Officials of Metavante Corp., the data processing unit of Marshall & Ilsley Corp. that withdrew its initial public offering about a month ago, are lukewarm about the possibility of refiling.
It would depend on being about as strong financially as when the IPO plan was filed and on better market conditions, said Mike Hayford, Metavantes executive vice president of corporate development and marketing.
Metavante must wait 90 days after the withdrawal to refile, but Mr. Hayford suggests that the company is taking a longer view. We would expect that six months from now or nine months from now whenever the period is that business conditions are appropriate we will look to relaunch, if the value proposition is still there, he said.
Metavante, formerly M&I Data Services, filed July 13 to offer 16.5 million of common shares. But on Nov. 2 its Milwaukee-based parent withdrew the IPO, citing technology stock prices and a slowdown in financial processing markets.
The withdrawal came after Metavante, based in Brown Deer, Wis., had reduced its original $11-to-$13 price range twice to $10 to $12 and then $8 to $9.
We didnt want to go into a market with uncertain stock price fluctuations, Mr. Hayford said. We wouldnt get the upside of taking out a healthy company in that market.
Jason Goldberg, a research analyst at Lehman Brothers, said M&I should be concerned more about revenue growth in data processing than with general market conditions. Revenues have been flat in data processing for the last six quarters. That was due in part to a slowdown because of Y2K, but that excuse ran out of steam a couple of quarters ago.
M&I does not break out Metavantes earnings. On Oct. 11 the parent announced third-quarter operating income of $90.6 million, compared with $90.8 million a year earlier.
Michael Granger, an analyst with J.P. Morgan Securities, agreed that improvements in market conditions and in Metavantes revenue growth would be required to rekindle enough interest to make an IPO desirable to M&I.
There are advantages to being part of M&I, a trusted financial institution with over 150 years of experience, Mr. Goldberg said. That says something to your potential customers in an e-commerce age where security is of the utmost importance. In addition, he said, Metavante gets 11% of its revenues from the relationship.
Employees at Metavante are not unduly gloomy about the withdrawn IPO, Mr. Hayford said. They would rather focus on operations than watch the companys stock price get tossed about in a stormy market, he said.
Metavante and M&I strengthened their hand in private-label banking in April with an agreement with AAA, formerly the American Automobile Association. M&I will provide banking products to AAA members over the Internet using Metavante technology.
In August, Metavante formed an alliance with Spectrum LLC, the bank-owned electronic billing consortium, to provide an electronic bill payment service.
Metavante also plans to focus on its customer relationship management business and to expand its wealth management services, Mr. Hayford said.