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Cushman & Wakefield Shares Begin Trading in Closely Watched IPO

Unlike Lukewarm Newmark IPO, Cushman Shares Price Within Proposed Range
August 2, 2018
Cushman & Wakefield executives and employees ring the opening bell of the New York Stock Exchange as the company’s shares began trading Thursday.

Cushman & Wakefield began trading on the New York Stock Exchange in one of the most closely watched initial public offerings for a real estate services provider since rival CBRE Group's offering in 2004 and Jones Lang LaSalle had its IPO in 1997.

The shares of Chicago-based Cushman & Wakefield traded at $17.91 at 2:51 p.m. New York time, after reaching as high as $18.18, or 6.9 percent above the $17 pricing. The stock was priced late Wednesday at $17, the midpoint of its proposed range of $16 to $18 per share.

"Some have suggested that the success, or failure, of the IPO could be a Wall Street referendum on the current economic expansion," said D. Hara Perkins, real estate attorney and director of law firm Goulston & Storrs PC. Cushman's offering "should be a good barometer of investors' comfort with the real estate market," she said.

The company said it expected to sell at least 45 million shares on the New York Stock Exchange under the symbol CWK. Cushman plans to sell at least 45 million shares, raising at least $765 million before commissions, expenses and underwriter discounts.

Cushman granted its underwriters a 30-day option to buy as many as an additional 6.75 million shares at the public offering price, minus underwriting discounts and commissions.

The company expects to use the funds to repay its $460 million second-lien loans related to its acquisition of Cassidy Turley, part of the company's $3.1 billion in total debt. Cushman & Wakefield said it would use any remaining net proceeds to fund corporate operations.

Morgan Stanley, J.P. Morgan, Goldman Sachs & Co. LLC and UBS Investment Bank are joint book-running managers and representatives of the underwriters for the offering.

Newmark Group, which includes brokerage Newmark Knight Frank, began selling shares in early December with plans to sell 30 million shares at a price range of $19 to $22 a share. But lukewarm response from investors caused parent company BGC Partners Inc. to cut the offering size to 20 million shares at a cost of $14 to $15 in the days leading up to the stock sale.

The company officially went public at $14 a share, with some analysts saying economic concerns may have weighed on the price.

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