International Financing Review September 8 2018 11For daily news stories
@ visit http://www.ifre.comwere available a few months
ago,” said a Sydney-based
syndication banker.
GM still sells vehicles in
Australia, although it closed its
Australian plant, which made
Holden cars, in October 2017.
The Australian dollar/US
dollar one-year cross-currency
basis swap has soared from
12.38bp on June 5 to 30.25bp
last Tuesday with smaller
increases seen along the curve.
The three-year has climbed
from 16.88bp to 31.15bp in that
time while the five-year and 10-
year basis swap levels have
moved from 20.76bp and
31.88bp up to 35.25bp and
37.50bp, respectively.
Europe has taken up some of
the corporate Kangaroo slack,
with UK-listed Vodafone Group
and German rail operator
Deutsche Bahn among the
biggest issuers.Despite the upturn in
European interest, new visitors
will still benefit from scarcity
demand given the slowdown in
overall corporate supply this
year. Domestic year to-date sales
of A$6.2bn are a little over half
the A$11.3bn raised in the same
period in 2017, according to
Thomson Reuters data.
Given its size, GM will
certainly be looking to do a
sizeable deal with expectations
centring on a A$1bn-plus
inaugural print. A roadshow is
no guarantee of a subsequent
issue, of course, with US
motorcycle maker Harley-
Davidson still yet to print its
first Kangaroo, 19 months after
holding investor meetings in
Australia and Singapore.
Meanwhile, GM was also in
the US dollar market last week,
raising US$2.1bn from a three-tranche deal. (^) n
Meituan IPO builds
early momentum
n Equities Books swamped despite volatile markets
BY FIONA LAU
MEITUAN DIANPING’s Hong Kong IPO
of up to HK$34.6bn (US$4.4bn)
was multiple times covered as of
last Friday despite a 3.3% drop in
the Hong Kong stock market
during the week.
The books were covered on
the first day of bookbuilding
last Tuesday and momentum
continued to build as the
week went on. At the time
of writing, about 150
investors were participating,
according to people close to
the deal.
“Some top-quality global
long-only funds came into the
deal on day one, which is a
very encouraging sign.
Despite the market sell-offs
later in the week, we didn’t
see many investors pull
their orders,” said one of the
people.
Beijing-based Meituan, a
diversified online services
provider, is selling about 480m
shares at an indicative price
range of HK$60–$72 each. The
float could raise up to US$5.06bn
if a 15% greenshoe is fully
exercised.
The IPO values the company
at around US$45.9bn–$55.1bn
pre-greenshoe, taking into
account shares to be issued
under a pre-IPO employee stock
ownership plan. The post-shoe
market capitalisation on the
same basis is US$46.4bn–
$55.7bn.
The price range also
represents a 2020 P/E of
23.5–28.2.
“Investors like Meituan’s
market-leader position and
believe it can monetise its
huge client base. The
participation of international
funds as cornerstone investors
also helps drive institutional
demand,” said another person
close to the deal.
Meituan has lined up
US$1.5bn of cornerstone
investments from five investors,
including its existing backer
Tencent Holdings. The Chinese
internet giant has committed
US$400m, Oppenheimer Funds
US$500m, UK hedge fund
Lansdowne Partners US$300m,
New York-based Darsana Capital
US$200m and China Structural
Reform Fund US$100m.
HUGE LOSS
Meituan, which runs a range of
online businesses from food
delivery to ticketing services,
posted a huge loss of Rmb19bn
(US$2.8bn) in 2017 on surging
marketing and research
expenses and after accounting
for its preferred shares.
According to an IPO
prospectus published last week,
in the four months ended
April, Meituan’s revenues
jumped by 95% to Rmb15.8bn
(US$2.3bn) while its loss
amounted to Rmb22.8bn,
compared with an Rmb8.2bn
loss over the same period in
- The latest numbers
reflect the impact of acquiring
unprofitable bike-sharing
start-up Mobike.
Meituan intends to stay
focused on developing its
food delivery business and is
not planning further
investment in ride-hailing,
co-founder and senior vice
president Wang Huiwen said
at a press conference last
Thursday.
The IPO books will close on
September 12. Listing is
scheduled for September 20.
Bank of America Merrill Lynch,
Goldman Sachs and Morgan Stanley
are joint sponsors for the deal.
The three banks are also joint
global coordinators and joint
bookrunners with China
Renaissance, China Merchants
Securities and UBS.
The other bookrunners are
ABC International, AMTD Tiger,
BoCom International, CMB
International, Futu Securities,
Haitong International and ICBC
International. (^) n
“Hiring the right individuals
is the correct path for us, rather
than buying a whole business
and trying to integrate it with
our culture and vision,” he told
IFR. “We already have the
distribution capabilities, what
we want to add is origination –
and there is no broker out there
that has just that.”
With the UK driving a big
piece of issuance in Europe, the
hope is that all investment
banking products will benefit.
“In ECM, 15% to 20% of
activity is in the UK, and all the
big players in the market have a
corporate brokerage business,”
said Sophie Javary, the bank’s
head of corporate finance. “It
just makes sense. We already
have the resources, we already
have the distribution, so it is a
logical next step for us.”
CALLING CARD
BNPP’s cash equities and
research joint venture with
Exane will be a major calling
card. Exane BNP Paribas has one
of the largest distribution
platforms dedicated to
European equities in the world,
according to the bank. It
currently covers 125 UK stocks.
More hires are planned.
Natural resources and power
banker John Bigham is set to
join from Nomura in the next
few weeks. Last month,
corporate finance banker Abid
Chaudhri joined from UBS,
where he was responsible for
co-originating mandates
alongside the corporate broking
team.
Despite punching below its
weight in the UK in recent
years, the bank has won some
lucrative mandates of late. It
was a lead arranger on the
£4.5bn-equivalent financing to
support the acquisition of GKN
by Melrose, and was a
bookrunner on €3bn of bonds
issues by GlaxoSmithKline.
Yann Gerardin, head of the
investment bank, said the push
was part of wider ambitions to
become one of the top banks in
Europe. He is also planning a
similar push in the Nordic
region.
“Our vision for BNP Paribas is
to be if not the leading then one
of the leading European
investment banks in Europe,” he
told IFR. “As the landscape is
changing considerably – not
least because of the challenges of
Brexit – we want to be strong in
Europe. Our plan is to strengthen
our presence and market share
in all European countries.” (^) n
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