Apollo

  • 25 Apr 2007 at 8:52 AM
  • Apollo

Apollo ‘Looking At’ An IPO

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apollo-d.jpgApollo Management has been amazingly tight-lipped about the rumors of a possible IPO. Until now. Yesterday Leon Black confirmed that Apollo is considering an IPO of the buyout shop he founded.

Leon Black, founder of Apollo Management LP, said executives of the New York-based buyout firm were examining whether to sell shares to the public, a step being taken by rival Blackstone Group LP.
“We’re looking at this, as is every other private-equity fund,” Black, 55, said today during a panel discussion at the Milken Institute Global Conference in Beverly Hills, California. Any setback to equity markets, trading at record highs, would likely come from a “geopolitical” crisis, he said.
Apollo is also considering the private sale of shares, which would raise capital while avoiding the scrutiny that comes with an initial public offering, two people familiar with the talks said April 5. A private placement wouldn’t preclude an IPO, and would allow Apollo to gauge the success of Blackstone’s offering before going ahead with its own, they said.

So that’s the confirmation. Apollo is now officially considering selling equity, either in a private or a public sale. Got that?
Black Says Apollo Weighs IPO, Market Drop Possible [Bloomberg]

    • 10 Apr 2007 at 3:34 PM
    • Apollo

    Being Leon Black

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    black.jpgWe’re just catching up on our weekend reading here at DealBreaker. Bess has her head buried in the Times wedding announcements. We’re reading the Wall Street Journal’s weekend edition, which is something we usually try to avoid. But this weekend’s had a long profile of Apollo founder Leon Black, so we’re into it.
    Nothing groundbreaking in the profile. Opens with a nice bit about Leon more or less crash landing a plane in the South Dakota badlands and then closing a deal right where he landed the plane. Other details:
    • Apollo likes the “down bid”—where you reduce your offer right before the deal is meant to close. We’ve actually been in the conference room when this has been done. It is nothing short of brutal. But, if you’re on the Apollo side of things, it does feel good to know you just made the sellers significantly less wealthy than they would have been. They’re probably the folks who screwed up the company anyway, so why should they be getting that rich?
    • He hated b-school. Shakespeare was good. Studying business was terrible. Doing business is the best.
    • He only went to b-school because his father urged him to. In his second year, his father committed suicide. We’re not going to make a joke about this.
    • Black was a big player in the original go-go days of popularizing “junk bonds”—the stuff we now call high yield—when he was at Drexel Burnham.
    • His net worth is around $2 billion, half of it in art. (You kind of have to wonder what he thinks when he reads about John Arnold making $2 billion last year.)
    Billionaire Black’s Latest Game Of Investing Hardball [Wall Street Journal]

      • 05 Apr 2007 at 9:29 AM
      • Apollo

      The Rumored KKR IPO Is Rumored To Be Kaput

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      kravisandrobertsipono.jpgAn initial public offering has been ruled out by Kohlbeg Kravis & Roberts, sources tell DealBreaker. “KKR is next” was one of the most persistent rumors that arose in the wake of news that Blackstone would offer $4 billion of limited partnership equity to the public was. There were published reports claiming that bankers at Goldman Sachs were already at work on putting together an IPO for KKR—and those might have been correct. Perhaps there were bankers pitching an IPO to KKR. Perhaps the venerable private equity titan had even encouraged the bankers. But now we’re told that the IPO is off. Indefinitely. Permanently. For now.
      Word from CNBC’s Charlie Gasparino that Goldman and JP Morgan were working on an IPO for Apollo Management, and subsequent stories in the Wall Street Journal and New York Post, quickly helped Apollo replace KKR in Wall Street afterhours chatter and on the pages of the newspapers. Part of what had been feeding the KKR rumors was the feeling that Goldman—which was notably absent from the list of advisers to Blackstone for its IPO—must be working on something for a Blackstone competitors. How else had one of the premier banks been shut out of one of the most talked about deals? It seemed the door was held open for nearly everyone else on Wall Street.
      Apollo fit just as well as KKR for this theory, and reports and rumors of its impending IPO private placement have quickly replaced those pointing to KKR. Even denials by people “close to Apollo”—as DealBook reported—and by people who maybe know some other people who are familiar with things that sometimes happen at Apollo—as the Wall Street Journal reported—haven’t quenched the thirst for this story. This morning’s WSJ report only served to confirm that it was Apollo and not KKR whose deal was keeping Goldman occupied during the rush of other banks into the arms of Blackstone’s IPO.
      But we came not to discuss the history and origins of the KKR rumor but to lay it to rest. Our sources—lets call them, “people familiar with KKR’s plans”—tell us the KKR has decided to stay out of the IPO game for the time being. The reasons we’ve heard are purely speculative: it didn’t like the comparatives with Blackstone, it didn’t like the attention Blackstone and its tax treatment were getting, it didn’t think the timing was right, it didn’t think the price would be good enough to justify the headaches of added public scrutiny, the KKR-ers aren’t pushing for freely transferable equity stakes like the ‘Stoners are. Take your pick or invent your own.

