Midwest digs deep
Morgan Stanley emerges as one of the big winners in the battle for Midwest, pocketing a handy sum for its trouble.
Morgan Stanley is set to pocket more than $19 million in success fees for its advisory work with iron ore group Midwest Corporation – a payment so large that the company has to turn to the market to issue more shares.
The Morgan Stanley team led by Nick Godhard began work for Midwest last October when they were engaged to fight off an unwanted takeover from neighbouring operator Murchison Metals.
That stock-based bid valued Midwest at $700 million, but after the emergence of Sinosteel as a rival bidder, with a final cash offer that valued Midwest at more than $1.4 billion, Morgan Stanley is set to pocket a sizeable success fee.
It is believed the $19.26 million – to be raised through a placement of 3.02 million shares (Morgan Stanley will manage the placement) – does not include fees to other legal and PR advisors and separately, is over and above the nearly $10 million in payments revealed earlier this year.
Midwest announced in April it had already spent $7.75 million spent on the takeover defence against Murchison in the 2007 calendar year – equivalent to 20 per cent of its revenues – and a further $2 million was spent until the takeover lapsed in February.
These payments were spread across Morgan Stanley and legal advisors Hardy Bowen and Clayton Utz, as well as Minter Ellison which acted for Midwest before a conflict of interest emerged after the Sinosteel bid. PR was provided by a team led by Martin Debelle from Cannings before Debelle took the mandate to his new firm Citadel.
JP Morgan can also expect a success fee after guiding its client, Sinosteel, to majority control. The company is expected to confirm tomorrow that it has 50.1 per cent of Midwest, though it is unlikely to reveal the size of the success fee. However, some of those payments will emerge when Midwest releases its results next month.
The JP Morgan team was led by Alan Young and David Hine, while legal advice came from Deacons and PR advice from FD Third Person.
The only parties who will have to make do with a mere retainer are the Murchison advisors Gresham Partners and RBC Corporate Finance, who failed with the original scrip offer and then again with an ambitious proposal to have Midwest turn the tables and bid for Murchison.
Murchison, however, did spend $5.6 million in a $113 million share placement last year. Those fees went to BBY, RBC Capital Markets and Merrill Lynch.
Midwest also spent $3.6 million in 2007 on a share placement and rights issue that raised a combined $67.5 million. Paterson Securities took a fee of $1.9 million for underwriting and managing the $38 million rights issue component.
The Morgan Stanley team led by Nick Godhard began work for Midwest last October when they were engaged to fight off an unwanted takeover from neighbouring operator Murchison Metals.
That stock-based bid valued Midwest at $700 million, but after the emergence of Sinosteel as a rival bidder, with a final cash offer that valued Midwest at more than $1.4 billion, Morgan Stanley is set to pocket a sizeable success fee.
It is believed the $19.26 million – to be raised through a placement of 3.02 million shares (Morgan Stanley will manage the placement) – does not include fees to other legal and PR advisors and separately, is over and above the nearly $10 million in payments revealed earlier this year.
Midwest announced in April it had already spent $7.75 million spent on the takeover defence against Murchison in the 2007 calendar year – equivalent to 20 per cent of its revenues – and a further $2 million was spent until the takeover lapsed in February.
These payments were spread across Morgan Stanley and legal advisors Hardy Bowen and Clayton Utz, as well as Minter Ellison which acted for Midwest before a conflict of interest emerged after the Sinosteel bid. PR was provided by a team led by Martin Debelle from Cannings before Debelle took the mandate to his new firm Citadel.
JP Morgan can also expect a success fee after guiding its client, Sinosteel, to majority control. The company is expected to confirm tomorrow that it has 50.1 per cent of Midwest, though it is unlikely to reveal the size of the success fee. However, some of those payments will emerge when Midwest releases its results next month.
The JP Morgan team was led by Alan Young and David Hine, while legal advice came from Deacons and PR advice from FD Third Person.
The only parties who will have to make do with a mere retainer are the Murchison advisors Gresham Partners and RBC Corporate Finance, who failed with the original scrip offer and then again with an ambitious proposal to have Midwest turn the tables and bid for Murchison.
Murchison, however, did spend $5.6 million in a $113 million share placement last year. Those fees went to BBY, RBC Capital Markets and Merrill Lynch.
Midwest also spent $3.6 million in 2007 on a share placement and rights issue that raised a combined $67.5 million. Paterson Securities took a fee of $1.9 million for underwriting and managing the $38 million rights issue component.
Share this article and show your support
Call 1300 880 160
Start a chat
Schedule a call
