888 looks set to strike £900m deal
Deal lawyers took little respite over the summer as the traditional lull failed to materialise. One deal that kept teams at Magic Circle duo Allen & Overy (A&O) and Freshfields Bruckhaus Deringer busy was the bidding battle between 888 and GVC Holdings for online gambling company Bwin.Party Digital Entertainment.
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PEARSON TURNS TO FRESHFIELDS ON SUMMER FT AND ECONOMIST SELL-OFF
Freshfields Bruckhaus Deringer advised Pearson twice over the summer. The publisher sold the Financial Times to Skadden, Arps, Slate, Meagher & Flom client Nikkei and split its 50% stake in The Economist Group between Macfarlanes client and co-shareholder Exor, while Linklaters acted for The Economist.
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Amid a challenging year for London’s top firms, Allen & Overy (A&O) managed to hit its stride with revenue growth of 4% to £1.28bn, while profits per equity partner (PEP) came in at £1.21m, a rise of 8%.
The result was significantly ahead of A&O’s London peers, which have also seen their sterling results impacted by weakness in the euro and the inroads of US law firms in City deal work (in constant currency, A&O estimates its revenue growth at 8%).
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Allen & Overy’s (A&O) New York office and Debevoise & Plimpton have won roles advising IT company CSC on its combination with US public sector tech outfit SRA to create a company with $5.5bn in revenues and billed as the ‘largest pure-play IT services provider serving the US government sector’.
The soon-to-be split CSC will combine its government services unit, Computer Sciences Government Services (CSGov), with SRA, creating a company with combined annual sales of $5.5bn and a workforce of nearly 19,000 employees.
A&O advised CSC on the deal which sees CSGov’s shareholders own 84.7% of the new company. Its New York-based team was led by M&A partner Peter Harwich, alongside the firm’s head of tax Jack Heinberg and co-head of antitrust Elaine Johnston. In May, A&O advised CSC when it first announced its was to separate its government services unit into two independent publicly traded companies, for which Harwich also led.
Debevoise is acting for both SRA and its owner Providence Equity Partners, with a team led by partners Margaret Davenport and Michael Diz, along with partners Gary Friedman, Jonathan Lewis, Pierre Maugüé and Steven Slutzky.
Under the deal, SRA’s shareholders will own 15.3% and will receive $390m in cash. The deal aims to close before the end of November 2015, when CSC’s is set to separate its government services unit.
jaishree.kalia@legalease.co.uk
Rounding out the Magic Circle retention rates, Allen & Overy has announced an 86% retention rate for the trainee intake qualifying in September 2015 while Linklaters is keeping on 84%.
The firm saw 42 of the 44-strong intake apply for newly-qualified positions. All but one of these received offers, and 38 ultimately accepted positions at the firm.
A&O’s rate is higher than the 82% it achieved last autumn, but is down slightly from its performance this spring, which saw it retain 93% of qualifiers.
James Partridge, A&O partner and training principal, said: ‘Our trainee retention rate for September 2015 is 86%, this is another pleasing result which demonstrates the consistently high standard of the trainees here at A&O, as well as our commitment to supporting their long term careers with us.’
Meanwhile, Linklaters kept on 46 out of its 55 initial intake with all of those being made offers choosing to accept them. In London, the capital markets practice benefitted the most with eight qualifiers set to join the team in September while banking and corporate received six and five respectively and litigation took seven. Two will join international offices with Singapore and Paris both taking a newly qualified.
Compared to its Magic Circle peers, A&O’s and Linklaters retention rates are marginally higher than what Freshfields Bruckhaus Deringer achieved for autumn 2015, with the latter having kept on 40 of its 48 trainees (83%).
Elsewhere, Slaughter and May retained 89% of their 37-strong intake – a low number by its usual standards but still higher than A&O and Freshfields have achieved.
Clifford Chance has thus far set the Magic Circle pace with an impressive retention rate of 96%. 45 of the cohort of 47 were offered places, and all of them accepted.
Daniel.coyne@legalease.co.uk
This article first appeared on Legal Business’ sister publication The Lex 100.
A raft of firms, including Allen & Overy (A&O), have landed roles on Carlyle Group’s $8bn purchase of software-storage company Veritas in what is the largest US technology leveraged buyout this year.
An investor group led by Carlyle, including Singapore’s GIC and others, will buy Veritas from owner Symantec. The $8bn cash deal is expected to net Symantec around $6.3bn and has been unanimously approved by its board of directors.
Carlyle used four law firms on the deal with A&O representing the private equity firm on matters outside of the US including closing the transaction in around 40 jurisdictions. The Magic Circle firm’s team was led by corporate partners Gillian Holgate and Karan Dinamani, who joined the firm last year from Ashurst following the defection of the City stalwart’s former global head of corporate, commercial and competition Stephen Lloyd. Other partners included Chris Harrison in tax, Mark Mansell in employment, Neil Bowden in pensions, Adam Cleal in real estate, Jim Ford for transitional services and commercial operations, and Bernardine Lam for Hong Kong/China-related advice.
A&O had previously worked for Carlyle on its $5bn disposal of its stake in China Pacific Insurance Group in 2013.
