SoftBank's ARM buy may net bankers $120 million in fees

LONDON/NEW YORK (Reuters) - Bankers are set to share up to $120 million in fees thanks to SoftBank Group Corp's 9984.T planned $32 billion acquisition of British chip designer ARM Holdings ARM.L, according to estimates on Monday.

An ARM and SoftBank Group branded board is displayed at a news conference in London, Britain July 18, 2016. REUTERS/Neil Hall

Seven finance houses will divide the proceeds from the purchase by the Japanese company. Each side could pay out $50 million to $60 million in fees to their respective advisers, estimates by ThomsonReuters/Freeman Consulting showed.

The deal, announced early Monday, is one of the largest this year and represents a large payday for bankers involved, especially for boutiques who generate the bulk of their fees from working on M&A transactions.

Goldman Sachs GS.N and Lazard were the lead financial advisers to ARM and will receive the lion's share of the money, the estimates showed. UBS UBSG.S and Barclays BARC.L were also on the ticket.

SoftBank was advised by U.S. boutique the Raine Group and UK outfit Robey Warshaw, plus Japan’s Mizuho Securities [MZFGX.UL].

Raine, a U.S. boutique investment bank, founded by former tech, media and telecom bankers from bulge bracket firms in 2009, has emerged as one of SoftBank’s most trusted financial advisers. Raine co-founder Jeff Sine and Softbank Chief Executive Masayoshi Son have a relationship spanning more than a decade.

The ARM deal comes less than a month after Raine advised SoftBank on an $8.6 billion divestiture of "Clash of Clans" mobile game maker Supercell to Tencent Holdings 0700.HK. It was also a key adviser on SoftBank's $20 billion investment in Sprint Corp S.N that closed in 2013.

Advising on SoftBank’s biggest-ever deal moves Raine up to No. 33 in worldwide M&A rankings by Thomson Reuters, ahead of U.S. boutique rivals Qatalyst Partners and Allen & Co.

Robey Warshaw, SoftBank’s other boutique adviser, is now ranked No. 25.


There will be a further windfall from the bridge financing, which is forecast to yield $45 million in arrangement fees.

The transaction will help European bankers who had feared that Britain’s vote to leave the European Union could leave a blank space in their deals calendar.

Last year was a bumper year for M&A.

Bankers advising Royal Dutch Shell RDSa.L on its acquisition of British energy firm BG netted $182.6 million in fees, according to estimates at the time.

Global M&A advisory fees fell 15 percent in the first half of 2016 against the same period last year, totaling $11.5 billion. This is in line with a 23 percent decrease in deal making this year.

Reporting by Freya Berry in London and Liana B. Baker in San Francisco; Editing by Keith Weir and Matthew Lewis