IPO difficulties plague National Beef

National Beef Inc has postponed its initial public offering indefinitely for undisclosed reasons, one of the deal's underwriters said on Thursday.

The beef processing company had planned to offer 17.25 million shares for between $15 and $17 each after the close of markets on Thursday, for expected proceeds of about $276 million. The shares were to list on the New York Stock Exchange on Friday under the symbol "NBP."

National Beef had planned to use about two-thirds of the proceeds of the IPO to buy shares in the company from its founding members, a structure that may have alarmed investors, said analyst Matt Therian of Connecticut-based investment firm Renaissance Capital.

What's more, he said, competition in the beef sector is very fierce, putting a question mark on the company's future profitability.

"The beef industry is not a high-margin industry, and investors were wondering if its high-margin initiatives were sustainable," Therian said.

The National Beef news comes on the heels of a difficult two-week period for IPOs. Four other new issues this week managed to come to market, but all priced below expectations. And last week, of the eight IPOs on the calendar, four were either canceled or postponed.

National Beef said in a prospectus filed previously with the U.S. Securities and Exchange Commission that it is one of the largest U.S. beef processing companies, accounting for about 14 percent of federally inspected steer and heifer slaughter in the fiscal year ended Aug. 29.

The IPO's lead managers are Bank of AmericaMerrill Lynch and Credit Suisse .