After discovering in January that his bank had lost €4.9 billion ($7.6 billion) through the actions of a rogue trader, the first investment banker that Société Générale chairman Daniel Bouton turned to was Donald Moore, Morgan Stanley’s global head of financial institutions. Urgently looking for ways to raise capital, Bouton phoned Moore as the deal maker was preparing to board a flight in Shanghai on his way to the World Economic Forum in Davos, Switzerland. Moore immediately called his boss, John Mack, and suggested that Morgan Stanley underwrite a rights issue of as much as €6 billion, arguing that SocGen’s underlying business was sound. When Moore landed in Hong Kong for a connecting flight, he opened an e-mail from Mack giving him the green light.
“I called Daniel and suggested we keep the rights issue as simple and as shareholder-friendly as possible, going for a deeply discounted rights offering for an amount roughly equal to the loss,” says Moore. “We wanted to make sure investors could immediately understand the value of the deal, both for the bank and for themselves.” Moore went to Paris the next day and pitched the idea to SocGen’s board. His confident advice on such short notice was “essential for stabilizing a messy situation,” says a senior SocGen banker close to Bouton. “When you are in crisis mode, Moore is the man to call.”
SocGen did its €5.5 billion rights issue in March at a discount of 39 percent to the predeal share price. The offering, underwritten by Morgan Stanley and JPMorgan, was 1.8 times oversubscribed.
The credit crisis is certainly keeping Moore busy. Working with bankers from BNP Paribas; Goldman, Sachs & Co.; and JPMorgan, he is advising UBS CEO Marcel Rohner on a huge Sf15.5 billion ($15.1 billion) rights issue to help fill a hole in the bank’s balance sheet caused by Sf38 billion in subprime write-downs. The shares were due to be offered this month at a 31 percent discount. “UBS is in a similar situation to SocGen,” says Moore. “The message we need to get out to investors is that this is a bank with very high-quality businesses and one isolated problem.”
Moore has a rich track record of helping banks on both sides of the Atlantic. The son of a former head of the old Carnation pet food business, Moore, 57, grew up outside Los Angeles and attended Pomona College, earning a bachelor’s degree in economics before heading straight to Harvard Business School at 22. The day after his last class in 1975, he started working as a junior investment banker at Morgan Stanley in New York.
His big break came in 1980, when Morgan Stanley’s then-head of administration and business development, Lewis Bernard, decided that deregulation and the rise of interstate banking would unleash a wave of banking consolidation. Bernard put Moore and a colleague, Edward Dunn, in charge of the bank’s first financial institutions group. During the next 17 years, Moore worked on a number of landmark transactions, including advising the Federal Deposit Insurance Corp. on the 1984 rescue of Continental Illinois and working with Wells Fargo & Co. on its $1.1 billion takeover of Crocker National Bank in 1986, the first billion-dollar bank deal in the U.S.
Believing that the launch of the euro would create similar opportunities in Europe, Morgan Stanley’s investment banking chief at the time, Joseph Perella, transferred Moore to London in 1997. Moore advised Bayerische Hypotheken- und Wechsel-Bank on its 1998 merger with Bayerische Vereinsbank, helped SocGen plot its successful defense against a bid from BNP in 1999 and worked with Royal Bank of Scotland on its hostile takeover of National Westminster Bank in 2000.
Last year Moore advised former ABN Amro CEO Rijkman Groenink, helping to negotiate a friendly takeover offer from the U.K.’s Barclays and then defend against a rival bid from RBS, Belgian-Dutch bank Fortis and Spain’s Banco Santander. The consortium prevailed with a record offer of €71 billion, but Moore says, “We managed to get the highest possible price for shareholders.”
Moore believes recent declines in bank stocks will spur further consolidation: “We will start to get clarity on how deep the subprime crisis will be and the health of bank funding in the second half, leading to new records for mergers and acquisitions next year.”
