| HONG KONG, June 6
HONG KONG, June 6 Credit Suisse is
expected to take a leading role in the anticipated IPO of
China's Alibaba Group, according to people familiar with the
matter, a coveted position that would yield massive fees for the
bank as rivals jostle for a role in the offer.
The Alibaba offering may come as early as the end of 2013
and is likely to rival last year's $16 billion IPO by Facebook
Inc in terms of size.
Alibaba Group Holding Ltd. has yet to officially
announce that it will hold an IPO, but people familiar with the
matter say the company has over the past few weeks intensified
its meetings with investment banks.
In a sign of how much revenue is at stake, many banks have
flown over top executives for the meetings - Citigroup Inc
CEO Michael Corbat was recently in China to meet Alibaba
executives, according to one person with knowledge of the visit.
Alibaba has yet to shortlist or formally mandate any bank
for the IPO, but bankers expect the listing to take place in
Hong Kong by the end of this year or early 2014.
Credit Suisse Group AG's transaction history with Alibaba
has increased the bank's chances of a key role in any issue, the
people familiar with the matter said, adding that Morgan Stanley
is also likely to land a top role.
Credit Suisse, Morgan Stanley and Alibaba declined to
comment. "As a matter of policy we don't comment on rumour and
speculation," Alibaba spokesman John Spelich said.
Last month, billionaire founder and Chairman Jack Ma told
the Wall Street Journal the company was ready for an IPO.
The issue is expected to value Alibaba at $60-$100 billion,
and could raise $15 billion.
Underwriting fees, estimated at 1.75 percent, would yield
about $260 million in commissions split between the banks
involved in the deal, Reuters Breakingviews reported last month.
That would make Alibaba the biggest Chinese fee payer to global
investment banks in a decade.
Credit Suisse was the lead financial adviser to Alibaba when
it bought back $7.1 billion worth of its stock from Yahoo Inc
last year and was part of the group of banks that
provided financing for the deal.
Credit Suisse also advised, and helped finance, Alibaba on a
$2.5 billion deal to delist and take private its Alibaba.com
Alibaba's Ma, who rarely addresses banking forums, was a
guest speaker at Credit Suisse's main Asian investment
conference in March and the company recently hired ex-Credit
Suisse China Internet and telecom equipment analyst Wallace
Cheung for its investor relations department.
Morgan Stanley, the lead underwriter of Facebook's IPO, also
worked with Alibaba on financing for the Yahoo share buy-back
and was one of the main underwriters of the Alibaba.com IPO in
The banking industry has kept a close eye on the list of
banks involved in an $8 billion loan by Alibaba for signs of who
might be chosen for the IPO.
The nine mandated lead arrangers and bookrunners for the
loan are Australian and New Zealand Banking Group,
Citigroup, Credit Suisse, DBS Bank, Deutsche
Bank, HSBC, JPMorgan, Mizuho
Corporate Bank and Morgan Stanley.
Goldman Sachs recently joined the group, offering
$500 million in financing.
As part of last year's share buy-back deal, Yahoo, which now
has a 24 percent stake in Alibaba, can appoint one of the joint
global coordinators of any eventual IPO. Yahoo can also review
and comment on any documents required to carry out an Alibaba
offering, according to a U.S. securities filing.
Japanese telecoms and Internet firm SoftBank Corp
may also have a similar agreement with the company, given that
its 35 percent stake in Alibaba is larger than Yahoo's share.
SoftBank, locked in a bidding war with Dish Network Corp
for U.S. telecoms firm Sprint Nextel Corp, told
banks they could hurt their chances of landing a role in the
Alibaba IPO if they help Dish, sources familiar with the
SoftBank did not immediately return a request for comment.
Credit Suisse recently dropped out of Dish's financing for
Sprint, one person familiar with the matter said.