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Opinion

Datang Renewable and Huaneng Wind IPOs: Top Gun or merely a windbag?

"We pulled the old Top Gun on them: hit the brakes and watched ’em fly right by!"

It was a tale of two near-identical rivals gunning for the top prize, worthy of any Hollywood blockbuster. Chinese wind-power companies Datang Renewable and Huaneng Wind sought IPOs on almost identical timetables at the end of last year, competing fiercely with each other for investor attention while playing a game of chicken as to which would set a price first. Leave it too long and the chance to list successfully might pass; price before the rival and both companies risked being undercut. So they flew on, side by side: Datang, advised by UBS, Everbright, Credit Suisse, JPMorgan, Cinda and Macquarie; Huaneng by Morgan Stanley, CICC, Goldman Sachs and Macquarie again. Both companies began pre-marketing to analysts on November 15,while their bookrunners tried to secure cornerstone investors.

Then, on November 28, Huaneng blinked first. When Datang seemed to lose momentum, Huaneng set a pricing range, allowing Datang to undercut it and emerge with an oversubscribed deal successfully completed while Huaneng’s deal remained undersubscribed and was eventually pulled.

That, at least, is the version of events given by one adviser to Datang Renewable during an awards pitch to Euromoney as he reminisced about the deal. "We pulled the old Top Gun on them: hit the brakes and watched ’em fly right by!"

We were unable to verify before press time whether the banker in question’s body could in fact cash the cheques his ego had written...

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