News Column

Wanted: Wise old heads for the latest flood of City deals

May 16, 2014

DAVID HELLIER



WHEN Astrazeneca recently got wind of Pfizer's intention to make a contentious £63bn bid, it hastily assembled two bulge bracket investment banks, Goldman Sachs and Morgan Stanley, to oversee its defence.


As if that weren't enough it also instructed Evercore, one of the many boutique investment banks that are famed for their independence and sector expertise.


But, in line with a growing trend, it also instructed Simon Robey, one of its former advisers and Simon Warshaw, a former UBS banking veteran, who recently set up their own firm.


So why take on the two Simons when the giant pharmaceutical group appeared to have all its bases covered? Those close to the deal say that Robey was brought on board for his longstanding knowledge of the company and his experience in guiding it through deals over the years.


They point out that there's one thing being part of a giant investment bank, which has proprietary trading desks, lending syndicates and links with hundreds of global institutions, but quite another having the advice of a seasoned veteran who has known your company for ages and is set to act for you without the complication of being able to offer services other than straightforward advice.


Earlier this week it emerged that Keith Harris, who runs a banking advisory practice of his own after losing his position as chairman of Seymour Pierce after that firm was taken over, is advising the US businessman Randy Lerner on the sale of Aston Villa.


Lerner has also instructed Bank of America Merrill Lynch to do some of the big-hitting but it would be surprising if Harris, who acted for Lerner in his purchase of the west Midlands football club, didn't occupy more of Lerner's time during the course of bid discussions. Harris has done more than 25 football takeover bids in recent years whereas Bank of America's recent football exposure doesn't amount to much.


Ian Hannam, the natural resources banker who left JP Morgan after getting into a skirmish with the City's regulatory authorities, has since helped out on a number of transactions including the £600m First Group rights issue and the recent takeover of Heritage Oil.


On both occasions he was brought in by boards or individuals who knew him well.


Other influential bankers have previously gone on to set up their own firms, like Ken Moelis (Moelis).


The investment banking model is always alive to innovation. And one thing's clear, relationships and experience are always going to be in vogue. david.hellier@cityam.com


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: City A.M. (UK)


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