Who the giants vying for Petrom's second privatisation are
The deal by which the state wants to sell a 9.84% stake in
Petrom (SNP), the biggest Romanian company, will be the biggest one
sealed so far on the Bucharest Stock Exchange.
The offering, valued at 500m euros, generated a flurry of talks
between Bucharest, London, New York and even Moscow, with the most
important domestic brokers trying to find partners among the
world's biggest investment banks in a bid to get the state's
mandate to sell the 5.5 billion shares. No domestic broker can
carry out such a sale on its own and this is why it must enter a
consortium.
Whereas until two years ago no major foreign investment banker
would not get out of bed in the morning for offers of below one
billion dollars, now all the large banks are knocking on domestic
brokers' doors and have activated all their connections to gain
this mandate, which is likely to bring underwriters between 5 and
10m euros, with the sum being now, amid the crisis, enough for any
banker.
The mandate will be awarded on the basis of a score where the
financial part, an objective criterion, and the technical part, the
subjective criterion, will weigh equally. Phones at the highest
level, both politically (Government and PDL) and economically, are
expected to be continually busy because beyond the fee to be
collected, the mandate is a trophy for any investment banker.
The battle will also be fought among domestic law firms, as a legal
consultant is needed when the stock sale prospectus is drawn
up.
Two weeks before the deadline for bid submission, four powerful
consortia have already emerged, which are likely to fight the final
battle, with each of them being made up of a foreign bank and a
domestic broker.
Morgan Stanley, the world's biggest stock offering underwriter in
2010, teamed up with Raiffeisen Capital&Investments, the
domestic brokerage that was involved in the most important
floatations on the Bourse of the past six years. JPMorgan will form
a consortium with BCR, the biggest domestic bank. Wall Street's
most influential bank, Goldman Sachs, partnered with UniCredit CA
IB Securities, while ING Bank will team up with a Swiss bank, most
likely UBS, according to capital market sources.
Citi, too, is reportedly interested in taking part in the selection
process and is currently seeking a domestic partner. Deutsche Bank
is also looking at the deal, but has not chosen a partner, and Bank
of America is also reading the list of domestic brokers that are
left.