HONG KONG: Chinese electric vehicle maker NIO Inc has blocked the eight top investment banks that did its IPO from working for rivals by tying them up in rare year-long non-compete clauses, several people with direct knowledge of the matter said.
Xpeng Motors and WM Motor were on that list, three sources said. A separate source said the list included those two and Byton, among others. Typically such deals restrict banks from working with rivals until the transaction closes or for a shorter period such as six months, two of the sources said."Issuers sometimes don't like it when you're doing an IPO for the competitors on a concurrent timetable because they will worry that you might divulge information to the benefit of the other clients," said Stephen Chan, partner at law firm Dechert LLP, speaking about general industry practices.
Adding to the banks' frustration, they had signed up to NIO's demands when the IPO was expected to raise about double the US$1 billion it actually brought in - meaning banks would initially have expected a much larger payout.
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