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Financial Times: M&A in spotlight over Shell move (


By James Politi in New York and Lina Saigol in London

Published: October 30 2004


The relevance of mergers and acquisitions league tables is facing new questions following a controversial decision by Thomson Financial to award $80bn of credit to the four investment banks working on Shell's restructuring.


M&A league tables based on deal volumes are used by Wall Street and City of London companies mainly as marketing tools, but their effectiveness in measuring the strength or profitability of banks in advising on corporate transactions is disputed. That debate was thrown wide open again this week after Thomson, one of the most influential financial data providers, decided to award $80bn of credit to Citigroup, Deutsche Bank, ABN Amro and Rothschild for their work on the collapse of Shell's dual-listing structure.


The move, which was not matched by Dealogic, a rival financial data provider, makes Shell's overhaul the largest M&A transaction of the year to date, trumping Sanofi-Synthélabo's $70bn takeover of Aventis. It also significantly alters Thomson's European and global M&A rankings for this year, moving Rothschild to the top in Europe, and thrusting Citigroup to second place globally.


People familiar with the matter said several investment banks unhappy with Thomson's decision were putting pressure on the company to remove the Shell deal from the rankings. Other banks are less incensed, but are nonetheless arguing that no value should be awarded to the work on Shell until its financial terms are disclosed.


Banks have tried and succeeded in gaining league table credit for restructurings before. Thomson has always been more willing to award credit on such deals, while Dealogic has been more reticent. For example, Thomson gave the share unification deal between Allied Zurich and Zurich Allied credit, while Dealogic has never recognised dual-headed collapses or share unification schemes. According to Dealogic, the Shell deal does not pass its "change of economic interest" test either.


"Shareholders of the two companies at present will receive shares in Royal Dutch in a ratio of 60/40 in favour of Royal Dutch, exactly mirroring the present structure. For M&A purposes, nothing is changing," Dealogic said.


The debate over M&A league tables was already in the spotlight this year when Morgan Stanley and Nomura failed to get any credit after MTFG, the Japanese bank and their client, struck a deal to merge with UFJ, and create the world's largest bank by assets, without disclosing the terms. But when SMFG launched an unsolicited offer for UFJ in a deal valued at $29bn, the two parties' advisers - Goldman Sachs and Merrill Lynch - were awarded credit.

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