BNP Paribas is now the only bank left on the mandate to arrange the debt backing Wendel Investissements’ circa €2bn buyout of Materis after Calyon dropped out in the latest twist to what has been one of the most acrimonious mandate processes in recent years.
Calyon’s departure from the MLA group comes after Goldman Sachs, RBS and SG – the trio that originally backed Wendel’s bid for Materis – walked away when the sponsor allowed BNP Paribas and Calyon into the mix, reputedly on terms so aggressive that the three banks did not think the deal was worth doing. The three were already fuming about other banks being approached to lead the deal, believing the awarding of the mandate was a formality.
Sources said that although Materis was an excellent credit, they questioned whether the deal made sense on a return basis at the rumoured fee level, although it is still possible to make money from the deal. Presumably, Calyon has come to the same conclusion.
BNP Paribas insisted that the deal was not overly aggressive and that this would become clear when the structure emerged in the next few weeks. However, even on-market pricing will not reveal how aggressive the deal is at the MLA level because it is possible for a lead bank to give away much of its fees in order to push a deal through the market.
France is now Europe’s biggest loan market and French banks are notorious for their willingness to price and structure deals aggressively to win business in their home market.