Legal Business

Dealwatch: A&O and Ashurst close £1.2bn UK tunnel project as US-led buyouts take centre stage

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Dealwatch Allen & OveryAshurst

Allen & Overy and Ashurst won leading roles on the £1.2bn Silvertown Tunnel project, the only big-ticket UK-led deal this week in a market awash with US buyouts.

A&O advised a consortium including Aberdeen Standard Investments, BAM PPP PGGM, Cintra, Macquarie and SK Group on the Silvertown Tunnel PPP with a team led by David Lee and including partners Mark Walker and Sara Pickersgill.

An Ashurst team led by partners Terry van Poortvliet and Jonathan Turner advised the procuring authority, Transport for London, on the tunnel, which will run under the River Thames and reduce congestion at the existing Blackwall Tunnel.

Lee commented: ‘This PPP deal is a significant UK infrastructure project which will bring huge benefits to South East London. It is interesting to note that in a world in which political discourse remains outspoken and disruption to our political system continues unabated, business and the public sector can still work together quietly and effectively to deliver important projects.’

Meanwhile leading US firms have dominated this week as LVMH Moët Hennessy Louis Vuitton (LVMH) acquires global jeweller Tiffany & Co for $16.2bn and eBay sold StubHub to Viagogo for $4.05bn.

Skadden, Arps, Slate, Meagher & Flom advised LVMH on its acquisition of Tiffany & Co for $135 per share in cash, with a valuation of roughly $16.2bn.

The Skadden team was led by New York partners Howard Ellin and Sean Doyle. Allen & Overy advised the banks financing LVMH with a team led by counsel Thomas Roy and partners London-based partner Nick Clark and Todd Koretzky out of New York providing support.

Roy commented: ‘Assembling loan facilities of this size in such a short time period is a testament to the strength of LVMH’s banking relationships and the depth of the European loan market.’

A Sullivan & Cromwell team led by New York corporate partners Frank Aquila and Melissa Sawyer advised Tiffany.

The deal is expected to close in the middle of 2020 and is subject to customary closing conditions, regulatory approvals and approval from Tiffany’s shareholders.

Meanwhile, Wachtell Lipton Rosen & Katz, Skadden and Kirkland & Ellis have all won lead mandates alongside Quinn Emanuel Urquhart & Sullivan as eBay agreed to sell StubHub to Viagogo for a purchase price of $4.05bn in cash.

Both StubHub and Viagogo are ticket marketplaces occupying the live sport, music and entertainment events space, with Viagogo having a much larger international presence, while StubHub is exclusively based in the US. Viagogo’s founder and chief executive Eric Baker co-founded StubHub in 2000 but left the company before eBay acquired it for $310m in 2007.

Baker commented: ‘It has long been my wish to unite the two companies. Buyers will have a wider choice of tickets, and sellers will have a wider network of buyers. Bringing these two companies together creates a win-win for fans – more choice and better pricing.’

Ebay is being advised by a Wachtell team led by corporate partners Daniel Neff, Karessa Cain and Raaj Narayan and includes restructuring and finance partner John Sobolewski and tax partner T.Eiko Stange. Quinn Emanuel is also advising eBay.

Viagogo is being advised by a Skadden team led by M&A partners Howard Ellin and Michael Chitwood and IP and technology partner Stuart Levi as well as a Kirkland team led by debt finance partners Jason Kanner and Andrea Weintraub and capital markets partner Sophia Hudson.

The sale is expected to close by the end of the first quarter of 2020 and is subject to regulatory approval and customary closing conditions.

Finally, Skadden also led on another big-ticket transaction, advising PayPal in its $4bn acquisition of Honey.

The Skadden team advising PayPal was led by corporate partner Michael Mies and antitrust/competition partner Ingrid Vandenborre. Latham & Watkins advised Honey Science Corporation with a team led by Los Angeles corporate partners Alex Voxman and Jordan Miller.

muna.abdi@legalease.co.uk

Legal Business

Deal View: A&O’s corporate practice has matured nicely but will O’Melveny fallout take its toll?

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Deal View Allen & Overy

Habitually viewed as the poor relation to its unparalleled banking and finance practice, Allen & Overy (A&O)’s corporate team has stepped up in recent years, the culmination of a decades-spanning campaign to forge a top-tier name in M&A.

Richard Browne, co-head of corporate, stresses the level of growth the 161-partner practice has seen, having increased its fee income by 50% in the last decade. ‘In the dark ages when I started, A&O’s corporate practice was not the best. It was a banking and finance firm. That is no longer the case at all. Corporate has become the same size as the banking business. It is incredibly profitable, with top-tier work and clients.’

