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Banks score R500m in Prosus listing

Entire transaction expected to cost R736m.

Three investment banks – Goldman Sachs, JP Morgan and Morgan Stanley – will be paid €7.2 million each, a total of €21.6 million or R367 million, for their roles as lead financial advisors in Naspers’s listing of Prosus in Amsterdam.

A further eight investment banks acting as other financial advisors will each be paid €0.9 million or R15 million for their work. These banks include Bank of America Merrill Lynch, Barclays, BNP Paribas, Citigroup, Deutsche Bank, ICBC Standard Bank and ING. Together, the 11 banks will be paid €28.8 million – nearly R500 million – for their work on the listing.

Read: Naspers says Prosus unit to be valued at about $100bn

The prospectus published by Prosus on Monday shows that the amounts paid to the banks comprise two thirds of the total estimated expenses for the group’s listing of €43.3 million (R736 million).

Lawyers are the next best-paid. Allen & Overy, which advised Prosus and Naspers on Dutch and US law, will be paid €3.8 million, while Webber Wentzel, which advised the two firms in South Africa, will be paid €3.3 million (R56 million). Linklaters LLP and Glyn Marais Inc will be paid around R16 million and R4 million respectively.

Prosus listing costs

Lead financial advisors

Goldman Sachs International

€7.2m

R122m

JP Morgan Securities plc

€7.2m

R122m

Morgan Stanley & Co International plc

€7.2m

R122m

Other financial advisors

Banca IMI SpA

€0.9m

R15m

Bank of America Merrill Lynch International DAC, Amsterdam branch

€0.9m

R15m

Barclays Bank plc

€0.9m

R15m

BNP Paribas

€0.9m

R15m

Citigroup Global Markets Limited

€0.9m

R15m

Deutsche Bank AG, London branch

€0.9m

R15m

ICBC Standard Bank plc

€0.9m

R15m

ING Bank NV

€0.9m

R15m

Other expenses

Allen & Overy LLP (legal advisor to the company and Naspers in respect of Dutch and US law)

€3.8m

R65m

Webber Wentzel (lead legal advisor to the company and Naspers in respect of South African law)

€3.3m

R56m

PricewaterhouseCoopers Inc (independent auditors)

€2.8m

R48m

Euronext Amsterdam

€2m

R34m

Other expenses and disbursements

€1.1m

R19m

Linklaters LLP (legal advisor to the financial advisors in respect of Dutch and US law)

€0.925m

R16m

Glyn Marais Inc (legal advisor to the company and Naspers in respect of South African law)

€0.23m

R4m

JSE

€0.203m

R3.5m

Investec Bank Limited (JSE sponsor)

€0.152m

R2.6m

AFM

€0.065m

R1.1m

* Converted using rand/euro exchange rate of R17: €1

The fees paid to Euronext for the listing on the Amsterdam exchange total €2 million (R34 million), while the JSE will be paid around R3.5 million. Investec, in its role as the company’s JSE sponsor, will be paid R2.6 million for the listing. The Netherlands Authority for the Financial Markets (AFM or Stichting Autoriteit Financiële Markten’) will be paid around R1.1 million.

So-called “other expenses and disbursements”, which include administrative expenses and publication costs, are expected to total €1.1 million (R19 million).

The separate listing of Naspers’s internet assets was approved by 95.5% of common (N) shareholders at the extraordinary general meeting immediately following Friday’s AGM. The listing will take place on September 11.

Hilton Tarrant works at YFM. He can still be contacted at hilton@moneyweb.co.za.

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What I gathered from this article is that the Rand is a very poor, ever-depreciating currency. Sigh!!

Over the past 5 years the Rand has depreciated around 8% against the GBP. Our wage growth has been around 6% a year whilst UK close to zero. The Rand needs to depreciate for us to remain “competitive” and I will depreciate every year as long as we have positive inflation and the rest of the world has no inflation, just economics really.

There will be periods where the Rand over/undershoots, and I find that’s when everyone seems to panic.

Like the ANC : A very poor ever depreciating disorganisation

Does it really cost this much?

Lots of companies have listings in other countries. I would assume by now there is a check list that the banks and lawyers go through, ticking the boxes.

This cost looks as if they have rewritten the manual. Ridiculous.

Having been part of the system/team in a similar process, I agree – most of it is quite pedestrian – simple procedures to follow!
But the size of the transaction is usually an indication for law firms and banks to hike the fees.
Nothing wrong with this – – its a good deal for them, BUT I would like to see the lawyers and bankers and advisors not running away when things go wrong – – – – STEINHOFF!! Similarly, board members also scored big – see them run if something goes wrong!!!

Ok thanks for that. Agree with you too.

500m here, 500m there; pretty soon you have a decent income doing absolutely nothing with no recourse at all.

Giving effect to this transaction boils down to an A4 list of journals (not counting the lawyers’ expense entries).

Shakespeare was after all quite correct

Bankers and lawyers — no wonder they are so despised and ridiculed along with politicians. They use the system they control to enrich and protect themselves. What work could possibly justify such obscene fees?

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