Squeeze on Wall Street banks' fees for GM float
The Wall Street banks preparing General Motors for its stock market flotation are seething at Goldman Sachs for what they suspect was a ruse to reduce their fees from what is expected to be one of the biggest initial public offerings of all time.
The US Treasury, which owns a majority stake in the bailed out car-maker, imposed a 0.75 per cent fee on the banks leading the IPO process, it emerged yesterday, after Goldman submitted a low-ball offer at that figure. Depending on the size of the IPO, the banks could net $120m in fees.
Goldman is not among the lead underwriters of the offering, however, and its rivals say it could never have expected to get the business. It works extensively for GM's rival Ford. It will have a much smaller role in the deal, expected to be launched within days, but the Treasury used its low-ball offer to pull down the price it charged other big banks, including JPMorgan Chase and Morgan Stanley. The IPO could be the largest ever in the US, with the exception of Visa, and the chief executives of the investment banks pitching for the business turned up in person to meetings at the Treasury on 19 May.
Wall Street's most prestigious banks typically charge 3 per cent of the offering size, and even with competition to get in on an act of GM proportions, analysts expected them to reap 2 per cent on this deal. The Treasury was concerned about the political damage, had it been revealed that it did not go with the lowest offer.
The US taxpayer owns 61 per cent of GM after funding the business through bankruptcy last year.
- 1 What happens to your body when you give up sugar?
- 2 Drugs Live cannabis trial: Hash is less harmful than any other drug, expert claims
- 3 Turkish Airlines flight TK 726 crash-lands on Nepal runway in dense fog
- 4 Have sex with your iPad thanks to the new sex toy no-one asked for
- 5 The majority of sex workers enjoy their job - why should we find that surprising?
Out-of-touch MPs ‘don’t get it’, says ex-Civil Service chief
George Clooney and Amal fail to get special treatment at New York restaurant
Cindy Crawford 'un-PhotoShopped' viral Marie Claire image was doctored, photographer claims
'A girl is more responsible for rape than a boy': The statement that shocked the world... except India
The 'sex selfie stick' lets you FaceTime the inside of a vagina
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
Ukip would cut billions from Scottish budget to fund English tax cuts
End of the licence fee: BBC to back radical overhaul of how it is funded
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
Boris Nemtsov shot dead: Outspoken Putin critic who had expressed fears for his life is killed near the Kremlin
iJobs Money & Business
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...
£36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...
£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...