NAB advisers set to share $77m honeypot

Australia’s biggest ever rights issue is a bonanza for NAB’s financial advisers, who will share in a $77 million fee honeypot.

Underwriters Macquarie, Merrill Lynch and Morgan Stanley will share equally in the payday in return for around-the-clock service this week to NAB head teller Andrew Thorburn.

Bankers convened in Sydney in recent days to bring the landmark deal to fruition. By yesterday afternoon, Thorburn and his trusty numbers man Craig Drummond were already knocking on the doors of institutional investors, caps in hand seeking $5.5 billion.

Making life easier for the NAB advisers was ANZ’s decision this week to flog off Esanda rather than tap shareholders for equity, which would have increased competition for insto cash.

Back at base the bankers, including Macquarie’s Paul Donnelly, Robin Bishop, Hugh Falcon and Angus Firth, Morgan Stanley’s Mark Burmeister and Rick Ball, and The Thundering Herd’s Guy Foster, David Goffage and top dog Kevin Skelton, were breathing a sigh of relief that the market was in better shape yesterday than on Wednesday when banks were battered.

While Rio Tinto’s $18bn raising in 2009 had a bigger headline, only $4.4bn of that came from Australia, making yesterday’s deal this market’s biggest ever rights issue.

Morgan Stanley and Macquarie are also advising NAB on the spin-off of British problem child Clydesdale Bank, squeezing out Goldman Sachs, which previously worked on the $5.4 billion Scottish basket case.

For Merrills’ gig on the raising, it would have only helped that NAB’s Drummond was the investment bank’s country head.

The four pillars now have investment bankers across the land salivating as they contemplate the potential fee pool from capital raisings coming down the line.

But not everyone is happy.

“It is absolute madness — the only people who make money out of this are investment bankers and advisers,” lamented Simon Mawhinney from contrarian investor Allan Gray, which holds a small NAB stake.

Mawhinney pointed out that at the same time as rattling the tin, NAB planned to pay a 99c-a-share dividend. “They’re raising equity to pay a dividend,” he said.

Henry’s new vista

By the time nature lover and NAB director Ken Henry slides into the chairman’s seat, cash from the rights issue will be in the door to shore up the $85bn Melbourne bank’s balance sheet.

It’ll be an altered vista for Henry, with the female ranks of the board to be swelled by PwC partner Anne Loveridge.

As a young accountant she came to Australia from Britain on a two-year secondment and almost 30 years later is still here, with NAB her first major listed-company directorship. The PwC network will no doubt have helped her appointment — retired partner David Armstrong and Kiwi partner John Waller will be friendly faces in the NAB boardroom when she joins at year end.

Henry will get an office and a big, fat pay rise — exiting chairman Michael Chaney trousered $770,000 last year.

That should give Henry the wherewithal to get a bit more skin in the game, with the former public servant holding share worth just $70,000 compared with Chaney’s almost $1m.

The women’s club

Forget the Melbourne Club — now there’s the 30 per cent Club.

On Wednesday night in Melbourne, NAB’s rival ANZ hosted the local launch of the international gender diversity outfit, which is gunning for 30 per cent women on ASX 200 boards by 2018.

Sadly for NAB, Loveridge’s seat at one of the 11 chairs at the board table (two others are taken up by Jillian Segal and Geraldine McBride) will take women to 27 per cent, just shy of the magic target.

As deputy chair of the PwC board of partners, Loveridge has had much to say on gender diversity, with the accountants having reached the 30 per cent target almost 10 years ago.

At the club’s launch at ANZ’s old Queen Street Gothic Revival HQ, ANZ director Paula Dwyer was part of a panel discussion that also included her fellow ANZ director Graeme Liebelt, Macquarie director Patricia Cross, Woolies director Michael Ullmer and Spotless chair Margaret Jackson.

A heavy-hitting audience that tuned into the panel, including ex-Telstra boss Ziggy Switkowski, Bank of Melbourne chair Elizabeth Proust and cruise ship captain Ann Sherry.

But there were few more attentive to the discussion than ANZ’s institutional business boss Andrew Geczy, seated centre in the front row, particularly when it came to the comments by his directors Dwyer and Liebelt.

Geczy is a strong contender to succeed ANZ boss Mike Smith when he pulls the plug at the end of next year, in a race that also includes chief number cruncher Shayne Elliott and boss of ANZ’s Australian operations Mark Whelan — neither of whom were anywhere to be seen.

[e-mail]
[e-mail]