BlackRock reaction: syndication is ruining UK IPOs

Author: | Published: 14 Jun 2011

UK equity lawyers agree with investors’ opposition to aggressive syndication on UK initial public offerings (IPOs).

A letter sent by BlackRock to investment banks in May outlined concerns surrounding fees on IPOs, unrealistic valuations of issuing companies and the growing number of banks syndicated on each listing.

“I agree with BlackRock’s point on syndications,” said one London-based partner.

Issuers are thought to push for the syndication to create competition amongst the banks, leading to small, often insignificant roles for each bank.

Glencore’s London IPO, valuing the group at about £36.6 billion...