WEBVAN DELAYS IPO IN SEC ACCORD

DAVID GHITELMAN

FOSTER CITY, Calif. -- Webvan Group, an Internet grocery company here, said it was postponing its initial public offering, originally scheduled for early last week, in response to concerns raised by the Securities and Exchange Commission.

A spokeswoman for Webvan told SN: "In view of the significant amount of publicity with respect to Webvan's proposed public offering, the SEC and Webvan have agreed to a cooling-off period prior to the commencement of the offering."

Asked how long the cooling-off period would last, the spokeswoman said it was up to the SEC.

According to published reports, the SEC had two major concerns:

Webvan officials had spoken with business magazines despite regulations requiring companies to remain silent in the weeks before an IPO. In September, Louis Borders, Webvan's chairman and co-founder and former chairman of Borders Books (now Borders Group), Ann Arbor, Mich., appeared on the cover of BusinessWeek and was featured in an article about the top 25 personalities of the Internet economy.

The SEC was also reportedly concerned about reports that Webvan's road-show presentations for institutional investors disclosed information not available elsewhere to the general public.

According to reports, investors at the road shows were told that although Webvan only began delivering groceries in May and had sales of just $400,000 in the first half of 1999, the company was making 1,500 deliveries a day worth an average of $80 each in September. These figures would produce monthly sales of $3 million.

In its IPO, Webvan was looking to sell 25 million shares to raise approximately $280 million.