IPO REPORT: Intrepid Potash's IPO Up 50% In Debut
14:35 EDT Tuesday, April 22, 2008
NEW YORK (Dow Jones) -- Intrepid Potash Inc.'s initial public offering jumped as much as 50% in its stock debut on Tuesday as the largest U.S.-based producer of potash to grow corn, wheat, soybeans, potatoes and hay tapped into bullish investment sentiment surrounding the agriculture sector.
Denver-based Intrepid Potash (IPI) traded at $48.48, up $16.48 above its IPO price of $32 a share.
The company raised $960 million by offering 30 million shares above its $27-$ 29 price range with underwriters Goldman Sachs (GS), Merrill Lynch (MER) and Morgan Stanley (MS).
The IPO marks the first from an operating company since Visa Inc. (V) made its blockbuster debut more than a month ago.
Buoyed by the boom in food and fuel, the U.S. farm belt -- along with the energy sector -- has sidestepped much of the economic downturn that has crippled the financial, airline and retail sectors.
The IPO comes after another producer, Potash Corp. of Saskatchewan Inc. (POT), has seen its shares jump to $210 a share from $60 in the past year. Mosaic
Intrepid Potash "is a great company and in the right space," said Mike Maher, a trader with Foster Equities in New York who bought 2,000 shares of the IPO. " There's a lot of demand. There's not much stock around."
"Given the company's organic growth opportunities over the next several years, high returns on capital, and significant free cash flow generation, the valuation looks reasonable," said Evan Smith, co-manager of the Global Resources Fund, who said the IPO doesn't look overvalued even at a 5% premium to its offering price.
Intrepid Mining LLC, the parent company of Intrepid Potash, is the largest producer of potash in the U.S. and is dedicated to the production and marketing of potash and langbeinite, another mineral containing potassium. Intrepid Mining owns three potash sites in New Mexico and two in Utah.
Underscoring the bullish prospects for Intrepid Potash's IPO were earnings reported by DuPont (DD) earlier Tuesday, on the heels of Monsanto (MON) reporting a sharply higher profit on April 2.
Australia's Intrepid Mining LLC is listed as a principal shareholder of Intrepid Potash. Intrepid Mining is owned 40% by Harvey Operating & Production Co., 40% by Intrepid Production Corp. and 20% by Potash Acquisition LLC, according to the company's prospectus.
(END) Dow Jones Newswires
04-22-08 1435ET
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