Facebook is expected to file to raise US$5bn in a preliminary IPO prospectus on Wednesday morning, which while less than anticipated could be increased to satisfy ultimate investor demand, according to sources close to the deal.
The smaller deal size reflects a decision to start with a conservative base before deciding whether to increase.
The social networking site has opted to hire five bookrunners, featuring Morgan Stanley in the coveted lead left role. Goldman Sachs, Bank of America Merrill Lynch, Barclays Capital and JP Morgan round out the initial list of bookrunners on the deal, though the syndicate could also grow, sources indicated.
The filing timetable appears to establish a framework for Facebook to finalise the IPO process by May, pending a smooth registration process with the SEC.
Investment banking sources note the company has been unusually guarded about the process for selecting banks involved in the underwriting syndicate, but Morgan Stanley’s market leading position in Internet IPOs has given it an upper hand in securing the leading role.
Morgan Stanley’s selection implies that Facebook took account of Goldman Sachs’ handling of a private placement last year, though some have also pointed to Facebook’s desire to distance itself from the bank.
With final pricing of Facebook shares unlikely to be settled for at least three months, it is still unclear what valuation the company is targeting on the IPO.
Recent trading in Facebook stock on private exchanges has pointed to a US$80bn-plus valuation.