The one that got away
The failure of BG's bid for Origin Energy raises some interesting questions for keen watchers of the league tables.
BG has conceded defeat in the face of Origin Energy's vertiginous deal with ConocoPhillips and will let its bid lapse, allowing the advisory teams from Gresham and Goldman Sachs JBWere to return to other duties, mostly notably BHP Billiton's continued pursuit of Rio Tinto.
For the advisors that worked on the $13.8 billion bid, this will probably always be remembered as the one that got away. BG was within an hour or two of getting the Origin board's signature on an agreed offer of $15.50 a share before Santos' deal with Petronas caused a fundamental re-evaluation of Australia's coal-seam gas reserves.
While the near doubling in the estimated value of Origin shares – at least in the eyes of independent expert Grant Samuel – has yet to be reflected in the market (still just 13 per cent above BG's offer), it makes the prospect of a higher bid and a board recommendation unfeasible for the UK company, which is likely now to turn to its other Australian coal seam gas investment via QGC.
BG hired a Gresham team led by James Graham and David Feetham and a Goldman Sachs JBWere team led by Alastair Lucas – Feetham and Lucas are also working together on the BHP bid.
Investment banks usually work for a success fee and glean modest returns from a bid that fails to land its target. But eyebrows were raised last month by Spotless Group's announcement that it had incurred $14.3 million in transaction costs from its failed bid for Programmed Maintenance and the ownership review of another smaller subsidiary.
That sum appeared generous enough to include a success fee for such a transaction and has confounded observers (namely bankers in rival firms). Goldman Sachs JBWere had advised Spotless.
Other advisors working on the BG bid were Morgan Stanley and Deutsche Bank, along with legal firm Malleson Stephen Jaques.
Which begs the following question? What happens to the league table credits to advisors for deals which have been announced but not consummated? Other firms will no doubt have a firm opinion on this.
And does this now trigger a success fee for Origin's advisors Macquarie and Clayton Utz? Nobody is saying.
For the advisors that worked on the $13.8 billion bid, this will probably always be remembered as the one that got away. BG was within an hour or two of getting the Origin board's signature on an agreed offer of $15.50 a share before Santos' deal with Petronas caused a fundamental re-evaluation of Australia's coal-seam gas reserves.
While the near doubling in the estimated value of Origin shares – at least in the eyes of independent expert Grant Samuel – has yet to be reflected in the market (still just 13 per cent above BG's offer), it makes the prospect of a higher bid and a board recommendation unfeasible for the UK company, which is likely now to turn to its other Australian coal seam gas investment via QGC.
BG hired a Gresham team led by James Graham and David Feetham and a Goldman Sachs JBWere team led by Alastair Lucas – Feetham and Lucas are also working together on the BHP bid.
Investment banks usually work for a success fee and glean modest returns from a bid that fails to land its target. But eyebrows were raised last month by Spotless Group's announcement that it had incurred $14.3 million in transaction costs from its failed bid for Programmed Maintenance and the ownership review of another smaller subsidiary.
That sum appeared generous enough to include a success fee for such a transaction and has confounded observers (namely bankers in rival firms). Goldman Sachs JBWere had advised Spotless.
Other advisors working on the BG bid were Morgan Stanley and Deutsche Bank, along with legal firm Malleson Stephen Jaques.
Which begs the following question? What happens to the league table credits to advisors for deals which have been announced but not consummated? Other firms will no doubt have a firm opinion on this.
And does this now trigger a success fee for Origin's advisors Macquarie and Clayton Utz? Nobody is saying.
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