A Lucky Escape For Dunkin' Holders From Secondary Offering (DNKN)

Usually when you get a filing for a large secondary offering of stock into an IPO lock-up period it tends to hurt the shares of the underlying company.  Dunkin’ Brands Group, Inc. (NASDAQ: DNKN) announced Friday evening that certain of its private equity backer  stockholders plan to offer 22 million shares of Dunkin’ common stock.  The underwriters will also have an overallotment option to purchase up to an additional 3.3 million shares from the selling stockholders.

It appears that the public was either wanting a larger float or that they were ready for this offering.  On Monday it has had almost no impact on the stock.  When companies release news like this on Friday evening, we generally say that they “snuck the news out” when investors were out at Happy Hour rather than watching their stock news.

Another issue that is helping is that the shares are not hitting the market immediately.  The filing and press release noted that the company expects the offering to be completed in the second quarter of 2012.

The stock is down only 1.8% at $31.33 and the post-IPO range is $23.24 to $32.44.  It is quite frequent that in offerings like that the shares drop 5% or so.  This is a case where it seems to have been handled delicately.

This one has rallied more than 50% from its IPO as well.  The IPO was for 22.3 million shares at $19.00 each, above the $16.00 to $18.00 price range.

JON C. OGG