Morgan Stanley took over the $4.8-billion stake sale in Ping An Insurance, after a last-minute bold steal from Goldman Sachs and Credit Suisse.
Ping An was discussing the deal with Credit Suisse and Goldman Sachs at first, but changed its mind by Sunday afternoon when the two banks were noted that the placement was given to a rival company.
People with knowledge of the matter said that the Chinese insurer did not quite like the number of orders, which Goldman Sachs and Credit Suisse gathered through their investor list that was originally approved by Ping An.
Morgan Stanleys move, described as the boldest “deal steal” in years by Hong Kong bankers, reportedly involved investors like Jack Ma and Pony Ma, founders of behemoth companies Alibaba and Tencent, respectively.
According to the people with knowledge on the matter, Morgan Stanley won the deal by securing a ten-member group of investors with a bigger share appetite. The stocks were sold at a 4.7% discount, smaller than the reduction that Goldman Sachs and Credit Suisse originally offered, to Ping Ans closing price on November 28.
Another big plus for Morgan Stanley was the fact that they were able to secure a compact group of investors, under Chineses laws private placements involving 11 or more investors are obligated to provide 10% of the offering to the National Social Security Fund.
Other banks outside the action said that the insurer made the deal available to other interested parties, after the initial two banks extended their time to attract investors.
Goldman Sachs and Credit Suisse managed to get commitments worth $2.7 billion by providing an 8% discount, which caused the insurer to ask his shares to be withdrawn from public trading on November 7. After Ping An was approached by Morgan Stanley, the insurer asked the initial two banks to match the its offer, however, they did not.
Ping An, Morgan Stanley, Goldman Sachs and Credit Suisse all declined to comment.
Morgan Stanley lost 0.23% on Tuesday and gained 1.91% on Wednesday to close at $35.77 in New York, marking a one-year increase of 13.81%. The Company is valued at $68.70 billion. According to the Financial Times, the 21 analysts offering 12-month price targets for Morgan Stanley have a median target of $36.00, with a high estimate of $46.00 and a low estimate of $33.00. The median estimate represents a 0.64% increase from the last price of $35.77.
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