The future of the London Stock Exchange has kept some of the City of London’s leading advisers and corporate brokers busy for the last six years. Now, Nasdaq will help keep the fees flowing a little longer.
But the deal has turned into the City’s equivalent of the Gordian Knot with a succession of determined and talented bankers failing to splice it.
The latest investment banks to join the challenge are JP Morgan and Greenhill, which are helping Nasdaq with its attempt to buy the LSE.
For JP Morgan, this may cause a problem. Its London joint venture – JPMorgan Cazenove – is a long-standing corporate broker to the LSE.
However, it is understood that if LSE deems Nasdaq’s takeover attempt as unfriendly, JP Morgan will step down as adviser to Nasdaq, leaving JPMorgan Cazenove to carry on broker.
The bank has had to manage such conflicts before, for example over its roles in last year’s takeover of Manchester United: while Cazenove had long been United’s broker, JP Morgan financed the bid. The parent bank ceased acting for Malcolm Glazer, whose for the club was eventually successful, when the bid was deemed hostile, but it continued to finance the bid.
If JP Morgan does decide to step aside from its Nasdaq advisory role, it will be down to Greenhill to concoct a creative solution with enough clout to convince Matthew Greenburgh, head of financial institutions at Merrill Lynch, who has been leading the defence for the London Stock Exchange, to consider Nasdaq’s offers.
Mr Greenburgh is being supported by Stephen Fox and Anthony Fry of Lehman Brothers, as well as David Mayhew of JP Morgan Cazenove.
Caroline Silver, a financial institutions banker at Morgan Stanley, also made an appearance at the start of the LSE saga when she counselled Euronext on its attempt at sealing the deal.
Goldman Sachs, however, seems to have lost out in the long-running siege of the LSE. It had initially advised Werner Seifert in Deutsche Börse’s ill-fated takeover attempt. But when that failed, Simon Dingemans of Goldman advised Macquarie Bank of Australia on its unsuccessful hostile bid for the LSE.