Legal Business

‘A landmark for the industry’: BLP and Nabarro advise CBRE on £1.4bn flagship property fund merger

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Property CMS UK
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Berwin Leighton Paisner (BLP) and Nabarro acted opposite Eversheds and Mayer Brown on CBRE Global Investors’ merger of its UK Property Fund with the Electricity Supply Pension Scheme (ESPS), creating a £1.4bn property fund called the CBRE UK Property PAIF.

CBRE has been the investment manager of ESPS’s UK property portfolio since 2006, and said the merger was part of the increasing trend of investors looking for ‘scale and simplicity’.

BLP and Nabarro advised CBRE, while Eversheds and Mayer Brown acted for ESPS. BLP’s team was led by investment management partner Kate Binedell, alongside corporate tax partner Paul Shaw and investment management partner Matthew Baker advising on financial services regulation. Nabarro’s team was led by real estate partners James Madden and Chris Chambers.

On the ESPS side, Mayer Brown’s team was led by head of London pensions practice Philippa James and corporate & securities partner Tim Nosworthy, while Eversheds’ side was led by head of London real estate Bruce Dear and real estate partner Clare Whitaker.

CBRE’s UK general counsel Manu Chopra said: ‘This merger establishes the PAIF as one of the major players in the UK market. The cross-practice team at BLP worked tirelessly to achieve this outcome and their creative and commercial approach was instrumental in helping us get this important deal over the line.’

Binedell added: ‘This is a strategically important fund to CBRE Global Investors and a significant landmark for the industry. This simplified and flexible fund structure will allow CBRE Global Investors to grow its investor base and reap long term benefits.’

Recent deals BLP has acted on for CBRE include its acquisition of the Glacis-Galerie shopping centre in Neu-Ulm, Germany, in October 2015 and its purchase of Rahlstedt Center in Hamburg, Germany earlier this year.

Nabarro has also advised CBRE in the past, acting as it signed a 15-year lease, when the property company moved to the West End in 2011.

georgiana.tudor@legalease.co.uk

Legal Business

‘Under one roof’: Nabarro and Olswang confirm move to CMS’ Cannon Place

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Legal mergers CMS UK
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Nabarro and Olswang have signed up to move into CMS Cameron McKenna‘s offices at Cannon Place, taking on two additional floors in the building.

Camerons currently occupies the 1st, 2nd and 3rd floors of the building in the City, with the lease agreement meaning the firms will take up additional levels on the 6th and 7th floors.

The proposals for the move-in were first reported last month shortly after the three firms voted to merge in early October. At the time, Olswang chief executive Paul Stevens said the three firms were still working out the ‘day-to-day mechanics‘ of the union in relation to property arrangements.

Camerons moved into Cannon Place in June 2015, cutting its total floor space in London from 190,000 sq ft to 140,000 sq ft. The deal for Cannon Place allowed Camerons to benefit from a lucrative property agreement which won them a six-year rent-free deal on the office space.

Olswang will move out of its offices at 90 High Holborn, while Nabarro will move from its offices at 125 London Wall, new offices the firm only occupied in 2014.

The merger between the three firms was confirmed on 11 October when the three partnerships voted to combine, taking on the CMS branding. The firm will have combined revenues of up to £450m when the combination goes through in May 2017, as well as around £1bn in revenue in the combined CMS network of European firms.

Nabarro managing partner Andrew Inkester said: ‘This is an important step in delivering a successful merger. Our people in London will be under one roof as one team in May. The technology and collaborative work space at Cannon Place will help the new firm make the most of its combined talent.’

matthew.field@legalease.co.uk

 

Legal Business

Nabarro boosts Middle East fee income as office prepares for Camerons merger

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Middle East and Africa CMS UK
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Nabarro has increased its Middle East fee income to around AED 7m (£1.65m) for 2015/16 in the firm’s loss-making Dubai office.

The firm launched the office in early 2014 with a practice focusing on construction and engineering under managing partner Terry Fleet.

After two years in charge, Fleet is set to return to fee earning while Sheffield-based construction and infrastructure partner Mark Rocca will take over the office.

