New York: Facebook bankers led by Morgan Stanley will split about $176 million (Dh646 million) for managing the social networking company's initial public offering after accepting a lower-than-average fee for their work.

The underwriters are collecting about 1.1 per cent of the $16 billion Facebook raised in its IPO on Thursday, the company said in a filing on Friday. The company hired 33 investment banks for the offering, led by Morgan Stanley, JPMorgan Chase & Co and Goldman Sachs Group.

Facebook, valued at $104.2 billion in the IPO, agreed to pay less than one-third the 3.6 per cent median fee on the ten largest US initial offerings in history before this one, according to data compiled by Bloomberg. With larger IPOs, banks are often willing to take a smaller percentage fee and can use high-profile offerings to help land more IPO mandates later on.

"This is just a once-in-ten-years event, so they figure they've got to be attached to it," said Eric Jackson, founder of investment firm Ironfire Capital in Naples, Florida.

Underwriters bought Facebook stock to keep it from falling below the $38 a share IPO price after its debut, people with knowledge of the matter said. The bankers supported the shares after Nasdaq OMX Group faced difficulties delivering trade execution messages, said one of the people, who asked not to be identified because the transactions are private. Jonathan Thaw, a spokesman for Facebook, declined to comment.

Facebook rose less than one per cent on Friday to $38.23.

The biggest share of IPO fees typically goes to the lead underwriter on the deal. Dan Simkowitz, Morgan Stanley's chairman of global capital markets, was one of the main bankers on the offering, said a person familiar with the matter. He also helped run General Motors's 2010 IPO that raised $18.1 billion.

Major decisions

Michael Grimes, global co-head of technology investment banking at Morgan Stanley, also played a key role. He introduced Facebook executives to investors at a lunch meeting recently in Palo Alto, California, part of a roadshow to pitch the deal to prospective buyers. Grimes became acquainted with Facebook Chief Operating Officer Sheryl Sandberg when he handled the IPO for Google, her former employer. He meets regularly with investors in search of the next promising start-up and is an avid consumer of his clients' products.

Sandberg excused herself from picking bankers for Facebook's IPO because she had relationships with several banks from her previous job at Google, one person said.

Facebook Chief Financial Officer David Ebersman was the point person on the deal, starting with the selection of the lead bankers, one person said. Sandberg and Chief Executive Officer Mark Zuckerberg were involved in major decisions throughout the process, the person said.

At JPMorgan, Vice-Chairman Jimmy Lee, technology bankers Jennifer Nason and Noah Wintroub, and equity capital markets bankers Liz Myers and Michael Millman worked on the offering, said one person.

The Goldman Sachs team working on the deal included technology bankers George Lee and Scott Stanford, and equity capital markets bankers David Ludwig and Andy Fisher, another person said.

Morgan Stanley handled the sale of 162.2 million, or about 39 per cent, of the IPO shares, Facebook said in Friday's filing. JPMorgan's allocation was 84.9 million shares, or 20 per cent, and Goldman Sachs got 63.2 million, or 15 per cent, the filing shows.

Other banks on the IPO include Bank of America, Barclays, Allen & Co, Citigroup, Credit Suisse Group and Deutsche Bank.

JPMorgan has won the biggest share of IPOs by US companies so far this year including Facebook's sale, with 12.2 per cent market share, edging out Morgan Stanley's 12.1 per cent, Bloomberg data show.