Le Lis Blanc Investors Almost Lose Shirt

Shares in Brazilian clothier Le Lis Blanc tanked 20% at their debut Tuesday, following a butchered IPO that saw several revisions to price and size. The company’s executives – accompanied by runway models – rang the Bovespa opening bell Tuesday amid much fanfare. But there was blood on the catwalk after a fall to BRL5.40 per share, versus a BRL6.75 IPO price that netted the issuer just BRL144m, or $86m. With a greenshoe, the company could grow proceeds to BRL162m. However, in a market where liquidity is the height of fashion, this is less than half the BRL325m Le Lis Blanc hoped for when it ventured out in early April at BRL10.50-BRL12.50. Executives away from the transaction note that Artesia, the private equity firm that held 85% of Le Lis Blanc shares prior to the IPO, bought at a comparably low multiple, leaving it less exposed. The firm pulled a secondary share portion from the offer last week to make it more attractive for investors. Merrill Lynch and Morgan Stanley led the IPO, which proves that markets remain hostile to small Brazilian equity launches.