The firm said Dubai had increased its turnover by more than 200% in a year. The office is losing money, according to the firm’s Middle East LLP accounts, with operating losses of around AED 6.1m, or around £1.34m.

Nabarro had increased its total turnover by around 3.5% in 2015/16, up to £130.4m.

The outpost has grown to nine fee earners, with four partners working out of Dubai, with the firm having recently added corporate partner Mohammed Majid to the office in March.

Nabarro is currently in talks to combine with CMS Cameron McKenna and Olswang early next year as part of a triple merger. The merged firm has an office overlap in the Middle East, where Camerons also has a Dubai office as well as further Middle East offices in Oman as well as an office in Iran that was launched at the start of this year.

Nabarro senior partner Ciaran Carvalho (pictured) said: ‘We have prioritised winning business and growing the team in this early phase and are building a solid client base across the region.’

CMS’s Middle East offices are under the Camerons LLP as part of its European network. The Dubai office is led by corporate partner John O’Connor, while the firm’s head of oil and gas Matthew Culver set up the office in 2012.

Carvalho added: ‘Mark and the team look forward to working with colleagues in the Dubai office of CMS as the firms move towards merger next year.’

matthew.field@legalease.co.uk

Legal Business

Nabarro slashes pension deficit ahead of three-way merger, LLPs reveal

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Legal mergers CMS UK
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Nabarro has more than halved its pension deficit from almost £31.9m to £12.2m, according to its latest LLP filing for the year ending April 2016.

The firm has set up a pension recovery scheme aiming to eliminate the deficit within 19 years. According to the accounts, the firm has planned to pay £1.25m per year from 2015/16 to 2018/19. However, the firm also injected £4.4m last year to cut the deficit more quickly, and said it anticipated to pay £5.25m for the financial year to April 2017.

The slashed pension liability comes as Nabarro gears up for a triple merger with CMS Cameron McKenna and Olswang, first reported in September.

Concerns over Nabarro’s pension arrangements for partners had previously hampered merger talks. Its previous LLP filing showed the pension deficit had increased from £24m to £32m from 2014 to 2015.

The firm’s top earning member took home £944,000 in 2016, down slightly from £966,000 the previous year. The figures in the LLP accounts do not necessarily equate to the highest paid equity member and can relate to ‘golden handshakes’ to retiring members. Key management personnel earned a total of £8m for the year, up from £7.6m in 2015.

Nabarro senior partner Ciaran Carvalho (pictured) said: ‘Despite living in a post-Brexit world, we are optimistic about results for the first half of 2016/17 too. While there is much to be done and much uncertainty at large following recent political events, we are confident that the firm will be well positioned to enter our merger with CMS and Olswang on 1 May in a position of strength.’

The firm is currently in the middle of merger talks with Camerons and Olswang. While the pension deficit is understood to have hampered previous merger discussions with Addleshaw Goddard in 2013, Carvalho said in October the trio had come to an agreement on the pension scheme.

If the merger goes ahead next year the three will create a combined firm with revenues of around £450m, rising to £950m counting CMS’s wider network of European firms.

The three firms are also looking at ways to consolidate their three London headquarters and European offices. Nabarro only moved into its new premises at London Wall in 2014, while Camerons occupies new offices at Cannon Place. A spokesperson has previously stated the firms have ‘no plans for fee-earner redundancies as part of the merger, nor do we envisage any office closures’.

According to the accounts, the number of lawyers at Nabarro increased to 393 fee earners from 362. The number of administration staff was 320 for the year, with staff costs at £47m, up around 3% on 2015. The firm’s turnover increased to £130.4m for the 2015/16 financial year.

Earlier this month, Legal Business revealed the head of Nabarro’s Manchester office Mark Haywood is currently involved in arbitration proceedings with his previous firm Addleshaws, which he quit in 2014 to join Nabarro. The firm is understood to have agreed to cover the costs of the dispute, valued at around £5m.

matthew.field@legalease.co.uk

Legal Business

Comment: Camerons double merger adds up but will it multiply?

