Robey Warshaw/George Osborne: no flannel

Wrap a cold towel round your head, George Osborne, and get studying. There are 419 pages in the Takeover Code, the abstruse text that rules the work of the British M&A banker. This is what the former Chancellor of the Exchequer aspires to become at Robey Warshaw, an advisory boutique.

The appointment is eye-catching. Former politicians more typically join advisory boards, “trophy cabinets” as they are sometimes known, as part-timers. Mr Osborne, who left politics in 2017 for a portfolio career, will be a full-time partner at Robey Warshaw.

The boutique has made a further unconventional choice. When a boutique is successful — outstandingly so, in this case — it generally expands via a merger or by recruiting new partners from big investment banks.

Mr Osborne appears to be an alternative, intended to widen Robey Warshaw’s appeal in the US and Asia. He can get help with the technical stuff most bankers learn as put-upon juniors. But unless he brings in clients, he will not progress within the four-man partnership.

About half of the business is reputedly owned by former Morgan Stanley banker Simon Robey. Mandates on a series of landmark deals, such as London Stock Exchange’s $27bn takeover of data group Refinitiv, have brought outsized rewards. Filings show that turnover of some £255m in the six years to March 2020 produced profits distributable to partners of around £207m.

Big, quoted UK businesses trade at a forward discount of around 30 per cent to US peers. Conditions are ripe for inbound takeovers from American bidders awash with cash raised to cushion pandemic risks, which are diminishing. But protectionism is rising in Brexit Britain, reflected in wider discretion for ministers to scrutinise and block deals.

Mr Osborne has the contacts to help get deals over the line. He also has the public profile to attract unhelpful attention to a previously low-profile business. Robey Warshaw is taking a calculated commercial risk. Watch and learn, Mr Osborne.

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