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U.S. energy group Venture Global was valued at just over $60 billion in its initial public offering, down from a much higher target of more than $100 billion.
The company priced its IPO at $25 per share, raising $1.75 billion, according to a statement. The company said earlier this month it was aiming to achieve a valuation of up to $110 billion, above oil giant BP, before scaling back the offering this week.
People close to the deal said the scale and timing of the rate cut underscores investors’ nervousness about rising U.S. stock market valuations, even as Wall Street bankers brace for a wave of floatations. He said he did.
One potential investor said Venture Global’s bankers explained the pricing rationale and why they were setting such a high multiple. “I resisted them at first, but then they tried to claim that I was a heretic and that all the other investors were fine with a higher multiple. That’s gaslighting at its best,” the source said. spoke.
Cole Smead, CEO of Smead Capital Management, which has invested about $1.5 billion in oil and gas companies but not in venture global IPOs, said public market financing is an energy strategy. It added that it was particularly tough for companies in the sector.
Venture Global declined to comment.
The listing comes after U.S. President Donald Trump this week ordered the reopening of licenses for LNG terminals, ending a Joe Biden-era moratorium that caused uproar among oil industry leaders.
Venture Global has built strong relationships with the incoming administration. In April, CEO Mike Sabel attended a dinner for oil and gas executives at Mar-a-Lago where President Trump offered $1 billion in exchange for reversing environmental policies. He is said to have requested campaign contributions in the amount of US dollars. The company donated $1 million to President Trump’s inauguration campaign.
Mr. Sabel and co-founder Robert Pender, who owns 84 percent of the company, pioneered modular construction of LNG facilities, which allows large-scale construction to reduce costs and project delivery times. Much of the facility prefabrication work can now be completed offsite.
Venture Global has earned a reputation as a start-up in the LNG industry, which has traditionally valued close relationships with foundation customers, with customers seeking long-term supply contracts that enable companies to raise financing for terminal construction. are tied.
But when Russia invaded Ukraine in 2022 and LNG prices soared, the company made a controversial decision to sell large quantities of its product on the spot market rather than honor long-term contracts. Shell, BP and several other foundation clients have filed a $5 billion arbitration claim against Venture Global, alleging that the company has broken long-term promises to profit from the spot market.
The company, which operates two LNG terminals on the U.S. Gulf Coast, denies breaching the contract.
Goldman Sachs, JPMorgan and Bank of America served as joint bookrunners for Venture Global’s IPO.
