The parent company of the New York Mercantile Exchange doesn't want to leave any money on the table, as it raises the price for its highly anticipated IPO just days before the deal comes to market.
, in a regulatory filing Tuesday, now expects to raise up to $370 million when its stock begins trading on the
New York Stock Exchange
The commodities and futures exchange boosted the range for pricing its shares to between $54 and $57--a 10% increase over the prior estimate. The earlier range had the shares pricing Thursday night at between $48 and $52. The Nymex also plans to offer an additional 500,000 shares, bringing the total size of the initial public offering to 6.5 million shares.
After the offering, the exchange expects to have 89 million shares outstanding, bringing its market cap to nearly $5 billion.
The move to boost the price and size of the offering is a bullish sign and another indication that there is strong institutional demand for shares. The offering has been much-anticipated on Wall Street because exchange stocks have been red-hot, and the Nymex is one of the last big U.S. exchanges to go public.
The Nymex, which specializes in energy trading and precious metals trading, is going public after 134 years as a private company.
"This is purely about one of the major commodities exchanges becoming public," says David Menlow, the president of IPO Financial Network. "These heavily commodity-based exchanges have done well and continue to do well and the Nymex is not going to be an exception."
But Menlow says the increase in price range is "inconsequential.'' He notes, "Those people that got the IPO shares are going to make more money than those that get it in the aftermarket," he says.
Even with the Nymex's decision to raising the price range, observers expect the stock to get a tremendous first-day pop. Other exchanges that have sold shares, including the
Chicago Mercantile Exchange
, all surged in their first day of trading. The stocks of most exchanges have continued to rise in the aftermarket.