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|Blackstone float set to proceed |
(about 12 hours later)
The partial stock market listing of private equity giant Blackstone is set to proceed as planned despite political concerns in the US over the move.
Blackstone, which owns businesses such as Cineworld, United Biscuits and Sungard, will sell shares worth $7.8bn (Â£3.9bn), valuing it at about $32bn.
Some US politicians have called for the float to be delayed, arguing Blackstone and similar firms should pay more tax.
|China's purchase of a large stake in Blackstone has also caused concern.||China's purchase of a large stake in Blackstone has also caused concern.|
|Tax debate||Tax debate|
The Chinese State Investment Company bought a 10% stake, worth $3bn, in May although some experts believe its stake will actually be much higher after the flotation.
Pressure in the US Congress for a delay to the flotation, which has been supported by trade unions, seems unlikely to have any impact.
I express my concern regarding the enormity of this public offering and the large investment from a foreign government Senator Jim Webb
Blackstone is set to announce the price at which the shares will be sold on Thursday ahead of the first day of trading on Friday.
Market regulators have said scrutiny of the flotation is proceeding normally, the Securities and Exchange Commission (SEC) noting that it was "comfortable" with the process.
Momentum behind a delay has grown since a powerful Senate Committee proposed legislation which would substantially increase Blackstone's tax bill.
Its supporters want to close a perceived loophole requiring partnership-based firms such as Blackstone to pay far less tax when raising money on the markets than public companies.
If agreed - and a similar bill is being considered in the House of Representatives - the tax rate would go up from 15% currently to the standard corporation tax level of 35%.
Blackstone owns the Cafe Rouge restaurant chain among others
Under current proposals, the increase would not come into effect until 2012, cushioning the impact on Blackstone.
But some legislators want it introduced sooner and for new laws to come into force before the high-profile stock market floatation.
The Treasury Department has been reviewing tax rules in this area for some time but Senators have urged it and the SEC to resolve Blackstone's position as quickly as possible.
China's involvement has also raised national security concerns in the Senate.
Blackstone has an interest in the firm that supplies software to the US military, prompting concerns about foreign influence over key national assets.
Democratic Senator Jim Webb has called for the float to be put on hold pending a review, citing concerns of "undue influence" by outside interests.
"In making this request, I express my concern regarding the enormity of this public offering and the large investment from a foreign government," he said.
Blackstone's flotation is eagerly awaited because it is the first time investors will be able to gain access to the fast-growing, acquisitive sector.
According to the Financial Times, demand for shares has been very strong with significant interest from outside the US.