Credit Suisse set to score a smaller role on Ant's mega IPO

[HONG KONG] In the initial list of four sponsors for Ant Group's mega initial public offering (IPO) in Hong Kong, one bank's name was conspicuously missing: Alibaba's go-to bank Credit Suisse.

Credit Suisse Group has been fighting for a major role in the offering and Ant is leaning towards naming them as a joint global coordinator for its Hong Kong listing, which could raise about US$10 billion, according to people familiar with the matter, who asked not to be identified as the information is private. Global coordinators help manage the marketing of a deal and collection of investor orders. They're one step down from sponsors, who get top billing in the prospectus and are responsible for liaising with the exchange.

Billionaire Jack Ma's Ant, the crown jewel of his Alibaba empire, is pursuing a simultaneous dual-listing in Hong Kong and on the Shanghai stock exchange's Star board, seeking a valuation north of US$200 billion. Alibaba Group Holding owns a third of Ant.

Ant has picked four sponsors for its Hong Kong share sale, Bloomberg News has reported. The banks include China International Capital, Citigroup, JPMorgan Chase & Co and Morgan Stanley, people familiar have said.

Credit Suisse advised the Alibaba independent committee when the company bought a 33 per cent stake in Ant, and did not advise on Ant's latest fundraising round, while the other four banks did, the people said. That gave them priority in getting a role as an IPO sponsor, they said.

Ant is still finalising its roster of banks and details of the line-up could change, the people said. More banks could be added at a later stage as banks including Goldman Sachs Group aggressively pitch for a role, they said. Representatives for Ant, Credit Suisse and Goldman Sachs declined to comment on the matter.

Credit Suisse rose 1.1 per cent in Zurich on Tuesday, the highest in a week. The benchmark Swiss performance index fell 0.3 per cent.

Credit Suisse's absence from the list of sponsors marks a break with history, given that it has been awarded plenty of top-shelf work in the past by Mr Ma's empire. The Swiss lender was one of the top underwriters on Alibaba's record-breaking US$25 billion US IPO in 2014. It and Morgan Stanley were the banks that received the most fees on the offering, Bloomberg News reported at the time. Credit Suisse has also advised Alibaba on at least US$14 billion of acquisitions, more than any other bank, according to data compiled by Bloomberg.

The bank is smarting after a tumultuous year. Its work as lead underwriter on the IPO by Luckin Coffee saw it named in a lawsuit after the beverage chain was engulfed in scandal. Credit Suisse later lost its role in Chinese online healthcare firm WeDoctor's IPO.

Wall Street banks fight aggressively for big name IPOs due to the money and the boost in league table rankings. A deal like Ant could generate tens of millions of dollars in fees, as well as prestige that can influence prospective clients' choice of bankers on future transactions.

BLOOMBERG