Nymex Holdings Inc., the parent company of the New York Mercantile Exchange is planning a secondary stock offering which could be in excess of US$ 1 billion.
The NYMEX is one of the world's oldest and also the biggest energy exchange. NYMEX had made an initial public offer in November 2006, which was a big success. The IPO had been made at $59. At the time of the IPO, the underwriters had been criticized for undervaluing the stock and the stock had doubled on first day of listing. Since then, the NYMEX stock has risen more than 135% from its IPO price.
The objective of the offer would be to allow existing shareholders to cash out their holdings and it may take place in March or early April.
The exchange's main stake holders - the 816 seat-holders which include members, traders, and investors control more than 60 million shares. Although there is an agreement between the underwriters and the seatholders regarding a lockup period for the shares, the seatholders are likely to find a way out.
The NYMEX stock ended $2.17 lower at $138.61 as investors feared that the fresh supply would drive down the stock's price.
