Greenhill was one of the first M&A advisory companies to go public when it sold shares in 2004, but has faced an ever-growing wave of competitors that includes PJT Partners, Centerview Partners, and Moelis, in recent years.
Mizuho, one of Japan’s largest financial institutions, has decided to pay $15 a share for Greenhill, which is estimated to be more than double the stock’s closing price earlier on Friday.
Greenhill shares climbed almost 120% in early trading on Monday.
The acquisition is Mizuho’s latest step to fulfil its investment banking aspirations in the fiercely competitive US sector.
Further, Mizuho said Greenhill would sit within its existing banking division and be led by Michal Katz, its current head of investment and corporate banking division in the Americas.
The Japanese group, on the other hand, intends to retain Greenhill’s brand and management.
Scott Bok, CEO and Chairman of Greenhill, said, “Our firm was a pioneer in the concept of the publicly traded independent investment bank, and that format served us well for many years.”
“Now, given the evolution of markets, we believe our clients and employees will benefit from our team becoming part of a larger, more diversified financial institution,” he added.
In addition, investment bankers in Tokyo have anticipated slumping relations between the US and China, which will provide an incentive for Japanese firms to strike more international deals.
However, some Japanese companies have already begun altering their supply chains to avoid China, a trend that bankers expect will prompt them to make more foreign purchases.
Mizuho is betting on an M&A boutique whose revenues fell to $50 million in the first quarter due to a weakening economy and uncertainty in the banking industry.
Founded in 1996 by Robert Greenhill, a former Morgan Stanley banker, the organisation pitched itself to clients as a way for them to avoid the disagreements that might arise while dealing with established bulge-bracket investment banks.
Greenhill, now in his late 80s, remains chair emeritus of the firm.
Greenhill’s shares soared to almost $100 within five years, after listing at $17.50 a piece earlier in 2004. However, in the decade after the global financial crisis, Greenhill’s growth has slowed as competition for transaction advice has increased.
Moreover, the deal continues in the footsteps of Japan’s three largest lenders — Mizuho, MUFG, and Sumitomo Mitsui Financial Group—by strengthening their investment banking operations.
Besides, MUFG has a 15-year affiliation with Morgan Stanley, while in April SMFG said it planned to triple its stake in Jefferies Group LLC, the U.S. investment bank, expanding a partnership that was initiated in 2021.
- Published By Team Genuine Reporter