Public conversations

Companies are increasingly recognizing the importance of communications efforts in the IPO process.

Companies are increasingly recognizing the importance of communications efforts in the IPO process.

When Rich Roberts awoke one seemingly ordinary morning in September 2005, the veteran communicator had no idea he was about to plunge into a year of intense work on an IPO that would ultimately form one of the world's largest publicly traded hospitality companies.

"From the moment I learned I would be part of the spin-off for Cendant, it became one of the most intense experiences I ever had, working every weekend and most nights," says Roberts, then VP of communications at Cendant. "We knew this was an amazing opportunity that we might not ever get a chance to do ever again."

That day, Roberts, now communications VP for Wyndham Hotel Group, learned that Cendant had acquired the Wyndham brand and franchise system for $100 million from The Blackstone Group.

The deal accelerated a strategy to shed the Cendant brand in favor of Wyndham Worldwide, which comprises three core units: Wyndham Hotel Group (6,500 hotels, 10 brands, six continents), Wyndham Vacation Ownership (140 vacation ownership resorts, 18,000 individual units), and RCI Global Vacation Network (relationships with 35,000 independent owners in 22 countries).

As Roberts found, communications is now critical to the outcome of a listing at a time when IPO activity is surging. Stronger performance in the US financial markets is providing liquidity, stoking greater interest in IPOs.

Not quite the unbridled onslaught of the 1990s, a Thomson Financial survey tallied 189 offerings in 2006, raising $43 billion, nearly $2 billion more than the $41.4 billion in 1997 - though that year saw 558 deals.

However, financial communicators today face an IPO market that is subject to a skeptical financial media, while regulators have redefined compliance, and underwriters, analysts, and investors remain ever more discerning.

For Wyndham Worldwide - a company so large it became a member of Standard & Poor's 500 index upon issuance - the decision was made to list on the New York Stock Exchange (NYSE), known for its concentration of blue-chip companies, says Ryan Barr, SVP/ director of financial relations at Hill & Knowlton.

"It's not selecting one exchange over another; it's selecting the right exchange," Barr says. "One company may select NYSE, which conveys a very historic, blue-chip aura. Another company may see the NASDAQ's perception of high technology as more in line with its image."

As the big day approached, Wyndham, working with H&K, orchestrated dozens of interviews. Key early hits included USA Today and the AP, both of which interviewed Stephen Holmes, who'd become Wyndham Worldwide's president, chairman, and CEO.

"We also scored coverage in key industry trades, including Hotel Business, Hotel & Motel Management, Lodging Hospitality, Hotels, Travel Weekly, and Business Travel News," says Roberts. "Christine [Da Silva, senior manager of trade media relations for Wyndham Hotel Group] placed eight trade covers in one year, the most out-front exposure I have seen afforded to a single company."

The team also had help from NYSE, a crucial partnership, as though virtually all major financial media have a presence at NYSE, that doesn't guarantee coverage.

"Because we've built such strong relationships with financial media, we can help coordinate a large number of interviews during a short span of time," says NYSE media relations specialist Annmarie Gioia.

Gioia's team helped coordinate the 9am bell ringing on August 1, 2006, followed by interviews with CNBC's Squawk on the Street, CBS MarketWatch, BBC-TV, Reuters, Bloomberg, The Wall Street Journal, Dow Jones News Service, and others.

The NYSE team also assigned a house photographer to shadow the players and arranged locations for the shoot, including use of NYSE's storied meeting spaces.

The exchange game

For another H&K client, Melco PBL Entertainment, NASDAQ seemed a better fit for its listing. A joint venture between Melco International Development and Publishing & Broadcasting Limited, Melco PBL operates casino gaming resorts in Macau, China. Wynn and Las Vegas Sands - two of the other five companies that possess Macau gaming licenses - had listed on NASDAQ earlier.

"They had already done a great job championing the Macau story, giving us the correlation we needed," says Simon Dewhurst, CFO at Melco PBL. "If we had tried this a few years ago, we would have needed a slide in the deck explaining the Pearl River Delta region, but that education had already been done for us."

H&K New York worked with H&K Hong Kong and Maggie Ma, Melco International Development's group PR manager, to coordinate listing-day activities and opening-bell ceremony logistics with NASDAQ, develop key press materials and arrange top-tier media interviews.

"PR was absolutely instrumental and as integral as the lawyers, the accountants, and the consultants," Dewhurst says. "When you are pursuing capital in a crowded market, it is critical to distinguish yourself from other opportunities."

On listing day, H&K provided on-site support at the NASDAQ MarketSite for Melco PBL.

There were several challenges, including the time difference between New York and Hong Kong, investor concerns over the potential saturation of the Macau market, and even the arrest of Macau's secretary of transport and public works within 10 days of the listing.

Despite the setbacks, according to H&K, the $1.1 billion IPO in December 2006 marked the largest ever out of Asia and one of the top seven of 2006. The stock opened up 17% above the offering price, exceeding the top estimates.

Coverage included Reuters, Dow Jones, CNBC, Bloomberg, WSJ, MarketWatch, and Forbes.com.

Meanwhile, during the first quarter of 2007, IPOs raised approximately $12 billion, representing 18% more than in the same period last year, according to Dealogic. With a thickening pipeline for IPOs ahead, the challenges financial communicators face should only intensify.

"But whether planning an IPO, executing the strategy, or having completed a listing, this is not the end of the road," Barr says. "It's just one path as your company's story continues to evolve."

Comparing the NYSE and NASDAQ
 
NYSE
(New York Stock Exchange)

Origins:
May 17, 1792
Location: Wall Street
Format: Continuous auction (though 50% of trades now execute electronically)
PR perception: Household brands, large blue-chips
PR assistance: Included as part of listing fees
Media presence: All major financial outlets
Photo op: 9am bell ringing to open market
 
NASDAQ
(National Association of Securities Dealers Automated Quotations)

Origins: February 8, 1971
Location: Times Square
Format: Largest US electronic stock market
PR perception: Technology, new economy
PR assistance: Included as part of listing fees
Media presence: All major financial outlets
Photo op: A span of windows overlooking Times Square

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