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Privatisation (Fees And Commissions)

Volume 79: debated on Friday 24 May 1985

The text on this page has been created from Hansard archive content, it may contain typographical errors.

asked the Chancellor of the Exchequer if he will list in the Official Report (a) updated figures for fees paid, including fees to auditors in respect of the first share issues for Amersham International Limited, Associated British Ports, British Aerospace, British Railways Board Hotels, Britoil, Cable and Wireless and the National Freight Corporation and (b) all the fees and commissions paid to primary underwriters, sub-underwriters, financial advisers, legal advisers, auditors and stockbrokers in respect of the second Cable and Wireless issue, the second Associated British Ports issue, Enterprise Oil, Sealink, Jaguar, British Telecom and the 1979 and 1983 BP issues; and if he will name each firm concerned.

[pursuant to his reply, 21 December 1984, c. 360.]: Tables 1 and 2, which each relate to the United Kingdom sales specified in part (a) of the question, have been revised and updated as follows:

Table 1
CompaniesAuditorsRevised Total Fee/Commissions (£'000 including VAT)
Amersham InternationalCoopers & Lybrand1484
Associated British Ports (1983)Price Waterhouse1926
Peat, Marwick
British AerospaceMitchell & Co.4471
BritoilThomson McLintock11,658
Cable & Wireless (1981)Deloitte, Haskins & Sells5342
National Freight Consortium*Ernst & Whinney264
* Share placing with a management and employees consortium

Table 2

Companies

Primary Underwriters

Sub-Underwriters

Financial Advisers

Legal Advisers

Auditors

Stockbrokers

Total Fee/Commissions (£'000 including VAT

Cable & Wireless (1983)Kleinwort, Benson Ltd. Baring Bros. & Co. Ltd. J. Henry Schroder Wagg & Co. Ltd. Morgan Grenfell & Co. Ltd.Various*Kleinwort, Benson Ltd.Freshfields Linklaters & Paines Speechly BirchamDeloitte Haskins & SellsMullens & Co. Cazenove & Co. James Capel & Co. Rowe & Pitman5028
Associated British Ports (1984)J. Henry Schroder Wagg & Co. Ltd. Kleinwort, Benson LtdVarious*J. Henry Schroder Wagg & Co. Ltd.Freshfields Linklaters & Paines Slaughter & MayPrice, WaterhouseW. Greenwell & Co. Cazenove & Co. Kitcat & Aitken1128
Enterprise OilKleinwort, Benson Ltd. Morgan, Grenfell & Co. J. Henry Schroder Wagg & Co. Ltd. S. G. Warburg & Co. LtdVarious*Kleinwort, Benson Ltd. Wood, Mackenzie & Co.Freshfields Allen & OveryPeat, Marwick, Mitchell & Co.Cazenove & Co. De Zoete & Bevan9234⋆
Sealink‡n/an/aHill, Samuel & Co. Ltd. W. Greenwell & Co. Ltd.n/an/an/a38
Jaguar║J. Henry Schroder Wagg & Co. Ltd.
British TelecomKleinwort, Benson Ltd. Barclays Merchant Bank Ltd. Charterhouse Japhet plc. Robert Fleming & Co. Ltd. Hill, Samuel & Co. Ltd. Lloyds Bank International Ltd. Morgan Grenfell & Co. Ltd. S. G. Warburg & Co. Ltd. Baring Bros. & Co. Ltd. County Bank Ltd. Hambros Bank Ltd. Lazard Bros. & Co. Ltd. Samuel Montagu & Co. Ltd. N. M. Rothschild & Sons Ltd. J. Henry Schroeder Wagg & Co. Ltd.n/a•Kleinwort, Benson Ltd.Linklaters & PainesCoopers & LybrandHoare, Govett Ltd. Cazenove & Co. De Zoete & Bevan Scrimgeour, Kemp-Gee & Co.89,363▀

Companies

Primary Underwriters

Sub-Underwriters

Financial Advisers

Legal Advisers

Auditors

Stockbrokers

Total Fee/Commissions (£'000 including VAT

British Petroleum (1979)S. G. Warburg & Co. Ltd. Robert Fleming & Co. Ltd. Kleinwort, Benson Ltd. Lazard Bros. & Co. Ltd. Morgan Grenfell & Co. Ltd. J. Henry Schroder Wagg & Co. Ltd.Various*Freshfields Linklaters & PainesErnst & WhinneyMullens & Co. Cazenove & Co. Hoare Govett Rowe & Pitman Scrimgeour, Kemp-Gee & Co.5,956
British Petroleum (1983)S. G. Warburg & Co. Ltd. Robert Fleming & Co. Ltd. Kleinwort, Benson Ltd. Lazard Bros. & Co. Ltd. Morgan Grenfell & Co. Ltd. J. Henry Schroder Wagg & Co. Ltd.Various*Freshfields Linklaters & PainesErnst & WhinneyMullens & Co. Cazenove & Co. Hoare Govett Rowe & Pitman Scrimgeour, Kemp-Gee & Co.9,499

Notes:

† The Bank of England was jointly responsible with Kleinwort, Benson for making the sale arrangements and providing advice. The bulk of the Bank's costs were incurred in its role as receiving bank. No estimate for costs incurred in the provision of advice is available.

‡ Trade sale.

║ The sale of Jaguar was conducted by BL plc who appointed advisers. Details of the appointments and the total cost are a matter for the Company. Only one firm was appointed to advise the Government, it is not the practice to disclose fees paid to individual firms.

¶ In both BP sales, the Bank of England was responsible on the Government's behalf for making the sale arrangements and providing advice. The bulk of the Bank's costs were incurred in its role as receiving bank. No estimate for costs incurred in the provision of advice is available.

• 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.

▀ Estimate for 1984–85: final accounts are not yet available.

⋆ Provisional

* Too numerous to list

In some cases the revisions update previous preliminary estimates. In other cases, figures have been revised to include fees for various minor financial advisory services, for example petroleum consultancy, insurance audits, property valuation. In accordance with the terms of the question, the figures exclude payments to receiving banks, public relations advisers, printers and distributors, and similar costs not associated with the provision of financial advice. Payments of stamp duty are similarly excluded.

Tables 1 and 2 relate to United Kingdom sales. In three sales, — BP in 1979 and 1983, and BT — special arrangements were made overseas: total value of fees and commissions incurred in respect of these was about £0·5 million and £27·5 million, including £7·8 million paid to the Bank of England, respectively. The BT figure is provisional, since final settlement of all bills has not yet been made. The principal advisers on the BP arrangements in 1979 were Davis Polk and Wardwell, Linklaters and Paines (US), Morgan Stanley and Co., and Sullivan Cromwell; in 1983 they were David Polk and Wardwell, and Sullivan and Cromwell; in the BT sale they were Morgan Stanley and Co., McLeod Young Weir, Nomura Securities Co., Swiss Bank Corporation International, and Sullivan and Cromwell.