Groupon is set to raise at least $700 million in its initial public offering after the largest daily deals company increased the price and size of the deal on strong demand.
Groupon priced the IPO at $20 per share, above the initial range of $16 to $18, two people familiar with the offering said.
The company is selling 35 million shares, up from 30 million previously planned, the people added.
The deal is one of the year's most closely watched IPOs and one of the largest offerings in years.
Groupon chief executive Andrew Mason and his executive team spent almost two weeks on the road pitching to investors and addressing widespread criticism about a replicable business model, slowing growth and accounting concerns.
To pull the deal off the company cut its valuation by about half. Existing shareholders aren't selling and Groupon is selling much less than 10 per cent of itself. It also skipped meetings with potential investors in Europe and Asia.
"I have been shocked at the stance that the media and analysts have taken on Groupon in general," said Boyan Josic, chief executive of Daily Deal Media, which tracks the industry.
"This is a company with permission to market to 150 million consumers daily. No other company in the world has ever had that type of reach," Mr Josic added. "Investors who truly understand this business model and the position that Groupon has in this market are buying."
Solid demand for a limited supply of Groupon stock may support the IPO on its debut today. The shares are set to begin trading on Nasdaq under the ticker GRPN.
Groupon was planning to offer 4.7 per cent of the company. With the increase in the amount of stock sold, this climbs above 5 percent - still one of the smallest floats of the past decade.
If underwriters, led by Morgan Stanley, Goldman Sachs and Credit Suisse, exercise their right to buy just over 5 million more Groupon shares in the IPO, known as the greenshoe, Groupon will raise more than $800 million, before fees.
The IPO values Groupon at almost $13 billion, more than twice what Google offered to acquire the company late last year.
Reuters