Goldman sale to raise
Staff and wire reports
as much as $3.8 bilNEW YORK -- Goldman Sachs Group Inc. said today it had raised the estimated selling price on its initial public stock offering to between $45 and $55 per share next month.
In an amended filing with the Securities and Exchange Commission, the New York-based investment bank said this would raise the total value of the offering to $3.795 billion.
Last month, the selling price was estimated at $40-$50 per share for a total of $3.45 billion raised. Hawaii's Kamehameha Schools/ Bishop Estate, which owns about 10 percent of the Wall Street giant, plans to sell 9 million of its shares in the Goldman IPO.
The potential payoff to KSBE was put at about $450 million last month, but estate trustee Henry Peters called that estimate conservative. The IPO will transform the 130-year-old investment banking partnership into the fourth-largest U.S. securities firm.
As many as 69 million shares, or 14.8 percent of the firm, will be sold, Goldman told the Securities and Exchange Commission today. The sale, expected the first week of May, values the firm at as much as $25.6 billion.
Chairman and Chief Executive Henry Paulson's 4.13 million shares could be worth as much as $227 million.
Bishop Estate would retain a roughly 4.7 percent interest in Goldman Sachs after the IPO. The estate initial investment of $500 million has more than tripled based on the Goldman's current valuation.
The share sale comes as investors drove up Wall Street firms' stocks in anticipation of higher profits. Based on its earnings, Goldman would be a more reasonably priced stock than Merrill Lynch & Co., the biggest U.S. securities broker.
"Goldman could be a very good addition to our portfolio," said Jack Ablin, who manages $300 million at Colonial Asset Management in Jacksonville, Fla., including shares of Merrill. "We'll be looking at it."
Goldman, which makes money trading, managing funds and advising governments and companies, earned $2.70 a share in its year ended Nov. 27.
At a $55 stock price, that's a price-to-earnings ratio -- a measure of investor optimism -- of 20.4, less than Merrill Lynch's 28.3 and more than the 17 for Morgan Stanley Dean Witter & Co., the biggest firm by equity capital.
Goldman raised the price because stocks of brokerage firms have rallied amid forecasts for higher earnings. Merrill Lynch rose 11 percent this month while Morgan Stanley climbed 12 percent.
Bear Stearns Cos., the sixth-biggest firm, today said third-quarter earnings jumped 23 percent to $1.42 a share, beating analysts' forecasts of $1.15.
Goldman earned a record $1.19 billion before partners' compensation and taxes in its first quarter ended Feb. 28, up 16 percent. Including compensation, corporate taxes and other expenses, it would have earned $520 million, or $1.08 per share, according to the SEC filing. The share sale, rejected by partners six times in 30 years before approval last June, will value the stakes of the firm's more than 200 managing directors at as much as $15.6 billion.
In Goldman's first quarter, investment banking revenues rose 42 percent to $902 million.
Reuters and Bloomberg News contributed to this report.
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