Investment banking deal volume is at record lows but one sector is still hanging in there: advising banks on how to buy other banks or sell themselves. The Wachovia sale to Wells Fargo generated at least $50 million in investment banking fees.
Wachovia Corp. has paid investment bank Goldman Sachs Group Inc. $77 million in fees since October 2006 for various advisory services and is set to pay another $25 million for advice involving the Charlotte bank’s sale to Wells Fargo & Co., according to a filing Tuesday.
The $77 million covers work such as Goldman’s assistance with Wachovia stock offerings as well as “financial advisory services since December 2007,” according to the filing. Wachovia, struggling with mounting mortgage losses, said in June that it hired Goldman to analyse its loan portfolio but hasn’t provided a timeframe for the work, The Charlotte Observer reported.
Representatives for Wachovia and Goldman Sachs declined comment.
In its latest round of work, Goldman Sachs provided a “fairness opinion” to the Wachovia board on Oct. 3, saying the sale to Wells Fargo was fair financially to shareholders. These opinions are a routine part of mergers and acquisitions. For Goldman to receive the full $25 million fee, the sale must be completed…
Investment bank Perella Weinberg Partners also gave Wachovia a fairness opinion on the Wells sale, according to the filing. That firm also will receive $25 million once the deal closes.
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