Legal Business

Barclays £5.8bn rights issue sees Clifford Chance, Sullivan & Cromwell and Freshfields in the lead

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Corporate BarclaysClifford ChanceFreshfields Bruckhaus DeringerSullivan & Cromwell
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Barclays has begun the biggest capital raising by a UK bank since 2009 under which Clifford Chance (CC), Sullivan & Cromwell and Freshfields Bruckhaus Deringer will lead on its initial £5.8bn rights issue, as the global financial institution moves to plug a £12.8bn funding gap.

A team from 3017-lawyer Magic Circle firm CC led by London corporate partner Patrick Sarch and capital markets partner Simon Thomas is advising on English law for Barclays, while a Sullivan & Cromwell team in London is advising the bank on US law, led by client relationship partners George White and John O’Connor.

Deputy general counsel Michael Shaw is leading the Barclays team.

At 2332-lawyer Magic Circle rival Freshfields, US capital markets partner Sarah Murphy heads the team providing English and US legal advice to the sponsor, joint bookrunners and underwriters including Credit Suisse, BofA Merrill Lynch, Deutsche Bank, ABN Amro, J.P Morgan Securities, BNP Paribas and ING Bank.

The prospectus was published on Tuesday (16 September) and forms part of the capital raising first announced in July, after the Prudential Regulation Authority (PRA) revealed the results of its review on the capital adequacy of major UK banks and building societies and a leverage ratio target of 3%. Barclays was found to have a PRA leverage ratio of 2.2%, leaving it with a shortfall of £12.8bn.

Shaw told Legal Business: ‘The most eye-catching piece of the leverage plan is, of course, the rights issue – the biggest equity raising in the UK since the crisis. Normally when a company carries out a rights issue or a similar capital raising, it would expect to announce and publish the prospectus simultaneously. The preparation of a prospectus takes a number of weeks of intense effort to ensure, once published, it contains the information needed by shareholders and investors for their investment decision.

‘However, Barclays needed to announce the leverage plan as soon as it was agreed with the PRA on 30 July, and there wasn’t time before then to prepare a prospectus. Unusually, the underwriting had to be done based just on the announcement and using a small group of initial underwriters. Once the rights issue was public, it was possible to expand the underwriting syndicate and then prepare the necessary prospectus. It really has been a great team effort to achieve everything in the time available.’

According to the prospectus, the bank will contest a £50m fine from the Financial Conduct Authority (FCA), which said the bank had ‘acted recklessly’ in breaching rules over disclosing the value of a deal with Qatari Holdings during a cash call in 2008. The FCA issued Barclays a warning notice on Friday 13 September.

francesca.fanshawe@legalease.co.uk

Legal Business

In-house: Clifford Chance and Slaughter and May lawyers take senior roles at CMA, Shell and PwC

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Magic circle lawyers have this week filled a number of senior regulatory and in-house positions, with a Slaughter and May partner unveiled as general counsel of the new Competition and Markets Authority (CMA) and a former lawyer named Shell‘s UK legal head; while Clifford Chance‘s head of employee benefits has joined PwC as a director in its employee rewards team.

The CMA – the new body which brings together the Competition Commission and and some consumer functions of the Office of Fair Trading- yesterday (12 September) announced the appointment of former Slaughter and May partner Sarah Cardell as GC as it completes its leadership team in time for its official launch on 1 October.Cardell most recently occupied the role of partner for legal markets at energy watchdog Ofgem, having left her position as competition partner at Slaughters in March 2011. She will join new CMA executive director, Sonya Branch, who moves across from her role as the executive director at the OFT, where she has been since 2007 having left role as corporate partner at Clifford Chance.

Business secretary Vince Cable said of the appointments: ‘The appointment of this executive team is another milestone in the creation of the new CMA. [They] complete our senior executive team and are a major step in creating the new organisation.’

Shell meanwhile, has appointed another former Slaughters lawyer as its UK legal chief, as Michael Coates takes over from current head Bob Henderson. Henderson is relocating to the US next month to take up the post of associate GC of integrated gas and new business development as part of a reorganisation of the energy giant’s senior legal team.

