Blackstone IPO could raise $4.8bn

The Blackstone Group has set a price range for its public offering, which has the potential to raise up to $4.8 billion, valuing the firm at approximately $40 billion.

The Blackstone Group will sell 133.3 million common units of its management company in a public offering expected to raise between $3.9 billion (€2.9 billion) and $4.1 billion. The IPO’s size could swell to $4.8 billion, should underwriters including Deutsche Bank, Morgan Stanley, Lehman Brothers, Citigroup and Merrill Lynch decide to float an additional 20 million units.

The revised IPO size – coupled with recent news that the Chinese government will buy a $3 billion stake in the firm’s management company – means Blackstone is set to raise nearly $8 billion in fresh capital.

Blackstone’s publicly traded units will be priced from $29 to $31 each and will trade on the New York Stock Exchange under the ticker symbol “BX.”

Filed Monday with the Securities and Exchange Commission, the new information about its IPO has prompted speculation that Blackstone will float within weeks, despite an attempt to halt the offering by the US’ largest federation of unions. Last week, the AFL-CIO sent a letter to the SEC alleging that the Blackstone offering is an attempt to tap the public markets without regulation.

Blackstone’s offering represents about a 10 percent stake in its management company, implying that the firm could be valued as high as $40 billion. Blackstone’s IPO will represent the second public offering of a preeminent alternative asset manager in the US. Fortress Investment Group sold a similar stake in its management company earlier this year, and its success has reportedly prompted many buyout firms to further consider raising capital via the public markets.