Lawyers, bankers and spin doctors set to rake in an astonishing £235million in fees to sell the London Stock Exchange to the Germans
Lawyers, bankers and spin doctors are set to rake in up to £235million from a German takeover of the London Stock Exchange.
The fees bonanza was revealed as plans were set out for Frankfurt-based Deutsche Boerse to seize control of the 215-year-old LSE.
The pair – who say the deal is a ‘merger of equals’ – said the £21billion deal would go ahead regardless of whether or not Britain remained in the European Union.
And it was announced they would seek to make £350million of annual savings through cuts, involving slashing 1,250 jobs.
Consultants: The fees bonanza was revealed as plans were set out for Frankfurt-based Deutsche Boerse to seize control of the 215-year-old LSE
But a determination to save cash does not appear to have extended to the fees for advisers, detailed in the small print.
In fact, the costs these dealmakers expect to suck out of the two firms are equal to more than eight months’ savings under the tighter regime.
Deutsche’s consultants will rake in £98.5million, with £46.2million for financial advisers alone. Another £30.9million is to be pocketed by its lawyers, £4million by its accountants and £2.8million by public relations people.
LSE is expecting to hand over £135.6million. Bankers will take up to £85.6million, lawyers £37.5million and accountants £3.2million.
And LSE is paying City spinners £1.7million to promote the deal in the press in the face of opposition over the plans to let one of Britain’s most revered financial institutions fall into foreign hands.
Those set to benefit from the fees bonanza include HSBC, which was named in the Panama Papers tax scandal. The bank and its affiliates had set up more than 2,300 shell companies for clients using law firm Mossack Fonseca.
Others listed in the deal documents include Goldman Sachs, the banking giant renowned for its ruthless focus on profit and lavish pay for high-flying staff.
Barclays, UBS and Deutsche Bank are also named. All three have been hit with multi-million-pound fines by regulators.
Politicians last night blasted the deal, accusing those involved of selling Britain’s national interest.
Influential Tory MP Sir Bill Cash said: ‘I think it’s very sad and tragic that this wholly unnecessary capitulation took place.’
When the cuts are made it is believed they will be split between the two companies.
The deal will now be decided on by LSE shareholders at a crunch vote on July 4. Deutsche shareholders will have their say later the same month.
Despite vocal opposition it looks increasingly likely that investors will vote it through.
Activist hedge fund boss Christopher Hohn, who helped block an earlier Deutsche takeover of the LSE through his Children’s Investment Fund, does not oppose it this time round.
Some MPs have called on Business Secretary Sajid Javid to block the deal but Chancellor George Osborne is in favour, effectively ruling this out.
The last hope of opponents could now be regulators, as EU and British watchdogs need to wave it through. French finance minister Michel Sapin wants the European Commission to intervene.
His words are likely to have been embarrassing for Xavier Rolet, the LSE’s French boss, who is said to harbour political ambitions.
Rolet will step down from the merged company if the deal goes ahead, with Deutsche boss Carsten Kengeter taking charge.
Deutsche shareholders will get a 54.4 per cent controlling stake and its headquarters will be in London. Bosses have said 550 jobs would eventually be created through expansion after the merger.
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