Investment banks Salomon Brothers Inc. and CS First Boston will reap multimillion-dollar paydays for their work in advising Society Corp. and Keycorp on banking's third-largest merger.
Sources say each investment bank will have received about $6 million in total by the time the merger is completed, which is expected by the second quarter of next year.
CS First Boston provided a fairness opinion for Society Corp.'s board of directors. Salomon did the same for Keycorp.
Officials at the investment banks and Keycorp declined to comment on the fees, which will likely be delineated in a proxy to be distributed to shareholders. Society Corp. officials did not return calls.
Investment bankers did not bring together the chief executive officers of the two banks, Keycorp's Victor Riley and Society's Robert Gillespie. "These people don't need intermediaries to meet each other," said Gerard Smith, Salomon Brothers managing director.
Years of Talks
The two chief executives had been talking with each other for more than two years, said Lee Irving, senior vice president and treasurer of Keycorp.
Salomon and CS First Boston apparently earned their place at the table from their performance in past deals. Salomon advised Keycorp on its purchase in January of Puget Sound Bancorp of Tacoma, Wash.
And CS First Boston has advised Society on a string of deals, including its purchase of Ameritrust Co. and recent sale of Texas trust assets, said Richard Thornburgh, managing director and head of CS First Boston's depository institutions group.