Crikey has been following the outrageous cost of takeover defence in recent times, so we’re impressed to hear that Richard Branson has come up with an innovative way to keep a lid on fees paid to advisers from CS First Boston as they try to fend off Chris Corrigan’s Patrick Corporation.

Rather than paying only cash, CS First Boston’s fee will include a large quota of airline tickets – presumably not only cheap seats between Melbourne and Sydney, but business class enjoyment on long-haul international flights with Virgin Atlantic.

CS First Boston hasn’t exactly set the world on fire defending Virgin Blue, and there’s talk among investment bankers that other firms knocked back the brief when the tickets-for-service deal was proposed.

And it also raises the question of other investment bankers who have been paid in kind over the years? When Rosemount was sold to Southcorp for an excessive $1.5 billion in 2000, the advisers were said to have been showered with cases of top quality reds by Bob Oatley, who was very happy to join the ranks of Australia’s billionaires. Similarly, Crikey has been told that Challenger Financial Services CEO Mike Tilley once received a holiday house in Fiji as part payment for doing a great job on a deal many years ago.

If anyone knows of other examples of these sorts of gifts, email [email protected]. We spent about $15,000 on the sell side of the Crikey sale, but haven’t done anything more than promise fresh stocks of merchandise to our lawyers.

Meanwhile, Patrick Corp shares might have peaked at $6.80 in January but they fell another 2c to a four-month low of $5.98 this morning in a weaker market. It will be interesting to see how big a “success fee” Patrick pays its advisers if it finishes up borrowing $1 billion to gain full ownership of Virgin Blue. And would that constitute “success” for CS First Boston, or would they get fewer business class freebies for not having defended the airline?

Peter Fray

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