Goldman Gets Excluded From IPO Bidding Process for Dong Energy

Goldman Sachs has been excluded from the bidding process to handle the initial public offering of Danish state utility Dong Energy.

The Wall Street investment bank wasn’t invited so as “to avoid speculation about Goldman Sachs’s role,” the Finance Ministry said in a reply to e-mailed questions on Wednesday. Sebastian Howell, executive director for media relations, said Goldman declined to comment.

Denmark, which holds 59 percent of Dong, revealed its IPO road map for the utility in September. The sale, which Sydbank has estimated may value Dong as high as 70 billion kroner ($10 billion), is set to be among the biggest in Denmark’s history. Goldman holds almost one-fifth of Dong, which is also owned by Danish pension funds ATP and PFA, and a group of smaller shareholders.

A committee overseeing the IPO said on Wednesday it selected JPMorgan, Morgan Stanley and Nordea as joint global coordinators. Citigroup, Danske Bank and UBS were selected as joint bookrunners. The committee has the option to hire more banks during the IPO process should it prove necessary, it said.

Dong dominated media headlines in 2014, when a junior coalition member quit the previous government in protest after part of Dong was sold to Goldman Sachs. The Wall Street firm paid about $1.5 billion for an 18 percent stake. A number of lawmakers questioned the price, which they argued was too low. The government at the time said the cash injection Goldman delivered came at a crucial moment and under terms others weren’t ready to accept.

The Danish government continues to have a “very well-functioning” relationship with Goldman in its role as co-owner of Dong, the ministry said on Wednesday.

Lawmakers have argued it would be problematic to involve Goldman in the IPO process because of its ownership of Dong.

“We can’t afford to have even a shred of doubt that any of the banks tasked with listing Dong could pursue special interests,” said Jonas Dahl, the finance speaker for the opposition Socialist People’s Party.

But Goldman has previously been involved in an IPO on a Danish company in which it already held a stake. In March 2014, Goldman was among a group of owners selling shares in ISS A/S. Back then, the investment bank also acted as joint global coordinator in what at the time was Denmark’s biggest IPO in 20 years.

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