Citigroup Drops Off Fangdd IPO After Last-Minute Fee Dispute
Citigroup Drops Off Fangdd IPO After Last-Minute Fee Dispute
(Bloomberg) -- After months of work, Citigroup Inc. was absent from a Chinese real estate website’s $78 million U.S. public offering after a dispute over fees, according to people familiar with the matter.
Fangdd Network Group Ltd. and Citi, which had been hired as the second bookrunner on the IPO, could not reach an agreement on the underwriting fees as late as Thursday, people familiar with the matter said, asking not to be identified because the matter isn’t public.
Citigroup, the fourth most active IPO arranger globally this year, had initially been listed in the IPO document in the second position after Morgan Stanley, but didn’t appear on the press release announcing the downsized IPO Friday on the Nasdaq Global Market.
Fangdd had cut the amount of shares it sold in its IPO from 7 million to 6 million after demand for its stock during its roadshow was lower than expected.
Representatives for Citigroup and Fangdd declined to comment.
Fangdd was trading slightly higher than its $13 offer price at $13.10 at 12:40 a.m. in New York on Friday.
U.S. offerings typically pay a higher percentage in IPO fees compared to most Asian countries. But U.S. IPOs of Chinese companies have shrunk in size this year as investors grew wary about the tensions between U.S. and China, squeezing fees for Asian investment bankers.
DouYu International Holdings Ltd., which raised $775 million in July, is the biggest U.S. IPO of a Chinese company this year while four deals from last year topped $1 billion, according to data compiled by Bloomberg. Chinese companies raised $2.9 billion in the U.S. this year, down from the $7.9 billion was raised during the same time last year.
Morgan Stanley, UBS Group AG, China International Capital Corp., and AMTD Global Markets Limited were as joint bookrunners for the Fangdd’s IPO.
To contact the reporters on this story: Carol Zhong in Hong Kong at yzhong71@bloomberg.net;Crystal Tse in New York at ctse44@bloomberg.net
To contact the editor responsible for this story: Liana Baker at lbaker75@bloomberg.net
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