It was a good weekend for Goldman, Sachs & Co.'s financial institutions group and an even a better one for Morgan Stanley & Co.'s unit.
The two Wall Street powerhouses wrapped up deals estimated to have earned them a total of more than $100 million in fees.
Morgan Stanley's group, headed by Donald Moore, advised Chemical Banking Corp. on its $10 billion merger with Chase Manhattan Corp., and Integra Financial Corp. on its $2.1 billion sale to National City Corp.
Goldman Sachs' group, headed by J. Christopher Flowers, advised senior Chase management, and Fourth Financial on its $1.2 billion sale to Boatmen's Bancshares.
Assuming that the firms received close to the average fee for investment bankers in 1994 - 0.49% of deal value - each adviser would have netted about $49 million for the Chase-Chemical deal.
Mr. Moore was the lead adviser to Chemical, and Joseph Wender and Charles Davis headed the Goldman team advising Chase.
Morgan Stanley would have earned another $10.3 million for its role in the Integra transaction, and Goldman another $5.8 million for advising Fourth Financial.
The hefty fees are one reason why bank M&A advisory is a growing business for the investment houses. Thanks in part to an influx of "hot money" into the banking industry, the investment bankers can look ahead to more weekend work in the months ahead.
Hot-money investors target companies or industries where stock prices are expected to rise or where there are strong takeover prospects.
Value investor Michael Price triggered an influx of hot money into the banking industry when he disclosed a 6.1% stake in Chase, and in a federal filing urged a sale or breakup of the company.
The influx of hot money has forced bankers, who traditionally have not worried much about their shareholders, to heed their suddenly vocal investors.
"Managements, even beyond banking, have become more conscious of enhancing shareholder value," said John Neff, manager of the $11.4 billion- asset Windsor/Vanguard Fund. "Chase, in particular, went through quite a catharsis in this movement toward representing shareholders."
Indeed, as recently as last April, Chase chief executive Thomas G. Labrecque emphatically resisted a sale of the bank in a public face-off with Mr. Price at the company's annual meeting.
Sources familiar with the transaction say Chase agreed to forsake independence less than two weeks ago.
Some observers discounted the effect of vocal shareholders, arguing that the merger occurred because it made economic sense, not because Chase's management was forced into a corner.
Nevertheless, one observer asserted, "the change in Chase's shareholder base made them take a second look at their strategic alternatives. (Trading volume) after Price was double the average before him."
