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 This is in sharp contrast to many so-called mega-deals, which have
historically involved at least two and sometimes three or four
financial advisers to each party.
Shell's cash and share offer, recommended by the board of BG on
Wednesday, represents a coup for Bank of America Merrill Lynch, as
Shell's sole adviser. It is also a significant payday for Goldman
Sachs and advisory boutique Robey Warshaw LLP, the firms hired by
BG.
To keep talks between Shell and BG confidential, the list of
advisers was intentionally kept short, one source familiar with the
deal said, even though this meant Bank of America Merrill Lynch
underwriting Shell's borrowing alone.
This compares with Vodafone's $130 billion sale of its 45 percent
stake in Verizon's U.S. wireless business in 2013 which earned big
fees for Goldman Sachs, Bank of America Merrill Lynch, JP Morgan,
Morgan Stanley, Barclays, UBS, Paul Taubman’s PJT Partners and
Guggenheim Partners.
And nine banks shared the spoils when Glencore took over Xstrata in
2012, while seven are handling the merger of Holcim and Lafarge and
related asset sales.
None of the parties involved have provided details on their likely
earnings from the BG deal but the figures will affect league tables
for fees and deals activity in the first quarter of next year, if
not sooner, given the small number of advisers on the big-money
ticket.
Merrill Lynch was already the top bank by fees and market share for
the energy and power sector in the first quarter of 2015, with a 7.9
percent share, according to Thomson Reuters data. The bank came
fourth for global mergers and acquisitions in terms of fees.
Goldman was at number one, after boosting its fee intake by 40
percent against the same period last year.
Investment banking fees for the energy and power sector reached
almost $2.4 billion, the third most lucrative sector globally for
the quarter.
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Robey Warshaw's role deals another blow to major bulge-bracket
banks, coming just weeks after independent investment banks Lazard
and Centerview Partners LLC saw off bigger rivals to advise H. J.
Heinz and Kraft Foods on a $46 billion merger.
The company began operations just last year under its two star
dealmaker founders -- Simon Robey and his namesake Simon Warshaw.
Dealmakers across the City are now expected to try to flush out
possible counter bidders to defend their positions in the league
tables, which help companies select which banks and advisers they
want to spearhead takeovers and share offerings.
"BG has long been mooted as a potential target for a number of
predators. It is not inconceivable that this deal flushes out a
counter offer for BG," one of BG's 15 largest investors told
Reuters.
(Additional reporting by Pamela Barbaglia and Sophie Sassard;
Editing by Keith Weir)
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