        • 04 Apr 2007 at 1:14 PM
        • Apollo

        The Apollo IPO Story: DealBook Doubts It!

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        apollo-d.jpgThere’s no Apollo IPO in the works and Apollo has not hired any investment banks to get the process started, says Andrew Ross Sorkin, fresh from the high of his takeover of the Business Section of the New York Times (technically, the B.S. still exists but it’s clearly now redundant and will be phased out).
        Sorkin takes the Wall Street Journal/Deal Journal theory of competing banks and pushes it a step further—he says the deal isn’t even “in the works.” Except maybe in the hopes and dreams of bankers at Goldman Sachs and J.P. Morgan. What’s more, he says that Apollo did go to hear an investment bank pitch an IPO yesterday—but that bank was neither Goldman nor JP Morgan.

        One problem: It’s not true. Apollo is not going public next month, nor the month after that — and probably not the month after that either.
        People close to the firm told DealBook they have not hired any investment banks, and while they have held meetings with bankers pitching such an idea, they have not even decided to take the initial steps to pursue it.
        As recently as Tuesday, Apollo’s senior executives met with an investment bank — not Goldman Sachs and J.P Morgan — to hear their pitch, these people said. One option on the table is to sell a small stake in the firm to a prominent investor as a way to create some liquidity and set a floor for any future offering or sale.
        So what’s with the rumors? Goldman Sachs and J.P. Morgan, which were both left out of Blackstone Group’s proposed initial public offering, appear desperate to take another private equity firm public — and so they may be not-so-subtly pushing Apollo into the market. (Talk about client service!)

        Sorkin’s sources denying the Apollo IPO story at least sound a bit closer to Apollo—literally, since he describes them as “people close to the firm”—than the Journal’s unnamed people who are familiar with people. So this sounds close to an actual denial, rather than the double-blind non-denial we prated on about this morning. But is it really credible that Goldman and JP Morgan have just made up this story, hoping that reality will catch up with them?
        So far all the reports–CNBC’s, the Journal’s and the Post’s–do seem to come from sources at the banks. So the question is who is getting played by their sources: Sorkin or everyone else?
        Apollo Close to an I.P.O.? Only in Banks’ Dreams [DealBook]

          • 04 Apr 2007 at 11:25 AM
          • Apollo

          Is the Apollo IPO A Consolation Prize or A Conflict Story?

