When the French government wanted to sell part of its stake in
media company Thomson in 2002, it did so at an unprecedented rate
for a privatization. Not for Thomson the rigmarole of a long
prospectus and city-by-city roadshows: the ¤1.1 billion deal took
just 24 hours to market and sell. Compare that with energy and
transport company Alstom's secondary offering in early 2001, one of
the last follow-on deals in France to be fully marketed. That took
two weeks.
Tough markets are driving this rush to accelerated book building,
which bankers say have been intensifying in the first months of
2003. Opportunities to do deals are scarce and short. Bankers can't
wait while their lawyers pore over a company's documents and write
a carefully worded prospectus. One deal in three is now sold within
48 hours, according to investment banking research firm Dealogic.
But some say bankers are rash to by-pass due diligence...