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Legal mergers CMS UK
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Pity the poor pundit obliged to come up with an opinion on the obtusely-forged union of CMS Cameron McKenna, Nabarro and Olswang. Despite representing one of the largest legal mergers in the UK, taking a view on the tie-up, good, bad or indifferent is challenging, not least because the trio have so far been strikingly gnomic over the whole thing.

The union combines three brands with impressive industry credentials across real estate, media, technology, financial services, energy and life sciences. That is a lot of sector to focus but in those areas, these outfits carry potency.

Where the brands bring less juice is as a whole (or three wholes). This trio has clocked up more than its fair share of strategic flip-flops and reverses over the years, including a bewildering range of merger bids, particularly Camerons. None of the three has excelled at organic growth for years or looked like a natural home to more ambitious partners, in part because of the lack of strong generalist teams in corporate and disputes.

In the case of Olswang, the curate’s egg nature of the practice and the combination of public strategic dissent and partner departures meant it plainly needed a deal. Nabarro, meanwhile, has been a byword for solid respectability without achieving much of the pace and drive displayed over the last five to ten years by many of its peers in the City mid-tier.

Camerons has been the most ambitious of the three by some way, even if few neutral observers would be satisfied by its attempt to position the CMS grouping as equivalent to a single global law firm. With practical limits on what can be achieved within the CMS alliance beyond marketing, Camerons in 2010 moved for an ambitious back-office deal with Integreon with mixed results as well as pursuing a string of merger bids before striking opportunistically but happily on its 2014 takeover of Dundas & Wilson.

The other big success Camerons can point to – backed by the astute property deal behind its Cannon Place move which should ultimately save it tens of millions of pounds – is a dramatic hike in profitability achieved in the last five years. Here the branding is an issue, since the £439,000 profit per equity partner figure for the CMS group is far lower than Camerons’ core equity ladder.

And the creation of a £450m national UK business on the rock of Camerons’ tightly-managed finances is not a bad place to be, especially with the additional asset of the CMS network, which has matured nicely over the last decade.

Certainly, it is hard to see the three businesses being worse off under the union (though support staff should be feeling a little nervous given Camerons’ battle against proliferating back-office teams).

But by the same token, neither is it a given that the trio will gain a new momentum. These are three firms with a growth issue and reputations for laidback collegiality – galvanising the much larger whole will be trying, even if the Dundas union proved solid business in similar circumstances. The early view: you could not argue against the deal but neither will the firms’ rivals be feeling nervous just yet.

alex.novarese@legalease.co.uk

For more coverage of the merger see: ‘I didn’t see anyone not put their hand up’: CMS, Olswang, Nabarro vote for merger’ 

Read more: ‘Exclusive: Morgan Lewis holds talks with KWM as Camerons circles’

For more on Cameron’s last merger see: ‘The Programme – how Dundas & Wilson fits into the CMS masterplan’

Legal Business

Exclusive: Morgan Lewis holds talks with KWM as Camerons circles

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Legal mergers CMS UKKing & Wood MallesonsMorgan, Lewis & Bockius
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Morgan, Lewis & Bockius has emerged as a potential partner to King & Wood Mallesons (KWM), despite the US giant also being targeted by CMS Cameron McKenna as its long-coveted US suitor.

A Morgan Lewis partner has told Legal Business that talks to combine with KWM had been on and off for months but KWM had been eager to press ahead with conversations in recent weeks. With 520 equity partners, the top 20 US law firm has a profit per equity partner (PEP) of $1.54m and revenues in 2015 of $1.84bn. In contrast KWM has over 550 partners around the world and PEP of $900,000.

It is understood that the talks were led by Morgan Lewis chair Jami Wintz McKeon and involved the possibility of a multi-profit centre union using a Swiss verein structure initially to ‘test the waters’.

However, the Morgan Lewis partner said talks had become strained since the resignation of KWM City funds partner Michael Halford, who had been central to the discussions, but they had not been officially called off. The departure of Halford last week and three fellow partners in London saw KWM halt a planned recapitalisation after a 2016 dominated by departures in Europe to reassess its options.

