Lazard Ltd. (LAZ:US)’s fee for advising Medco Health Solutions Inc. (MHS:US) on its takeover by Express Scripts Inc. (ESRX:US) is the advisory firm’s biggest in a decade, according to researcher Freeman & Co.
Medco agreed to pay Lazard, the largest independent merger adviser, and JPMorgan Chase & Co. (JPM:US) about $35 million each if its takeover by Express Scripts was completed, according to a Nov. 18 regulatory filing. The Federal Trade Commission approved the $29.1 billion purchase by a 3-1 vote today.
That amount would be the biggest that Hamilton, Bermuda- based Lazard has received since it got an estimated $66 million fee for advising DHL on its sale to Deutsche Post AG about 10 years ago, said Lam Nguyen, a director at New York-based Freeman. It is also Lazard’s biggest publicly disclosed fee, he said. The sum may be a boon to Lazard, whose revenue from mergers and acquisitions fell 36 percent to $167.1 million in the fourth quarter.
“This is certainly a good one for Lazard,” said Steve Kaplan, a professor at the University of Chicago Booth School of Business. “We weren’t sure what the government was going to do on this and so there was clearly some risk involved in working on this deal.”
Credit Suisse Group AG (CSGN) will receive $25 million for advising Express Scripts on the deal, with an additional $10 million possible at the “sole discretion” of the company, according to the filing. Citigroup Inc. (C:US) will get $15 million, the filing shows.
Lazard ranks 13th for advising global deals this year, according to data compiled by Bloomberg. Morgan Stanley is the top adviser and JPMorgan is in second place.
Judi Mackey, a spokeswoman for Lazard, declined to comment. Jack Grone, a spokesman for Credit Suisse, and Mark Costiglio, a spokesman for Citigroup, declined to comment. Jennifer Zuccarelli, a spokeswoman for JPMorgan, declined to comment.
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