Coates, who will assume the new role on 1 October, most recently worked as secretary to the company’s executive committee and as executive assistant to Shell chief executive Peter Voser, a role he took in 2011, having joined Shell from Slaughters in 2004.

The restructuring was led by group legal director Peter Rees QC in a bid to expose senior lawyers to different areas within the business.

The news comes shortly after Shell concluded a review of its external legal advisers in May, ‘prequalifying’ more than 150 firms to its global network, a number which will then reduce as Shell’s lawyers form closer relationships with certain firms.

Elsewhere, PwC continues to expand its 140-strong reward team with the appointment of Clifford Chance’s former head of employee benefits Daniel Hepburn. Hepburn has advised on employee rewards for over 20 years and has worked with many leading UK and multinational companies on their employee incentive arrangements. In his new role, he will advise on the design and implementation of a wide range of employee and executive incentives, including share, cash, bonus and other arrangements.

Carol Dempsey, a partner in PwC’s reward team, said: ‘Daniel joins at a crucial time as many companies are re-evaluating the way they reward their employees of all levels, while dealing with ever increasing regulation on remuneration structures and practices.’

francesca.fanshawe@legalease.co.uk

Legal Business

Glaxo reviews advisers as A&O & CC take lead roles on £1.35bn Ribena and Lucozade sale

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As GlaxoSmithKline (GSK) reviews its preferred law firms in a decision that could see the healthcare giant create a formal panel, Allen & Overy (A&O) has won the lead role to advise on its £1.35bn sale of drinks brands Lucozade and Ribena to the Japanese consumer goods company Suntory Beverage and Food (Suntory).

A&O won the deal after a series of GSK’s preferred firms pitched for the role. The corporate team at A&O will include partners Edward Barnett and Andrew Ballheimer, with assistance from senior associate Nigel Parker and associate Matthew Appleton, alongside anti-trust partner Alasdair Balfour and employment partner Mark Mansell.

Clifford Chance is advising Suntory, led by corporate finance partner Joel Ziff, who will work alongside fellow corporate partner Robert Crothers and lead associate Katherine Moir, as well as IT partner André Duminy.

Slaughter and May is widely regarded as GSK’s go-to corporate firm, having previously advised on a string of major deals including last year’s £650m investment to increase its stake in its India and Nigeria subsidiaries; its acquisition of Maxinutrition from Darwin Private Equity in 2010; its agreement with Pfizer to create ViiV in 2009; and a €515m acquisition of the marketed product portfolio of UCB.

However, GSK also operates a list of preferred firms for its legal advice and is discussing whether to set up a formal panel. According to a GSK spokesperson the details will be confirmed at the end of this year.

A&O corporate partner Edward Barnett says: ‘We are proud and delighted to have worked with GSK on this strategic transition and contributed to achieving GSK’s stated aims of diversifying these iconic brands, provided appropriate value was realised for shareholders.’

The sale comes after GSK decided to increase its focus around a core portfolio of healthcare brands, with a particular emphasis on emerging markets, following a strategic review of Lucozade and Ribena in February this year. Annual sales of the two brands were approximately £0.5bn in 2012.

Under the agreement, Suntory will acquire global rights to the brands with the exception of Nigeria, where GSK Nigeria will continue to manufacture and distribute Lucozade and Ribena under licence from Suntory. The transaction is expected to be completed by the end of the year, subject to regulatory approvals.

jaishree.kalia@legalease.co.uk

Legal Business

Clifford Chance snares BLP’s contentious tax head

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Senior exits from Berwin Leighton Paisner (BLP) continue apace as Clifford Chance has confirmed the hire of Liesl Fichardt, the head of BLP’s contentious tax practice.

Announced today (4 September), the loss is a blow to the tax team at the 782-lawyer BLP as heavyweight Fichardt, who joined the firm in 2008, is a veteran of the legal market. Acknowledged in the Legal 500 as a ‘masterful team head,’ she also practised as a tax barrister for 13 years before joining Dorsey & Whitney in 2006.

The news comes just two weeks after the announcement that corporate finance partner and global head of private equity Raymond McKeeve departed to join US firm Jones Day’s London office, while longstanding head of the commercial and technology group, Adam Rose, is to join Mishcon de Reya after 23 years at the firm.

