Twitter plans to pay bankers fee of 3.25%

Twitter On Screen

Twitter is seeking to raise more than $1bn in an initial public offering and plans to pay bankers a fee of about 3.25%, people with knowledge of the matter said.

Bloomberg reports that the social-media service will probably start a roadshow with bankers to promote the deal in the last week of October, said the people, who asked not to be identified because the details aren’t public.

Twitter, which is leaning toward listing on the New York Stock Exchange, is still negotiating with that exchange and Nasdaq on the ability to handle the IPO, as well as associated listing fees, one of the people said.

Twitter’s ability to negotiate a fee well below the norm for U.S. IPOs -- which have averaged 5.7%, according to 2013 data compiled by Bloomberg -- shows investment banks are still willing to take tens of millions of dollars less to land a high-profile role with a large client. Missing out on the Twitter IPO could cost an investment bank in reputation among technology clients and in future IPOs with smaller startups.

'It’s a low fee for Twitter to have to pay, and it’s a very positive development', said Josef Schuster, founder of IPOX Schuster LLC in Chicago. 'It may set a standard that will help companies with future IPOs save costs when they come to market'.

To access the complete Bloomberg article hit the link below

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