The talks come as KWM Europe, UK and Middle East (EUME) managing partner Tim Bednall and senior partner Michael Cziesla have flown to China to talk about the future of the firm amid a turbulent period for its European practice, which joined KWM through the 2013 merger between KWM and SJ Berwin. It is understood that talks are ongoing for the Asia-Pacific business to offer support to the EUME partnership to help stabilise the firm in the region. Moves by the larger Asia Pacific business, which is still growing at more than 20% a year in China, may involve lock-ins with the EUME partnership, which is a separate profit centre, in return for financial commitments or guarantees to the business.

The Morgan Lewis partner added that while many US law firms were interested in KWM’s Chinese arm, its large Australia business would put off some US rivals.

The partner added that while Morgan Lewis was likely to not be the only firm seriously approached, ‘I think they liked us best.’

However, KWM is not the only firm vying for a union with Morgan Lewis, as Camerons has approached the firm ‘quite aggressively’ in recent months. The partner said that Camerons had indicated that Morgan Lewis was its preferred choice of US suitor.

The Morgan Lewis partner added: ‘However, there are partners in the US who feel CMS partners are in a different standard from Morgan Lewis, plus there is an issue with the German arm.’

A former Camerons partner said: ‘I would have thought the PEP levels at Morgan Lewis were too strong. I don’t think Camerons would have fitted too well with a New York firm, but an East Coast firm would be good for them. I have a high level of confidence the firm would be interested in Morgan Lewis. It’s a tightly run, profitable outfit.’

Camerons is currently moving to implement its combination with Nabarro and Olswang, with partners at the three firms having voted to merge last month. When the three-way merger goes through the combined firm will have revenues of more than £400m in the UK.

Morgan Lewis is no stranger to rescue deals, having in 2014 completed a ‘transaction’ which saw 226 partners and more than 525 other lawyers, legal professionals and staff move over from Boston-bred Bingham McCutchen.

Morgan Lewis, KWM and Camerons declined to comment.

sarah.downey@legalease.co.uk, matthew.field@legalease.co.uk

Read more in the opinion piece: ‘Comment: The moment of truth arrives in the SJ Berwin saga’

Read more analysis in the feature: ‘Branded – Inside the troubled takeover of SJ Berwin’

Legal Business

Camerons’ double merger adds up but will it multiply?

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Legal mergers CMS UK
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Pity the poor pundit obliged to come up with an opinion on the obtusely-forged union of CMS Cameron McKenna, Nabarro and Olswang. Despite representing one of the largest legal mergers in the UK, taking a view on the tie-up, good, bad or indifferent is challenging, not least because the trio have so far been strikingly gnomic over the whole thing.

The union combines three brands with impressive industry credentials across real estate, media, technology, financial services, energy and life sciences. That is a lot of sector to focus but in those areas, these outfits carry potency.

Legal Business

‘I didn’t see anyone not put their hand up’: CMS, Olswang, Nabarro vote for merger

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Legal mergers CMS UK
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Madeleine Farman, Matthew Field and Kathryn McCann speak to those inside and outside the fence

‘A merger was definitely going to happen. That was obvious when I was at CMS four years ago,’ a former CMS Cameron McKenna partner tells Legal Business. ‘It is another great scheme; I don’t feel that the firm’s brand has improved since I left. I know from people inside that the network, although they make a great show of it working well, doesn’t really work as well as it should.’

Legal Business

Nabarro drops out of European alliance as three-way merger talks continue

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Legal mergers CMS UK
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Nabarro is to lose its seat in the five firm Broadlaw Group as a consequence of its merger plans with CMS Cameron McKenna and Olswang.

The legal alliance of European firms included links with more than 1,000 lawyers in 30 cities across Europe, Asia, the Middle East and Africa.

Member firms include 150-lawyer German firm GSK Stockman + Kollegen, 160-lawyer French firm Lefèvre Pelletier & Associés, Italian firm Nunziante Magrone and 250-lawyer Spanish firm Roca Junynet.