Legal Business

A&O’s transatlantic woes continue as New York leveraged finance pair quit for Shearman

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Strategic recruitment Allen & OveryShearman & Sterling

Allen & Overy (A&O) has suffered a fresh blow to its transatlantic aspirations following its failed US merger as two key leveraged finance partners depart for Shearman & Sterling.

Alan Rockwell and Michael Chernick are leaving A&O’s New York office for the US firm just a month after A&O lost well-respected London corporate partners Simon Toms and George Knighton to Skadden, Arps, Slate, Meagher & Flom. That blow came only 10 days after the Magic Circle firm’s long-winded merger talks with O’Melveny & Meyers came to nothing and was widely viewed as collateral damage from the failed tie-up.

A&O broke its lockstep to hire the two partners, with Rockwell joining as part of a four-partner team from White & Case in 2016 and Chernick as part of a three-partner team from Paul Hastings the following year.

Shearman senior partner David Beveridge said: ‘The opportunity to add Alan and Michael to our team is significant for the firm as we look to further cement our position as one of the leading transatlantic leveraged finance firms.’

The New York exits come only a month after A&O’s managing partner Andrew Ballheimer vowed ‘more focus and speed of execution’ in the Magic Circle firm’s US recruitment push as new partners, including US lawyers, had recently been voted in by the partnership.

A spokesperson for A&O said: ‘We thank Alan Rockwell and Michael Chernick for their contributions during their time at A&O and wish them all the best for the future. Our New York leveraged finance practice continues to be a robust and integral part of A&O’s global offering.’

For Shearman, the hires follow high-yield star Ward McKimm famously in July 2018 returning to the firm after a three-year stint at Freshfields Bruckhaus Deringer. The firm had taken the symbolic step to break its much-cherished lockstep to lure him from US rival Kirkland & Ellis in 2015, a move which exercised changes to the partnership ushered in the previous year to attract top US talent.

nathalie.tidman@legalease.co.uk

Legal Business

A&O adds NY capability in London as Freshfields lures Linklaters Paris partner

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Strategic recruitment Allen & OveryFreshfields Bruckhaus Deringer

A double Magic Circle hire today (17 September) has seen Allen & Overy (A&O) hiring financial services regulation counsel Knox McIlwain as a partner from Cleary Gottlieb Steen & Hamilton as Freshfields Bruckhaus Deringer bolstered its own regulatory offering, hiring Linklaters’ Paris FinReg partner Marc Perrone.

The hire of McIlwain reunites him with Bob Penn, A&O’s former financial regulatory services head, who re-joined the firm in June 2018 having defected for a two-year stint at Cleary. It also makes good on A&O’s plan to accelerate investment in its US-law capability following protracted and ultimately fruitless merger talks with Los Angeles firm O’Melveny & Myers. Senior partner, Wim Dejonghe, said that the hire demonstrates the firm’s commitment to growing its top-tier global regulatory practice and building on its US capabilities.

Located in London, McIlwain will also form an integral part of the US regulatory team and will focus on financial institution resilience and insolvency as well as working with the global derivatives practice.  Damian Carolan, head of A&O’s London financial services regulatory practice, commented: ‘A huge challenge our clients face is managing the regulatory change agenda across the US, EU and Asia-Pacific. There has been a deluge of reform covering all aspects of financial services, which remains at varying stages of implementation or revision. Knox’s arrival will bolster our transatlantic regulatory capability and improve our coverage of financial institutions’ global regulatory needs.’

Meanwhile Freshfields is in growth mode in Paris, with the hire of Perrone following swiftly after that of arbitration partner Christophe Seraglini from French boutique Betto Seraglini. Perrone, who has been at Linklaters for 14 years and made partner in 2012, advises financial institutions, investment funds and financial services and market infrastructure operators.

Seraglini acts for international companies on disputes in the technology, energy and construction sectors.

Hervé Pisani, managing partner of Freshfields’ Paris office, said: The arrival of Marc and Christophe is a testament to the appeal of the firm and demonstrates our willingness to support our clients on the strategic issues they face, as well as our ambition to consolidate our position in the French and international market with an integrated, global offering in line with the economic and regulatory changes underway.’

nathalie.tidman@legalease.co.uk

 

Legal Business

Dealwatch: Rich pickings for A&O and Linklaters on €120bn tech listing as Addleshaws wins Battersea redevelopment

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Dealwatch Allen & OveryLinklaters

The European teams of Allen & Overy (A&O) and Linklaters are set to bring in a total of more than €4m in legal fees after acting on the largest European listing of the year.

