Exclusive | 29 investment banks, one failed US$6 billion IPO: Who is to blame?

Recriminations are flying between investment banks after a record 29 of them failed to avert the collapse of a US$6 billion deal to sell shares in Sino-US pork producer WH Group.

A meeting yesterday of senior executives at WH - formed when Shuanghui, the mainland's top meat producer, bought out US pork supplier Smithfield Foods in a landmark US$4.7 billion deal last year - blamed poor communications between the banks for the deal's demise, according to a source with knowledge of the meeting.

"The banks should have done a better job. Unfortunately, some of them were too confident, and even a bit arrogant, when they tried to price the deal and co-ordinate with each other," said the source, who declined to be identified as the meeting's discussions were confidential.

BOC International, Morgan Stanley and UBS headed the huge roster of institutions marketing the share offering that finally failed about three weeks after it was launched and just days after the offer price and size were slashed in a bid to save it.

Orders were secured for fewer than a third of the US$1.9 billion worth of shares that were eventually being put up for sale, according to market sources.

WH chairman Wan Long had high hopes that Morgan Stanley would be able to repeat the success it had on last year's Smithfield takeover deal - on which it was the sole adviser - which was widely regarded as one of the most successful of the year.

"Morgan Stanley is inevitably the bank to take the responsibility given its senior status among the underwriters," said one of the bankers involved in the deal.