boston.com Business your connection to The Boston Globe

Blackstone IPO could be sixth-largest ever in US

NEW YORK -- The IPO market may not be as large as it once was, but there is still expected to be plenty of room for this week's debut of private equity powerhouse Blackstone Group, likely one of the biggest initial public offerings in US history.

Blackstone's IPO is expected to raise between $3.87 billion and $4.14 billion. If it comes in at the high end of the range, it will be the sixth-largest US offering ever and the biggest in nearly five years, according to Renaissance Capital and IPOHome.com.

The size of the deal has been matched only by the controversy surrounding the offering.

Blackstone first defied expectations when it said in March it would go public, having made its fortune taking companies private. It also raised eyebrows by structuring the company to hand little control to investors -- instead tying their stakes to the management committee that runs the firm.

Since then, Blackstone made headlines by disclosing chief executive Stephen Schwarzman made $400 million in 2006 and could walk away from the IPO with a stake valued at as much as $7.7 billion.

The number of IPOs so far this year has jumped 28 percent over the same period in 2006.

One area where the IPO market may cool, though, is among competitors to Blackstone in the private equity business.

A new bill pending in the US Senate would tax publicly traded partnerships that derive profits from managing other people's assets at the same tax rate as corporations, abolishing a two-decade old provision that grants the partnerships a lower tax rate.

SEARCH THE ARCHIVES