Legal Business

US bonuses: Simpson and Davis Polk match Cravath rewards of up to $100,000 for associates

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Salaries Cravath, Swaine & MooreDavis Polk & WardwellSimpson Thacher & Bartlett
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Leading Wall Street firms have begun announcing their 2016 year-end associate bonuses with Cravath, Swaine & Moore leading the way again on rewards with other Manhattan firms following suit.

According to Above the Law, Cravath associates were told their year-end bonuses on Monday afternoon (27 November). Newly qualified associates in 2016 and 2015 will receive $15,000.

The bonus scale means 2014 associates will receive $25,000, 2013 will receive $50,000, while associates from 2009 will earn up to $100,000 in bonuses. The scale remains on a par with last years’ US bonuses.

After Cravath announced its new bonus round, Simpson Thacher & Bartlett and Davis Polk & Wardwell both matched their New York rival.

This summer saw a US pay war launched as leading firms rushed to match the $180,000 on offer for Cravath’s new associates. The firm boosted pay for the first time since 2007 in a move that saw first year associates take home an extra $20,000.

A host of US firms followed suit, including Milbank, Tweed, Hadley & McCloy; Paul Weiss, Rifkind, Wharton & Garrison; and Weil Gotshal & Manges.

Magic Circle firms were also pushed to compete with US rivals on the latest pay scale, as Freshfields Bruckhaus Deringer and Clifford Chance both bringing up the salaries for US-based associates, bringing it in line with the $180,000 pay scale.

Last year in the UK, Slaughter and May upped the ante for bonus levels amid fierce competition from US players. Slaughters lifted bonuses between 9% and 16%, allowing high-performing junior lawyers to take home an extra £15,000.

matthew.field@legalease.co.uk

Legal Business

Clifford Chance and Davis Polk deliver $8bn Hong Kong IPO for Postal Savings Bank

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Corporate Clifford ChanceDavis Polk & WardwellKing & Wood Mallesons
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Clifford Chance, Davis Polk & Wardwell, King & Wood Mallesons and Chinese law firm Haiwen & Partners have advised on the year’s largest initial public offering (IPO) of $8bn for Postal Savings Bank of China launched today (14 September).

US firm Davis Polk advised state-owned Postal Savings Bank on the float on the Hong Kong Stock Exchange with Haiwen acting as Chinese counsel on the deal.

Magic Circle firm Clifford Chance advised the underwriters China International Capital Corporation, Morgan Stanley, Bank of America Merrill Lynch, Goldman Sachs and JP Morgan as joint sponsors on the Hong Kong Stock Exchange, while King & Wood Mallesons acted as Chinese counsel to the banks.

Clifford Chance’s team was led by China co-managing partner Tim Wang with Hong Kong partners Amy Lo and Fang Liu, supported by Singapore-based Jean Thio.

Postal Savings Bank has more than 40,000 branches across China and more than 500 million retail customers.

The bank’s IPO is the largest share offering globally so far in 2016. The deal is the largest IPO since the record breaking offering on the New York Stock Exchange of Chinese e-commerce giant Alibaba, which raised more than $25bn as the largest such deal in history.

Clifford Chance’s China team has advised on several major Hong Kong IPOs this year, including the float of China Everbright Securities for $1.1bn and Bank of Tianjin for $990m.

Other major IPO mandates this year have seen Linklaters and Clifford Chance act on the float of Metro Bank in March, valuing the bank at around £1.6bn.

In January, Clifford Chance, Linklaters, Allen & Overy and King & Wood Mallesons all advised on the proposed IPO of Clydesdale and Yorkshire Bank.

matthew.field@legalease.co.uk

Legal Business

Slaughters and Davis Polk face off as MasterCard buys UK payments firm

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Slaughter and May rubbed shoulders with Davis Polk & Wardwell in the second major announced deal this week, this time opposite the Wall Street firm on the acquisition of British payments system company VocaLink by New York-based MasterCard.

MasterCard said it will buy a 92% stake in VocaLink, for around £700m, in a bid to strengthen its presence in the UK. London-based VocaLink offers payment processing services, including the LINK cash machine network.

VocaLink was owned by several banks, including Barclays, Royal Bank of Scotland, Lloyds, Santander and HSBC, which were told by the Payments System Regulator to sell their stakes in February this year.

The FCA subsidiary said the banks’ ownership of VocaLink, which processes over 90% of salaries, more than 70% of household bills and almost all state benefits, was harming competition and innovation.

Slaughters team on the deal was led by corporate partner Rebecca Cousin with the newly-promoted Victoria MacDuff and M&A head Roland Turnill. IP and IT partner David Ives, tax partner Jeanette Zaman and head of pensions Jonathan Fenn also acted on the takeover, along with real estate partner Jane Edwarde and finance partner Azadeh Nassiri.

The Magic Circle firm already advised VocaLink in April as the company separated its LINK network of cash machines from VocaLink and renegotiated VocaLink’s processing contract with LINK and its members.

