prevent unauthorized access to electronic and other confidential information could result in an additional data breach which could materially adversely affect our reputation, financial condition and operating results."

Although the data breach story was overshadowed by the similar problem at Target, the potential for further issues could be alarming for both shoppers and investors.

In July of 2010 Samuel Wyly and the estate of Charles Wyly, former Michaels executives and longtime Republican party fundraisers, lost a $550 million insider trading case for sitting on corporate boards while trading certain securities in secret through offshore entitities, according to the SEC report.

Michaels was not immediately available for a response.

-- Written by Whalen MacHale in New York.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
YHOO $44.13 -0.69%
AAPL $124.25 -0.14%
FB $81.66 -0.67%
GOOG $542.56 -0.99%
TSLA $187.59 -0.63%

Markets

DOW 17,698.18 -77.94 -0.44%
S&P 500 2,059.69 -8.20 -0.40%
NASDAQ 4,880.2280 -20.6570 -0.42%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs