* Shares down as much as 2.1 pct
* Company valued at about $3.4 billion
* Was taken private in 2006 for $6 bln
(Adds details, background, analyst comment, updates share
June 27 Shares of Michaels Cos Inc fell
as much as 2.1 percent in their return to the market, valuing
the biggest U.S. arts and crafts retailer at about $3.4 billion.
Michaels sells scrapbook and paper craft supplies, apparel
and framing accessories, kids clothing, home and ceremony decor
through its more than 1,200 stores in the United States and
The company, which was taken private by Blackstone Group LP
and Bain Capital LP for $6 billion in 2006, filed for an
IPO of up to $500 million in March 2012 but withdrew it after
John Menzer stepped down as chief executive after suffering a
The two private equity firms reduced their stake in the
company to about 80 percent from 93 percent.
The Irving, Texas-based company raised $472.6 million after
its offering of 27.8 million shares was priced at the low end of
the expected $17-$19.
The company's shares opened at $17 and touched a low of
$16.65 on the Nasdaq on Friday.
"Investors lost enthusiasm because all the proceeds from the
offering will go into paying down debt," said Jay Ritter, an IPO
expert at the University of Florida.
Michaels had about $3.7 billion in debt as of May.
The company, whose product brands include Recollections,
Artist's Loft and Loops & Threads, competes with Hobby Lobby
Stores Inc, Jo-Ann Stores Inc and Wal-Mart Stores Inc
Michaels is headed by Carl Rubin, the former chief executive
of Ulta Salon Cosmetics & Fragrance Inc. John Mahoney,
the former chief financial officer of Staples Inc, is a
member of the company's board.
The retailer, which also offers courses in baking and
beading & jewelry making, plans to open 40-45 stores this year,
the retailer said in its IPO filing. (bit.ly/1jV0u1G)
Michael's net sales rose about 4 percent to $4.57 billion
last year, driven by the sale of its bracelet-making kit
"Rainbow Loom", a big hit with young kids.
The company said in April it was hit by a security breach of
customer payment cards and about 400,000 cards were potentially
affected between June 26, 2013 and Feb. 27, 2014.
J.P. Morgan and Goldman Sachs & Co were lead underwriters to
(Reporting by Tanya Agrawal and Neha Dimri in Bangalore;
Editing by Don Sebastian)