Goldman Sachs CEO visits Groupon over possible IPO

Goldman Sachs Group Inc Chief Executive Officer Lloyd Blankfein visited the Chicago headquarters of Groupon Inc yesterday to pitch executives on hiring his firm for a possible share sale, a person familiar with the matter said.

Morgan Stanley is also in talks with Groupon to arrange an initial public offering, said the person, who asked not to be identified because the discussions are private.

Goldman Sachs aims to win the mandate to handle a sale for Groupon, a two-year old company that rebuffed a $6 billion takeover offer from Google Inc. last month. The start-up this week announced a round of funding said to value it at $4.75 billion and now is weighing an IPO that may give it a $15 billion valuation, people familiar with the matter have said.

Julie Mossler, a spokeswoman for Groupon, and David Wells, a spokesman for Goldman Sachs, based in New York, declined to comment. Pen Pendleton, a spokesman for New York-based Morgan Stanley, also declined to comment.

Goldman Sachs and Morgan Stanley are among securities firms vying for lucrative assignments to arrange what may become a surge in multi-billion-dollar IPOs for Web start-ups.

LinkedIn Corp, the largest networking site for professionals, is planning a share sale this year and is working with banks including Morgan Stanley to complete an IPO prospectus by the end of the first quarter, according to people familiar with the matter.

Goldman Sachs, Morgan Stanley
Goldman Sachs led a recent $500 million funding round for Facebook Inc, valuing the social-networking site at $50 billion. The securities firm is also using a special-purpose vehicle that will let clients buy Facebook equity worth as much as $1.5 billion, according to people familiar with the matter.

The backing leaves Goldman Sachs in a prime position to handle an eventual share sale by Facebook, based in Palo Alto, California.

Groupon isn’t currently discussing the creation of a special-purpose vehicle with Goldman Sachs, according to the person familiar with those talks.

Blankfein wasn’t among banking executives who met on January 13 with officials from the Treasury Department and American International Group Inc. to explain why their institutions are best suited to handle the sale of the government’s stake in the insurer, a person with direct knowledge of the meetings said.

Blankfein absent
Bank of America Corp. CEO Brian T Moynihan, JPMorgan Chase & Co CEO Jamie Dimon and Morgan Stanley CEO James Gorman attended the meeting in New York, this person said. Goldman Sachs was represented by President Gary Cohn.

Groupon could use money raised in an IPO to step up international expansion plans. The company said it will use some of the $950 million in funding announced this week to let employees and early investors sell shares. Private companies must keep the number of shareholders below 500 or they are subject to reporting requirements by US regulators.

Groupon sends daily deals to 50 million subscribers in 35 countries, up from 2 million subscribers in the US a year ago. It offers daily discounts of as much as 90 percent from businesses such as restaurants, nail salons and clothing stores. It then keeps a portion of the revenue.

Investors in Groupon’s most recent funding round include venture capital firms Andreessen Horowitz, Greylock Partners and Kleiner Perkins Caufield & Byers.