Partners Mark Plotkin and David Fagan at Covington & Burling advised on the buyout’s regulatory issues for Carlyle while a team at Latham & Watkins‘ Washington DC office also worked on deal that is expected to close by the end of the year. Latham’s team included corporate partners Patrick Shannon and Jason Licht, finance partners Jeffrey Chenard and Scott Forchheimer while antitrust was handled by partner Marc Williamson and tax by Cheryl Coe. Alston & Bird represented Carlyle on other aspects.
Co-investor GIC turned to a team from Ropes & Gray including private equity partner Anthony Norris and finance partner Stefanie Birkmann out of New York for M&A advice. Sidley Austin represented the sovereign wealth fund on US regulatory matters with Washington DC-based team inlcuding partners James Mendhenhall and Howard Stanislawski.
Baker & McKenzie and Fenwick & West acted for the seller, Symantec, while JP Morgan acted as financial adviser. On the other side, BofA Merrill Lynch, Morgan Stanley and UBS Investment Bank were financial advisors to Carlyle and GIC.
jaishree.kalia@legalease.co.uk
A raft of Global 100 firms, including Allen & Overy (A&O) and Slaughter and May, have won work as three of Europe’s bottlers combine to form the world’s largest independent Coca-Cola bottler.
The three-way merger will see bottling operations Coca-Cola Enterprises (CCE), Coca-Cola Iberian Partners and Coca-Cola Erfrischungsgetränke (CCEAG) merge into a new European bottler, serving over 300m consumers across 13 countries and with net revenues of $12.6bn. The new business has been estimated to have a value around €28bn.
A&O acted for Spanish-company Coca-Cola Iberian Partners with a large cross-border team from London, New York, Frankfurt, Amsterdam, Paris, Luxembourg and Brussels.
The Magic Circle firm’s team was led by M&A partners Ed Barnett in London and Eric Shube in New York, while Dave Lewis in New York led on US tax advice. German partners Matthias Horn and Hans-Peter Loew advised on the contribution of the German bottler CCEAG, while other partners advising on the transaction included London partners Sarah Henchoz for employment, James Roe on equity capital markets, Chris Harrison covering Tax and Alasdair Balfour antitrust. In Amsterdam Justin Steer from the equity capital market group provided support while Uria Menendez also served as legal counsel.
A large cross-border team from Cleary Gottlieb Steen & Hamilton, based in New York, London and Brussels acted for The Coca-Cola Company led by partners Matt Salerno, Vic Lewkow, Simon Jay, Sam Bagot, and Raj Panasar. Partner Nick Levy advised on antitrust and counsel Kathleen Emberger advised on employee benefits matters. Skadden, Arps, Slate, Meagher & Flom provided tax advice with New York based partner David Rievman advising.
Cahill Gordon & Reindel represented CCE led by corporate partners Helene Banks and John Schuster, antitrust partner Elai Katz and tax partner Craig Horowitz. Slaughters represented CCE on UK matters with a team including William Underhill and Padraig Cronin, who were supported by competition partner Bertrand Louveaux,; pensions and employment partners Charles Cameron and Roland Doughty; and tax partner Steve Edge. Hengeler Mueller in Germany, Pérez-Llorca in Spain and De Brauw Blackstone Westbroek in the Netherlands also all picked up work from the deal.
CCE’s franchise relationship committee used Clay Long Esq and Baker Hostetler as legal counsel.
A&O partner Ed Barnett commented: ‘This was an extremely complex cross-border transaction involving three very established entities with strong brand equity coming together to create a new company that will deliver significant synergies and drive profitable growth.’
At closing, Coca-Cola Iberian Partners and The Coca-Cola Company will own 34% and 18% of the combined company respectively, with CCE shareowners owning 48% on a fully diluted basis. CCE shareowners will receive, for each CCE share held, one share of Coca-Cola European Partners and a one-time cash payment of $14.50. The cash payment, totaling around $3.3bn, will be funded by the new company using newly issued debt.
The merger is expected to close in the second quarter of 2016, and is subject to approval by Coca-Cola Enterprises Limited’s shareowners.
jaishree.kalia@legalease.co.uk
Berwin Leighton Paisner (BLP) and Allen & Overy (A&O) have taken the lead roles on US private equity firm Lone Star’s £700m acquisition of Wembley Arena-owner Quintain Estates and Development.
The agreement sees Lone Star’ bid company Bailey Acquisitions Limited, which is indirectly controlled by the firm’s Real Estate Fund IV, offer around £700m in cash for the property developer that has substantial land owning in Wembley Park and planning permission for 5,500 homes.
BLP advised Quintain having previously worked on its £186m disposal of interests in the Greenwich Peninsula. Its team was led corporate finance partners Nick Myatt and Alex Latner with support from Dylan Mackenzie and Cath Shirley while client relationship partner and BLP chairman Robert MacGregor gave real estate advice to the group that floated in 1996 and David Dennison covered incentives.
A&O’s team also built on its relationship with client Lone Star, having previously acted on its acquisition of Moorfield Funds I and II in December 2014 and on its Jury’s Inn buy in January this year. Its team was led by corporate partners George Knighton and Annabelle Croker, real estate finance partner Arthur Dyson and real estate partner Chris Woolf.
