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Bloomin' Brands IPO raises less money than expected but stock proves tasty

Bloomin' Brands, which operates Outback Steakhouse and other restaurant chains, raised less money than expected in its initial public offering on Wednesday but proved a tasty treat for investors.

The Tampa-based company sold 16 million shares at $11 apiece late Tuesday, raising $176 million. That was below its initial target of 21 million shares for $13 to $15 each, which would have raised about $300 million.

"It was really downsized in both size and price so it would be an easily digestible offering for individual investors,'' said Sam Hamadeh, CEO of PrivCo, a research firm that follows the privately held company.

Shares rose to a high of $13.08 in the stock's first day of trading on the Nasdaq but closed at $12.41, giving Bloomin' Brands a market value of $1.46 billion. The stock is trading under the ticker BLMN.

"I think it has done well because of the pricing being so low," Morningstar analyst James Krapfel said.

The company said it plans to use proceeds to pay down debt and for working capital and general corporate purposes. The parent of Outback Steakhouse, Carrabba's Italian Grill, Bonefish Grill and other chains, Bloomin' operates more than 1,400 restaurants in 48 states and 20 countries.

The company, which used to be called OSI Restaurant Partners, was public until 2007, when private equity firms Bain Capital Partners and Catterton Management Co. bought it for $41.15 a share in cash in a deal worth $3.24 billion.

The offering comes amid a rush of restaurant IPOs, and Bloomin' Brands' offerings fit right in the middle of the previous two — low-budget Mexican chain Chuy's Holdings which jumped 16 percent on its debut and is now up 47 percent, and New York's expensive steak house Del Frisco's Restaurant Group, which was flat.

Wedbush Securities restaurant analyst Nick Setyan said he sees investors more excited about fast-casual restaurant concepts, especially in this economy. The average check at Bloomin' restaurants is in the mid-teens and up, higher than many value-oriented, fast-casual chains.

"This is another example of one of these older, mature brands being passed over for more newer, exciting chain concepts,'' he said. "I think there's more appetite for restaurants that are going to grow quite a bit.''

The Bloomin' Brands IPO was the biggest market debut since Facebook's disappointing entry in May chilled the market. Other companies scheduled to go public this week include Carl's Jr. owner CKE Inc. and British soccer club Manchester United. The team is owned by the Malcolm Glazer family that controls the Tampa Bay Buccaneers.

Bloomin' Brands IPO raises less money than expected but stock proves tasty 08/08/12 [Last modified: Wednesday, August 8, 2012 10:33pm]

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