copperco takeover costs

The detailed costs of financial and legal advisory services are rarely broken down, even in the largest takeover situations, so the near 400-pages of documentation accompanying the proposed CopperCo merger with Mineral Securities are refreshing in their detail.

CopperCo, a company created in 2004 through a deal with Robert Champion de Crespigny’s Buka Resources, is offering $240 million worth of stock for the London-based MinSec, a company created by Keith Liddell and Perth broker Tony Barton and which Champion de Crespigny also chairs.

The total costs of the merger are put at $US6.5 million, not including taxes, with CopperCo’s share of the fees put at $5.5 million.

More than half the costs will be payable to the UBS team being led by Richard Saywell, which is advising CopperCo and is due to receive a flat fee of $600,000 as well as a success fee of 1 per cent, or another $2.4 million, if the transaction is completed.

The principal legal advice is coming from Ian Cochrane of Cochrane Lishman, which will receive about $1.1 million for its services, while Reed Smith is due to receive about $1 million for taking care of the legal work in the UK and the US.

Other fees are going to Ernst & Young – $250,000 – for acting as accounting adviser – and Snowden Mining Industry Consultants, which gets $150,000.

The breakdown for MinSec’s costs – it is using RBC Capital Markets and Franklyn Legal, is not provided.


http://www.businessspectator.com.au/bs.nsf/Article/Takeovers-A-Z-G52U9?OpenDocument