Years after the rumours started regarding the flotation of Alibaba, the markets now wait for the Friday morning bell in New York. Only 15 years old, Alibaba has built up into a configuration of several companies including the recent purchase of online video-site operator Youku Tudou and a football team, making it bigger than eBay and Amazon, its two closest competitors, combined.
The final price on this largest US IPO ever, is $68 up from the $66 muted last week. At this price, if all shares on offer sell, the total raised will possibly stretch to $21.8 billion, not quite beating the largest IPO in US history, that of $22 billion raised by Agricultural Bank of China Ltd. in 2010.
BANKS PROFITING FROM ALIBABA DEAL
It’s not just Executive Chairman Jack Ma, Vice Chairman Joseph Tsai and major shareholder Japan’s SoftBank Corp that will be reaping the rewards of working and aquisition since 1999, it will also be the six banks Alibaba has appointed as coequal leads. Normally, one or two would be given the lead but the banks will share a pot of base fees of 1% of the proceeds, probably exceeding $200 million.
Another percentage point will be available in performance incentive pay to the group of banks, namely Citigroup Inc, Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and Morgan Stanley. Image Source: www.alibabagroup.com