Boutique banks set to cash in as Sky deal wraps up

As the contentious $39 billion takeover saga for Sky draws to a close, boutique banks appear poised to reap some of the richest rewards.

PJT Partners, Robey Warshaw, Evercore and Centreview Partners are the small advisory shops that worked on the battle between Comcast and Twenty-First Century Fox for control of Sky. The protracted takeover effort began in December 2016, when Fox offered to acquire the share of the British broadcaster that it did not already own – neared culmination this weekend with Comcast outbidding Fox in a rare one-day auction.

Sky shareholders have until October 11 to accept, but its independent directors have already recommended the deal, which is set to be the biggest British takeover this year, according to Bloomberg data. The high-stakes battle illustrates how UK targets, especially those with European and global operations, remain attractive to overseas buyers despite uncertainty surrounding the country’s Brexit negotiations to leave the EU.

Morgan Stanley, PJT Partners and Barclays stood to share a pool of as much as £61.5 million (Dh295.6m) in fees as Sky’s advisers, under the terms of an offer made by Comcast in the months leading up to Saturday’s frenzied bidding war. Robey Warshaw, Evercore, Bank of America and Wells Fargo were to split up to £37.8m for their work on behalf of the US cable operator, according to the proposal.

Ranked as the fifth-largest transaction globally so far this year, the deal could boost the banks’ positions in the socalled league tables, a fiercely contested list of the year’s top advisers that is used to pitch for new business. Evercore, Lazard and Centreview are among the top 10 advisers for deal-making so far this year.

As the larger banks navigate to avoid conflicts of interest stemming from advisory roles through their many different types of services or their relationships with certain clients, boutique banks are stepping into the breach by using their focus on mergers and share sales as an advantage. Executives often bring them on board to provide advice alongside the financing and capital-markets expertise of the larger financial institutions.