August 27, 2014 / 5:51 PM / 3 years ago

UPDATE 1-U.S. real estate company Paramount Group files for IPO

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Aug 27 (Reuters) - Paramount Group Inc filed with U.S. regulators to go public, in what could be the second-largest initial public offering by a real estate company in the United States after Hilton Worldwide Holdings Inc’s IPO last year.

Paramount has over 16.5 million square feet of prime office space and several buildings in major cities, including San Francisco’s landmark One Market Plaza building, Washington DC’s Liberty Place and Paramount Plaza on Broadway.

Reuters reported in July that Paramount was exploring an offering that could raise around $2 billion, valuing the company at up to $15 billion.

Paramount, founded in 1978 by German mail-order entrepreneur Werner Otto, said it planned to use the IPO proceeds for debt repayment.

The company also said it intended to structure itself as a real estate investment trust (REIT) after the offering.

Companies with large real estate assets seek a REIT structure as it helps reduce the tax burden on their rental income. Shareholders also stand to gain as REITs are required to distribute at least 90 percent of their profits as dividends.

Paramount listed BofA Merrill Lynch, Morgan Stanley and Wells Fargo Securities as the underwriters for the offering.(

Paramount said it planned to list its stock on the New York Stock Exchange under the symbol “PGRE”.

The filing included a nominal fundraising target of about $100 million, but did not reveal how many shares Paramount planned to sell or their expected price.

The amount of money a company says it plans to raise in its first IPO filings is used to calculate registration fees. The final size of the IPO could be different. (Reporting by Neha Dimri in Bangalore; Editing by Ted Kerr and Kirti Pandey)

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