Business

Saturday November 7, 2009

Seven banks expected to rake in RM318mil in fees for maxis listing

By RISEN JAYASEELAN


PETALING JAYA: From the lawyers to the industry experts to the public relations firms and not forgetting the investment bankers, Maxis Bhd’s listing is a boon for the lucky ones selected to participate.

Ultimate shareholder, Maxis Communications Bhd – owned by T Ananda Krishnan and Saudi Telecom Co Ltd – is selling 30% of its holding in its Malaysian operations and is forking out the bulk of the fees involved in the listing.

That amounts to around RM360mil, out of a total estimated figure of RM409.4mil.

The balance will be borne by the soon-to-be-listed Maxis.

The bulk of the fees will go to seven investment banks handling the institutional placement, which are all big names in the industry: CIMB Investment Bank, Credit Suisse, JPMorgan, UBS, Goldman Sachs, Nomura International and RHB Investment Bank.

Some will be doing the book-running and others working as joint global co-ordinators.

In total, these companies will be raking in about RM318mil in fees for placing out Maxis shares and conducting road-shows and a book-building process.

It is not clear who gets what, but even if the total fee were split seven ways, that still works out to a whopping RM45mil each.

This can easily translate into hefty bonuses for the bankers involved at a time when business is supposedly slow.

It should be noted that CIMB will have the largest share of the total fees and commissions from Maxis’ listing, considering that it is the principal adviser for Maxis’ re-listing exercise, joint managing underwriter for the retail offering, joint global coordinator and joint bookrunner for the institutional offering.

RHB is also a big gainer. It has been appointed adviser to the selling shareholders of Maxis and is joint-managing underwriter for the retail portion of the initial public offering (IPO).

CIMB and RHB will be earning about RM7.5mil each for underwriting the retail portion, while the other two underwriters, AmInvestment Bank and Maybank Investment Bank will be raking in about RM5mil each.

Arguably, “selling” Maxis shares to local and foreign institutions may not be that difficult.

The company is well known, has performed well and is in an industry that is familiar to most investors.

It also had a track record of rewarding investors well.

Underwriting Maxis shares is also hardly a risky effort, considering the huge retail interest and the relatively small number of shares being sold to individuals.

To be sure, these are the market rates of such deals, considering the level of professionalism required for putting together the country’s largest IPO.

Needless to say, with the high fees come high expectations from Ananda & Co that this IPO proceeds without any glitches and that the book building process is able to fetch them the best possible price for their shares.

Maxis’ retail offering closed on Thursday, while its institutional portion closes on Monday, the same day that the balloting of the retail portion will take place.

Its IPO price will be determined the next day on Nov 10.

Maxis will be listed on Nov 19.

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