When it makes sense for the Top Dog to pitch

David Hellier
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FEW need reminding how treacherous current conditions in Europe’s equity markets are. Russia’s Valinor recently became the 25th pulled listing in Europe, Middle East and Africa so far this year and a 15 per cent downwards repricing of the Spanish bank Bankia yesterday underlined the fragility of investor appetite for new issues.

So it is perhaps no surprise that banks will fight increasingly aggressively to get on the mandates of the juiciest and more certain flotations.

The recent scramble to get aboard the flotation of the Spanish lottery company Loterias prompted UBS bankers to attend the pitch meeting with iPads in tow rather than the conventional powerpoint presentation.

But there’s nothing quite like bringing out the Top Dog to bat for the cause at pitch meetings. So Goldman Sachs’ chief executive Lloyd Blankfein attended a pitch meeting for the imminent flotation of the German pharmaceuticals group Evonik in Essen, Germany.

Evonik is owned by CVC and RAG Foundation and if a float goes ahead to raise more than $7bn that will make it Germany’s second largest ever equity money-raising exercise after Deutsche Telekom. Not a bad one to work on, as Goldman now is.

Blankfein is by no means the only bank chief executive to play an active role in pitching. JP Morgan’s Jamie Dimon met with the travel reservations group Amadeus in London ahead of last year’s flotation. The meeting was evidently successful as his bank ended up as one of the advisers on the deal.

Deutsche Bank’s Josef Ackermann is understood to have joined the pitch for the huge Agricultural Bank of China flotation and Bob Diamond, the chief executive of Barclays Bank, attended a meeting ahead of Peter Wood’s esure insurance group ahead of a possible float.

Diamond’s presence is down to his relationship with the founder Wood, who he knows from his days when he set up Direct Line (and they are both Chelsea fans). But the Barclays boss is also said to attend pitch meetings with the government’s UKFI.

It is clear that seeing a bank chief executive at an IPO pitch is no longer the surprise it once was. “The deals are sometimes so massive and the relationships so key to winning the mandate that sometimes you have to pull out all the stops,” said one banker. david.hellier@cityam.com