BarCap’s role in £56bn deal is challenged
BARCLAYS Capital’s last-minute inclusion in the adviser list for the Glencore-Xstrata merger, which has lifted its place in the Thomson Reuters league table for M&A worldwide, has been challenged by one of its rivals.
Thomson Reuters, which has lifted BarCap from eighth to sixth following the bank’s declaration that it is an adviser on the £56bn merger, said yesterday that a rival had complained.
“The challenge focuses on the role of BarCap and whether they should be credited as an adviser on the deal,” said Leon Saunders Calvert, Thomson Reuters head of global deals and private equity.
Calvert said the bank now needed to provide proof of the advisory work it was providing on the bid. “They need to provide an engagement letter and we want to see details of what they advised on. If they provide sufficient proof which is consistent with the details we expect, they will retain their credit. Otherwise their accreditation will be removed from the transaction.”
News of BarCap’s inclusion as an adviser to the deal took bankers by surprise when they heard about it.
One of the 18 named bankers working on the deal over the past few weeks said: “We’ve not seen hide nor hair of BarCap over the past few weeks.”
The extent to which one major transaction can influence the rankings, and the suddenness of BarCap’s arrival on the scene, has prompted some to criticise the way the tables are put together.
One of the complaints is that some widely followed tables rank the number and value of deals, and one bank’s advisory work is given the same weight as another’s, regardless of the amount of work.
In the case of Xstrata and Glencore, for example, banks such as Citi and Morgan Stanley, JP Morgan, Nomura and Deutsche may have been working on the deal for weeks and yet will get the same weighting in the league table as BarCap, which came in at the last minute.
“That’s pretty tough for an adviser who has just endured several sleepless nights,” said one banker.
Yesterday advisers on the deal were talking to shareholders.