LONDON, July 30 — Deutsche Bank, RBS, Barclays Capital and BNP Paribas will share in fees estimated at nearly US$100 million (RM318 million) after helping shepherd EDF’s $9 billion sale of British power networks to Hong Kong billionaire Li Ka-shing.
Late on Thursday, the world’s second-biggest utility reached a deal to sell its UK electricity distribution networks to Li’s Cheung Kong Infrastructure and Hongkong Electric (HKE).
Agreement on a sale — the largest utility deal since February 2009 and one of the largest-ever Asian buys into Europe — came hours before EDF was due to report its quarterly results.
It followed days of wrangling in London, with EDF and its advisers locked in parallel negotiations with CKI and a rival bidding group led by Macquarie, the Australian bank whose name is synonymous with infrastructure dealmaking. Both teams had submitted binding bids on Monday.
People familiar with the matter said Nigel Robinson, a former Goldman Sachs banker who focuses on natural resources deals, and sector specialist Alan Brown, led a Deutsche Bank team that was EDF’s key financial adviser.
A Herbert Smith team under veteran energy lawyer Henry Davey provided legal advice. EDF finance chief Thomas Piquemal, the former Lazard banker brought in by new chief executive Henri Proglio, supervised the sale.
EDF was also advised by Barclays Capital and BNP Paribas, with BarCap’s Paul Jeffery helping re-shape the financing of EDF’s UK units ahead of the sale.
Leading the internal deal team for Li were CKI Deputy Managing Director Andrew Hunter and Basil Scarsella, the chief executive of Northern Gas Networks (NGN), the British utility bought by CKI in 2005.
CKI turned to Royal Bank of Scotland (RBS), which had helped finance the 2005 NGN takeover. It tapped utilities specialist Simon Wilde and merger expert Charles Roast, a former Merrill Lynch banker who helped oversee the sale of London’s Gatwick airport last year.
The deal represents part-nationalised RBS’s biggest-ever sole mandate, Thomson Reuters data shows, and is a boost to one of Europe’s mergers and acquisitions (M&A) minnows.
Excluding EDF, RBS ranks just 18th for M&A announced this year with a European target, with US$14.3 billion of deals, Thomson Reuters data shows. It has worked on barely a fifth of the deals by number or dollar value that market leader Morgan Stanley can claim.
Freeman & Co, a merger consultancy, estimates EDF’s three advisers will earn US$40 to US$50 million in fees, while CKI’s bank will make US$30 to US$40 million.
The four banks, plus units of Lloyds Banking Group, Mizuho and Santander, are also providing 665 million pounds (RM3.3 billion) of loans to help fund the acquisition, people familiar with the matter said. Freeman says those loans could garner another US$5 to US$8 million in fees.
The rival group — Macquarie, Canada Pension Plan (CPP) and the Abu Dhabi Investment Authority (ADIA) — had been working with Macquarie’s own investment bankers, led by European utilities head Daniel Wong, and advisers from Goldman Sachs and boutique Lexicon Partners. — Reuters