Financially, the firm has reported a drop in revenues of 5% down to £233m, the worst financial performance of the top UK 25 firms. However, there is still no word on its profits, although profit per equity partner understood to be down by at least 35% to £430,000.

On Fichardt’s appointment, David Harkness, global head of Clifford Chance’s tax, pensions and employment practice, said: ‘Liesl’s extensive contentious tax and trial experience will be a valuable addition to our existing strong tax team both in London and globally. The current tax environment is becoming ever more complex for large organisations as they face greater amounts of legislation, including the General Anti Avoidance Rule, an enhanced disclosure regime and shifting public and government expectations.’

‘As a result we are seeing increasing demand from clients for advice and help on resolving their tax disputes and we expect this is an area that will continue to grow for the Firm’s market leading practice.’

Fichardt added: ‘CC’s leading reputation in tax and global reach will enable me to provide quality advice to clients in dealing with and resolving their tax disputes in the UK and internationally.’

‘Their offering combines unrivalled expertise in taxation and regulatory matters, extensive experience in dealing with tax authorities in resolving disputes and litigating in the courts and the ability to advise clients in a commercial and sensible manner on how best to deal with risk – within one global team.’

Sarah.downey@legalease.co.uk

Legal Business

Private equity: CVC gifts Clifford Chance and Cleary with two major European mandates

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Corporate Cleary Gottlieb Steen & HamiltonClifford Chance
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Followers of the tussle between UK and US private equity practices for European mandates were last month rewarded with an instruction to both camps by leading buyout house CVC Capital Partners in its acquisitions of Domestic & General (D&G) and Campbell Soup.

Advent International agreed to sell extended warranty provider D&G to CVC in a deal thought to be worth about $1.2bn, according to The New York Times, although this sum has not been officially disclosed.

Clifford Chance (CC) advised CVC, with a team led by Kem Ihenacho, co-head of the firm’s Africa practice and one of its private equity stars. He was assisted by M&A partner Brendan Moylan and insurance partner Hilary Evenett.

Legal Business

Private equity: CVC gifts Clifford Chance and Cleary Gottlieb with two major European mandates

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Corporate Cleary Gottlieb Steen & HamiltonClifford ChanceFreshfields Bruckhaus Deringer
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Followers of the tussle between UK and US private equity practices for European mandates were this week rewarded with an instruction to both camps by leading buyout house CVC in its acquisitions of Domestic & General and Campbell Soup.

Advent International agreed earlier this week to sell extended warranty company Domestic & General (D&G) to CVC in a deal thought to be worth about $1.2bn, according to The New York Times, although this sum has not been officially disclosed.

Clifford Chance (CC) advised CVC, with a team led by Kem Ihenacho, co-head of the firm’s Africa practice and one of its private equity stars. He was assisted by M&A partner Brendan Moylan and insurance partner Hilary Evenett.

Freshfields Bruckhaus Deringer advised Advent on the sale, with a team led by corporate partner Adrian Maguire. Maguire told Legal Business: ‘Following advising Advent on its acquisition of D&G in 2007 and remaining close to the company throughout Advent’s ownership, we were happy to assist on the disposal of the asset.’ Advent bought UK based-D&G for $1.1bn.

Macfarlanes advised D&G’s management with a senior team led by corporate head Charles Meek, who was supported by tax partner Damien Crossley. The firm previously advised the D&G management team in connection with the company’s sale to CVC in 2007.

Freshfields typically competes with CC for CVC mandates and most recently acted for the private equity house on its sale of a $1.3bn stake in Indonesian retailer Matahari Department Store earlier this year.

However, this week has also seen Cleary Gottlieb Steen & Hamilton’s strong Brussels offering get its foot in the door, advising opposite Allen & Overy (A&O) on CVC’s proposal to buy the European brands of Campbell Soup (excluding its UK arm) in a deal worth around $400m.

Cleary is fielding a team that includes Brussels M&A partners Laurent Legein and Jacques Reding, Paris M&A partner Jean-Marie Ambrosi and London partner David Billington who advised on finance matters.

