Saudi Aramco: Wall Street's Banks Walk Into a $2 Trillion Mess - Bloomberg:
The scaling back of Saudi Aramco’s initial public offering — despite nearly every major investment bank being involved — raises awkward questions about the effectiveness of mammoth syndicates of advisers and IPO book-runners. More appears to be less.
Almost all of the big Wall Street and European investment banks are on the roster for the sale of shares in the world’s most profitable company. Alongside them were no less than three so-called “special advisers,” M Klein & Co., Lazard Frères SAS and Moelis & Co. Usually, that job would be to prevent the book-runners (who underwrite the offering) from setting a price that’s an easy sell but less than ideal for the vendor. They probably had a more general role here. Either way, with three firms in this category, it’s a wonder there wasn’t another layer of advisers on top.
The syndicate’s job was largely to sell the Aramco shares to big institutional funds in the West. Now, with Saudi Arabia focusing on a local sale, their work is pretty much redundant.
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