Top Budweiser IPO Banks Said to Lose Up to $170 Million in Fees
Top Budweiser IPO Banks Said to Lose Up to $170 Million in Fees
(Bloomberg) -- JPMorgan Chase & Co. and Morgan Stanley lost out on their cut of what would’ve been the year’s biggest initial public offering last week.
The top two advisers on Anheuser-Busch InBev SA’s Asia Pacific unit IPO would’ve split up to $140 million to $170 million in fees, according to people with knowledge of the matter. The world’s biggest brewer intended to raise as much as $9.8 billion before it announced Friday that it wouldn’t proceed with the listing citing “prevailing market conditions.”
Advisers of Budweiser Brewing Company APAC Ltd. were slated to split about 2% of the funds raised in the IPO, said the people, who asked not to be identified because the information is private. Sponsors, or lead arrangers, would take home about 70% of the fee pool plus potential incentive payments, the people said.
The banks’ reputations are taking a hit alongside their wallets as some analysts blame them for the IPO’s failure. Morgan Stanley has been ranked No. 1 for equity offerings in Asia Pacific since 2017, according to data compiled by Bloomberg. JPMorgan is eighth on equity deals in the region so far this year.
“AB InBev and its bank consortium headed by JPMorgan and Morgan Stanley failed to properly price, attract cornerstone investors and drum up demand,” said Nikolaas Faes, an analyst at Bryan Garnier & Co., in a note to clients where he called the IPO a “fiasco.”
Representatives for AB InBev, JPMorgan and Morgan Stanley declined to comment.
Budweiser had planned to seek $8.3 billion to $9.8 billion in the Hong Kong IPO, valuing the business at as much as $64 billion. It could’ve been the biggest IPO so far this year, taking advantage of the beer market’s growth in Asia to attract investors, and surpassing Silicon Valley darling Uber Technologies Inc.’s May share sale.
--With assistance from Albertina Torsoli.
To contact the reporters on this story: Crystal Tse in Hong Kong at ctse44@bloomberg.net;Vinicy Chan in Hong Kong at vchan91@bloomberg.net
To contact the editors responsible for this story: Fion Li at fli59@bloomberg.net, Amy Thomson
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