Francesca Withstands Secondary Offering News Quite Well (FRAN)

Francesca’s Holdings Corporation (NASDAQ: FRAN) is holding up rather well considering its news and considering that it has been public for less than six-months.  Its lock-up expiration is approaching.  The company owns and operates Francesca’s Collections, Inc., a chain of retail boutiques under the Francesca’’s Collections brand.

Last night came news of a follow-on secondary offering for up to 9 million shares of common stock.  All of the shares are being sold by existing shareholders including “certain members of management and certain affiliates of CCMP Capital Advisors, LLC.”  That means none of the proceeds will end up with the company.

Goldman Sachs and J.P. Morgan Securities are listed as the joint bookrunners of this underwritten offering, and co-managers were listed as Stifel Nicolaus & Company and KeyBanc Capital Markets.  The underwriters were given an overallotment to purchase up to 1.35 million shares as well.

The current share value of the offering comes to roughly $200 million at current prices.  The total market cap was almost $1 billion before the news of the offering hit and the near-4% drop today to $22.12 compares to a post-IPO range of $15.22 to $29.75.

JON C. OGG