BANKERS are already salivating over the sizeable fees associated with the upcoming flotation of the Swiss-based commodities group Glencore.
The IPO, if it goes ahead (some think it may yet stumble), will be listed in London and Hong Kong and will bring in fees of £300m-plus to a group of banks that is likely to be led by Citi, Morgan Stanley and Credit Suisse.
Absent from the pack will be JP Morgan and Ian Hannam, the man many regard as the doyen of the mining sector as far as corporate financiers are concerned. Hannam’s issue is that he has been a long-term adviser of Xstrata and its chief executive Mick Davis.
Glencore owns a 34.5 per cent stake in Xstrata and many expect the two to be in merger talks shortly after Glencore floats, if not before, ruling Hannam offside.
Conflicts such as these are a measure of success, JP Morgan would say, but must be frustrating all the same, especially since the bank was recently excluded from advising on the LSE merger with TMX because of its work for Deutsche Boerse on its deal with Nasdaq.
The mining sector, in particular, throws up many conflicts because it is dominated by a few large powerful groupings.
“When you’re corporate broker to as many people as JP is, then you’re going to be conflicted from time to time,” said one banking source yesterday. Just a shame that the conflict comes on two of the biggest deals so far this year.
Hannam, though, won’t be out there begging for work exactly. He’s currently leading the reconstruction of Nat Rothschild’s ambitious coal mining group Vallar, which yesterday completed the first leg of its merger with the Indonesian mining group Bumi, and most resources groups in town seek his advice, when he isn’t conflicted.
CVAs and KPMG
KPMG’s restructuring head Richard Fleming has invoked the fury of some JJB landlords by proposing a creditors’ voluntary agreement that will hopefully save the sports retail group from administration.
Some landlords are unhappy about being paid just 55 per cent of their current rent if their premises happen to be one of the 97 stores that JJB feel aren’t working. But, as Fleming points out, the alternative is administration, and he’s confident creditors will back the scheme at a meeting in two weeks’ time. Meanwhile, his team will soon be bolstered by the recruitment of Colin Haig from PwC.