Facebook Inc (FB) bankers may split around $176 million for managing the social- networking company's initial public offering, an amount that is lower-than-average fee, according to Bloomberg.
However, the bankers led by Morgan Stanley would take around 1.1 per cent of the $16 billion Facebook raised in its IPO yesterday, Bloomberg quoted ''two people with knowledge of the matter, who wished not to be identified because the rate had not been disclosed. Facebook hired 33 investment banks for the offering, with Morgan Stanley, JPMorgan Chase & Co (JPM) and Goldman Sachs Group Inc (GS) leading the sale.
Facebook, valued now at $104.2 billion, is paying less than a third of the 3.6 per cent median fee on the 10 largest US offerings in history before this one, data compiled by Bloomberg shows. Banks are willing to take a small percentage fee with bigger IPOs, which helps land more IPO mandates later on.
According to some analysts, this was just a once-in-10-years event, and they figured they would gain with their association and being a part of it. They said banks would look to getting higher fees and more business in the future in the bargain.
Typically, the lead underwriter receives the biggest share if IPO fees and Dan Simkowitz, Morgan Stanley's chairman of global capital markets, was one of the main bankers on the offering, Bloomberg quoted a person familiar with the matter. Simkowitz also helped with the IPO of General Motors Co which raised $18.1 billion.
According to one person quoted by Bloomberg, vice chairman Jimmy Lee, technology bankers Jennifer Nason and Noah Wintroub, and equity capital markets bankers Liz Myers and Michael Millman worked on the offering at Morgan Stanley.
Another person quoted by Bloomberg said, the Goldman Sachs team working on the deal included technology bankers George Lee and Scott Stanford, and equity capital markets bankers David Ludwig and Andy Fisher.
(See: Facebook to open trading today on Nasdaq)