NEW YORK (TheStreet) -- If, as the saying goes, investment bankers "eat what they kill" then the financiers at Greenhill & Co. (GHL) are in for a long-overdue feast. Shares Greenhill surged more than 8% in early trading on Tuesday, after the boutique investment bank acted as adviser to Actavis (ACT) in its announced $25 billion takeover of Forest Laboratories (FRX).
The advisory mandate is a major coup for Greenhill, which has struggled amid a corporate merger and acquisition landscape that remains below pre-crisis levels and has been tempered in recent years by market volatility, political uncertainty and C-suite caution.
Advising Actavis in its biggest-ever deal, a cash-and-stock takeover of branded drug-maker Forest Labs, will help boost investor confidence in the advisory boutique. The deal may also prove important to Greenhill's bottom line.
According to Freeman Consulting Services, a boutique consulting and research firm, fees paid by Actavis to its advisers are expected to be between $50 million and $59 million. Greenhill is listed as Actavis' financial adviser, while law firm Latham & Watkins is the company's legal adviser. For context, a fee in excess of $50 million on the Actavis deal would represent over 15% of Greenhill's 2013 revenue.
Fees paid to Forest Labs advisers are forecast by Freeman & Co. to come in at between $55 million and $65 million. JPMorgan is Forest Labs legal adviser while Wachtell, Lipton, Rosen & Katz is its legal adviser.
Greenhill's shares were rising to $52.81 in early Tuesday trading on news of the deal and the firm's involvement.
Hedgeye Research analyst Jonathan Castelyn said on Twitter the mandate was a step in the right direction for Greenhill. Excluding dividends, shares in Greenhill have fallen 13% over the last 12 months.