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          One storyline that is clearly emerging from the various private equity and hedge fund IPO rumors and reports is that the investment banks are gunning hard for this business. And they’re not waiting around for hedge funds to decide to go public—they’re pitching, even pushing, the idea of launching a public offering on the firms.
          “All over Wall Street, bankers are pushing private-equity shops to move quickly, reminding them that market conditions could deteriorate and diminish investor appetite for any offering,” Wall Street Journal reporters Katie Kelly and Robin Sidel write in today’s paper. “In this case, however, it isn’t clear whether bankers are more concerned about a capital-markets slowdown or getting a high-profile deal to the finish line before rival firms attempt to do the same.”
          A sign of how ultra-competitive the investment banks have become for this business is the public attention paid to the fact that Goldman Sachs was not included as an underwriter for the public offering of Blackstone partnership equity. There was a lot of speculation about why one of the premier banks on Wall Street (yes, yes, Broad Street, we know, “Wall Street” is a metaphor or a synecdoche here) was left out of a deal that seemed to include every other bank on the Street. Was it because Goldman “called bullshit” on the Blackstone IPO, as some said? Or was it personal animosity between the higher-ups at Blackstone and some prominent Goldman personages? Or—and we’re sorry there are so many “ors” here but that’s just the way the world is—was it that Blackstone was hesitant to let Goldman—which competes with Blackstone in many of its businesses—do much digging into its books in preparation for the offering.
          If the reports of an Apollo IPO—a story broken by CNBC’s Charlie Gasparino yesterday and carried several millimeters forward in today’s Wall Street Journal and New York Post—are correct, then it seems we have the answer: Goldman couldn’t take the Blackstone business because it was already working on the offering of its competitor. Now Goldman is famous for finding creative ways to cleverly untie seemingly Gordian knots of conflicts—but underwriting two competing private equity IPOs might have been too going too far.
          That’s the story as we’ve heard it. But the boys at Deal Journal have an alternate reading of the Apollo story. They write that the Apollo IPO isn’t so much of what kept Goldman out of the Blackstone underwriting syndicate—it’s a consolation prize for the banks, a bit of business they apparently pushed to get after being shut out by Blackstone. Of course, Deal Journal has been a big proponent of the Blackstone In Competition With Goldman theory, and this take would allow them to leave that notion in place. The Apollo Conflict theory, in fact, undermines the whole idea that Goldman was shut-out.
          Of course, we’re probably just counting our eggs while they are still in the bush. Or however the saying goes.

            • 04 Apr 2007 at 9:02 AM
            • Apollo

            Apollo Launching An IPO?

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            charliegasparinoonapollogoldman.bmpGoldman Sachs is advising Apollo Management on an initial public offering, we learned from CNBC’s Charlie Gasparino late in the afternoon yesterday. Later CNBC reported that JP Morgan had a piece of the deal as well. While no final decision has been made to pursue the IPO, the private equity firm was “pretty far along” in the discussions and leaning toward launching an IPO possibly as early as this far, Gasparino said.
            Today’s Wall Street Journal adds to the story, reporting that Apollo has hired J.P. Morgan as well as Goldman Sachs to arrange the IPO, which the Journal’s Kate Kelly and Robin Sidel say would include only a small portion of Apollo equity and could be worth a $1.5 billion. Team Kelley & Sidel also cite “people close to the banks” naming an even earlier IPO date, saying it could come “as early as this month or May.”
            The New York Post weighs in as well this morning, reporting that its sources say that Apollo might file for the IPO as early as… “soon.”
            Questions remain open. First and foremost: Is this really going to happen? Team Kelley & Sidel cite unnamed “people familiar with Apollo’s thinking” who then cite unidentified people in “Apollo’s executive ranks” who deny that an IPO is “in the works.” Team Kelley & Sidel treat this as “Apollo distancing itself” from the IPO talk—and the boys at the Junior Journal (also known as the Journal’s M&A blog, Deal Journal) read this as a straight forward denial.
            But it’s clearly anything but a straight forward denial! Denying something through double blind, unquotable paraphrase is tantamount to, well, admitting it. No one at Apollo, Goldman or JP Morgan seems willing to take responsibility for the denial. Something they could easily do if there was no IPO in the works. This might be “distancing” but one senses Apollo is only backing up while getting ready to charge into an IPO.
            Apollo IPO? [CNBC.com]
            Apollo Is Pushed to Become Latest Private-Equity IPO [Wall Street Journal]
            Apollo: Goldman and J.P. Morgan’s Consolation Prize [Deal Journal]
            Apollo Boss Plans To Follow Rival To IPO [New York Post]

              • 02 Aug 2006 at 10:05 AM
              • Apollo

              Apollo Chairman Resigns

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              How many times can Michael Gross quit Apollo Investments? Back in February we heard he had quit his job heading the publicly traded arm of buyout shop started in 1990 with billionaire investment banker Leon Black. Word was that he wanted to start a new business. It turned out that business was Marathon Acquisition, a new outfit flush with cash from the biggest blank check offering ever.
              Apparently Gross remained the chairman of Apollo’s board until Monday. Now he’s stepping down, severing yet another tie. Presumably he continues to hold a good deal of Apollo stock, however, so it would be going to far to say he had cut all his ties to the sun god.

              Gross Leaves Apollo Investments               [TheStreet.Com]