A fast food chain, an Islamic development bank, and the largest financial institution in China hit the financial media recently with their respective initial public offerings.
This week, we check out the PR implications of these IPOs and determine whether they represent a case of Good PR dollars-and-sense or a Bad PR investment.
| The PR Focus | Good PR or Bad PR? |
|---|---|
| Burger King is selling more than hamburgers and malteds these days - it is also selling shares. Burger King's May 17 IPO presented 25
million shares (19% of the company) at $17 a share, which was at the high end of the forecast share. According a Reuters report, the proceeds of the IPO will be used to pay down debt; the company was purchased in 2002 for $1.5 billion by an investment group led by Texas Pacific Group. |
GOOD PR: Okay, 'fess up - did you really know that Burger King was not a publicly-traded company before reading this? The low-key but
successful IPO mirrors Burger King's low-key but successful PR strategies. Unlike McDonald's, whose PR woes include hostile movies and books about the chain, Burger King's inventive and unobtrusive PR (hello, Subservient Chicken!) helped to keep it out of controversy. |
| May 17 also saw the IPO for the European Islamic Investment Bank, the first Shariah-compliant Islamic financial institution authorized by
Great Britain's Financial Services Authority. The bank raised more than $141 million (before expenses), with roughly $113 million coming from existing shareholders. Proceeds from the IPO will be used to provide banking products and services that are compliant with the financial tenets of Islamic law. |
GOOD PR: This IPO creates a new era in the global Islamic financial presence. EIIB is not the first European-based Islamic bank (Islamic
Finance House opened in Luxembourg in 1978), but it is the first to launch an IPO and to secure a listing on a major European market (the London Stock Exchange). Considering Europe's growing Muslim population and the level of global Islamic investment, this IPO is a win-win PR story. |
| May 18 saw one of the world's largest IPOs ever, the $9.8 billion share sale of Bank of China. The IPO was particularly popular in Hong
Kong, which has a history of IPO mania. A Reuters report found heavy traffics at the bank's Hong Kong branches - which was not unexpected, since the bank reported thousands of new accounts opened when news of the IPO was first announced. The bank will be listed on Hong Kong's Hang Seng Exchange. |
GOOD PR: Faith in the IPO goes far beyond Hong Kong: Goldman Sachs and UBS co-sponsored the IPO and more than $30 billion in institutional
orders were placed in advance of the individual investors. This is the third Chinese bank to go the IPO route within the past year (following China Construction Bank and Bank of Communications), signaling more financial power to the booming Chinese economy. |