Aussie government picks three arrangers for Snowy privatization

Macquarie Bank, Goldman Sachs JBWere and UBS will lead manage the A$3 billion float of the renewable energy company.
The Australian government and its advisors Credit Suisse surprised pundits on Thursday by picking three of the busiest investment banks in the country to handle the privatization of Snowy Hydro. Macquarie Bank, Goldman Sachs JBWere and UBS were named as joint lead managers on the A$3 billion float despite commentators placing bets on Citigroup, Deutsche Bank and JPMorgan for the role.

Goldman Sachs JBWere and UBS are already acting as global coordinators on the third and final sale of Telstra shares due in Q3 (valued at about A$25 billion), while Macquarie Bank is preparing the listing for Dyno Nobel. With SnowyÆs shareholders insisting that the IPO must be launched before June 30, the joint lead managers will have their work cut out.

The trio will handle the privatization on behalf of the Federal government, and the state governments of New South Wales and Victoria, which announced their intention to sell the asset at the end of last year.

On Thursday, the governments said they were pleased with the response from the investment banking industry, receiving several proposals from contending banks. ôThe three [selected] firms have a significant track record in successful initial public offerings and have demonstrated the capacity to assist the governments in ensuring the companyÆs sale meets the best interests of all taxpayers,ö they said.

In terms of size, the Snowy Hydro float will top last yearÆs biggest IPO which was the A$2.12 billion listing of Goodman Fielder, and will be the biggest since AMPÆs A$3.4 billion IPO in June 1998.