Nielsen is a Wall Street star in IPO pricing


The Nielsen Company priced its IPO a dollar above the expected range at $23 per share. The strong Wall Street reception is good news for the media sector, since the big offering – now over $2 billion – is seen as a test of the market’s appetite for media stocks. Apparently, Mr. Market is hungry.

Nielsen is far and away the biggest IPO so far in 2011, although the year is still quite young – and the biggest since General Motors raised $20.1 billion in November. The Nielsen IPO had been pending since last June, but the company and its underwriters waited until market conditions improved to launch the roadshow earlier this month. As the big player in the TV ratings business, Nielsen is a well known name to consumers as well as people in the industry, so that “big name” apparently helped market the IPO.

The plan had been to sell about one and three-quarters billion in new stock which will trade on the NYSE, beginning Wednesday, as “NLSN.” Another quarter billion was to come from some bonds which seem quite similar to convertible preferred stock, since they carry a mandatory conversion to stock in just two years. But those estimates were based on the projected price range of $20-22 per share. Since the IPO priced at $23, it looks like the haul will be around $2.2 billion.

JP Morgan and Morgan Stanley led the offering, with participation from just about everyone who is anyone on Wall Street.

Nielsen, it should be noted, was public once before under the name VNU, but was taken private by a group of private equity funds for $9.7 billion in 2006. Those funds will retain majority control.

Also priced Tuesday evening was Demand Media, which will trade on the NYSE as “DMD.” It likewise priced above expectations. Less well known to broadcasters, it is an Internet content producer – sort of like a smaller Yahoo! or AOL – which creates content to be used on client websites. It uses lots of freelance writers and video creators to produce “how to” videos and instructional content.

Demand Media’s claim to fame is that its CEO is Richard Rosenblatt. He’s the guy who headed MySpace when it was sold to News Corporation for $580 million in 2005.

The Demand Media IPO was led by Goldman Sachs and Morgan Stanley. It hoped to raise about $112.5 million with the new shares selling at $14-16 each, but it got even more since the IPO priced at $17.

RBR-TVBR observation: This is about more than Nielsen or Demand Media. The strong Wall Street embrace for Nielsen’s IPO should set the stage for other people in the media space to start lining up for IPOs or for existing public companies to sell new shares. As previously noted, Pandora and Groupon are candidates for IPOs this year – and they have to be encouraged by the Nielsen and Demand Media pricings.