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from Breakingviews:
Alibaba’s next superlative: China’s top fee payer
By John Foley
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)
Alibaba’s initial public offering is going to be less about the forty thieves, and more about the fight for fees. The unlisted Chinese e-commerce giant is already an important source of advisory and financing revenue in a weak market. If a highly anticipated stock market listing comes to pass, it could become China’s biggest payer of fees to global investment banks in a decade.
As the company has expanded, chairman Jack Ma has overseen the listing and de-listing of subsidiary Alibaba.com, the arrangement of a $3 billion syndicated loan, the restructuring of payment engine Alipay, and a buyback of shares from U.S. investor Yahoo. Such deals generated combined fees of $176 million since 2007, according to Thomson Reuters Freeman data, based on public disclosures and proprietary estimates. That’s more than any other non-state Chinese company over the same time.
The treasure keeps coming. Alibaba recently secured another $6.5 billion syndicated loan from a consortium led by nine banks, according to IFR. Based on an average arrangement fee of around 1.7 percent, the payday was worth about $110 million.
from Breakingviews:
Apple’s bite out of market seeds IPO appetites
By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist the opinions expressed are his own.
By taking a big bite out of the American stock market, Apple is inadvertently seeding the appetite for equity. While the iPad maker’s recently supersized $50 billion buyback program may be unique in its scale as the largest of all time, it also typifies one of the big challenges facing investors seeking to deploy their money.
from Breakingviews:
Why Alibaba could be China’s next $100bln IPO
by John Foley
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)
Could Alibaba be China’s next $100 billion stock market listing? The Hangzhou-based e-commerce giant continues to be coy over when it will take the plunge. But sooner or later founder Jack Ma will need to offer some kind of exit for his backers, not to mention employees, and an initial public offering is the most likely solution. Now is a good time to start asking how the company should be valued.
from Breakingviews:
Mafia and Cyprus may release IPO animal spirits
By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The mafia and Cyprus could trigger a full release of animal spirits. High debt didn’t deter buyers from this month’s Intelsat and SeaWorld initial public offerings. Now comes Qiwi, a Cyprus-domiciled, Russian payment system warning about the potential effects of organized crime, the island’s bailout, money laundering and a dual-class share structure. It puts investor appetite to the ultimate test.
from Global Investing:
Turkey: ceasefire with PKK may bring economic gains
Turkey's ceasefire last month with the Kurdish militant group PKK could boost its trade partnerships multilaterally, as increasing prospects for stability in the region bring economic opportunities in the Middle East and Africa.
The halt in the decades-long armed campaign came on March 21 after the leader of the Kurdistan Workers' Party, Abdullah Ocalan, sent a letter with the announcement from the island prison cell where he has been held since 1999 when he was arrested for treason.
from Breakingviews:
Satellite IPO launches risk tolerance into orbit
By Quentin Webb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Intelsat’s initial public offering could be a telling launch for stock markets. The owners want a full valuation despite the satellite operator’s slow growth and stratospheric debt. If investors are ready to buy, it suggests risk tolerance is heading sky-high.
from Breakingviews:
How to go public and private all in one go
By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
A Brazilian company seems to have found a way to go public and private all in one go. Biosev, an ethanol producer, is preparing to sell new shares next month. As part of the deal, parent company Louis Dreyfus is offering to buy them back in 15 months. It’s essentially an initial public offering, convertible bond and potential buyout packaged together. And it’s an overly clever solution to a unique problem.
from The Great Debate:
Buying our way out of the IPO era
In 1988, Michael Dell was a 23-year-old wunderkind who sold cheap computers directly to “end users,” which is what he called his customers. He arranged an initial public offering to raise cash and attract top-tier engineers and managers while basking in the light of transparency.
Dell was so small that the IPO wasn’t mentioned in the New York Times. At around $12 million, or $23 million in 2013 dollars, the book value of Dell’s common stock likely would have been too low to entice a modern-day Goldman Sachs, one of its lead underwriters. But Dell’s IPO was a winner. In two months, its stock price jumped from $8.50 to $19 per share. By the end of the year, it had made $159 million in sales.
from Breakingviews:
SeaWorld IPO may not make second investment splash
By Antony Currie
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
SeaWorld’s next investment splash might be smaller than its last. Blackstone Group is ready to take public the amusement parks it bought in 2009 from Anheuser-Busch InBev. Dividends have helped the buyout firm recoup a big part of its original cash outlay already and it may end up trebling its money. But new buyers hoping for a similar performance after the initial public offering should beware getting soaked.
from Global Investing:
Russian equity sales: disappointing
Investment banks have been dismayed this year by the slump in first-time share listings across emerging markets, the area they had hoped would yield the most growth (and fees). But as we pointed out in this story, emerging IPO volumes fell 40 percent this year. And equity bankers have seen lucrative IPO fees dry up - they almost halved this year from 2011 and are a third of 2007 levels.
One market that has possibly disappointed investors most is Russia. Its plan a few years ago to privatise large swathes of state-run companies via share sales had bankers salivating -- estimates for the proceeds ranged from $30-$50 billion. The pipeline is still alluring, with all manner of companies up for privatisation, including shipping company Sovcomflot and the Russian Railways monopoly. The Kremlin did raise $5 billion this year by selling a 7.6 percent stake in Sberbank, the banking giant, but not much else has come to pass. In fact, 2012 saw the state tighten its grip on the energy sector, as government-controlled Rosneft bought oil producer TNK off BP, forking out $12.3 billion and some equity.
