People who have real jobs are sometimes surprised to learn how much of investment banking consists of hopeless pitching. Your team puts together a forty-page slide deck with sixty pages of appendices, proofreads it repeatedly, updates numbers every day for two weeks, and prints a dozen glossy spiral-bound copies. Then you lug them halfway across the continent, slog through the first five pages with an increasingly bored potential client, are politely rebuffed, and then cleverly ask “hey do you want any extra copies of the presentation for your colleagues?” so you don’t have to carry them back on the plane. Glamorous work.
It could, however, be worse, in that you typically don’t expect the prospective client that you’re pitching to put your slide deck on the Internet with a condescending link.* Sadly for publicity shy investment bankers everywhere, corporate innovator Larry Ellison wants to change that norm.
If you haven’t heard, there’s a silly spat occurring between Oracle and Autonomy, the software company that Hewlette-Packard agreed to buy in August. In summary, (1) Oracle’s Ellison was asked about the combination and he said something to the effect of “nah, Autonomy asked us to buy them first but they looked too expensive so we passed,” (2) Autonomy CEO Mike Lynch denied ever pitching Oracle, (3) Oracle pointed out that Lynch came to Oracle’s office in April with tech M&A dean and Qatalyst Partners CEO Frank Quattrone to meet with Oracle president Mark Hurd and M&A head Doug Kehring, (4) Lynch claimed that that meeting was just a customer meeting facilitated by Quattrone and that they discussed database technology, not M&A, (5) Oracle called that claim a “whopper” and released what it claims are the pitch slides from that meeting at the link Oracle.com/PleaseBuyAutonomy, and (6) Quattrone jumped in to claim that those slides “were for the purpose of [Qatalyst] independently pitching Autonomy as an idea to Oracle,” were prepared before Autonomy hired Qatalyst to sell itself to H-P, and “were not used in our April meeting with Mark and Doug.”
From looking at the slides (here and here), which are dated January and provide a mostly generic overview of Autonomy based on public information, it seems unlikely that Oracle’s version is accurate. If you’ve ever met an investment banker, you will find it hard to believe that the CEO of a bank would show up to an M&A pitch meeting in April with a client CEO and a pitch book that hasn’t been updated since January. It is just imaginable that they’d have an M&A discussion without a deck – but not imaginable that they’d have that discussion with a four-month-old deck.
Also suspicious is that the deck contains real company names. Ridiculous though it sometimes seems, bankers love the veneer of secrecy that alliterative code names provide. If these slides were for an Autonomy mandated meeting where Autonomy was trying to sell itself to Oracle, they would be labeled “Autoeroticism Overview” and, if they fell into the wrong hands, would disguise the target’s identity so cunningly that even the cleverest reader would fail to recognize it.**
So you can see why Quattrone was so quick to say that the slides came from him and were not used in any Autonomy meetings – first of all because it’s probably true, and second because if these slides were actually used in a meeting between Autonomy and Oracle it would be a pretty lame performance by Qatalyst.
But it’s a little awkward for Qatalyst anyway. Yes, bankers spend a lot of their time rubbing sticks together to try to produce mergers and acquisitions. Yes, every client suspects that the banker that they consider their trusted advisor is leaving their office, going to their competitor’s office, and telling the competitor “you should really buy those guys, I just met with them and they can’t make it on their own.” But it’s still rough to see it in black and white, on the recipient’s computer system – even if the target here came to the same conclusion and sold.
It’s especially rough for Qatalyst, who have made their name as a sell-side advisor. Their web site’s page of tombstones includes only four buy-side deals (and 20+ sell-side deals), and they’ve gotten quite a bit of press for Quattrone’s ability to push up prices. Going to Oracle and saying “you should hire us to help you buy Autonomy” may seem a little awkward if you’re also talking to Autonomy, but it’s clearly part of the game. It’s just not so much part of Qatalyst’s game.
On the other hand, going to Oracle and dropping hints that they should try to buy Autonomy, hoping that Oracle’s approach will inspire Autonomy to hire you as an advisor, is a little more awkward – and much more of a conflict of interest.
Barbs Fly in Autonomy-Oracle Feud [DealBook]
Please Buy Autonomy [Oracle]
* This might actually be better, ex ante, because it could cut down dramatically on analyst workload.
