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Exclusive: Moelis clinches Pfizer advisory role with help from Eric Cantor - sources
November 16, 2015 / 6:59 PM / 2 years ago

Exclusive: Moelis clinches Pfizer advisory role with help from Eric Cantor - sources

(Reuters) - Former U.S. Representative Eric Cantor helped Moelis & Co, the investment bank he joined last year, secure an advisory role with Pfizer Inc on its merger talks with Allergan Plc, three people familiar with the matter said.

The appointment illustrates how veteran politicians can help investment banks win business with companies concerned about the political or regulatory risks associated with their deals and want well-connected advisers.

Cantor, who led Republicans in the U.S. House of Representatives between 2011 and 2014 and is now a Moelis vice chairman and managing director, will help Pfizer navigate the political pitfalls of a deal with Allergan, the people said on Monday.

Pfizer’s intention to redomicile in Ireland following the merger with Allergan in a so-called inversion intended to reduce its U.S. tax rate has attracted the ire of several politicians, including some U.S. presidential candidates.

Following a wave of inversions last year, the U.S. Treasury has made inversions more difficult by requiring that at least 40 percent of the combined company be owned by the overseas company’s shareholders.

While the possibility of the U.S. Congress taking legislative action against Pfizer’s deal during a presidential election year is seen as remote, the political controversy could spur Treasury to tighten the rules further to make inversions even more difficult.

Moelis and another investment banking boutique, Centerview Partners Holdings LLC, have joined Guggenheim Partners LLC and Goldman Sachs Group Inc as advisers to Pfizer on its negotiations with Allergan, the people said.

Reuters reported earlier this month that Guggenheim and Goldman Sachs are advising Pfizer, while JPMorgan Chase & Co and Morgan Stanley are advising Allergan.

The sources asked not to be identified because the advisory roles are not public. Moelis declined to comment, while Pfizer and Centerview did not immediately respond to requests for comment.

A deal between Pfizer and Allergan, which have market capitalizations of $204 billion and $118 billion respectively, would be the biggest merger of the year and the largest ever transaction in the healthcare sector.

Banks advising Allergan stand to earn collectively between $140 million and $180 million, while banks advising Pfizer could make between $80 million and $100 million in total, depending on the purchase price, according to estimates by consultancy Freeman & Co.

Alergan’s and Pfizer’s advisers are finishing their due diligence and hope they can reach a deal before Christmas, one of the sources said.

Reporting by Pamela Barbaglia in London and Greg Roumeliotis in New York; Editing by Cynthia Osterman

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