sell off the last 22 percent of BT shares to the public.
The government would choose two banks, one British and one American, to lead the process, along with several “co-managers,” banks that would play a smaller and much less prestigious role. BT would pay a total of 3 percent of the value of the offering proceeds as its fee, most of which would go to the lead managers. With the offering expected to total close to $8 billion, the participating investment banks could collectively earn a total of $240 million. Merrill wanted to break into the top tier of investment banks, using British Telecom as a wedge to do so. It desperately wanted a piece of the action.
So my trip to St. Martin with Paula—the first time we’d gone away alone in years—was hardly relaxing. Several times a day, the hotel concierge brought me a stack of faxes from Mark Maybell, the head of telecom banking at Merrill, who was preparing Merrill’s presentation to the British government. Maybell wanted to include my views on BT shares. So I sat on the beach calculating subscriber-line growth rates and marking up draft slides while Paula read a book.
I did have time to read one book that week— I Can See You Naked, by Ron Hoff. It wasn’t pornography, but rather a book intended to help inexperienced public speakers conquer fears of large audiences. The main suggestion was to imagine everyone in the audience is naked, while you remain clothed. This, the author said, would stop your heart from racing and your voice from quavering. I figured I’d need the naked trick with my new global responsibilities.
On March 10, 1993, I walked into the glass-enclosed towers of the World Financial Center, where Merrill had its world headquarters, directly across from the two World Trade Center towers that would be destroyed eight years later. I didn’t feel the anxiety that I’d felt just four years earlier walking up Madison Avenue, but I wasn’t exactly calm either. The money was great, and it was nice to be able to cover AT&T and to be out from under Ed’s shadow. But the scope of the new job was much greater. Now I had global responsibilities and a global-level pay package too. I figured Merrill’s top management would be on me like fleas on a dirty dog.
Moreover, unlike Morgan Stanley, Merrill had a huge retail system, the largest in the world—the most customers, brokers, and money under management. Although my research would remain directed at the sophisticated institutional investor, there was no doubt that Average Joe also was going to hear about my calls. More than 10,000 Merrill brokers would pick up the phone as soon as I got off the squawk box and try to talk someone into making a trade.
Brokers needed action to make any money, since their compensation was based largely on transactions. Analyst recommendations were jumped on and embraced like a new lover. Unlike institutional clients, who made their own investment decisions and used my research as one of many inputs, these brokers and investors might actually take every word I wrote or said as the gospel. Now that was scary.
I had no time to dwell on it. It was time to see the world. About 10 days later, on a Sunday night, Mark Maybell and I flew to London so that I could meet Neil Barton, Merrill’s London-based European telecom analyst, and Merrill’s telecom bankers there before we all went over to see the key decision makers at Her Majesty’s Finance Ministry and try to make a good impression. Upon arrival, we quickly showered and suited up at 47 Park Street,a posh London hotel, while our drivers waited outside. I was fried, having skipped sleep in favor of going over every last shred of research and information just one more time.
Staffers at the Finance Ministry had made it clear that the U.S. telecom analyst would play a major part in its choice of a bank. The British government—and many others, I learned—believed that a bank’s U.S. analyst could create a positive halo effect
The government would choose two banks, one British and one American, to lead the process, along with several “co-managers,” banks that would play a smaller and much less prestigious role. BT would pay a total of 3 percent of the value of the offering proceeds as its fee, most of which would go to the lead managers. With the offering expected to total close to $8 billion, the participating investment banks could collectively earn a total of $240 million. Merrill wanted to break into the top tier of investment banks, using British Telecom as a wedge to do so. It desperately wanted a piece of the action.
So my trip to St. Martin with Paula—the first time we’d gone away alone in years—was hardly relaxing. Several times a day, the hotel concierge brought me a stack of faxes from Mark Maybell, the head of telecom banking at Merrill, who was preparing Merrill’s presentation to the British government. Maybell wanted to include my views on BT shares. So I sat on the beach calculating subscriber-line growth rates and marking up draft slides while Paula read a book.
I did have time to read one book that week— I Can See You Naked, by Ron Hoff. It wasn’t pornography, but rather a book intended to help inexperienced public speakers conquer fears of large audiences. The main suggestion was to imagine everyone in the audience is naked, while you remain clothed. This, the author said, would stop your heart from racing and your voice from quavering. I figured I’d need the naked trick with my new global responsibilities.
On March 10, 1993, I walked into the glass-enclosed towers of the World Financial Center, where Merrill had its world headquarters, directly across from the two World Trade Center towers that would be destroyed eight years later. I didn’t feel the anxiety that I’d felt just four years earlier walking up Madison Avenue, but I wasn’t exactly calm either. The money was great, and it was nice to be able to cover AT&T and to be out from under Ed’s shadow. But the scope of the new job was much greater. Now I had global responsibilities and a global-level pay package too. I figured Merrill’s top management would be on me like fleas on a dirty dog.
Moreover, unlike Morgan Stanley, Merrill had a huge retail system, the largest in the world—the most customers, brokers, and money under management. Although my research would remain directed at the sophisticated institutional investor, there was no doubt that Average Joe also was going to hear about my calls. More than 10,000 Merrill brokers would pick up the phone as soon as I got off the squawk box and try to talk someone into making a trade.
Brokers needed action to make any money, since their compensation was based largely on transactions. Analyst recommendations were jumped on and embraced like a new lover. Unlike institutional clients, who made their own investment decisions and used my research as one of many inputs, these brokers and investors might actually take every word I wrote or said as the gospel. Now that was scary.
I had no time to dwell on it. It was time to see the world. About 10 days later, on a Sunday night, Mark Maybell and I flew to London so that I could meet Neil Barton, Merrill’s London-based European telecom analyst, and Merrill’s telecom bankers there before we all went over to see the key decision makers at Her Majesty’s Finance Ministry and try to make a good impression. Upon arrival, we quickly showered and suited up at 47 Park Street,a posh London hotel, while our drivers waited outside. I was fried, having skipped sleep in favor of going over every last shred of research and information just one more time.
Staffers at the Finance Ministry had made it clear that the U.S. telecom analyst would play a major part in its choice of a bank. The British government—and many others, I learned—believed that a bank’s U.S. analyst could create a positive halo effect
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