Knighton commented: ‘We are delighted to be working with Lone Star on another large transaction in the real estate sector. On this transaction we deployed a full team with expertise covering public takeovers, acquisition finance, real estate and tax issues.’
The bid company received financial advice from Morgan Stanley which saw Ashurst pick-up an additional role advising the bank. Its team was led by corporate partners Karen Davies and Tom Mercer with finance advice given by Mark Vickers and Tim Rennie.
Lone star’s bid for the £60m turnover company involves a cash offer of 131p per Quintain share – a 22.4% premium on the 28 July closing price. The deal is being partially financed by a £425m term facility with Wells Fargo.
michael.west@legalease.co.uk
After having launched a second office in Spain last year, Allen & Overy (A&O) has continued to build its offering in the country by recruiting finance partner Juan Hormaechea from Ashurst, where he most recently led the Spanish banking and international finance department.
Before joining Ashurst nearly 10 years ago, Hormaechea spent three years as vice president and assistant general counsel of the Equity Derivatives Group of JP Morgan Chase in London. Prior to this, he was also in-house counsel at Santander Investment (Banco Santander) and worked at Natwest Markets, both in Madrid.
Hormaechea specialises in structured finance and derivatives – particularly in equity and corporate debt. He also has experience on capital markets deals and disposing and acquiring loan portfolios.
He joins A&O’s Madrid office as a partner in the banking and finance practice taking the team’s total partner headcount to five. The hire comes on the back of ‘increasing legal advisory services as a result of regulatory changes and the increasingly sophisticated profile of investors in Spain’, the firm said in a statement.
Spain co-managing partner Ignacio Ruiz-Cámara added: ‘Juan’s appointment is in line with our current growth strategy in Spain and is aimed at ensuring that the banking and finance team continues to be one of the firm’s benchmark practice areas, both in Spain and on a global level.’
Hormaechea said: ‘Allen & Overy’s sophisticated approach in Spain and the potential to contribute to its growth was a major factor that influenced my decision to take this next step in my career following a successful ten years at leading law firm Ashurst.’
The news comes as Ashurst lost a four-partner team in June who joined King & Spalding to spearhead its Tokyo office launch while earlier this month Paul Hastings hired a nine-lawyer team in the US from the City stalwart including its US managing partner and finance partner Eugene Ferrer based in New York and global co-head of the securities and derivatives group, Scott Faga.
At the beginning of this year, nine investors in Europe’s largest solar power plant, including German energy giant RWE, instructed A&O to sue the Spanish government at the World Bank’s arbitration court following cuts to solar energy subsidies.
jaishree.kalia@legalease.co.uk
Following a record financial year that has seen Allen & Overy (A&O) move ahead of Magic Circle rivals Linklaters and Freshfields Bruckhaus Deringer in turnover, the firm’s associates will see a £20,000 increase in their base salaries as the firm incorporates bonuses into the annual pay packet.
The pay hike follows the firm’s review of its London associate salaries against market data and having consulted with its partnership and associates on how to reward more competitively.
The inclusion of bonuses sees a steep rise in newly qualified (NQ) associates base pay with them receiving £12,000 more at £78,500. One year post-qualification experience (PQE) associates will see wages increase from £72,500 to £92,000; two-year PQE lawyers will receive £104,500 up from £82,500; 3PQEs will be paid £115,000 compared to £93,500.
All spot rate salaries have also received a ‘market increase’ and associates will be paid their annual bonuses for the 2015 financial year in July this year. Standard bonus payments for the 2016 financial year will be folded into associate base salaries from 1 August with changes backdated to 1 May 2015 and a new bonus scheme operating from next year to reward exceptional contribution.
A&O global managing partner Wim Dejonghe said: ‘Our new salary structure recognises the significant contribution our associates make to the success of the business. Our aim has always been to offer a competitive total reward package while retaining the flexibility to reward exceptional performance. The record results we reported this year would not have been possible without the hard work of our associates. By adding our standard bonus to base salaries we provide our associates with more certainty as to their pay and more consistent recognition for the work they do every day.’
In terms of the associate salary race for the peer group, the move places A&O on par with Freshfields despite its salary freeze for junior lawyers at 2014’s levels. Slaughter and May made significant increases to the salaries it pays after it announced NQ’s will receive £5,000 more than last year, rising 8% from £65,000 to £70,000 as competition for talent hots up in the City. Demand for talent has increased in recent years following the expansion of US firms in the City, with newly qualified lawyers at Davis Polk & Wardwell paying £100,000 a year.
Clifford Chance made smaller increases in percentage terms than its Magic Circle peers, but matched the higher of the rates being offered to qualified lawyers by either Slaughters or Linklaters.
The news follows A&O’s impressive financial results for 2014/15 with an annual revenue of £1.28bn up £47m, or 4%, from £1.23bn, while profits per equity partner moved up 8% to £1.21m from £1.12m.
A&O’s revised base salaries comprise:
Jaishree.kalia@legalease.co.uk
