* National Beef had expected to price shares on Thursday
* Underwriter says delay is indefinite
* Thin margins in beef industry a concern-analyst
(Adds company statement, analyst's comment, byline)
By Phil Wahba
NEW YORK, Dec 17 National Beef Inc NBP.N
unexpectedly postponed its initial public offering on Thursday,
citing weakness in the IPO market.
The beef processing company had planned to offer 17.25
million shares for between $15 and $17 each after the close of
markets on Thursday, for expected proceeds of about $276
million. The shares were to list on the New York Stock Exchange
on Friday under the symbol "NBP."
National Beef attributed its decision to "current weakness
in the IPO market" and gave no indication of when or if it
would make another attempt to go public.
The company, based in Kansas City, Missouri, was due to get
about one-third of the proceeds of the IPO and the balance was
to be used to buy back shares.
"With $356 million in debt, the company will still be
highly leveraged after the IPO because some of the proceeds are
going to repurchase shares from the founding members,"
Morningstar senior equity analyst Mike Taggart wrote in a
research note earlier this week.
Competition in the beef sector is fierce, which may also
have investors questioning the company's future profitability,
said analyst Matt Therian of investment firm Renaissance
Capital in Connecticut.
"The beef industry is not a high-margin industry, and
investors were wondering if its high-margin initiatives were
sustainable," Therian said.
National Beef's decision to postpone its IPO was made in a
week during which four new issues came to market, but all
priced below expectations.
Last week, of eight IPOs on the calendar, four were
canceled or postponed.
National Beef said in a prospectus that had been filed with
the U.S. Securities and Exchange Commission that it is one of
the largest U.S. beef processing companies, accounting for
about 14 percent of federally inspected steer and heifer
slaughter in the fiscal year ended Aug. 29.
The IPO's lead managers are Bank of America Merrill Lynch
(BAC.N) and Credit Suisse CSGN.VX.
(Reporting by Phil Wahba; Editing by Lisa Von Ahn)