The Swiss lender is Alibaba billionaire Jack Ma's house bank. But Credit Suisse is absent from the Chinese conglomerate's upcoming $200-billion listing of Ant Group.
The deal is garnering even more attention since most capital markets and advisory activity ground to a halt during the coronavirus crisis: Jack Ma's (pictured below) fintech Ant Group is poised to list in Hong Kong and Shanghai. The company is valued at $200 billion, and the double listing could haul in $20 billion – making it the largest initial public offering ever.
One bank is conspicuously absent in the roster of investment banks – Bank China International Capital, Citigroup, J.P. Morgan, and Morgan Stanley – are set for a role on the record listing: Credit Suisse. The Swiss bank is fighting for a role as global coordinator, «Bloomberg» reported on Wednesday. The role would a backbench job given Credit Suisse's status as Alibaba's house bank.
Jack Ma, founder, Ant Group (Image: Shutterstock)
Coveted Double Role
Should Credit Suisse be nervous? The Swiss bank led Alibaba's listing in New York six years ago – in which the Chinese company set a new record by taking in $25 billion. Ma hived off Ant from the Chinese online shopping giant before that listing – but Alibaba still holds a one-third stake.
Ant, the world's most valuable fintech, caters to millions of Chinese customers and reportedly posted $2.4 billion in revenue last year. Ma and Credit Suisse stayed tight after the 2014 IPO, and the Swiss bank was the only foreign lender to win a coveted dual joint sponsor as well as a joint coordinator role in the second listing in Hong Kong.
Asian Misfortune
All told, Credit Suisse chaperoned Alibaba and its subsidiaries through deals worth $14 billion over the years –more than any other investment bank. It isn't clear why Credit Suisse isn't on the marquee for Ant, nor is it even clear whether the bank has fallen from favor (the bank didn't comment). Credit Suisse also wasn't among the issuers of Ant's last financing round, though Bank China International Capital, Citigroup, J.P. Morgan, and Morgan Stanley were.
The snub comes against the backdrop of a streak of bad fortune in wider Asia: Credit Suisse is exposed in an accounting scandal at Chinese coffee chain Luckin, where ex-founderLu Zhengyao was touted by former bank CEO Tidjane Thiam as a «poster child» of the type of business he hoped to win in China.
Prestigious Mandate
Credit Suisse's ties to Softbank as well as its billionaire founder Masayoshi Son are no less controversial. It is hard to conceive that Credit Suisse will give up the prestigious Ant IPO – which means lucrative fees as much as industry prestige – without a fight.
The episode isn't the latest high-profile IPO miss by Credit Suisse's investment bankers: it won a role with Saudi Aramco, the last record-largest IPO, last year. The Swiss bank ended up being superfluous when the deal flopped.
