Bloomin' Brands, Changes From Weak IPO to Value Proposition (BLMN)

Bloomin’ Brands, Inc. (NASDAQ: BLMN) had all of the earmarks for a poor initial public offering as it was a lower number of shares at a lower price than what had originally been anticipated.  Apparently, that was not the case as investors are treating the IPO as a value proposition so far.

Shares began trading on Wednesday and the company calls itself one of the largest casual dining restaurant companies in the world.  To prove its value, the company does own and operate some 1,400 restaurants spread over 48 states and in 20 countries or territories.  Its five founder-inspired restaurant portfolio includes the chains under the names of Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill, Fleming’s Prime Steakhouse, and Roy’s.

The IPO was 16 million shares at a price of $11.00 per share.  That was well under the $13 to $15 price range and well under the 21 million shares expected to be sold.  Keep in mind that this the relaunch of a private equity roll-up as the Outback Steakhouse parent company used to trade under the “OSI” stock ticker.

BofA, Morgan Stanley, J.P. Morgan, and Deutsche Bank were the key underwriters. Some 3 million shares were sold by the selling shareholders.  The underwriting group was given a 30-day overallotment option to sell up to 2.4 million more shares with half being from the company and half coming from holders. This IPO was a 10% float offering as there were listed to be 119,906,167 shares outstanding after the offering.

With more 7.8 million shares having traded hands before noon and with a gain of 10.5% to $12.16 so far on the day, chances are high that the overallotment option will be exercised.

The company’s use of proceeds was said to be. “We expect to receive net proceeds, after deducting estimated offering expenses and underwriting discounts and commissions payable by us, of approximately $130.2 million. We intend to use the net proceeds from this offering, together with cash on hand, to retire all of our outstanding 10% notes due 2015, or Senior Notes. There were approximately $248.1 million in aggregate principal amount of Senior Notes outstanding as of March 31, 2012.”

JON C. OGG