** Unless the reader looked at the stock price chart, comparison of selected companies with all of Autonomy’s competitors named, or the list of Autonomy’s management and directors.
I had the misfortune to be a buyer of deals from Quattrone when he was at First Boston/CSFB/whatever. He was the most arrogant SOB ever. He would ask you to put a valuation together for an IPO (hello, I'm the client, not your employee) and tell him exactly how much you would pay per share and why you chose those multiples. Stopped doing business with them. How he managed to overturn his conviction on his blatant favoritism is beyond me. Court must have been mesmerized by his ridiculous mustache. Asshole.
Thanks for the 9 paragraphs of analysis. Don't worry, it was still really funny on paragraph 6!!!
Actually, I thought paragraph 7 had the best zinger.
- guy who doesn't get sarcasm
Mario & Wollensky
If there is a company who sounds like they want to get bought more than Autonomy, I sure haven't heard of it.
Um, where is Luigi?
We can all agree – buyside, strong side.
On the next twelve multiple charts they shouldn't carry the decimal unless they plan on using it… Just sayin'
I haven't even looked through the next deck, sloppy fellas- real sloppy.
The thicker the pitchbook, the dumber the banker.
The Autonomy book is embarrassingly bad. Looks like a first year “career-changer” mba interpretation of what they think a prospecting book looks like.
Sorry, is Fixed Income code word for copy room?
i dont get what the big deal is here…"sell siders" have "ideas" presentations with potential buyers all the time to keep up relationships put some companies on the table, even if they are not formally mandated by the sellers. Oracle seems to just be splitting hairs on the difference between an ideas book and a formal sell side ptich.
Hey Bess go F¡79 yourself!
S & Wollensky
ps: feel free to drop the '&'
uh….what?
are you having a stroke?
"Glamorous work" – HAHAHAHA
Giving hand jobs for crack is a more glamorous profession than I-Banker.
Hmm, I actually do both.
- UBS Associate
Pays better than I-Banking.
-UBS MD
I guess Bess had to reject another charming young gentleman's advances. It happens.
I can confirm this.
- Kweku
"Hewlette-Packard"
Really?
Ugh, ugly deck.
– guy who cares more about fonts & colors than multiples and valuation
I misread the title of the post, it thought it was Frank's Bitchbook
Matt, welcome to Inside the Actor's Studio. Tell me, do you and Bess ever watch movies in the office? If so, haveyoueverwatchedthetimelessandwonderfulepic "A River Runs Through It" that defined a generation? The 1992 film launched the wildly successful career of one Brad Pitt. Thereisawonderfulsceneinthatclassicmovie…where the father is requiring the son to write… and rewrite… and rewrite yet again his home-school essay, each time making them ever shorter uttering those immortal words…. "half as long"…"half as long"… "half as long"…until it the prose is perfect in its brevity upon which time he father instructs young Mr. Pitt to "now throw it away."
I found myself quite fond of para 5…the word "cunningly" seriously caught my eye.
Less student loans too.
the operating statistics and multiples titles are switched…
What's a ZJ?
If you have to ask, you can't afford it.
has it been a while pmco?
Links 404, looks like Oracle took the slides down.
Fewer student loans. Other than that I have no issues.
- AIG Grammar Quant
There are just some things for which electric man is not a good substitute. Ya feel me, guest?
Let me guess….JPM VP? If the deck aint done in "Trebuchet MS 10pt" it's garbage. Garbage, I tell ya!
-JPM MD
The fact that you referenced "A River Runs Throught It" disturbs me. Besides….the correct method of referencing a movie is by underlining it, not putting it in quotations.
-MLA
no…too busy…give me 15 seconds
damn, damn, damn! slides are gone – please tell me that the good folks at DB have them downloaded and saved for all the latecomers to see.
-curious deckhand
His pitchbook consists of:
1-Go all in on BAC outs
2-If that doesn't work, blame the SEC and direct everyone to Zero Hedge
slides or it didn't happen
can I have the bitch book back? i want to spank it
if ppt's of that quality and buying someone the occasional hooker are all you have to do to be an i-banker, things are starting to make sense now…..
it would have been more understandable if you had just said "cat got my tongue"
Spanking and hair pulling?
We only use "Windings 24pt"
-UBS Font Quant
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