A&O is advising the iconic company famously portrayed by Andy Warhol in the 1960s out of Belgium, where the European base of Campbell Soup is located. The team is being led by corporate head Pierre-Olivier Mahieu, alongside employment head Pieter De Koster, tax head Patrick Smet and environmental law head Gauthier van Thuyne.

According to a release by the private equity house, CVC has raised fully committed senior debt financing, with Linklaters advising Rabobank, ING and BNP Paribas Fortis, the joint underwriters and bookwriters on the deal.

david.stevenson@legalease.co.uk

Legal Business

Resurgence in debt and equity capital markets sees Allen & Overy claim top spot for issuer and manager roles

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Finance Allen & OveryClifford ChanceSimpson Thacher & Bartlett
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Allen & Overy (A&O) has topped Thomson Reuters’ table of legal advisers on global debt and equity capital markets work for the first half of 2013, landing roles on 456 deals.

The Magic Circle firm came out in first place for both manager and issuer roles, advising on 350 and 106 deals respectively.

Clifford Chance, which held the top spot this time last year for issuer roles, has fallen into second position followed by US rivals Simpson Thacher & Bartlett in third, Skadden, Arps, Slate, Meagher & Flom in fourth and Sidley Austin in fifth. Linklaters came in joint eighth position, down from fifth place at the half year in 2012, however for manager roles it claimed second place, advising on 234 deals.

Philip Smith, a capital markets partner at A&O told Legal Business: ‘It’s been an incredibly busy period since October last year until about three weeks ago. A combination of huge volumes in the emerging market space combined with a resurgent European high yield market have driven volumes. The uptick in equity markets has also driven increased activity in the equity-linked market.’

In high yield the firm has recently expanded its team by making Jeanette Cruz up to partner and high profile debt capital markets deals have included advising the Co-operative Group Limited and The Co-operative Bank on a plan to fill a £1.5bn capital deficit led by Alistair Asher, who joined the Co-op as General Counsel at the start of the month.

Boyan Wells, former head of A&O’s capital markets group and now a member of the global board, told Legal Business: ‘The past year has been one of a high level of issuance and we are delighted to have played a large part in that.’

The combined debt and equity capital markets activity was valued at $3.4tn in the first six months of the year, which is 5.9% higher than the first half of 2012. As for continued growth in the area, Wells remains cautious, commenting: ‘Market reports suggest that market level will continue to be high but only time will tell.’

 

david.stevenson@legalease.co.uk

Legal Business

Clifford Chance underperforms Magic Circle with 9% drop in PEP

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Financial results 2013 Clifford ChanceFreshfields Bruckhaus Deringer
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Clifford Chance (CC) has underperformed its Magic Circle rivals in its 2012/13 results as the firm today announced a 2.5% decline in revenue to £1,271m and a 9% drop in profit per equity partner (PEP) to £1m.

The firm, which has expanded the number of equity partners year-on-year from 379 in 2010-11 to 411 in the past financial year, pointed to factors including the predicted Eurozone crisis together with a slowdown in the Asia-Pacific market and a change of political leadership in China as having a negative impact on its bottom line.

Managing partner David Childs said: ‘We are living through an extended period of choppy conditions in global markets. However, our continued investment across geographies and practices have given us a broad-based business with the resilience to weather this volatility, as shown by our results over recent years as well as the major mandates and awards that we have been proud to win.’

Last year CC posted a 7% increase in revenue to $2,048m and 12% increase in PEP to $1.66m, as reflected in Legal Business Global 100 for 2011-12.

The past year has seen the 3,017-lawyer global firm open an office in Seoul as well as winning approval to enter into the first ever mixed partnership arrangement with a Saudi Arabian firm, Al-Jadaan & Partners Law Firm, in March this year.

CC also entered into an alliance in Singapore with litigation boutique Cavenagh law, giving it access to the lucrative Singapore litigation market. ‘We are the first full service firm in Singapore offering litigation advice,’ said Childs.

Deals highlighted by the firm include acting for the sponsors and financial advisers on Glencore International’s acquisition of Xstrata and Anheuser-Busch InBev on the bank financing of its $20.1bn acquisition of Mexican brewer Grupo Modelo.

