NEW YORK (Reuters) – Nasdaq OMX and IntercontinentalExchange unveiled an $11.3 billion bid for NYSE Euronext on Friday, in an effort to trump Deutsche Boerse’s earlier bid.
If Nasdaq wins the bidding war, the United States could end up with one massive listings venue. Some have voiced concerns that the monopoly could lead to increased listing costs that could impact equity capital markets businesses — but equity capital markets bankers and lawyers play down that concern.
The exchanges are regulated by the U.S. Securities and Exchange Commission, which keeps a close eye on costs. Furthermore, listings costs are only a small part of the total cost of going public, so even if an exchange were to increase those costs slightly, it would be unlikely to have a big impact on the IPO market.
Here is a sample budget for a $100 million IPO from one equity capital markets banker:
Legal fees: $0.75 million to $1.5 million
Accounting fees: $0.75 million to $1.5 million
Printing costs: $0.3 million
Listing fees: $0.35 million to $0.5 million
Roadshow costs: $0.1 million to $0.2 million
Total IPO budget at the midpoint: $3.1 million
Listing fees account for about 14 percent of the midpoint of the cost of going public in this sample budget.
Note: Legal and accounting fees are variable. The table above does not include the gross spread paid to the banks, which is about 7 percent on a $100 million IPO.
(Reporting by Clare Baldwin; Editing by Tim Dobbyn)
Factbox: Listing fees a tiny part of U.S. IPO cost
