Bankers reel as Ant IPO collapse threatens payday of $400 million

For bankers, Ant Group’s initial public offering was the kind of bonus-boosting deal that can fund a big-ticket splurge on a car, a boat or even a vacation home. Hopefully, they didn’t get ahead of themselves.

Dealmakers at firms including Citigroup Inc. and JPMorgan Chase & Co. were set to feast on an estimated fee pool of nearly $400 million for handling the Hong Kong portion of the sale, but were instead left reeling after the listing there and in Shanghai abruptly derailed days before the scheduled trading debut. Top executives close to the transaction said they were shocked and trying to figure out what lies ahead.

And behind the scenes, financial professionals around the world marveled over the surprise drama between Ant and China’s regulators and the chaos it was unleashing inside banks and investment firms. Some quipped darkly about the payday it’s threatening. The silver lining is the about-face is so unprecedented that it’s unlikely to mean any broader issues for underwriting stocks.

“It didn’t get delayed because of lack of demand or market issues but rather was put on ice for internal and regulatory concerns,” said Lise Buyer, managing partner of the Class V Group, which advises companies on initial public offerings. “The implications for the domestic IPO market are de minimis.”

One senior banker whose firm was on the deal said he was floored to learn of the decision to suspend the IPO when the news broke publicly. Speaking on condition he not be named, he said he didn’t know how long it might take for the mess to be sorted out and that it could take days to gauge the impact on investors’ interest.

Meanwhile, institutional investors who planned to buy into Ant described reaching