Davis Polk’s team was led by Will Pearce with executive pay advice from Jeffrey Crandall, IP and IT advice from Pritesh Shah and regulatory guidance from Angela Burgess. Tax partner Jonathan Cooklin also acting on the deal.

Similarly Davis Polk advised MasterCard last year on its $600m acquisition of cloud-based analytics firm Applied Predictive Technologies.

Hogan Lovells advised the senior executive management of VocaLink with a team led by global head of PE Tom Whelan with partners Keith Woodhouse and Nick Atkins.

MasterCard is currently facing the biggest UK legal claim ever as Quinn Emanuel Urquhart & Sullivan leads a US-style class action worth £19bn on behalf of British debit and credit card users hit with ‘illegal’ charges.

The sale of VocaLink to US owners follows Cambridge-based ARM Holdings announcing its takeover by Japanese telecoms group Softbank for £24.3bn.

victoria.young@legalease.co.uk

Legal Business

Deal watch: Corporate activity in April 2016

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FORSTERS AND SLAUGHTERS LEAD ON TATA STEEL SELL OFF

Forsters and Slaughter and May acted on Greybull Capital’s rescue deal to buy Tata Steel’s European long products business, which includes the Scunthorpe steel works employing 3,500 people. Slaughters advised Tata, while Forsters acted for family office Greybull.

Legal Business

Simpson Thacher tops first quarter global deal tables, as Davis Polk dominates Europe

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Despite a looming Brexit referendum swaying levels of transactional activity, certain law firms are enjoying a healthy pipeline of deals with Simpson Thacher & Bartlett emerging on top for global M&A deal value in Q1 2016.

According to Dealogic data, the firm worked on $101bn worth of deals at announcement, a total of 26, constituting 13% of market share. Major mandates under its belt include advising on China National Chemical Corp’s $43bn bid for Swiss seeds and pesticides group Syngenta, in what will be the largest ever acquisition by a Chinese firm; and acting on the $16.5bn merger of industrial company Johnson Controls and security provider Tyco.

While M&A rankings are notoriously hard to interpret, with US securities and secondary roles typically inflating the position of non-European law firms, such figures support the argument that US-bred advisers are steadily pushing into premium deal work in the region.

Other firms to appear in the global top ten for the first quarter included Davis Polk & Wardwell in third place with $77bn worth of deals, Jones Day in fifth with $57bn, and Freshfields Bruckhaus Deringer with $49bn worth of deals.

For European M&A lawyer rankings, US firm Davis Polk & Wardwell took the lion’s share with $59bn worth of deals, followed by Fangda Partners at $51bn, Homburger in third at $50bn, Simpson Thacher in fourth at just under $50bn. Magic Circle firms Freshfields and Allen & Overy placed seventh and ninth respectively while Weil Gotshal & Manges took the tenth spot with $12bn worth of deals.

For US M&A rankings Simpson Thacher also came top, with $51bn worth of deals, a total of 17, and marking 16% of market share. Jones Day came second with deals valuing at $47bn, a total of 81, and constituting 14% of market share. Other firms in the top ten included Weil Gotshal in third, Wachtell Lipton Rosen & Katz in fourth, and Kirkland & Ellis in fifth place.

On European activity levels, Weil Gotshal co-head of private equity Marco Compagnoni told Legal Business: ‘It started slow in the New Year and then picked up towards February and March. Activity levels have been good but are taking a lot longer to do. I can’t work out the effect of Brexit on people’s minds. When you talk to people I think they assume it’s not going to happen – but when they’re looking for reasons not to do something, it hangs in the air.’

‘There’s not much about of your classic UK buy out – there’s loads of deals being done in the Baltics or Italy – a lot of interest in privatisation and transactions involving public companies. We’re getting a lot of inquiries about that. How sustainable that will be? I don’t have a lot of visibility to feel raging confidence. Not a huge amount of activity in industrials but a lot of stuff in financial services and TMT.’

sarah.downey@legalease.co.uk

mckinseyAI

 

Legal Business

Data deal: Davis Polk advises Markit on US merger

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Longstanding adviser Davis Polk & Wardwell has acted for Markit again as the London-based data provider signed a deal with US firm IHS for a $13bn merger.

Davis Polk’s team was led by New York-based Louis Goldberg and Oliver Smith, with Richard Truesdell and Mark Mendez acting on capital markets issues.

Giving tax advice were partners Michael Mollerus and Jonathan Cooklin, while executive compensation partner Jeffrey Crandall also acted on the deal.

Weil Gotshal & Manges is advising Colorado based IHS, in the deal which values Markit at $5.9bn, and is another example of a US deal which will take advantage of overseas tax base.

IHS shareholders will own about 57% of the combined company after the deal closes, and will pay $31.13 per Markit share.

Weil fielded a team across the US and the UK, led by corporate partner Michael Aiello, while tax partners Kenneth Heitner in New York and David Irvine in London also worked on the deal.

Banking and finance partner Allison Liff, capital markets partner Heather Emmel, executive compensation & benefits partner Paul Wessel all advised for Weil, while Washington DC antitrust partner John Scribner advised with technology partner Charan Sandhu.

