What a waste! £835 million creamed off the Refinitiv and LSE deal by ‘advisors’

Refinitiv’s deal with LSE may be one in which shareholders and financial markets professionals look forward to, but what about the massive sum being bilked from both sides by lawyers and advisors? This type of conduct never gets scrutinized

Nobody likes lawyers or consultants, however when looking at today’s revelation regarding the recently confirmed impending merger between Refinitiv and the London Stock Exchange, more fuel will likely be added to that fire.

Shareholder interest may well be focused on the potential might of the merging of one of the world’s largest providers of financial markets data infrastructure and the London Stock Exchange, however that shouldn’t detract from the massive amounts being charged by hangers-on such as lawyers and external advisory firms who are set to receive a total of £835 million in combined fees when the deal goes live.

It is well known that lawyers create paperwork and obstacles in order to extract as much as possible from companies during an acquisition or merger, however this is outlandish, and there are no rules which prevent lawyers from creating drag and obstacles in order to milk their clients.

FinanceFeeds has been witness to external consultancies in the UK robbing the health service blind, to corporate lawyers creating a situation in which they live from the losses of customers when dealing with the administration of insolvent financial services firms and providing low penny-to-the-pound offers to defrauded customers when acting on their behalf in recovering funds, the lawyers often helping themselves to more than the client receives.

The predicted £835 million should alarm shareholders and directors of LSE and Refinitive that are responsible for conducting the transaction.

Firms including Goldman Sachs, Morgan Stanley, Robey Warshaw, Barclays, RBC Capital Markets and law firm Freshfields Bruckhaus Deringer will be raking in the cash after advising the LSE on the deal.

Refinitiv, which is owned by Thomson Reuters and investment giant Blackstone, will be handing out cheques to firms including Evercore, Canson Capital Partners and Jefferies.

Jefferies and Freshfields are in the same building at 100 Bishopsgate. They will no doubt be jointly celebrating.

The forthcoming merger between LSE and Refinitiv was first announced in summer 2019, but has taken months to work through as regulators comb through the details.

The LSE hopes its combination with Refinitiv, best known among City traders for its terminal screens, will make it a major player in the increasingly valuable financial data market.

Accountants at mid-tier firm BDO may have been looking at the LSE advisers’ fees with envy, as they took a double-digit hit to their pay. After the draconian lockdowns instigated by the government whose aspirations are toward total control disrupted business, their average share of profit before tax slumped 14 per cent to £518,000 for the year to June 30.

It is time that these outlandish fees which go totally unquestioned are brought under the microscope.

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