Childs singled out litigation and banking and finance as having a good year, commenting: ‘Our global litigation and dispute resolution practice put in another excellent performance, with roles on some of the most high-profile and complex matters around.’

But despite Clifford Chance remaining as the leading Magic Circle firm in this year’s Legal Business Global 100 in revenue terms, in fifth place behind DLA Piper, Baker & McKenzie, Laham & Watkins, and Skadden, Arps, Slate, Meagher & Flom, the firm underperformed Freshfields Bruckhaus Deringer in seventh position. Freshfields last week reported a 7.2% increase in turnover from £1.139bn to £1.22bn and PEP rose by 7.6% to £1.398m.

Linklaters, in eighth place in the Global 100 2012-13 saw its revenue drop by 1% to £1,195bn but its PEP was up by 6% to £1.260m. Allen & Overy, meanwhile, in ninth place, reported a 0.6% increase in revenue to £1.19bn and flat PEP of £1.1m for 2012/13.

david.stevenson@legalease.co.uk

Click here to see the Global 100 results

Legal Business

Back at the gate: US invaders raise fresh questions over private equity status of CC and Linklaters

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David Stevenson surveys a fast-changing buyout landscape to find US ‘barbarians’ once again pressing in on City leaders

Unfortunately for top City firms looking to defend their position in private equity, it takes more than a five-year freeze in credit markets and a sustained downturn in leveraged buyouts to stop foreign rivals trying to move in on their patch.

Such a dynamic has once again thrown scrutiny on Linklaters’ now decade-long effort to carve a credible position in the private equity market and the position of Clifford Chance (CC), by contrast traditionally established as the market leader in Europe’s buyout scene.

In the former case, the debate continues among peers (and some internally at Silk Street) over the extent to which Linklaters has forged a practice worthy of its much-vaunted general corporate team. In CC’s case, a purple patch in public M&A last year arguably did not extend to private equity, while the firm has had to contend with the resignation in April of global head of private equity David Walker for Latham & Watkins.

Legal Business

CC to boost London corporate and regulatory insurance capability with hire of NRF’s Ashley Prebble

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Clifford Chance (CC) has hired Norton Rose Fulbright (NRF) corporate insurance partner Ashley Prebble as the Magic Circle firm aims to boost its Lloyds and London market and general insurance capability.

Prebble, who will work closely with the firm’s private equity and regulatory teams, specialises in corporate and regulatory insurance work including initial public offerings (IPOs), mergers and acquisitions, Part VII transfers, distribution agreements and regulatory matters.

While at NRF, Prebble advised on a number of high profile insurance transactions including the Part VII transfer of Royal Bank of Scotland’s Churchill, Direct Line and NIG businesses into UK Insurance last year, said at the time to be the largest general insurance portfolio transfer ever completed in the UK, with the four insurance business together worth in excess of 20 million policies.

Other headline deals he has advised on include the £135m sale of HSBC Insurance Brokers to Marsh, Admiral Group’s £711 million IPO and Brit Insurance Holdings’ $300m sale of Brit Insurance Limited to Riverstone Holdings.

Katherine Coates, head of the corporate insurance practice at CC, said: ‘Ashley joins us at a key time for the insurance industry, which faces unprecedented challenges and uncertainty due to market and regulatory pressures.

‘Ashley’s particular experience of the London market and general insurance operations will be a valuable addition to our current team, which is uniquely placed to support our clients across the sector on a wide range key strategic projects and transactions in both mature and growth markets.’

CC’s global insurance industry sector group comprises over 180 lawyers from its corporate, banking & finance, capital markets, M&A, regulatory, dispute resolution, antitrust, tax, real estate, pensions and employment teams.

Prebble added: ‘Joining Clifford Chance is the perfect opportunity to develop my practice in the London market and internationally, working as part of a leading global insurance sector team. I look forward to working closely with the firm’s pre-eminent private equity and regulatory teams, as financial investors are playing an increasing important role in the sector and sweeping changes in regulation and regulator approach pose new challenges for clients.’

caroline.hill@legalease.co.uk