London: British telecom firm Vodafone has dropped Goldman Sachs and UBS as the company’s corporate brokers, says a media report.
“Vodafone dropped Goldman Sachs and UBS as its corporate brokers this week, severing of one of the longest-running advisory relationships in the city,” The Times has reported.
The daily in a report published online said that Vodafone’s chief executive Vittorio Colao and its board have chosen JP Morgan Cazenove and Citigroup as advisers.
The Times noted the change underlines “how power is shifting away from traditional mergers and acquisitions groups to specialist brokers.”
The new brokers are Charles Harman at JPMorgan Cazenove and Nigel Mills, a City veteran who built his career at Hoare Govett before defecting to Citigroup.
According to the daily, Vodafone has built itself through a series of “gung-ho deals” around the turn of the decade with the advice of Scott Mead, who used to work for Goldman Sachs and Warren Finegold, then at UBS.
It “... culminated in the the blockbuster £101 billion takeover of Germany’s Mannesmann. During that time, the two banks also acted as the company’s brokers, in a relationship that dates back, uninterrupted, to the 1990s,” the report said.
However, under Colao, Vodafone is pursuing an organic growth, deal-light strategy, meaning that its relationship with house brokers “who provide day-to-day advice on how the company is perceived by investors, is more important”.
The Times said that technically Goldman Sachs and UBS remain Vodafone’s advisers for mergers and acquisitions, with the relationships now handled by Simon Dingemans at Goldman and Simon Warshaw at UBS.
“But, in the absence of deals, the relationship will amount to little more than a consolation prize,” the report noted.