Facebook Executives Said to Meet With Underwriters Tomorrow

Facebook Inc. (FB) will meet with its underwriters in New York tomorrow to discuss the social- networking service’s planned initial public offering, according to two people with knowledge of the matter.

Facebook will hold a so-called teach-in at each of its main banks, starting with Morgan Stanley and then moving on to JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS), said one of the people, who declined to be identified because the plan is private. Executives will use the sessions to go over Facebook’s growth prospects and other talking points for its IPO road show, the person said.

Facebook plans to hold meetings with investors on May 7 in New York, May 8 in Boston and May 11 in Palo Alto, California, according to a road show schedule.

Spokesmen for the underwriters declined to comment. Jonathan Thaw, a spokesman for Facebook, didn’t immediately respond to a request for comment.

Facebook has hired 33 banks to manage the IPO, including Morgan Stanley (MS) as the lead underwriter. In its initial filing on Feb. 1, Facebook named Morgan Stanley, JPMorgan, Goldman Sachs, Bank of America Corp. (BAC), Barclays Plc and Allen & Co. to handle the deal and later added more banks.

The Menlo Park, California-based company is seeking to raise as much as $11.8 billion in its offering, scheduled to price May 17. The company plans to pay underwriters a 1.1 percent fee, two people with knowledge of the company’s plans said in March. Based on that percentage, underwriters would share about $130 million assuming Facebook sells stock at the top end of its proposed price range. The lead bank typically earns a bigger cut of the total.

At 1.1 percent, Facebook would be paying its banks about one-fifth the typical rate for U.S. IPOs, according to data compiled by Bloomberg. With larger IPOs, banks can often afford to take a smaller percentage fee, and high-profile offerings such as Facebook can lead to future business, making securities firms willing to accept less. Facebook won’t disclose the fees for its bankers until the IPO is completed.

To contact the reporters on this story: Zijing Wu in London at zwu17@bloomberg.net; Jeffrey McCracken in New York at jmccracken3@bloomberg.net

To contact the editor responsible for this story: Jennifer Sondag at jsondag@bloomberg.net

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