Barings tops league with pounds 20bn deals

JOHN WILLCOCK

Financial Correspondent

Baring Brothers has topped the UK mergers and acquisitions league table for 1995 with deals totalling nearly pounds 20bn, despite its February derivatives disaster and subsequent rescue by the Dutch bank ING.

The corporate finance arm of ING Barings, Baring Brothers, handled 26 public and private deals worth pounds 19.48bn, according to the Acquisitions Monthly magazine.

By far the biggest part of this came from one mega-deal, when Barings advised Wellcome, working with Morgan Stanley, early this year in its pounds 9.1bn takeover by Glaxo. The bank also had a hand in the second-biggest, Lloyds Bank's pounds 5.9bn takeover of TSB Group, in which it advised Lloyds. The year was also notable for seeing last year's champion, Warburg, falling to third place. Warburg first tried to merge with Morgan Stanley, failed, and was then in effect swallowed by the rival Swiss Banking Corporation to become SBC Warburg.

Four American banks benefited from the problems besetting several of their UK competitors and made big gains in the table. JP Morgan and Morgan Stanley sprang from outside the top 20 to fifth and seventh place, respectively.

Mark Burch, a director of corporate finance at Barings, said the result was "very good news. It's been a very busy and a very good year."

Mr Burch said that the weeks following the discovery of over pounds 800m in derivatives trading losses in Singapore in February had been "a very tough period". Many corporate clients had thought about their relationship with Barings, he said. "ING moved very quickly. They themselves have grown through mergers, and they had no prescribed formula for change. We also had a high level of cohesion in the group.

"There were no departures. We agreed to stick together, and this year has proved that [was the right thing to do]."

Such was the wealth of M&A activity in 1995 that Barings had to hire extra people. The UK corporate finance team grew by seven to 67, including 17 directors and 40 executives.

Such a boom year has fuelled talk of bumper bonuses. Mr Burch said: "Clearly it has been a very good year and so compensation is likely to reflect that." Barings' bonuses are decided in Feburary and paid in March, he said.

Utility bids have helped to boost figures for the year generally. Barings advised on one of the few hostile utilities bids so far. Along with Deutsche Morgan Grenfell it acted for Scottish Power in its pounds 1.1bn takeover of Manweb, the regional electricity company based in Chester.

There were 14 public bids over pounds 1bn announced during 1995, compared with only one in 1994. This also beats the 1989 record when there were 11 such deals. The number of public bids completed in 1995 rose to 84, worth a combined pounds 36.47bn, compared with 62 in 1994 totalling pounds 5.09bn.

Second is Lazard Brothers with 30 deals totalling nearly pounds 15bn. As well as advising Glaxo, the bank is working on two large pending deals - advising Granada in its pounds 3.1bn bid for Forte as well as National & Provincial in its proposed pounds 1.3bn takeover by Abbey National.

Analysts expect 1996 will be another good year, possibly as good as 1995.

UK Mergers & Acquisitions

League table 1995

Adviser Number of deals Total value

(pounds m)

Baring Brothers (4) 26 19,477

Lazard Brothers (9) 30 14,683

SBC Warburg (1) 48 13,821

NM Rothschild(11) 42 12,067

JP Morgan(-) 7 11,940

Schroders(2) 30 11,931

Morgan Stanley(-) 9 11,083

Deutsche Morgan Grenfell(6) 46 8,348

Kleinwort Benson(7) 25 8,192

Goldman Sachs(3) 13 6,835

Source: Acquisitions Monthly