View from City Road: SBC outrages the sixth form

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The Independent Online
Schoolboys are notoriously hostile to pushy new bugs. The City still acts like a boarding school, albeit with a large contingent of foreign boarders, and Swiss Bank Corporation's trumpet-blowing on its part in the Eurotunnel/Transmanche Link settlement has put the prefects' backs up.

SBC has done three things to needle the chaps. It has taken credit for the Eurotunnel settlement, which the seniors insist was brokered by Morgan Grenfell and Banque Indosuez, Eurotunnel's advisers.

Second, it has blurted out when and for how much Eurotunnel's rights issue will be, sending Eurotunnel's not normally phlegmatic co-chairman, Sir Alastair Morton, ballistic.

Lastly, it has sought to scoop some of the underwriting gravy from Warburg's plate.

While outwardly the banks were tight-lipped yesterday, the sixth form common room was in uproar, as the City establishment shared its outrage over the bumptious Swiss. But is their outrage overdone?

Certainly, it is hard to think of an instance when a City broker last announced the details of a forthcoming rights in this way. There are suggestions that Mr Keelan may not have understood exactly how he would be quoted by the journalists he spoke to.

It is also difficult to recall another City broker agreeing to banish its head of corporate finance from a particular deal. But while Sir Alastair said yesterday SBC had confirmed that Mr Keelan would play no part in the rights, SBC denies that he would have played any part in it anyway, since he is a merchant banker who was only involved in the initial planning.

Eurotunnel needs this row like a hole in the head. Muddying the waters ahead of the rights has done nothing for SBC's relations with its client. Yet there is something to SBC's view that issuing business in the City is a closed club that is well overdue for a shake-up.

SBC put together the recent rights for Trafalgar House and a convertible preference issue for British Land. The Swiss feel they offer a quality service, and the current row is merely sour grapes on the old boys' part.

The Swiss may well weather this latest squall and go on to expand their issuing business in London. But they would do well to keep an eye over their shoulder. The old boys are on the prowl and eager to haul Mr Keelan off to the bike sheds for a good duffing up.

Mr Keelan may have had his Italian holiday booked already, but it looks like remarkably good timing. While there he might also pick up some useful tips on muscling in on Italian privatisations, where the London elite have made inroads.

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