Shares of energy companies Rose Rock Midstream LP and Memorial Production Partners LP received a mixed response on Friday, after failing to garner much investor interest during the run-up to their initial public offerings.
Shares of Memorial Production closed on Nasdaq at $18.78, a percent down from the $19 offer price, after remaining at that level through most of Friday's trading session.
On Thursday, the company had cut the number of units in its initial public offering (IPO) by a tenth and priced them at the lower-end of the $19-$21 expected price range. Rose Rock shares closed flat at $20 on the New York Stock Exchange after opening 3 percent higher. Tulsa, Oklahoma-based Rose Rock had recently been in the centre of a bidding war between Plains All American and SemGroup Corp.
Plains had urged SemGroup to defer the IPO, saying it would reduce the value available to shareholders in a potential SemGroup sale. Rose Rock Midstream, which raised $140 million from the IPO, plans to use the proceeds to make a cash payment to SemGroup. The units in the IPO made up 41 percent of Rose Rock, with SemGroup indirectly owning the rest.
Rose Rock's IPO was underwritten by investment banks led by Barclays Capital, Citigroup and Deutsche Bank Securities. Houston, Texas-based Memorial Production raised $181 million from its IPO, partly to reduce debt.
Memorial Production, which owns assets in south and east Texas, was formed in April by Memorial Resource Development LLC to own and acquire oil and natural gas properties. Raymond James, Citigroup and Wells Fargo Securities were the lead underwriters to the Memorial Production offering.
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