Evercore set for Takeda payday, but role raises eyebrows

IFR 2231 28 April to 4 May 2018
3 min read
Matthew Davies, Steve Slater

Boutique advisory firm Evercore Partners is set for a lucrative payday for its work for Takeda Pharmaceutical’s US$64bn takeover of rival Shire, but in the process it has raised a few eyebrows as it was a key adviser to Shire until two years ago.

Japan’s Takeda approached Shire four weeks ago and on Wednesday Shire said it was willing to recommend a sweetened offer, in what will be the biggest acquisition of a drug company since 2000 if it goes ahead.

Evercore, JP Morgan and Nomura were all listed as joint financial advisers for Takeda on the deal. Shire is being advised by Citigroup, Goldman Sachs and Morgan Stanley.

In the past, Evercore was one of Shire’s most trusted advisers, working on the big acquisitions of Baxalta and Dyax. It also worked on Shire’s defence from a bid by AbbVie, which was later agreed but then fell apart. Evercore was last listed as an adviser to Shire in a press release in April 2016, related to the US$32bn Baxalta deal.

It is not known why the Shire and Evercore relationship ended. Neither firm responded to requests for comments.

Advisory firms can switch among companies, and often have to choose sides if they advise two firms in a sector and a conflict emerges. But bankers said it can be frowned upon if a firm’s adviser switches to advise on an approach by a rival.

“It raises some issues,” said one banker at a major firm.

Indeed, a big bank would have been criticised if it had advised Takeda after being such a close adviser for Shire, two bankers at major investment banks said.

Boutique advisory firms such as Evercore often promote themselves on the basis that they have fewer conflicts of interest than M&A teams at bulge-bracket banks as they work on fewer deals and don’t have to consider the financing that makes such deals possible.

When Takeda first announced it was considering an offer for Shire on March 28 the press release listed Francois Maisonrouge as the lead Evercore adviser. Also listed were his London colleagues Simon Elliott and Edward Banks.

But on subsequent press releases from Takeda, they were replaced by US-based bankers Will Hiltz and John Honts, and UK-based Julian Oakley. Those changes followed discussions about the roles of bankers, sources said.

Maisonrouge is a senior managing director in Evercore’s advisory business who specialises in the pharmaceuticals sector, and has worked on blockbuster deals for Takeda, Shire, AstraZeneca and Sanofi. He joined Evercore in 2007 from Credit Suisse. Elliott and Banks also worked on deals for Shire in the past, according to their biographies.

Maisonrouge was described in the UK’s Daily Telegraph as Shire chairman Susan Kilsby’s “long-term friend” and that he had “had her ear” when they were both working on defending Shire from the approach by AbbVie.

Maisonrouge, Elliott and Banks could not immediately be reached for comment.

London-listed Shire rejected four previous offers from Takeda. Shire is twice the size of Takeda, and the bid is 56% in new Takeda shares, raising some doubts the bid will succeed.

Evercore Partners