Morgan Stanley Said to Win Aena IPO Role on Lowest Fees

Morgan Stanley (MS) won a role on what may become Europe’s largest initial public offering this year, the sale of Spanish airport operator Aena Aeropuertos SA, after offering to charge the lowest fees among global banks, said three people with knowledge of the matter.

Morgan Stanley offered to charge 0.19 percent of the amount raised in the IPO in fees, said the people, who asked not to be identified because they weren’t authorized to speak publicly. Spain’s government said today it will sell 49 percent of Aena, including 21 percent to so-called anchor investors. The IPO may value Aena at over 5 billion euros ($6.7 billion), the people said.

Bank of America Merrill Lynch and Goldman Sachs Group Inc., which also won roles after presentations this week, offered to charge fees of 0.24 percent and 0.45 percent respectively, the people said. The advisers typically have to adjust their fees based on the lowest winning bid.

Banks often offer lower fees on IPOs of large state assets because they bring league table credit and the chance of repeat business from companies once they are public. Aena’s IPO could raise about 2.5 billion euros if the government sells 49 percent, making it the largest in Europe this year.

Banks managing the 2 billion-pound ($3.4 billion) sale of state-run postal service Royal Mail Plc (RMG) in October were paid 0.7 percent in fees, according to data compiled by Freeman & Co., a New York-based consulting firm. The 866 million-euro IPO of Belgium’s postal operator bpost SA netted sale managers 1.5 percent in fees in June last year. Banks earned about 3 percent on average in total IPO fees in Europe in 2013, data compiled by Bloomberg show.

Spokesmen for Morgan Stanley, Bank of America and Goldman Sachs declined to comment.

Spain’s government said 70 percent of the banks’ grading would be based on their fee bid and 30 percent would be based on their expertise, according to a company spokeswoman for Aena.

Listings in Spain have raised over $6 billion this year, the most since 2011, data compiled by Bloomberg show, as investors return to the country’s markets on the hope of an economic recovery. Morgan Stanley ranks 7th in managing IPOs in Spain so far this year, the data show.

The IPO of NN Group NV, the insurance arm of ING Groep NV, was the largest in Europe this year, raising 1.8 billion euros.

To contact the reporters on this story: Ruth David in London at rdavid9@bloomberg.net; Manuel Baigorri in London at mbaigorri@bloomberg.net

To contact the editors responsible for this story: Aaron Kirchfeld at akirchfeld@bloomberg.net Elizabeth Fournier

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