Trump just dealt Wall Street a $135 million blow

Business Insider | Mar 13, 2018, 04.43AM IST

hock tan trump

Martin H. Simon/Getty Images

U.S. President Donald Trump looks on as Broadcom CEO Hock Tan announces the repatriation of his company's headquarters to the United States from Singapore during a ceremony in the Oval Office of the White House on November 2, 2017 in Washington, DC.

  • President Trump issued an executive order Monday blocking Broadcom's takeover of Qualcomm.
  • Trump said there is "credible evidence" that Broadcom "might take action that threatens to impair the national security of the United States."
  • Wall Street banks had been due to make a small fortune from advising on the deal.

President Trump issued an executive order Monday blocking the impending takeover of Qualcomm by Broadcom.

In doing so, he also likely sent millions in advisory fees for those working on the bid up in smoke.

Moelis & Co., Citi, Deutsche Bank, JPMorgan, Bank of America Merrill Lynch, and Morgan Stanley were advising Broadcom on the potential merger. Those banks would have shared between $110 million and $135 million in fees if the deal had completed, Jeffrey Nassof, director of consulting firm Freeman & Co., told Business Insider in November when the bid was first announced.

Bank of America, Citi, Deutsche Bank, JPMorgan, and Morgan Stanley were also helping arrange debt financing, while Silver Lake Partners had agreed to supply $5 billion in convertible debt financing.

Qualcomm had resisted the takeover offer, hiring Goldman Sachs and Evercore to aid its defence. Had the deal gone ahead, Goldman Sachs and Evercore could have made between $120 million and $145 million in fees, according to Nassof.

Now the deal has been blocked, Qualcomm's advisers are likely to see some payout, though it's not clear how much.

The blow to Wall Street could be temporary, with Trump's decision to block the deal potentially triggering another round of bids. Intel has reportedly been watching the Broadcom-Qualcomm situation with interest, for example.

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