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SK Hynix's $26.5 Billion US Listing Yields $260 Million Fee Windfall for Banks
A consortium of global investment banks and brokerages earned approximately $260 million in fees for managing SK Hynix's mega share sale in the United States, a significant payday for the financial industry. The South Korean chipmaker successfully raised about $26.5 billion from the offering, according to a Reuters report.
A Lucrative Mandate
The fees represent about 0.97% of the total capital raised, according to the company's filings. This percentage is notably higher than the fee structure for last month's record-breaking initial public offering from SpaceX.
While the $75 billion SpaceX IPO generated a larger absolute fee pool of $500 million, its bankers earned a lower rate of 0.67% of the deal size. The higher percentage from the SK Hynix listing provides a welcome revenue boost for the underwriting banks.
Fee Distribution
Citigroup, which served as a joint global co-ordinator and the depository bank, earned over $70 million from the transaction, a figure reportedly 20% higher than the other lead banks, according to a person with direct knowledge of the matter cited by Reuters. The bank declined to comment on the figure.
AdOther joint global co-ordinators on the deal included:
- Bank of America
- Goldman Sachs
- JPMorgan
JPMorgan declined to comment, while Bank of America and Goldman Sachs did not respond to requests for comment, according to the report.
Deal Background
SK Hynix priced its U.S. stock at $149 per depository receipt. This represented a 2.7% premium over its average share price on the Seoul stock exchange over the preceding three days, signaling strong investor appetite for the chip manufacturer's U.S.-listed securities.