Yahoo bid a prize assignment for bankers

By Jessica Hall and Megan Davies

PHILADELPHIA/NEW YORK (Reuters) - Microsoft Corp's $44.6 billion bid to acquire Yahoo Inc marked a coup for the companies' advisers and gave a surprise boost to Blackstone Group and Lehman Brothers in the closely watched rankings of financial advisers.

Landing such a large deal is a plum assignment for bankers, who earn large fees from advising on mergers and acquisitions. The fees on the Microsoft bid for Yahoo were not disclosed.

Microsoft hired Morgan Stanley and Blackstone Group, while Yahoo hired Goldman Sachs and Lehman Brothers, according to research firm Dealogic.

It was unclear if the companies had hired additional advisers. Microsoft and Yahoo, as well as the advisers, declined to comment.

While Goldman Sachs and Morgan Stanley often compete for the top spot among global merger advisers, the Microsoft-Yahoo bid sparked a significant shuffle in the "league table" rankings.

"It's good bragging rights for the day," said Richard Peterson, director of capital markets at Thomson Financial. "But it's early in the year. Everything will change with the next big deal."

So far this year, global merger volume has totaled $263.2 billion, down 8 percent from the same period in 2007, according to Dealogic.

Goldman held on to its No. 1 ranking, but Lehman toppled Morgan Stanley from its No. 2 position. Lehman, which ranked ninth globally in 2007, now stands in the No. 2 spot and Morgan Stanley sits at No. 3, according to Dealogic.

Meanwhile, Blackstone, which failed to make the rankings of the Top 20 global advisers last year, surged to fourth place, Dealogic said. So far this year Blackstone has advised on only three deals, but the three have a combined value of $49.9 billion, Dealogic said.

"You'll occasionally see a boutique firm on a large deal that will catapult them in the rankings," Peterson said.

Goldman Sach's role advising Yahoo is notable since Goldman has previously worked with Microsoft, including earlier this month on its $1.2 billion bid to buy Norway's Fast Search & Transfer. In fact, Goldman had been one of Microsoft's advisers when it had held unsuccessful talks with Yahoo last year.

Of course, Morgan Stanley has worked with Microsoft in the past, as well. Morgan Stanley advised Microsoft on its $125.4 million takeover of Swedish software group Sendit in 1999, according to Thomson Financial.

The banking team from Morgan Stanley's side is made up of Paul Taubman, Chuck Cory, Drew Guevara and Thomas Whayne, one source familiar with the situation told Reuters.

(Reporting by Megan Davies in New York and Jessica Hall in Philadelphia; Editing by Tim Dobbyn, John Wallace, Gary Hill)