The Wall Street Journal is reporting, via its Deal Journal blog, that sources familiar with the company’s plans say the planned IPO of Michaels Stores Inc has been put on hold indefinitely following the stroke in April of CEO John Menzer.
Bain Capital and The Blackstone Group, the private equity companies that own Michaels Stores, filed in March with the SEC declaring their intent to take the company public through a $500 million IPO offering. Lew Klessel, who is Managing Director with Bain Capital Partners, LLC, and Charles “Chuck” Sonsteby, who is Michaels Stores’ Chief Administrative Officer and Chief Financial Officer, have been running Michaels Stores since Menzer’s stroke. The company announced Menzer’s illness on April 20th.
News of a delay in the company’s IPO is not surprising. Companies have been reluctant to be the first big post-Facebook IPO to hit the market due to perceived investor skittishness over IPO’s after the Facebook debacle in May. Investors dislike uncertainty in companies making IPO offerings, and so having a company’s CEO out on medical leave for an extended and indeterminate period of time is also likely to make them wary of a company. Put together, those two factors make the delaying of Michaels Stores’ IPO offering not unexpected.