People are stilling buzzing about the fee bonanza expected from the Facebook IPO.
If the deal eventually fetches $10 billion--the firm will likely increase the size of the offering from the current $5 billion as demand soars--and the underwriters take a 1.5 percent cut, the deal would generate $150 million in fees. That’s a bundle. But there’s another deal that also looms as a gravy train for top investment banks.
The news that trading giant Glencore will likely merge with mining giant Xstrata was nothing short of seismic in Europe, where it was given massive coverage. It strikes some as a new kind of super-miner one that will control the value chain all the way from the ground to market, both financial and end-user. The $88 billion deal will line the pockets of advisors.
The Financial Times reports that Deutsche Bank, Goldman Sachs, JPMorgan and Nomura are advising Xstrata, while Morgan Stanley and Citigroup are advising Glencore. The big omission is Credit Suisse, which advised Glencore when it went public last year.
The paper suggests that each bank will make up to $15 million, meaning the total take will be roughly $100 million. When you toss in other professional services like law firms and accountants, the total fees could hit $150 million. All in all, the year is off to good strat fo those who predicted an investment banking revival.
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