General Lee
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- Aug 24, 2002
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May 23, 2008, 4:10 pm
Delta-Northwest: Wall Street’s $80 Million Fee Bonanza
Posted by Heidi N. Moore --WSJ
Merging two of the nation’s airlines isn’t easy, and it won’t be cheap. The first bill to come due: Over $80 million in fees to the investment bankers who advised the airlines on the $3 billion merger.
Our friends at FactSet MergerMetrics broke it down for us. Three of the advisers together are getting $80 million. The biggest chunk of fees is going to Morgan Stanley, which is getting $42 million for its advice to Northwest. The fellows at Morgan Stanley need to hope that the deal will pass regulatory muster, however, because the bank will get $37.3 million of that fee only when the deal closes. (J.P. Morgan also advised Northwest, but its fees haven’t been disclosed.)
With $42 million of fees on a $3 billion deal, Morgan Stanley is doing extraordinarily well. Morgan Stanley’s bankers have won the distinction of being the first to score more than $40 million of fees on any deal worth less than $10 billion.
According to FactSet MergerMetrics, here are the only five other deals with $40 million of fees for a bank. Morgan Stanley was on two of them.
That includes Morgan Stanley’s $51 million fee for advising May Department Stores on their $10.4 billion takeover by Federated Department Stores and its $47 million for advising First Data on its $25.6 billion leveraged buyout by Kohlberg Kravis Roberts & Co.
Greenhill and Merrill Lynch, working for Delta, didn’t do too shabbily either. Each bank brought in $20 million. For Merrill Lynch, that kind of payday is common, but boutiques like Greenhill don’t see that kind of cash very often. Rival boutique investment bank Evercore, for instance, earned $4.75 million for its advice to First Data according to FactSet MergerMetrics. The only other boutiques that appear as advisers at all in FactSet MergerMetric’s list of the top five fee-rich deals are Lazard and Peter J. Solomon. Both received a couple of million dollars only for fairness opinions. Banc of America Securities analyst Michael Hecht estimated this week that Greenhill’s pipeline of pending mergers and acquisitions totals $68 billion, including the pending (and now troubled) buyout of BCE.
For more on Greenhill’s work on Delta-Northwest, and to find the names of the individual bankers who worked on the deal, see this Deal Journal post from last month.
Deal Journal Trivia: The other two banks who have ever scored more than $40 million on a single deal were Goldman Sachs and UBS. Goldman will earn around a $49 million fee for advising Clear Channel Communications and brought in $40 million for advising Freescale Semiconductor. UBS Securities raked in $40 million from advice to Harrah’s Entertainment on its buyout.
Bye Bye---General Lee
Delta-Northwest: Wall Street’s $80 Million Fee Bonanza
Posted by Heidi N. Moore --WSJ
Merging two of the nation’s airlines isn’t easy, and it won’t be cheap. The first bill to come due: Over $80 million in fees to the investment bankers who advised the airlines on the $3 billion merger.
Our friends at FactSet MergerMetrics broke it down for us. Three of the advisers together are getting $80 million. The biggest chunk of fees is going to Morgan Stanley, which is getting $42 million for its advice to Northwest. The fellows at Morgan Stanley need to hope that the deal will pass regulatory muster, however, because the bank will get $37.3 million of that fee only when the deal closes. (J.P. Morgan also advised Northwest, but its fees haven’t been disclosed.)
With $42 million of fees on a $3 billion deal, Morgan Stanley is doing extraordinarily well. Morgan Stanley’s bankers have won the distinction of being the first to score more than $40 million of fees on any deal worth less than $10 billion.
According to FactSet MergerMetrics, here are the only five other deals with $40 million of fees for a bank. Morgan Stanley was on two of them.
That includes Morgan Stanley’s $51 million fee for advising May Department Stores on their $10.4 billion takeover by Federated Department Stores and its $47 million for advising First Data on its $25.6 billion leveraged buyout by Kohlberg Kravis Roberts & Co.
Greenhill and Merrill Lynch, working for Delta, didn’t do too shabbily either. Each bank brought in $20 million. For Merrill Lynch, that kind of payday is common, but boutiques like Greenhill don’t see that kind of cash very often. Rival boutique investment bank Evercore, for instance, earned $4.75 million for its advice to First Data according to FactSet MergerMetrics. The only other boutiques that appear as advisers at all in FactSet MergerMetric’s list of the top five fee-rich deals are Lazard and Peter J. Solomon. Both received a couple of million dollars only for fairness opinions. Banc of America Securities analyst Michael Hecht estimated this week that Greenhill’s pipeline of pending mergers and acquisitions totals $68 billion, including the pending (and now troubled) buyout of BCE.
For more on Greenhill’s work on Delta-Northwest, and to find the names of the individual bankers who worked on the deal, see this Deal Journal post from last month.
Deal Journal Trivia: The other two banks who have ever scored more than $40 million on a single deal were Goldman Sachs and UBS. Goldman will earn around a $49 million fee for advising Clear Channel Communications and brought in $40 million for advising Freescale Semiconductor. UBS Securities raked in $40 million from advice to Harrah’s Entertainment on its buyout.
Bye Bye---General Lee