Meanwhile in London, Addleshaw Goddard and Norton Rose Fulbright acted on the £600m financing of the latest phase in the redevelopment of Battersea Power Station.

Last week (11 September) South African internet group Naspers floated its internet group and technology investment business Prosus on Euronext Amsterdam, with a secondary listing on the Johannesburg Stock Exchange, giving the company a market capitalisation of €120bn.

A&O’s Amsterdam partner Tim Stevens led the team advising Prosus and Naspers on Dutch and US law and the firm is expected to receive €3.8m in fees according to the listing prospectus.

Linklaters’ Amsterdam partner Alexander Harmse and London partner Mike Bienenfeld acted for the financial advisers, bringing an estimated €925,000 to their firm. Linklaters’ South African alliance firm Webber Wentzel advised on South African law and is expected to receive €3.3m.

The listing, that sees Naspers retain control of about 73% of Prosus, made the company the third largest listed group in Amsterdam behind British-Dutch giants Royal Dutch Shell and Unilever.

In the City, Addleshaw’s real estate partner Luke Harvey led the team advising Battersea Phase 3 Holding Company on the financing of the third phase of the 42-acre development. NRF worked alongside Addleshaw on the deal.

The financing will be used to help create a new pedestrian high street called Electric Boulevard, and a mixed-use development including shops and homes.

Addleshaw also advised on the previous phases of the £9bn development, which is set to be completed in 2021.

Last year the firm advised as Malaysia’s asset manager Permodalan Nasional Berhad and state pension fund The Employees Provident Fund took a £1.6bn stake in the project. Battersea Power Station Development sold the commercial assets of phase two of the project, including a six-acre site hosting the former coal power station on the south bank of the river.

marco.cillario@legalease.co.uk

Legal Business

The end of A&O’s marathon O’Melveny merger bid reveals the stark choices facing the Magic Circle

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The News Leader Allen & OveryO'Melveny & Myers

This article sits in the news leader slot of our latest issue, but when considering Allen & Overy (A&O) and its epic courtship of O’Melveny & Myers, the defining factor has been the absence of news. Since it emerged last spring that A&O was in merger talks with the Los Angeles-bred firm, there have been bare scraps of information, alongside alternating whispers the deal was/was not on. Finally the resolution came on 2 September, with the pair announcing the end of the talks with the traditional noises about mutual respect.

The reason for the long delay was as much the scale and ambition of the merger as the inevitable complications of bringing 700 partners on side. The looming spectre of a messy ‘no-deal’ Brexit and fresh falls in sterling further strained a delicate situation, probably tipping it over the edge. Not only were the firms aiming for full financial integration upfront – a move never attempted on the scale of a £2.4bn transatlantic union – the aim was to do an immediate merging of governance, leadership and remuneration. Forget vereins and grace periods kicking tricky issues down the road. That all-in approach raised the stakes and logistic issues enormously. Not least it would have involved substantive reform of A&O’s remuneration structure to make it more compatible with a US firm.

Legal Business

Revolving doors: US & City firms target Simmons & Simmons as Ashurst makes hires

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Strategic recruitment Allen & OveryAshurstMishcon de ReyaWatson Farley and Williams

US & City firms saw a steady influx of lateral hires across sectors as Latham & Watkins, Allen & Overy (A&O) and Watson Farley & Williams hired partners from Simmons & Simmons.

US firm Latham hired Simmons’ head of equity capital markets, Chris Horton, as partner in its corporate department. Horton joined Simmons in 2008 and has experience advising on IPOs, secondary offerings and M&A transactions by listed companies, investment banks, and hedge funds.

Co-chair of Lathams’ corporate department Nick Cline commented: ‘Chris has a terrific blend of transactional and regulatory experience that will be of great value to our clients in the UK and globally.’

Global vice-chair of the corporate department David Walker added: ‘Chris’s experience complements and enhances the existing strength of our ECM and corporate practices in London and globally. His arrival will further advance our goal to become the market’s leading firm for complex, cross-border transactions.’

A&O similarly hired from Simmons, bringing in employment partner Vicky Wickremeratne to its London office. Wickremeratne became partner in 2015 and was previously the managing director and senior counsel of Goldman Sachs Asia, based in Hong Kong.

