Lest we for­get... lawyers, bankers cash in

Daily Mail - - News - By City Cor­re­spon­dent

BANKERS, spin doc­tors and lawyers work­ing on the Mel­rose takeover of GKN are set to rake in more than £220mil­lion.

Some of the City’s big­gest names in­clud­ing in­vest­ment bankers RBC Cap­i­tal and Roth­schild, Lloyds Bank, and South African in­vest­ment firm In­vestec will split a fees bo­nanza for work on the con­tro­ver­sial deal.

Al­ready crit­ics have de­scribed the hos­tile takeover as an ‘abuse of cap­i­tal­ism’ that has seen the short-term in­ter­ests of a few prof­i­teer­ing City firms de­feat­ing the longer-term con­cerns of other in­vestors.

Pa­per­work shows ad­vis­ers work­ing for Mel­rose would have made £22mil­lion had the firm failed, but will pocket £139.5mil­lion if the deal is com­pleted. GKN ran up close to £80mil­lion in fees try­ing to de­fend it­self from the takeover, tak­ing the to­tal to al­most £220mil­lion.

It brings the com­bined to­tal that could be made by bankers, hedge funds and Mel­rose’s top four bosses to al­most £680mil­lion.

Crit­ics said bankers would be ‘lick­ing their lips’ at the fees. The Unite union’s Steve Turner said: ‘The as­tro­nom­i­cal sums of money that will be pock­eted would have Wall Street bankers lick­ing their lips.

‘This is a bid that put a jack­pot pay­day for a small num­ber of peo­ple ahead of the long-

‘As­tro­nom­i­cal sums of money’

term sta­bil­ity of a world-class en­gi­neer­ing firm and the thou­sands of work­ers who make it a suc­cess.’ Yes­ter­day, the Daily Mail re­vealed how hedge funds who tar­geted GKN had made an im­me­di­ate killing of £172mil­lion as shares soared af­ter in­vestors backed the takeover.

Pa­per­work pub­lished by Mel­rose showed that its bankers Lloyds and RBC Cap­i­tal – an arm of Royal Bank of Canada – will make up to £69mil­lion for fi­nanc­ing ar­range­ments, while RBC Cap­i­tal along with 180-year-old French firm Roth­schild and In­vestec will make up to £50mil­lion for broking ad­vice.

Mel­rose’s lawyers Simp­son Thacher and Bartlett could get up to £9mil­lion when the deal com­pletes. Its pub­lic relations agen­cies in­clud­ing May­fair-based Mont­fort Com­mu­ni­ca­tions could get up to £5mil­lion.

GKN also ran up mil­lions in fees, in­clud­ing £60mil­lion for bankers Gleacher Shack­lock, JP Mor­gan and UBS, £12.3mil­lion for lawyers Slaugh­ter and May, and £6.4mil­lion for PR firms FTI Consulting and Brunswick, run by Sir Alan Parker.

Mel­rose’s top four bosses – chief ex­ec­u­tive Si­mon Peck­ham, 55, chair­man Christo­pher Miller, 66, vice- chair­man David Roper, 67, and fi­nance chief Ge­of­frey Martin, 50, could share a bonus pot of £285mil­lion if their plans post-takeover are suc­cess­ful. The four are en­ti­tled to gen­er­ous bonuses based on the in­crease in price of Mel­rose’s shares.

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