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Underwriters bidding for seat at China table
(iht.com/bloomberg)
Updated: 2006-02-27 14:18 http://www.iht.com/articles/2006/02/26/bloomberg/bxbanks.php
Credit Suisse Group, Deutsche Bank and Goldman Sachs Group are among the
banks that have been asked to submit plans to manage a $10 billion initial
public share sale by China's biggest lender, bankers receiving the proposals
said. It would be the world's largest initial public offering in six
years.
Industrial & Commercial Bank of China on Friday sent out
letters asking the investment banks to submit proposals on valuations and other
details of the IPO before Tuesday, the bankers said, asking not to be identified
before the sale happens.
HSBC, Merrill Lynch, J.P. Morgan Chase and China
International Capital also have been invited to compete for managing
underwriting of the issue, potentially the biggest ever in China, the investment
bankers said.
The assignment may result in $250 million in fees and will
probably help the winning investment bank secure the top slot arranging Chinese
share sales overseas. Chinese companies sold $34 billion of shares outside the
mainland last year, 44 percent of the total in Asia excluding Japan.
"The
sale could be the biggest ever out of China and I don't expect there would be
any IPO bigger than that in the future," said Sam Ho, a fund manager at KDB Asia
in Hong Kong. "Getting this underwriting mandate means a lot for the investment
banks' reputations and league rankings in China."
Morgan Stanley and
Citigroup were not invited to compete for the mandate, the bankers said. The
exclusions come after the banks lost their top managers in China this year.
Cheung Po-ling, a spokeswoman at Morgan Stanley, and Richard Tesvich at
Citigroup declined to comment.
Wei Christianson, former head for China at
Citigroup, quit last month. The chairman for Asia, Francis Leung, plans to leave
Citigroup before the end of March. Morgan Stanley lost Jonathan Zhu as chief
executive for China last month. Christianson will join Morgan Stanley in May to
succeed Zhu.
Industrial & Commercial Bank will be the third of the
big four state-owned Chinese lenders selling shares outside the mainland, and it
may list in Hong Kong as early as the third quarter, bankers said
earlier.
Bank of China, the second-largest lender, hired Goldman, UBS and
BOC International Holdings, its investment banking unit, to arrange an IPO of $6
billion to $8 billion.
China Construction Bank, the No.3 lender, hired
Morgan Stanley and China International Capital to sell $9.2 billion shares in
its IPO in November. The sale lifted Morgan Stanley to the top place in
arranging Chinese share sales outside the mainland in 2005, from second the year
before.
Industrial & Commercial Bank's IPO would be the largest since
2000, when New Cingular Wireless Services, a unit of the biggest U.S. cellphone
carrier, sold $10.6 billion in first-time shares in April that
year.
Industrial & Commercial has eight million corporate clients and
more than 100 million retail customers. It sold a 10 percent stake to Goldman
Sachs, Allianz and American Express for a combined $3.78 billion.
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