EasyJet boss ejects Jefferies from cockpit

WHEN Jefferies bought Hoare Govett for £1 from RBS in February, it expressed the hope that it would be able to retain some of its larger broking clients.

So it will come as something of a blow to find that FTSE-250 firm easyJet, the discount airline headed by former Guardian media group chief Carolyn McCall, has decided to bring in Nomura to be joint broker to the group alongside Credit Suisse.

City sources say the bulge bracket firms, such as Nomura, Goldman Sachs, Barclays etc, have all been lobbying hard to win mandates from Hoare Govett both during the time of its uncertain ownership and since the deal with Jefferies was done. Jefferies has a lot of equity focused expertise in a great many sectors but crucially for some firms it doesn’t have the balance sheet of a larger bank.

Although Hoare Govett lost Tullow Oil at about the time the Jefferies deal went through, it still retains the brokership for a number of other big companies, including BAE Systems, Tate & Lyle, Rolls-Royce and Rexam.

Brokerships are not necessarily very profitable in themselves but they do tend to be the precursor to more lucrative work, such as equity placings and mergers.

EasyJet will be the fourth FTSE 250 mandate for Nomura’s broking team, which has sometimes struggled to make headway in the UK’s ultra-competitive broking market.

The Japanese bank, whose new riverside offices at One Angel Lane were opened by chancellor George Osborne a year ago, has eight corporate broking clients, including music retailer HMV and Britvic, which produces drinks such as PepsiMax, J2O and Lipton Ice Tea.

Jefferies Hoare Govett, which has been acting for CWW this week in its merger talks with Vodafone, declined to comment about this setback to its plans.

Carolyn McCall has rung the changes