Keeping His Cool

His reputation for calm, careful analysis has made Simon Robey (left), co-head of global M&A at Morgan Stanley, one of Britain’s most trusted merger advisers for years.


When HBOS faced a sudden run on liquidity in mid-September after its stock price plummeted 70 percent in two days and counterparties withdrew interbank credit lines, the bank’s CEO, Andrew Hornby, quickly turned to Simon Robey for help. The unflappable Robey, co-head of global M&A at Morgan Stanley, persuaded Hornby to a seek a short-term liquidity infusion from the government to stay afloat, then opened a 12-hour overnight negotiating session that concluded successfully with a £12 billion ($19.5 billion) takeover of HBOS by rival Lloyds TSB. Less than four weeks later, with global markets — and HBOS — on the brink of a meltdown, Robey advised Hornby on the terms of what was in effect a forced nationalization that will see HBOS accept £11.5 billion in capital from the U.K. government, then merge with Lloyds TSB on revised terms. The state will hold a 43 percent stake in the combined group.

Robey’s reputation for cool, careful analysis has made him one of Britain’s most trusted merger advisers for years; the financial crisis has only increased demand for his services. In addition to assisting HBOS, Robey in September advised U.K. Chancellor of the Exchequer Alistair Darling on the rescue of Bradford & Bingley, under which the government nationalized the savings bank’s £41 billion mortgage portfolio while selling its 200 branches, with their £22 billion in deposits, to Spain’s Banco Santander for £612 million (see story, Super Santander).

“As an investment banker these days, you’ve got to see how the world is changing and be decisive when it comes to advising in ways that might not have made sense only the day before,” the 48-year-old banker tells Institutional Investor. “You’ve also got to be one of the calmest people in the room.”

According to data provider Dealogic, Morgan Stanley’s U.K. team has placed among the country’s top four mergers and acquisitions advisers since 2004, when Robey, a 21-year veteran of the bank, was made head of its entire U.K. operation. For the first ten months of 2008, Morgan Stanley ranked third in U.K. M&A, working on 33 deals worth $98.1 billion. Robey has cultivated ties with a broad range of clients over the years; he advised pharmaceuticals company Glaxo Wellcome on its $76 billion purchase of rival SmithKline Beecham in 2001, and is currently advising U.K.- and Australia-based mining company Rio Tinto in its year-old defense against a $147.7 billion hostile offer from competitor BHP Billiton.

“It’s rare to come across a banker who puts as much thought and careful preparation into understanding the needs of his clients,” says Luqman Arnold, founder and chief executive of London-based private equity firm Olivant. As CEO of Abbey National in 2004, Arnold hired Robey as an adviser on the £9.5 billion sale of the bank to Santander, in what was then the largest-ever cross-border banking acquisition.

After the early death of his father, Robey was raised in Cambridge, U.K., by his mother, an elementary school teacher, and he obtained a bachelor’s degree in English from Oxford University’s Magdalen College in 1983. One day that year, while training to be a professional choral singer, he was putting up recital posters in a room where a group of Lazard partners, led by Marcus Agius, now chairman of Barclays, was giving a recruitment presentation. Robey caught the bankers’ attention with some astute questions about the business, got an invitation to dinner and, eventually, a job offer as a trainee banker. He worked under Philip Hampton, now chairman of supermarket group J Sainsbury, and advised B.A.T. Industries on its $1.4 billion acquisition of insurer Eagle Star Holdings before joining Morgan Stanley four years later. “I immediately fell in love with the fast pace and constantly changing action in investment banking,” Robey recalls.

He believes the U.K. Treasury’s bank bailout will boost economic confidence “because it puts the fate of British banks beyond not just a reasonable doubt but any doubt at all.” What’s good for the economy is good for Robey too. He expects the banks to provide plenty of work as they sell businesses to rebuild capital and buy back the government stakes. “Since the beginning of time, people have needed capital and advice,” he says, “and that is not about to change.”