Lord Stoneham of Droxford
Main Page: Lord Stoneham of Droxford (Liberal Democrat - Life peer)
Lord Stoneham of Droxford (LD)
My Lords, one of the sad things about this is that at the last stage of what was otherwise a very successful privatisation it seems to have been undervalued. What lessons have the Government learnt from this? What was the implication for the advisers? Did they take a reduction in the price they charged the Government for this performance, and would the Government use those advisers again?
Viscount Younger of Leckie
The occasion will not arise for those advisers to be used, but I am pretty sure that we would use them again. Again, much work was done with those well chosen advisers. On the fees, which my noble friend raised, the investment banking syndicate fees were split into a success fee of 0.9% and a discretionary bonus of 0.3%. However, I hasten to add that that particular aspect is under review, and no decision has been made on it. There are always lessons to be learnt from these IPOs. I reiterate that this is one of the largest IPOs that has been handled for many years. One of the lessons that we should take on board—again, it is right that we should deal with it in this way—is the question of the book-building process. That is very much the traditional way in which one can build up shares in an IPO. There are other, novel ways of doing it, but we believe that it would have been too risky for such an important IPO to have taken that course.