Goldman Sachs wins prime role in Twitter IPO - Financial Times

When Twitter publishes the prospectus for its long-awaited IPO, the name of Goldman Sachs is likely to appear on the first page, in prime position. Goldman's selection as lead underwriter, known in the industry as the "lead left", is a setback for rival Morgan Stanley, which has dominated tech deals in recent years but was criticised after last year's botched $16.1bn initial public offering of Facebook, which led to a $5m fine by the Massachusetts securities regulator. The two banks have been vying with each other to nab a bigger piece of the technology IPO pie as a flood of start-ups tap in to investor demand to issue shares. This year Goldman has been lead left on IPOs for Silver Spring Networks, Gigamon and Ruckus. Morgan Stanley has led initial offerings for an array of tech companies including Shutterstock, Palo Alto Networks and Workday. But Goldman has now scored one of the biggest tech prizes around. Estimates from Freeman & Co suggest that if Twitter sells 10 per cent of its shares, the underwriting banks could split fees of between $40m-$50m. Bankers including Anthony Noto – a former chief financial officer of the National Football League (NFL) who returned to the investment bank to co-head the telecommunications, media and technology group with Goldman's George Lee – worked with Nick Giovanni in San Francisco to help secure the highly-valued deal. The size of the deal means that a vast array of banks, will also have a hand in the much-anticipated IPO. Bank of America will work on the offering according to people familiar with the matter. Goldman Sachs, Morgan Stanley and Bank of America declined to comment. News of Twitter's IPO came in the same week that Verizon sold a record-breaking $49bn worth of bonds to help finance its $130bn acquisition of Vodafone's stake in Verizon Wireless. Some bankers reckon that companies may be scrambling to get deals done in order to lock in lower rates and higher demand from investors before the Federal Reserve begins to raise interest rates – providing a fresh flow of fee income for the banks. "I think we're kind of at a tipping point," said one senior banker who says he expects investment banking activity to pick up. "People have woken up and said if I have something strategic to do that's a compelling reason to act now." "The market right now is extremely strong and who knows how long that is going to last," said one person familiar with the Twitter deal. He added that Twitter may also be trying to emulate LinkedIn's positive 2011 debut on the New York Stock Exchange. "They [LinkedIn] did it at the right time, they did when growth was ahead of them, they did it when there was still positive information yet to be announced," the person said. "They didn't wait to the last minute. I think the industry feels that Facebook waited for too long to go public." The person added that Morgan Stanley's omission as lead left in the Twitter offering may make life at the bank awkward for Michael Grimes, its West Coast-based head of technology banking, who led the Facebook IPO. "It's unlikely that Morgan Stanley will be in the final line-up unless they agree to accept a diminished role. They may agree to do that, but that's what is ultimately putting Michael Grimes in a difficult position." Copyright The Financial Times Limited 2013. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web. via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNG4zccNYsBIa_okwswAnhF32r55oA&url=http://www.ft.com/cms/s/0/095fd274-1c59-11e3-8894-00144feab7de.html

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