A&O head of London employment Sarah Henchoz told Legal Business: ‘Vicky spent a lot of time in-house before she joined Simmons & Simmons. She’s really good at looking at what the wider objective is rather than looking through a narrow lense and it’s a very unique perspective in many ways.’

Meanwhile, Watson Farley hired capital markets partner Simon Ovenden in London. Ovenden also joins from Simmons, where he was head of the debt capital market group. Ovenden has experience in debt and equity capital markets transactions and advises both underwriters and issuers across capital markets products.

Ovenden told Legal Business: ‘It is a challenging market with intense competition. You have to show clients something that really distinguishes you from the rest of the pack. You can’t be an average player in capital markets.’

‘It wasn’t a difficult sell for me to join. I like the people and I like the vision and the fact that they see capital markets as being part of what they want to offer,’ Ovenden added.

WFW managing partner Chris Lowe told Legal Business: ‘It’s not an easy market to attract high quality talent and I think it’s a testament to the firm and to Simon to have the vision that the platform will be able to deliver on what he does.

Elsewhere, Ashurst hired partner Ruby Hamid to its dispute resolution team in London. Hamid joins from Freshfields Bruckhaus Deringer, where she was counsel, and specialises in white-collar crime, financial regulation, global investigations and risk and compliance.

Head of dispute resolution in EMEA Tom Connor told Legal Business: ‘She brings a white collar crime practice and a deep expertise in corporate and financial crime – bribery and corruption work in particular will be a strong focus for Ruby. Ruby’s hire reflects our continuing focus on international investigations, alongside complex commercial litigation and international arbitration work.’

Mishcon de Reya, meanwhile, appointed Ben Brandon to its white collar crime and investigations team. He joins from barrister’s chambers 3 Raymond Buildings, and specialises in extradition and fraud.

Further afield, Ashurst made another hire from Freshfields in the form of Andrew Craig to its corporate practice in Melbourne, Australia. Craig specialises in digital economy and technology and has experience in advising corporate, private equity firms and financial institutions on technology transactions.

muna.abdi@legalease.co.uk

Legal Business

Bad timing – A&O loses M&A duo to Skadden following failed US merger talks

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Strategic recruitment Allen & OverySkadden, Arps, Slate, Meagher & Flom

Allen & Overy has lost two well-respected London corporate partners to Skadden, Arps, Slate, Meagher & Flom just days after the magic circle firm confirmed the collapse of its merger talks with US firm O’Melveny & Myers.

Simon Toms and George Knighton have quit A&O, inflicting a considerable hit on its M&A capabilities ten days after it announced it was calling it a day on its attempts to tie up with O’Melveny after more than a year of talks.

Toms counts among his clients 21st Century Fox, which he advised in its bid to acquire European satellite broadcaster Sky, HP and Cerberus Capital Management, while Knighton recently acted on the £1.7bn sale of Virgin Money to CYBG.

The departures to a US outfit carry a particularly high symbolic value at a time when A&O’s leadership has promised to fast-track investment in its US practice as the pressure to strengthen its capabilities Stateside persist.

Meanwhile, this is the biggest coup for Skadden’s European corporate practice since the hire of former Linklaters private equity partner Richard Youle from White & Case in 2017.

A&O and Skadden declined to comment.

marco.cillario@legalease.co.uk

Legal Business

A&O’s Mansell to appear before SDT in December as #MeToo fallout promises busy winter

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Legal regulation Allen & OveryBaker McKenzieFreshfields Bruckhaus Deringer

Allen & Overy (A&O) employment partner Mark Mansell is to face his first Solicitor Disciplinary Tribunal (SDT) hearing on Wednesday 5 December following an investigation into his role drafting a controversial non-disclosure agreement (NDA) for disgraced film producer Harvey Weinstein.

A spokesperson for the SDT confirmed to Legal Business yesterday (9 September) the new date for Mansell’s hearing, which had originally been scheduled for 3 June.

It comes after the Solicitors Regulation Authority (SRA) referred the employment veteran for prosecution on 3 April over the NDA drafted in 1998 when Zelda Perkins (pictured), who worked at Weinstein’s company Miramax, alleged the producer had sexually harassed a colleague.

Mansell instructed A&O partner and general counsel Andrew Clark, while the SRA drafted in Capsticks partner Daniel Purcell. A spokesperson for A&O said the firm was ‘unable to comment on SDT proceedings’.

The SRA announced it was investigating the City firm shortly after Mansell was grilled by a Women and Equalities select committee as part of a probe into the ethics of NDAs in March 2018.

