Euromoney, August 28 2020
Euromoney has moaned before about the absurd level of redaction in Hong Kong listing prospectuses, but we think Ant Group set a new level of petulance in redacting the joint global coordinator line from their filing.
The joint sponsors are there, and the financial adviser, but the line between? [REDACTED].
Still, maybe there’s a reason. The joint sponsor list – Citi, JPMorgan, Morgan Stanley and CICC – attracted great interest, not just because of who was on it, but who wasn’t. When one compares it with the listing of Alibaba, Ant’s parent in 2014, one name has been added (CICC) but three have gone: Credit Suisse, Deutsche Bank and Goldman Sachs.
Deutsche’s absence is not really a surprise, given the decline in that firm’s investment banking franchise in the intervening years, but the others were more of a shock.
Credit Suisse has long prided itself on its relationship with the Alibaba group, through Vikram Malhotra and others, and it has handled many deals for the group either as underwriter or adviser. For a time, it was pretty much considered Alibaba’s house bank.
Now, it appears that Credit Suisse is the one firm on that redacted line: a joint global coordinator, but not a joint sponsor. Opinion is divided on this outcome. Some say that Credit Suisse can’t be a sponsor because it’s a shareholder in Ant, and is therefore conflicted, which makes some sense, except CICC is also a shareholder and a joint sponsor.
Others believe the bank has been tarnished for its closeness to Luckin Coffee, which suffered an accounting scandal and defaulted on loans earlier this year.
But what of Goldman? Those close to the deal believe the bank will appear as a joint lead manager, another step down from Credit Suisse, and that this apparent demotion is principally down to the amount of work Goldman has done for Alibaba’s arch-rival Tencent.
This tends to happen: many banks observe that their closeness to one of the region’s leading fintechs, whether in China, India or southeast Asia, counts against them when a rival fintech is mandating banks.
In the other direction, Citi has probably made the greatest ascent since the Alibaba IPO, when the bank was on the top line but was considered sixth of sixth – “made the coffee on the roadshow”, as one person close to that deal recalls it.
Since then, it has led Ant’s Series C financing, Alibaba’s Hong Kong secondary listing and is now a top line joint sponsor on the Ant IPO. The hiring of Jan Metzger as TMT head from Credit Suisse in 2015 – he is now Asia-Pacific head of banking, capital markets and advisory – has clearly helped.
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