Arthur D. Little and Solon deny strategic advisory roles to Lebara

15 June 2018 Authored by Consultancy.uk

Telecommunications company Lebara has come under scrutiny from two of its alleged consultants, following its sale last year. The international sim-card company pitched a €350 million bond sale to investors in August 2017, however two of the consulting firms it cited as advisors for the deal have publicly denied playing the roles attributed to them.

When a company launches a fund-raising effort via an IPO, or is exploring merger and acquisition options, it is standard practice for the organisation to appoint advisors to help weigh up strategic elements, or due diligence issues. When private equity investors Palmarium put forth proposals to Lebara Group for a multi-million-euro bond sale last August, it named five firms as having worked on the deal as advisors or auditors.

PwC was named as having performed due diligence and brand valuation for the deal, something which the firm has not commented on, citing client confidentiality, while KPMG, which is currently auditing a full year report for the company, was also listed as independent auditor. Deltadrei is run partly by Palmarium principals Raphael Auerbach and Suzanei Archer and it shares business addresses with companies managed by the pair, and was noted as having done research and technical evaluation into the deal.

Arthur D. Little and Solon deny strategic advisory roles to Lebara

Arthur D. Little, the world’s oldest management consulting brand, was allegedly engaged as a strategic advisor, while Solon Management Consulting was supposedly leveraged for a commercial assessment, however both firms have since disputed their role in the deal. Both firms confirmed to Bloomberg News that they had not advised the Swiss private fund Palmarium on its takeover of Lebara last year, which was funded by the bond issue.

A Managing Director at Solon, Dan Lerner, said that the company never provided an assessment of Lebara related to the takeover. While he declined to comment on whether the technology and media-focused consultancy had worked for Lebara previously, he did state, “Palmarium AG has never been a client of Solon. Nor have we performed a commercial assessment in respect of Palmarium’s investment into Lebara.”

Karim Taga, who runs Arthur D. Little’s telecommunication and media advisory business, also argued against his firm’s alleged role, confirming that while he’d spoken with Palmarium, any pitches for business “were not converted to assignments.”

The Lebara Investor Presentation  which caused Arthur D. Little and  Solon Management Consulting  to issue their denials

Taga elaborated, “Being considered as a ‘strategic advisor’ is usually when you get paid. No revenues were generated. We haven’t received any document whatsoever on Lebara.”

In the document put forward to potential investors, Palmarium and Lebara said they had worked in close collaboration to appoint “some of the worlds most renowned independent advisors and telecom specialists to independently validate the financial, tax, legal and commercial situation and future assumptions of Lebara.” This was echoed by Pareto Securities AS, the Norwegian bank which arranged the debt sale, and also named the advisors as having “worked closely” on the deal in an August 21 2018 research note to clients.

Following the denials of Arthur D. Little and Solon, Palmarium has issued a refutation of both statements. Palmarium spokesman Matt Pollard was quoted by the press as having said, “We fully stand by the contents of this presentation.” Defending the listing of Solon as providing a “commercial assessment”, Pollard said the company had previously advised Lebara, adding that Arthur D. Little was named a “strategic advisor” because it had given discretionary advice on executive appointments and arranged a “framework agreement” for potential work.

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