New York - Blackstone Group chairman Stephen Schwarzman will own 24 percent of the company after its planned initial public offering (IPO) of more than $4 billion (R29 billion), the largest by a private equity firm.
Schwarzman's stake would be valued at $7.73 billion if the shares sold for $30 apiece in the public offering, the New York-based firm said yesterday in a filing with the US Securities and Exchange Commission.
Senior chairman Peter Peterson, who co-founded Blackstone with Schwarzman in 1985, will hold 4 percent of the stock, valued at $1.31 billion.
Blackstone, the manager of the world's second-largest buyout fund, plans to go public as soon as this month, after taking part in $199 billion of deals in the past 20 years.
The company, which started with $400 000, will have a market value of $32.4 billion, with 12.3 percent of the stock held by the public. China's state investment company is buying a 9.7 percent stake in a private transaction.
"The equity values are large enough that you can't ask the junior partners to buy you out at full value," said Frederick Joseph, the managing director of Morgan Joseph & Co in New York.
Meanwhile, financial deals are blooming in a part of the world far from Wall Street.
The total value of equity deals struck by Indian companies in a year has crossed the $50 billion mark for the first time, surpassing $14.3 billion recorded in the same period in 2006, according to news reports yesterday.
A total of 287 strategic mergers and acquisitions (M&As) worth $46.8 billion and private equity deals worth $5.1 billion were announced in the country from January through May this year, totalling $51.9 billion.
This was according to advisory firm Grant Thornton, quoted in the Economic Times newspaper.
M&As worth $10.8 billion and $3.5 billion of private equity deals were struck from January to June 2006, totalling $14.3 billion.
The two transactions that stood out were Tata Steel's $11.3 billion acquisition of Anglo-Dutch steel maker Corus in January this year and Mittal Steel's takeover of the European steel maker Arcelor for $33.7 billion in July 2006.
"Billion-dollar deals have become quite common today," said CG Srividya, a partner in corporate advisory services for Grant Thornton.
"Though we may not see any other Tata-Corus-type deal soon, we expect a few more one-off big deals in the manufacturing sector, including those in textiles and automobiles."
Lakshmi Mittal, the president and chief executive of Arcelor Mittal, projected a few months ago that Indian companies could clock deals worth $100 billion this year.
The Indian corporate sector seems to be on track to meet this projection, after the year began with some multibillion-dollar deals.
Big deals in May included UB Group's $1.1 billion acquisition of Scottish scotch whisky maker Whyte & Mackay, and wind energy powerhouse Suzlon Energy's deal to snap up German heavyweight RWE Power for $1.7 billion.
Bullish sentiment is also reflected in the stock market, with all major indices reaching their all-time highs.
"There is definitely a correlation between the two," Karvy Stock Broking vice-president Ambareesh Baliga was quoted as saying in the Economic Times.
"When the stock markets rise, more M&A deals happen. In the past, this trend was not as strong, as the deals were primarily domestic," Baliga said.
"But today, with the cross-border deal flow, the linkage is more apparent."
However analysts say that the value of M&As in the remaining year are unlikely to cross the $50 billion mark.
They cite equity and market limitations of Indian companies in sectors where mergers can take place.