Pic: NBC10
As we noted previously, FriendFinder (i.e., Penthouse Media Group) was using Renaissance Capital as the underwriter for its upcoming IPO. At the time, we indicated that the company was in dire financial straits and the IPO seemed a bit of a last-ditch effort.
Perhaps that’s the reason the company can’t get a more-mainstream underwriter. Or maybe no firm wants to be associated with the racy business. But with $30 million in fees at stake (assuming standard 7% commission on a $460 million offering), you’d think the banks would get past the sleaze factor. As breakingviews.com reports (via NY Times)
While the company hopes to add [other underwriters] to the list, that may be a tough sell. Banks like nothing more than money, but after a year of public drubbing for precipitating the credit crisis, they are understandably wary about attracting any further negative attention.
More explanation for the reticence and the BigLaw connection after the jump.
This might just be a case of once bitten, twice shy. Breaking Views reminds us that
Similar fears about shifting regulations kept Wall Street firms away from offerings by online gaming companies a few years ago, which feared reprisals from regulators. That premonition proved spot-on when Congress effectively banned Internet betting. As tempting as Penthouse’s I.P.O. may be, this seems to be one fee where Wall Street is sensibly taking a pass.
For better or worse, there has been no such difficulty finding legal representation for FriendFinder or Renaissance. Akin Gump is representing the issuer and Skadden, the underwriter.
And a reminder for those who prefer the articles in Playboy, one of our more-popular posts relates to that magazine and can be found here.
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