Groupon cutting back size of IPO

NEW YORK, USA: The world's largest daily deals company Groupon Inc is cutting the size of its initial public offering, sources said on Wednesday.

Groupon in June filed to raise up to $750 million in its IPO. It now plans to raise less than that amount, though not significantly less, one of the sources said. Another of the sources said Groupon is now planning to raise roughly $500 million.

About 5 per cent of the company will be sold in the IPO, a source familiar with the offering said. The offering will value Chicago-based Groupon at between $10 billion and $12 billion, depending on how much the company raises, the source added.

The sources declined to be identified because they're not authorized to speak publicly about Groupon's financing plans. Groupon declined to comment.

Groupon's latest IPO filing said that existing shareholders are no longer planning to sell stock in the offering.

Equity markets have fallen and become significantly more volatile in recent months, putting a damper on all new issues.

Groupon has also been hurt by questions about its accounting metrics, the long-term viability of its business model and the fact that it has lost two chief operating officers this year.

Led by outspoken chief executive Andrew Mason, Groupon is one of the most closely-watched offerings in the US IPO pipeline.

Along with LinkedIn Corp (LNKD.N), Zynga, and, next year, Facebook, Groupon offers investors a way to invest directly in social media.

Groupon is expected to launch its IPO roadshow early next week, sources told Reuters on Tuesday.