You could almost forget that these are two of Europe’s biggest banks and their business is advising and financing companies making mergers and acquisitions.
It’s a shrewd tactic to sew up as many advisers as possible in order to prevent the competition from hiring the best advisers. After all, with Citigroup advising Barclays, ABN can be confident the US bank won’t launch a rival offer. Likewise, having brought Goldman into its camp, there is no chance of one of the smartest M&A houses cooking up a blockbuster counterbid.
But is it really in the interests of ABN’s shareholders to limit the number of possible buyers? Shouldn’t ABN be quietly trying to encourage a series of rival bidders, which may come up with alternative, and possibly more creative, structures, so it can sell itself at the best possible price to the most suitable buyer?
The answer has to be yes.
One problem however, is that all 10 investment banks involved in the deal will receive league table credit in what could be one of the largest financial service trans- actions of all time.
As a result, some must have taken the decision that they would rather be one of several advisers on the winning side than a sole adviser on the losing side. So well done Merrill Lynch, which so far is the only bank to show any guts by putting together a daring rival bid comprising a complex consortium of three parties from three different countries.
If Merrill’s client succeeds in winning ABN, the investment bank will reinforce its position at the top of the European advisory league tables in the year to date.But that is just a side- effect of Merrill Lynch doing what it is paid to do — that is, provide strategic advice to key decision-makers on how to structure and execute a deal.
It is time the banks stopped being so obsessed with league tables and concentrated on generating revenues for their own shareholders.
This is the first of Lina Saigol’s new weekly column on M&A issues in the Financial Times