Wal-Mart IPO Set the Stage for Global Expansion

by George Waldon  on Monday, Jul. 2, 2012 12:00 am  

Mike Smith, left, was syndicate manager and J.D. Simpson was a corporate finance executive when they led the initial public offering of Wal-Mart stock by their employer, Stephens Inc. of Little Rock, in 1970.

“We financed the growth strictly through the small banks in the towns that we put the stores in,” Mayer said. “That was the catalyst for getting started.”

Two Arkansas expatriates in key positions helped Walton secure more loans and make the IPO happen. Both would be given seats on Wal-Mart’s board of directors.

James H. Jones, a native of Alpena (Boone County), provided the company with a $1 million loan, first as an executive at Republic National Bank of Dallas and later as president of First National Bank of Commerce in New Orleans.

Jones also alerted Walton to the opportunity to acquire the Bank of Bentonville in 1961 and even arranged for a $350,000 loan to make the deal happen. That purchase provided the Walton family’s entry into banking, which blossomed into today’s Arvest Bank Group.

H.L. “Buck” Remmel, who grew up in Little Rock and was a senior vice president at White Weld & Co., provided Wall Street cachet to Walton’s IPO aspirations.

White Weld & Co., a well-known firm that would be acquired by Merrill Lynch in 1978, joined Stephens Inc. as the lead underwriters among a group of 44 investment firms that signed up to move 300,000 shares of Wal-Mart stock at $16.50 per share.

The bound volume of the documentation associated with the company’s IPO is as thick as a Gutenberg Bible, with 47 numbered tabs.

Stephens started with 30,000 shares in the IPO but ended up moving more Wal-Mart stock than any of the other firms.

“They didn’t know Wal-Mart anywhere near as well as we did, and we were still learning,” said J.D Simpson, a corporate finance exec with Stephens at the time. “I bet 100,000 shares came back to us after the IPO, and we placed it. We were accounting for a majority of the offering.

“We could tell more people about Wal-Mart than anyone in New York, and we knew where to sell it. We were buying it for our customers and ourselves. I sold it to every friend I had. By the time it was all done, they thought I was a genius. We were at the right place at the right time.”

Jack Stephens, president of Stephens, was named to the Wal-Mart board of directors in recognition of the company’s early support and work on the IPO. The net proceeds of the stock offering to Wal-Mart were about $3 million.

“Going public really turned the company loose to grow, and it took a huge load off me,” Sam Walton recalled in his self-titled “Made in America” autobiography published in June 1992, two months after his death.

 

 

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