Goldman, Morgan Stanley bow out of Unicredit

A behind-the-scenes tussle for control over a 7.5bn ($10bn) share sale by Italys Unicredit has shown how increasingly tense market conditions are driving a wedge between investment banks, Reuters reports.When the opportunity to be involved in a big deal comes along, banks are usually quick to pile in, with fees, league table credit and client relationships to play for, as well as all-important kudos.But the risk in taking on any transaction in such uncertain markets, let alone underwriting the shares of an Italian bank at a time when Italys economy is being sucked ever deeper into the euro zone debt crisis, has brought strains to the fore.US heavyweights Goldman Sachs, Morgan Stanley and J.P. Morgan considered the risk involved in Unicredits offering too great for the potential reward on offer, according to a report by IFR, a Thomson Reuters publication.The 14-strong syndicate of banks appointed will underwrite between 700m and 850m euros worth of shares each and will receive fees between two and 2.5 per cent, said a person close to Unicredit who attended the meeting with the banks.That source said that when Goldman Sachs was declined a controlling role it then linked up with Morgan Stanley and J.P. Morgan to present themselves as alternative global co-ordinators of the share sale and requested a vote.When that vote failed, the three US banks walked away. All three later tried to reopen negotiations but only J.P. Morgan was successful in securing an underwriting position, the source said.Morgan Stanley, Goldman Sachs and J.P. Morgan declined to comment.
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