The new date for Mansell’s case management hearing means he will face the SDT three days after Baker McKenzie and its former London head Gary Senior, whose substantive hearings will start on Monday 2 December.

Bakers and Senior had originally been due for a case management hearing on 12 August after the SRA referred them for prosecution over allegations that the latter ‘sought to initiate intimate activity’ with a junior member of staff in 2012 and improperly sought to influence the initial investigation launched into the episode seven years ago.

The case management hearing was later vacated since all parties ‘agreed directions and process’, according to a Bakers spokesperson.

The hearings, which also see Bakers’ former litigation partner Tom Cassels and former HR director Martin Blackburn face prosecution for their roles in leading the initial investigation into Senior’s misconduct, are estimated to last for 15 days.

Bakers, Cassels and Blackburn are accused of allowing Senior to ‘improperly influence’ the investigation launched into the episode and failing to report the matter to the SRA until February last year despite being aware of the facts.

The struggles of BigLaw with sexual misconduct in the wake of the #MeToo movement will also take centre stage at the end of this month, as Freshfields Bruckhaus Deringer partner Ryan Beckwith faces his next SDT hearing on 30 September.

Beckwith is alleged to have attempted to engage in sexual activity with an intoxicated junior member of staff in an abuse of seniority at an event organised by the firm.

The allegations, published following a case management hearing in the spring, focus on two instances: that Beckwith kissed or attempted to kiss the junior member of staff (the SDT has imposed reporting restrictions on their identity), over whom he was in a position of seniority, and that he initiated and/or engaged in sexual activity with the same person.

The SRA referred the case to the SDT in late June 2018.

marco.cillario@legalease.co.uk

For in-depth coverage of the Weinstein NDA and the controversy over the profession’s role in concealing harassment, see last year’s piece ‘Draining the swamp’ (£)

Legal Business

‘Focus and speed’: A&O to fast-track US investment after foiled O’Melveny merger with new hires imminent

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Leadership Allen & Overy

Andrew Ballheimer, Allen & Overy’s (A&O’s) global managing partner, has promised heavy investment in its US practice in the wake of the City giant’s abandoned tie-up with O’Melveny & Myers, saying new US hires are on the verge of being announced.

Speaking to Legal Business on Friday (6 September), Ballheimer said the market could expect ‘more focus and speed of execution’ in the Magic Circle firm’s US recruitment push as new partners, including US lawyers, have recently been voted in by the partnership.

The news came in just days after A&O and O’Melveny admitted that protracted talks for a transatlantic combination had been abandoned, citing the impact of Brexit-induced currency turmoil.

The proposed deal had been sketched out in detail before falling at the final hurdle, with the merged firm’s name, compensation structure and governance all hammered out before it fell through. In spite of disappointment that the merger, a chance to create an international player with more than 3,000 lawyers and combined revenues of around £2.4bn, Ballheimer pledges that A&O would swiftly adjust to pushing through its US strategy.

‘We now have a better understanding of the US market having been through the potential merger process. You will see much more investment from us in the States than historically,’ said Ballheimer, insisting that, although too small compared with the potential opportunity, A&O’s current US offering remains high-quality.

Senior partner Wim Dejonghe and Ballheimer have put building out a credible US business at the top of their agenda since 2016 when they took up their management roles. Ballheimer confirmed that he and Dejonghe would continue to the end of their terms next year. ‘Wim and I are committed to the firm and plan to continue to the end of our terms. We have received a large number of generous messages of support from the partnership and leaders of other law firms.’

A&O is expected to keep a weather eye for another US merger but is realistically expected to shift focus towards building the practice organically. Said Ballheimer: ‘There are two key criteria we apply when looking at individual or team hires or for a potential merger – top-tier quality and a good cultural fit. Our culture is special and we are proud of it. We are building out globally in our own image. Any opportunities that we look at must meet those two key criteria. O’Melveny would have been a good fit – it is a top-tier practice and the culture is similar. Our mutual priorities are the client first, the team and the individual partner in that order.’

A&O started looking at detailed merger terms 18 months ago with the protracted timeframe attributed to the desire to create a fully-integrated law firm from launch rather than a verein structure where there would have been years of discussion on how to fully combine.

Ballheimer struck a bullish note on A&O’s positioning in the brutally-competitive global market: ‘We are in the same place that we were before the merger talks started – a leading member of the global elite – and a truly global law firm. Our position is strong. We are disappointed that we missed the opportunity to pull away from the other leading firms but our goal and ambition are unchanged.’

nathalie.tidman@legalease.co.uk