By Olivia Oran and Soyoung Kim
NEW YORK, Sept 19 Twitter is in talks to add
additional banks to its underwriting syndicate for its upcoming
initial public offering and in the process of finalizing the fee
structure, according to three people familiar with the matter.
Typically, underwriters receive around 7 percent of overall
IPO proceeds, but larger offerings can command a lower fee.
Underwriters were willing to split a fee pool of just 1.1
percent for Facebook Inc's $16 billion IPO because of the
deal size, as well as the prestige of being associated with a
It was not clear what percentage of the potential IPO
proceeds Twitter has proposed to pay underwriters.
Twitter Chief Financial Officer Mike Gupta is leading the
microblogging platform's IPO and is in touch with the investment
banks about their roles, one of the people said.
The people asked not to be named because they were not
authorized to speak with the media. The company declined to
Twitter's valuation is estimated at around $15 billion by
analysts. Assuming that it sells around 10 percent of its shares
and an overall fee would come to 4 to 5 percent, underwriters
could stand to split a fee pool of around $60 million to $70
Facebook underwriters who worked on the social network's $16
billion IPO, meanwhile, divided up fees of $176 million.
Twitter is likely to raise over $1 billion in its IPO, a
separate source said. The IPO will likely come before
Thanksgiving, the source said.
Goldman Sachs Group Inc is the lead adviser on the
Twitter IPO with Anthony Noto, the global co-head of the firm's
global telecommunications, media and technology group, playing a
key role, according to a fourth source familiar with the
Other banks including Morgan Stanley, JPMorgan Chase
& Co and Bank of America Corp are also involved,
sources previously told Reuters.