Many Investment Banks Are Loyal To Ali And Give Up Billions Of Dollars.

It is estimated that the IPO scale of Alibaba is likely to exceed $16 billion of Facebook's financing scale two years ago.

Alibaba's IPO is facing a new round of mergers and acquisitions in China's technology market, which makes major investment banks face difficult choices when undertaking related businesses. In the increasingly competitive technology market, enterprises are very sensitive to hiring IPO underwriters, so as not to disclose confidential information to competitors.

Another concern of these enterprises is that investment banks that have already undertaken IPO of technology companies can no longer devote themselves to the transactions of their clients' competitors. In the past year, major investment banks are waiting for Alibaba IPO underwriting opportunities, according to people familiar with the matter. In order to win the deal, they also gave up the business of Alibaba competitors.

　　 first IPO Preparation meeting

Alibaba announced on the 16 th this month that it will go to the US IPO, and the underwriting cost is expected to reach US $300 million. On Tuesday, Alibaba will hold its first preparation meeting in Hongkong. On Tuesday, Reuters quoted a number of people familiar with the matter as saying that Alibaba will meet 6 leading underwriters responsible for the IPO issue and lawyers and other professionals related to IPO. The main content of the conference is to discuss the main responsibilities of all parties and make plans for listing.

At present, the 6 investment banks Alibaba has contacted are Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan chase and Morgan Stanley. People familiar with the matter said that at this Tuesday's meeting, Alibaba could also announce the second investment partners of the 6 main investment banks.

The 6 investment banks are in a favorable position and are likely to be underwritten, according to people familiar with the matter. For global investment banks, about $300 million in IPO underwriting costs will also make Alibaba the most expensive Chinese listed company in the past ten years.

Ronald Van, chief China consultant of Asian Capital Holdings (Ronald Wan), said: "Alibaba IPO is a huge transaction, and all major investment banks are concerned about the competition for the underwriting rights is very fierce." (Ronald Wan) From the Alibaba's point of view, if any underwriter is not a friend, it is the enemy. The boundary is very clear. There are no third possibilities.

　　 Draw a clear line of loyalty.

Recently, Alibaba acquired the High German software transaction, which allowed major investment banks to draw a line with Alibaba competitors. Alibaba has already held 28% of the High German software, and announced last month that it would purchase all the remaining shares of Gould software, valuing the latter $1 billion 600 million.

People familiar with the matter said that when the High German software investment bank When consulting how to defend, some investment banks rejected the business to avoid potential conflicts with Alibaba's IPO business. Finally, Gao de software hired Lazard company as a financial adviser. In the past, similar services were a bad job for investment banks, and they could get nearly 2% of the transaction cost.

In February 2012, there were reports that at least five banks, including Credit Suisse, Goldman Sachs and Morgan Stanley, were fighting for Jingdong IPO underwriting rights. But when the Jingdong filed a $1 billion 500 million IPO application last month, only two underwriters from the Bank of America and UBS were involved. Jingdong is China's second largest e-commerce company and Alibaba's competitor.

Similarly, people familiar with the matter say that Alibaba The largest Internet rival Tencent announced this month when it announced an alliance with Jingdong, and all six investment banks that were in contact with Alibaba were not listed. The consultant of Tencent is Barclays, and Jingdong's financial advisor is Bank of America.

In addition, Alibaba announced last week that it will spend $800 million to acquire a majority stake in cultural China Communications Group Limited. In this transaction, the mainstream investment banks have not signed a service agreement with the latter. At that time, Goldman Sachs provided advisory services to Alibaba, while the financial advisory service for cultural China communication group was an unknown Hongkong investment bank Reorient Financial Markets.

"We can see that the major investment banks have seen the huge scale of Alibaba IPO, so they will try to avoid doing anything that annoy the Alibaba or its management," said Ronald Wan, capital of Zhuo Asia.