Spansion IPO Nets $506M

Online staff -- Electronic News, 12/16/2005

After repricing its initial public offering shares twice, AMD-Fujitsu flash memory joint venture Spansion Inc. began trading its stock on the NASDAQ market system for $12 per share for 42.2 million shares, netting the company $506.4 million.

This price was below the range of $13 to $14 a share the company predicted in an SEC filing Thursday morning and well below the $16 to $18 Spansion hoped to bring in earlier in the month.

The Sunnyvale, Calif.-based company is trading its stock under the symbol “SPSN.”

Spansion also granted its underwriters a 30-day option to buy an additional 5,064,000 shares of Class A common stock to cover over-allotments, if any. Citigroup Global Markets Inc. and Credit Suisse First Boston LLC are the joint book-running managers for the offering while J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Inc., Morgan Stanley and Co. Inc., Deutsche Bank Securities Inc., UBS Securities LLC and Dresdner Kleinwort Wasserstein Securities LLC acted as co-managers for the offering.

Financial analysts have said this is a very price-sensitive situation because chip companies that are spun off from larger parent companies can cause investor concerns, as was the case with the 2004 offering of Freescale Semiconductor, which experienced similar pressure when it was spun off from Motorola Inc.

The Spansion deal was supposed to be priced Wednesday night, with shares going on sale to the public Thursday, but the offering was pushed back a day.