Pan Gongsheng: The man who pulled the strings
It looked likely to be the biggest IPO ever, and the world’s leading investment banks had been flying their chief executives out to Beijing for the previous four years cultivating contacts with ABC in preparation for this event. Being on the deal meant the likelihood of multimillion dollar fees for the banks involved, the prestige of having worked on the world’s biggest IPO, and vindication that they were deemed worthy of working on the most important China deal of the year. For Agricultural Bank of China, its stock exchange debut would mark the next step on a long road to rehabilitation, and emergence from pariah status as the last of China’s four largest banks to go public. Finally, with investors worried by bad loans in China and the country’s banks poised to raise substantial amounts of capital, the IPO would act as a referendum on China’s banking industry and the credibility of its growth story. For all parties involved, the stakes were high.
Monday, April 5, would be the Qing Ming (tomb sweeping) holiday in China, leaving just one working day, April 6, before the all-important pitch meetings began on April 7. In a way it didn’t matter: all the banks involved worked furiously over the holiday to complete their pitch books, thousand-plus-page documents they had been working on for months before the official request for proposal call came in. They knew what the outline of the RFP would look like but there were some surprises in the details. ABC wanted to see photocopies of the degree certificates and passports of the bankers who would be pitching, something that an experienced China public sector banker says he had never experienced before. There were endless questions about the possibility of other strategic relationships that investment bank and client might develop if the former were appointed on the deal. And the banks had to provide photographs of everyone in their teams for the security passes they would need once they got to ABC’s Beijing headquarters.
Banks pulled out all their big hitters to win places on the largest ever IPO, such as Deutsche Bank CEO Josef Ackermann (here with ABC chairman Xiang Junbo)
April 7-8: pitching
"You couldn’t win a spot on this deal at those pitch meetings," says a banker who was in them, "but we got the feeling you could certainly lose one."
April 9-13: waiting
"My sense is that who was on that deal changed 10 times in three days."
April 14: the winners announced
ABC announced which banks would be helping it to complete its transformation into a company with publicly traded shares.
April 16: the kick-off meeting
For those who won a slot on the deal there was no time for self-congratulation.
April 16- May 4: claustrophobic preparations
With nine external bookrunners working on the deal, appointing each a separate workspace within the bank proved impossible.
May 4-June 20: anchors, and tense bankers
The banks competed fiercely for ABC’s approval.
June 20-July 1: tough questions on the road
"I recall one investor looking at chairman Xiang and saying: ‘Look I trust you, but this bank has half a million staff. How do you know one of them is not going to cause a scandal?’"
July 1-6: the mood darkens
The prospectus is an imposing 771-page document. For many would-be investors, however, one section stood out: the "risk factors" section.
July 6-August 13: the biggest deal of all time
For ABC staff, the moment represented vindication of years of diligent preparation. For investors, time will tell if they got a good deal. For bookrunners, there is the satisfaction of having worked on the biggest IPO ever. For China, the deal is merely another chapter in its remarkable economic transformation.
Pan Gongsheng interview: How Pan handled the process
ABC IPO: The cornerstones
ABC IPO: Timeline