Tyco International Ltd. raised a disappointing US$4.6 billion in the initial public offering for its finance unit, CIT Group Inc., yesterday afternoon. Two hundred million shares sold for US$23 each, below the planned range of US$25 to US$29 per share.
"People simply are pulling away from anything that isn't triple-A," said Peter Van Winkle, investment chief for PNC Advisors in Boston.
"Anything touched by Tyco, at least right now, is going to be a problem." The embattled Bermuda conglomerate pressed ahead with the IPO of its finance unit despite weak markets, because it has US$27 billion in debt hanging over its head. Bond-rating agencies in recent weeks have said that Tyco's future financial health rested in part on its ability to raise money on CIT. Tyco bought the New York-based finance group a year ago for US$9.5 billion.
