SpaceX Leaves Some Banks Peeved at Junior Roles in IPO Lineup
(Bloomberg) -- Several junior banks marketing shares in SpaceX’s landmark listing are working for relatively small fees and being relegated to roles that don’t come
(Bloomberg) -- Several junior banks marketing shares in SpaceX’s landmark listing are working for relatively small fees and being relegated to roles that don’t come with any credit, according to people familiar with the matter. Some of the banks listed on the lower lines in the SpaceX filing were informed in recent weeks that they had been appointed as co-managers, the lowest rung of broker on an initial public offering, the people said, asking not to be identified because the matter is private. The banks that were notified include Societe Generale and Mizuho Financial Group Inc., the people said.
It’s another example of SpaceX exerting its leverage on banks ahead of its $75 billion IPO. It was already negotiating to pay proportionally smaller IPO fees of less than 0.75% to investment banks. Minor roles as co-managers generally don’t come with the same bragging rights for such a blockbuster listing. Some of these banks had assumed they would have snagged the role of passive bookrunner, which comes with more prestige, the people said. The co-managers have been involved in allocating the stock to retail and institutional investors in various countries around the world.
The bankers involved are frustrated but don’t want to miss out on the high-profile listing or sacrifice the future relationship with SpaceX, they added. Some of the banks have more prominent roles in the share sales in their local jurisdictions. Societe Generale is a joint book-running manager for retail shares being offered in Europe, according to a filing. Mizuho Securities Co., the Japanese bank’s brokerage arm, is administrative manager of its share sale in Japan. A representative for SpaceX didn’t immediately respond to a request for comment.
Representatives for Societe Generale and Mizuho declined to comment. The lead bulge-bracket banks are already positioned to take in a bigger share of the fee pool than the other 21 brokers involved, leaving little cash for the banks not on the top line of the filing. With assistance from Bailey Lipschultz. More stories like this are available on bloomberg.com
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