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Stock Commentary

Repower delays pricing after finding anchor buyer

Merkado Barkada
Repower delays pricing after finding anchor buyer

Repower Energy Development [REDC pre-IPO] [link] notified the exchange yesterday that it would extend its “book-building period”, but Merkado Barkada has learned from a source with first-hand knowledge that this is because REDC found a listed Japanese company that confirmed it will buy the majority of the REDC IPO as an anchor buyer.

REDC did not say whether the extended book-building period would impact the tentative schedule of the IPO. 

MB BOTTOM-LINE

This is a fresh development that has many potential benefits to REDC both for this transaction, and going forward post-IPO. Typically an anchor investor can help build confidence in an IPO because it helps validate of the business model and support the valuation.

That information could be useful to potential buyers, as the thought of a huge chunk of shares being off the market does increase the scarcity of the remaining float. I’m curious to learn the identity of the buyer, to learn more about the relationship between the parties, and to see if there are any strategic benefits to REDC beyond this deal. Of course, I’m also curious to learn the price, but there’s plenty of time for that.

 

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