CB Richard Ellis Group Inc., the world's largest commercial property broker, fell the most in four years after abandoning plans to raise up to $400 million in a private offering and saying it will instead sell shares to the public.
The stock dropped as much as 33 percent. CB Richard Ellis said yesterday in a statement it will sell 50 million Class A common shares. In the prospectus, the company disclosed it terminated talks with investors on a proposed private sale of convertible preferred stock.
"The fact that the company failed in its attempt to raise money in a private placement indicates that at Friday's closing prices, the company wasn't that attractive to certain investors,'' Will Marks, an analyst with JMP Securities in San Francisco, said in an interview.
Commercial real estate brokers are reporting profit declines as banks tighten credit. CB Richard Ellis, based in Los Angeles, lost 70 percent of its market value this year through yesterday as financial institutions worldwide racked up losses and asset writedowns of more than $690 billion.