Relationship bankers reign as BAT chases $47bn Reynolds deal


BAT is offering to buy the 57.8% of shares it doesn’t already own in Reynolds American, according to a statement on October 21. It has proposed a cash-and-share deal that would value the stake at $ 47 billion.

The tobacco giant is being advised by Centerview, Deutsche Bank and UBS. Deutsche Bank and UBS are corporate brokers to BAT, while the Centerview bankers on the deal are no strangers to the client.

The Centerview team includes Nick Reid and Hedleigh Beals in the UK and Blair Efron in the US. Reid and Beals are among a clutch of high-profile former UBS bankers now working for the advisory boutique in London.

In 2014, the pair led a UBS team that advised BAT on a $ 4.7 billion investment it made as part of the Reynolds’ acquisition of rival tobacco producer Lorillard. That deal allowed BAT to maintain a 42% equity position in the enlarged business.

Reid joined Centerview soon after with UBS colleagues Robin Budenberg and James Hartop, while Beals followed in 2015.

At Deutsche Bank, bankers working on the proposal include Nigel Meek and James Ibbotson as well as corporate broking colleagues Matt Hall and Jimmy Bastock. Both Meek and Ibbotson worked on the 2014 investment by BAT in Reynolds.

For UBS, John Woolland and James Robertson are working on the proposed transaction, alongside David Roberts in corporate broking. Robertson also worked with Reid and Beals on the 2014 deal, according to an announcement at the time.

Deutsche Bank replaced JP Morgan as joint corporate broker to BAT in May 2015. Corporate brokers typically work for UK companies in an ongoing advisory capacity for a nominal fee in the hope the relationship will lead to more lucrative M&A work.

Both Deutsche Bank and UBS were used as advisers by BAT when it acquired a 25% stake in the Brazil-based tobacco packaging company Souza Cruz. That deal completed in October 2015 and was valued at $ 3.5 billion by Dealogic. Ibbotson, Meek and Robertson were all involved.

Additional reporting by Lucy Burton

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