The network of independent firms formed an alliance with reach across Europe as well as practices as far as Shanghai, Tokyo and Singapore in Asia; Dubai in the Middle East; and Algiers, Cameroon and Casablanca in Africa.

The five firms did not share fees within the referral network. The alliances were non-exclusive, with firms able to refer work outside the group if necessary. Lefèvre Pelletier managing partner Christophe Jacomin told Legal Business: ‘The alliance will remain between GSK, Lefèvre Pelletier & Associés, Nunziante and Roca Junyent. Other European firms, including UK firms, are interested in joining the Broadlaw alliance.’

French firm August & Debouzy previously left Nabarro’s international alliance in March 2014. The firm was replaced by Lefèvre Pelletier & Associés in November that year.

Nabarro’s merger suitor CMS Cameron McKenna is already part of the franchise group CMS, which includes around 2,900 lawyers as part of the network organised as CMS Legal Services EEIG.

The firms include the branding CMS, but are independent firms other than sharing around €10m for training, branding and business development. Among the firms are CMS Hasche Sigle in Germany and other firms in France, Italy and Spain.

The trio of firms confirmed the union on 10 October after the three partnerships voted in favour of a merger.

Nabarro head of international Patricia Godfrey said: ‘Following the announcement of our merger with CMS and Olswang, I can confirm that we will be resigning from the Broadlaw Group. Over many years we have developed close relations with our colleagues in the four other firms. I would like to thank them all for their support, their referrals and most importantly their friendship during that time and wish them every success for the future.’

matthew.field@legalease.co.uk

Read more in: ‘Working the mechanics: Camerons, Nabarro and Olswang’s leaders on finalising the merger’

Legal Business

Olswang and Grant Thornton charged £8.4m for BHS sale, Sir Philip Green claims

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CMS UKGrant ThorntonLinklaters
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Months after the collapse of BHS, Sir Philip Green has revealed that Olswang and Grant Thornton charged purchaser Retail Acquisitions Limited a collective £8.4m for the transaction.

During an investigation into the demise of BHS, MPs led by Labour MP Frank Field called on the law firms involved to disclose further details of their dealings. Linklaters and Nabarro released what they billed at £1.2m and £217,000 respectively to their clients, Green’s Arcadia Group and Taveta Group.

Olswang had refused to provide details of its fees and cited client privilege.

Speaking in his first major interview since the event to ITV News yesterday (18 October), Green (pictured), who has faced criticism for his role in BHS’s demise, said both Olswang and Grant Thornton were ‘well regarded professional firms, that weren’t afraid to charge…they charged £8.4m for their services.’

Green further stated that ‘these two companies never got interviewed by the Select Committee, or the correct people didn’t get interviewed by the Select Committee, in spite of Mr Field stating, when he was told I don’t want reserves from the bench, he never called for the two principle people from the two companies to ask they what work they had done/ hadn’t done.’

Stressing that while he wasn’t ‘making an excuse’ he felt that ‘with two prominent advisers, there were two or three other lawyers in the team…we felt they had relevant people around them, there were different letters that came, different views, letters came on finance being offered, so we thought there was a good opportunity for someone to take the business forward, with money, that was provided and give it a fresh start. Unfortunately that didn’t work out.’

Green, who chairs the Arcadia Group which includes Topshop and Burton, bought British Home Stores in 2000 for £200 million, rebranding it BHS. Having faced intense market competition in 2006, the business was eventually sold to Retail Acquisitions, led by Dominic Chappell, for £1 in 2015. Chappell told the inquiry in June he was considering legal action against Green.

A plan to turn BHS around failed and it collapsed into administration in April 2016, with many blaming Green for taking big dividends and leaving the company with a huge pension deficit.

Green has since commissioned the legal opinion of Lord David Pannick QC of Blackstone Chambers who dismissed the conclusions of the inquiry criticising Green over the fall of BHS, describing it as ‘bizarre,’ ‘unstoppable,’ and ‘beset by serious factual errors.’

It comes ahead of a House of Commons vote on Green’s conduct, which will determine whether he can keep his knighthood.

sarah.downey@legalease.co.uk