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Privatisation Programme (Fees And Commissions)

Volume 79: debated on Friday 24 May 1985

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asked the Secretary of State for Trade and Industry what fees and commissions have been paid to City institutions in respect of shares sales of those privatised enterprises for which he is responsible; to whom these fees and commissions have been paid; and on what basis they have been calculated.

My Department has been directly responsible for the privatisation of Cable and Wireless, first sale of shares*, British Aerospace and British Telecom. The following table shows the total value of fees and commissions paid in respect of these sales and the firms to which they were paid. The information does not include advice paid for by the companies being privatised.

British Aerospace (1st sale 1981)Cable and Wireless (1st sale 1981)British Telecom (1984)
FirmsPrimary Underwriters
Kleinwort, Benson Hill Samuel Morgan Grenfell and Co. J. Henry Schroder and Co.Kleinwort, Benson Baring Bros, and Co. J. Henry Schroder Wagg and Co.Kleinwort, Benson Barclays Merchant Bank Charterhouse Japhet Robert Fleming and Co.Hill, Samuel and Co. Lloyds Bank International Morgan Grenfell and Co. S. G. Warburg and Co. Baring Bros, and Co. County Bank Hambros Bank Lazard Bros, and Co. Samuel Montagu and Co. N. M. Rothschild and Sons J. Henry Schroder Wagg and Co.
Sub-Underwriters
Various†Various†Various†‡

British Aerospace (1st sale 1981)

Cable and Wireless (1st sale 1981)

British Telecom (1984)

Financial Advisers

Kleinwort, BensonKleinwort, Benson Baring Bros, and Co. N. M. Rothschild and Sons W. Greenwell and Co.Kleinwort, Benson

Legal Advisers

Slaughter and May Linklaters and Paine sLinklaters and Paines Slaughter and MayLinklaters and Paines

Stockbrokers

Hoare, GovettCazenove and Co. James Capel and Co. Rowe and PitmanHoare, Govett Cazenove and Co. De Zoete and Bevan Scrimgeour, Kemp Goe and Co.

Auditors

Peat, MarwickDeloitte, Maskins and SellsCoopers and Lybrand

Total Fees║ (£'000 including VAT) 4,471

5,342¶89,363

Footnotes

* The second sale of shares in Cable and Wkeless in 1983 was the responsibility of Her Majesty's Treasury.

† Too numerous to list.

‡ The United Kingdom offer was placed with institutional investors ('Priority Applicants'). The cost of the commissions payable to Priority Applicants is included in the total.

║ These figures exclude payments to receiving banks, public relations advisers, printers and distributors and similar costs not associated with the provision of financial or legal advice.

¶ Provisional pending final settlement of all bills. It also excludes the overseas offering for which the total value of fees and commissions was £27·5 million (also provisional) which includes £7·8 million paid to the Bank of England. The principal advisers for the overseas offers were Morgan Stanley and Co., Macleod Young Weir, Nomura Securities Co., Swiss Bank Corporation International and Sullivan and Cromwell.

The sale of Jaguar was the responsibility of BL plc. The Department sought advice from one firm, J. Henry Schroder Wagg and Co. Ltd. It is not the practice to disclose the value of individual contracts between the Department and its advisers.

Payments are based on a variety of hourly rates, flat rates and percentage commissions. Where appropriate the basis for payment is disclosed in the offer for sale document.