NEW YORK (Reuters) - Skype is moving forward on an initial public offering of up to $1 billion, but investors will have to wait until next year before it prices, said several people close to the situation.
Despite investor expectations that an IPO would materialize by the end of the year, market conditions and other factors appear to be slowing the offering, said two people close to the situation.
The Luxembourg-based software company, popular for its cheap voice and video calls over the Internet, filed a Form S-1 registration statement with the Securities and Exchange Commission in August. In October, Skype named Tony Bates, a former senior vice president of Cisco Systems, as its chief executive.
The company is still assessing a number of factors such as the current IPO inventory and its own preparedness, said another person familiar with the situation, noting that the new CEO would make the decision about the right timing for the offering once he becomes more familiar with staff and products.
The IPO will occur some time next year, said a separate person familiar with the situation.
Once the deal occurs, the value of the IPO will range from $750 million to $1 billion, said two of the people. Goldman Sachs is leading the effort along with several joint book running managers, including JPMorgan, Morgan Stanley, BofA Merrill Lynch, Barclays Capital and Citigroup.
Frank Quattrone’s Qatalyst Partners is also said to be advising, although not listed as a book runner on the IPO, said one of the people. Qatalyst Partners did not return calls seeking comment.
Skype’s advisers, breaking with a common practice, decided not to run a dual track in which the company would also explore the option of selling a stake.
But just weeks following the S-1 filing, Skype and its advisers fielded calls from various technology and telecommunications companies eager to discuss a pre-IPO stake or investment, said two of the sources.
Companies such as Yahoo, Microsoft, Google, Apple as well as Verizon Communications Inc and AT&T Inc and Cisco Systems were all considered interested third parties at one point, said one of the people. Meanwhile, a separate person said Skype would have been a natural fit for Comcast because of its already established cable networks.
These discussions have cooled, according to two of the people. “The valuation expectations were very high and never got anyone to really bite,” said one person.
In November 2009, Skype was acquired from eBay by an investor group led by Silver Lake that included the Canada Pension Plan Investment Board.
Verizon, Google, Apple, Cisco and Comcast declined comment. Representatives for AT&T, Yahoo and Apple were not immediately available for comment.
Reporting by Nadia Damouni and Sinead Carew in New York; additional reporting by Soyoung Kim and Ritsuko Ando in New York