Groupon Inc could price its initial public offering above the current range of $16 to $18 a share, according to three investors who said they spoke with lead underwriters on Wednesday, after demand was stronger than expected for the market's biggest IPO in months.
Books closed on Wednesday afternoon. The IPO is scheduled to price late Thursday and the 30 million shares are due to begin trading Friday on Nasdaq under the ticker GRPN.
The company is targeting a price $1 to $2 above the current range, the investors said. If the IPO prices at $19 per share, that would value Groupon at $12.02 billion. If it prices at $20 per share, that would value the company at $12.7 billion.
No further information was immediately available. A spokesman for Groupon declined to comment. The lead underwriters, Morgan Stanley, Goldman Sachs and Credit Suisse declined to comment.
Scott Sweet of research firm IPO Boutique said earlier on Wednesday that orders from investors were stronger than expected.
"It is many multiple times subscribed," Sweet added. "There is a strong likelihood that Groupon will price above the prevailing $16 to $18 range."
One of the investors who had placed an order for 150,000 Groupon shares said he expected to get a much smaller allocation. Another investor told Reuters he wasn't planning to invest in the IPO.
The third investor said he was unhappy with the price increase and a move by some underwriters to close their books earlier on Wednesday.
Sweet of IPO Boutique noted that some underwriters were closing their books as early as midday on Wednesday.
Groupon's IPO is one of the most closely watched offerings in recent years. The company's business -- selling discounts on local products and services and sharing the revenue with merchants -- has been questioned by some investors. Groupon has also changed its accounting at least twice.
Groupon scaled back the size of the offering last month and is planning to sell less than 5 percent of the company, one of the smallest floats in the past decade.
The move may have added some scarcity value to Groupon's IPO. The company's road show, which started in late October, has been well attended and some investors expressed concern the small float would mean there might not be enough to go around.
(Reporting by Alistair Barr in San Francisco and Anthony Hughes and Clare Baldwin in New York; Editing by Tiffany Wu, Andre Grenon and Richard Chang)