Privatization of state-owned enterprises represents a significant realm of business for investment banks around the world. It also involvew balancing a number of sometimes conflicting objectives among buyers and sellers and a host of risks for both sides as well as the financial firm itself. This case focuses on a large partial privatization in the Middle East that illustrates all of these issues and came to define the requirements for investment banks to perform successfully in future privatizations.
The objective is to identify and dissect the entire value-chain in the privatization process, starting with mandate-seeking, IPO design and placement strategy/tactics, book-building and pricing, syndication and road-shows, as well as providing after-market support and liquidity. From this partial privatization in a sensitive part of the world, students are asked to identify the risks and returns to the various parties involved. Stock performance data are provided on post-IPO performance through 2013.
- Equity markets
- Global capital markets
- Global investors
- Underwriting risk
- Financial integration
- Corporate Governance
- Auditing, Risk Control and Performance