Cerberus’s Tower International may post a profit on its $106 million IPO

Article by Christian A., on October 15, 2010

The initial public offering of Tower International Inc. for 6.250 million shares was priced at $13 a share – which falls below expectations. Tower International, the automotive supplier controlled by Cerberus Capital Management LP, said that the common stock will start trading Friday on the New York Stock Exchange under the symbol "TOWR".

The company gave a 30-day option to underwriters to buy an additional 937,500 shares of common stock on the same terms and conditions.

Cerberus, whose investment in Chrysler LLC's car business had dissipated due to bankruptcy last year, aimed to post a profit on Tower's $106 million initial public offering.

In 2007, Cerberus bought Tower, which makes hoods and doors for Volkswagen AG and Toyota Motor Corp. According to a Securities and Exchange Commission filing, Cerberus hoped to sell the shares at $15 to $17 each.

The filing showed that the midpoint price would value the private equity firm's $181.6 million stake at nearly $200 million. Cerberus’ investment was part of a $1 billion deal that had pulled Tower out of bankruptcy right before the credit crisis hit.

Cerberus is believed to take consolation from any profit from Tower after the company had given up its equity investment in Chrysler and relinquished most of its stake in General Motors Corp.'s GMAC LLC finance unit as part of government bailouts of the auto industry.

Tower, which had once been the largest maker of car and truck frames in the world, is hoping to end at least five years of losses as global auto sales increase toward a record in 2010. [via BusinessWeek]

Topics: ipo, united states

If you liked the article, share on:

Comments

Recommended

The first time Porsche revealed the Panamera Sport Turismo to the public was during the 2017 Geneva Motor Show earlier this year. And now it has already entered production, and...
by - July 27, 2017
Autocar has got some juicy rumours for us regarding a new McLaren hypercar. The British publication has inside sources claiming that a new model will be added to the Ultimate...
by - July 27, 2017
Ferrari has recently launched the New Power15 extended warranty program. The company developed this program in response to the notion that supercars are very expensive to maintain. Truth be told,...
by - July 27, 2017
The UK it seems is about to take the same road as its neighbouring country France by banning sales of petrol and diesel vehicles beginning 2040. As reported by The...
by - July 27, 2017
What has BMW been up to lately? The company recently announced that they are currently focusing on electrification, and so far, their new architecture will enable “electrification of every model...
by - July 26, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries