050602 Premium Standard's Planned IPO on HoldJune 11, 2005Washington - Premium Standard Farms Inc.'s planned IPO, which was to begin trading under the symbol PORK, never priced Thursday night. According to investors, underwriters indicated Premium Standard's owners were unhappy with the amount that investors were willing to pay for the shares. Premium Standard had filed to sell 12.5 million shares at a price range of $15 to $17 a share. On Wednesday, investors said the deal was being marketed to investors below that level, at $12 to $13 a share. The Kansas City, Mo., company, which was founded in 1988, is the sixth-largest pork processor and second-largest sow owner in the United States. Premium Standard's plans to come public this week coincided with a warning to investors from ConAgra Foods Inc. that its fourth-quarter earnings would be lower than expected due to weaker profits from its packaged meat operations. Premium Standard also warned in its IPO filing with the Securities and Exchange Commission that it expects net sales and net income to be substantially lower this fiscal year compared with the year that ended in March. All the proceeds from the offering were to go to selling shareholders, not to the company itself, an arrangement that hasn't been looked upon favorably by investors in other deals this year. Selling shareholders included privately held agribusiness giant ContiGroup Cos., Putnam Investments and investment bank Morgan Stanley, which was also the lead manager for the IPO. The IPO hasn't been canceled, but is now considered a "day-to-day" deal, according to syndicate desks, which means the company will wait for improved market conditions or investor sentiment before trying again. Some day-to-day deals never end up pricing and are eventually pulled; others eventually do price.
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