£27m advisers' bill for Investec

SOUTH African bank Investec is paying £27.5m to advisers on its London listing in two weeks' time, almost a third of the new money it is hoping to raise. This includes an above average commission fee of 3.75% to underwriters on the placing of 10m ordinary new shares.

As sole sponsor and bookrunner, Schroder Salomon Smith Barney will take the lion's share of the banking fees although Goldman Sachs will claim a small chunk as joint global co-ordinator. Including a discretionary bonus of more than £700,000, the commission tops £3.7m.

Accountants Ernst & Young and lawyers Linklaters, who have advised Investec on the restructuring of its business in 17 jurisdictions, share almost £16.5m. Allen & Overy are also handsomely remunerated for their role as lawyers to SSSB.

Because Investec is already listed in Johannesburg, the prospectus, published today, offers no indicative price for the new shares. Instead, the price is expected to be based on the Johannesburg shares' worth. At today's price of 150 rand, each new ordinary share would be worth about £9.83, and £98.3m would be raised.

Although the going rate for underwriting is usually 2%, bankers close to the deal said they would expect to make at least 3% on an initial public offering. Investec, which has a market capitalisation of £1bn, is the sixth South African company to opt for a dual listing in London. Unlike many recent flotations, Investec's offering is open to retail investors.