Renaissance Lifestyle Communities put its $260-million initial public offering on hold this week, and reports have indicated that the deal was shelved because of market conditions.
It turns out there is more to the story. Though markets are shaky, regulators have actually gone back to company and asked for more information before they give it their blessing, according to someone familiar with the deal.
This isn't to say that Renaissance is in trouble. It's just that in the post-Sino Forest world, the regulators are taking extra precautions to really examine new listings.
Renaissance, in particular, is under the microscope because it's a unique company. At the moment, it's just a shell, but will use the funds it raises from its IPO to partially acquire 20 seniors housing properties. (The rest will come from mortgages that have already been lined up.)
Technically, Renaissance never started marketing, so it's not that much work to put it on the back burner until the new year. And because marketing never kicked off, it makes sense that market conditions couldn't be the only issue holding the deal back. That kind of information can only be determind once bankers strut the company in front of a bunch of different accounts over the course of a few months. (Not to mention that the prospectus was filed only two weeks ago, and markets have been just as shaky since.)
Renaissance plans to purchase 20 seniors housing buildings in British Columbia, Alberta, Saskatchewan and Ontario for a total cost of $580-million. Some of that will come from the IPO funds, and the remaining portion will be paid for using $277-million in mortgages that have already been lined up, plus a $60-million revolving credit facility.