Mechanics of deals with multiple banks
Question applies to either underwriting or M&A. What purpose does having multiple banks serve for either?
For example, why wouldn't GS, the lead underwriter, just handle the Twitter IPO exclusively? Why do banks like other BBs or even Allen & Co have the opportunity to join in on such a deal?
And I imagine the answer to this is substantially different, but why would a company (seems to be the case on larger deals) have multiple advisors on a given acquisition? What are the advantages to be gained? I realize that this is a pretty stupid question, but would appreciate any answers provided.
For issuance, distribution (all 20 of those banks are going to have their sales guys sell some of that IPO, even if the lead guy runs the book). For M&A, internal politics and keeping financing banks happy with deal credit/fees.
Thanks. What purpose does more expansive distribution serve?
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