When SunTrust Banks put in a hostile bid for Wachovia in mid-May in an attempt to steal it away from friendly bidder First Union, Wachovia felt it needed to bolster its advisory team. It called Goldman Sachs.
It?s not an unusual move. Goldman?s M&A franchise is broad-based, but its financial institutions group is one of its strongest sectors, and it has long had a reputation for being the best defence M&A adviser.
Another example of its deft defence work came earlier this year when Shell put in an unsolicited bid for Barrett Resources of $55 a share. But Goldman had been working on defence strategies with Barrett for a while. ?We look at this deal as a textbook case of how to run a defence,? says David Baum, Goldman?s co-head of M&A for the Americas. ?We felt Shell had come in light on valuation, so we immediately put our defence plan into action.? That involved seeking out a white knight, which they duly found in Williams. The price they offered was $73 per share. ?The deal worked out great for all involved,? says Baum. ?The shareholders, and Williams each got what they wanted.?
But defence work isn?t the only string to Goldman?s bow, as its role in advising AIG on trumping the Prudential of the UK?s offer to buy American General shows.