The Wall Street Journal
June 25, 2020
Deal expected to be first major IPO at the exchange since floor reopened
The New York Stock Exchange is looking to show it’s back in business as it hosts the initial public offering of Albertsons Cos., the first major IPO since its famed trading floor reopened.
Shares of the grocery-chain operator are expected to start trading Friday at the Big Board, which was closed for two months due to the coronavirus pandemic. Shareholders of Idaho-based Albertsons are set to sell as much as $1.3 billion of stock in the deal, making it one of the largest IPOs at the NYSE so far this year.
Albertsons’ debut will proceed under unusual circumstances due to Covid-19 restrictions that have forced NYSE floor traders to wear face masks, sit between Plexiglass barriers and maintain a six-foot distance from one another.
The company’s debut will appear subdued compared with big prepandemic IPOs at the NYSE, which is owned by Atlanta-based Intercontinental Exchange Inc. Due to social-distancing rules, there will be no crowd of floor brokers gathering to listen as Albertsons’ designated market maker shouts out information on the stock’s expected opening price. DMMs are traders who stand at posts in the middle of the floor and help ensure orderly trading in NYSE-listed companies.
The market maker handling the Albertsons debut is set to be Glenn Carell, a managing director at GTS, a trading firm that owns one of the largest DMM operations at the NYSE. Mr. Carell previously ran the IPOs of companies including Alibaba Group Holding Ltd. and Twitter Inc.
He will work alongside a representative of Goldman Sachs Group Inc., the bank acting as the “stabilization agent” for Albertsons’ IPO, which can intervene to steady trading in the company’s stock by buying shares. An NYSE official will also be nearby overseeing the process.
The three won’t work together too closely, though. Under social-distancing rules in effect at the NYSE, they must all stand at least six feet apart, wearing masks.
The NYSE has made it possible to conduct IPOs remotely. But Patrick Murphy, a partner at GTS and head of its DMM and listings business, said it’s still valuable to have the in-person interaction of an IPO on the floor, with the market maker, bank and exchange acting in close coordination. “Having that dialogue is vital,” he said.
Executives from Albertsons itself aren’t expected to be on hand for the IPO and will instead carry out a virtual bell-ringing, a person familiar with the matter said. A spokesman for Albertsons declined to comment.
It’s an important deal for the NYSE, which has been trying to regain its footing after falling behind archrival Nasdaq Inc. in the IPO race earlier this year.
Companies listing on Nasdaq have raised $18 billion so far this year, compared with $12.3 billion at the NYSE, according to data from Dealogic through Thursday.
But the NYSE is hoping to catch up with a string of coming deals. Besides Albertsons, other companies that have recently unveiled plans to list on the NYSE include business data and analytics provider Dun & Bradstreet Holdings Inc., which is seeking to raise $1.4 billion, and a blank-check company run by hedge-fund billionaire William Ackman that is seeking to raise $3 billion. Such companies don’t have any assets or operating history when they go public, and they conduct IPOs to raise cash for acquisitions.
The NYSE and Nasdaq compete fiercely for IPOs. Traditionally, the NYSE has been the home of U.S. blue-chip stocks and drawn more big listings than Nasdaq. During the past decade, Nasdaq beat the NYSE in capital raised in IPOs twice, in 2012 and 2019, according to Dealogic.