Davis Polk has advised Markit on several mandates including its $1.5bn IPO, when the company listed shares on the Nasdaq exchange. The offering was the largest US IPO by a European issuer in 2014.

The firm also acted for Markit in 2015, when it repurchased $200m of its common shares, in a deal which is to be completed by the third quarter of this year. Also in 2015, Davis Polk advised Markit in connection with its SEC-registered secondary offering of 27m shares, which raised $685m.

Markit has turned to Proskauer Rose in the past when the data provider, alongside a dozen major banks, was accused by investors of rigging the credit derivatives market. The case resulted in a $1.87bn settlement.

victoria.young@legalease.co.uk

Legal Business

New York slowdown: Weil Gotshal revenue flat again as Davis Polk’s strong run comes to an end

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New York elite firms Weil, Gotshal & Manges and Davis Polk & Wardwell struggled to achieve meaningful growth last year, with Weil’s haul of $1.16bn in 2015 still behind what the firm generated in 2011.

Similarly, growth at Davis Polk stuttered in 2015 after notching double-digit growth in 2014 to break the $1bn barrier. Impacted by the drop-off in financial crisis-related litigation and a cooling in the capital markets space at the back-end of 2015 following the stock market turmoil in China, revenue dipped slightly to $1.07bn.

This equates to a $20m fall in revenue, ending a rapid period of growth for Davis Polk that saw it increase revenue by 27% between 2009 and 2014.

New York rival Weil posted a 1% rise in revenue to $1.16bn in 2015, continuing a period of slow growth. While last year saw a marked increase in activity levels within its cornerstone bankruptcy practice, turnover at the firm is down 5% over the past five years, having generated $1.23bn in 2011.

The number of lawyers at Weil, which laid off more than 150 people in 2013, shrunk for the third consecutive year to 1,063 in 2015. A reduction in the number of equity partners at the firm also helped to push up profitability, with profits per equity partner (PEP) up by 5% to $2.52m.

PEP at Davis Polk, meanwhile, was 1% up on 2014 to $3.33m last year.

Other US firms to post results this reporting season include White & Case, which also reported flat revenues up 1% to $1.524bn, while Cooley’s financials for 2015 show revenue has risen 14% to $912m. Hogan Lovells continues to post modest financial growth as its results showed revenue for the calendar year increased by 2.3% to $1.82bn.

tom.moore@legalease.co.uk

 

 

Legal Business

Simpson Thacher, Davis Polk and Bär & Karrer win mandates on $43bn ChemChina-Syngenta deal

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Simpson Thacher & Bartlett, Davis Polk & Wardwell, and Swiss firm Bär & Karrer have landed key advisory roles on China National Chemical Corp’s (ChemChina’s) $43bn bid for Swiss seeds and pesticides group Syngenta, in what will be the largest ever acquisition by a Chinese firm.

Simpson Thacher is advising China’s state-owned ChemChina on M&A, acquisition finance and regulatory aspects with a team led by partners Alan Klein, Shaolin Luo, Chris May and Sinead O’Shea, alongside Homburger.

Davis Polk & Wardwell and local Swiss firm Bär & Karrer are acting for Syngenta.

HSBC is arranging the debt financing for the deal, with advice from Linklaters, who is acting with a team led by London banking partner Brian Gray. Clifford Chance is advising ChemChina’s financial adviser China CITIC Bank with a team led by Maggie Lo.

Clifford Chance has acted for ChemChina in the past, advising on its $7.7bn bid to buy Italian tire-maker Pirelli. The deal announced last year, gave Chinese investors a significant foothold in Italy’s manufacturing industry while signalling continued Chinese investment into Europe. Davis Polk and Bär & Karrer previously worked together advising Syngenta in its defence of a takeover proposal by agriculture company Monsanto.

Syngenta said today (3 February) that the agreed offer amounted to $465 a share, plus a special dividend of 5 Swiss francs ($4.91) a share to be paid immediately before the deal’s closing. The company also announced that a ‘future initial public offering is intended’ while the transaction will ‘enable further expansion of Syngenta’s presence in emerging markets and notably in China.’

sarah.downey@legalease.co.uk

Legal Business

Dealwatch: Davis Polk and Simpson Thacher lead as AstraZeneca takes over ZS Pharma for $2.7bn

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Wall Street leaders Davis Polk & Wardell and Simpson Thacher & Bartlett are lead advisers on Anglo-Swedish pharma giant AstraZeneca’s $2.7bn acquisition of California-based biopharmaceutical company ZS Pharma.

The deal is the latest in a wave of takeover deals in the healthcare industry, including the potential $100bn merger of AstraZeneca and Pfizer, which came to a halt last year. Last week Dublin-based Shire moved to acquire US firm Dyax for $5.9bn, in a deal which Ropes & Gray‎, Slaughter and May, Davis Polk and Sullivan & Cromwell all advised on.

Under this latest agreement, AstraZeneca will acquire all of the outstanding capital stock of ZS Pharma for $90 per share in an all-cash transaction.

Davis Polk’s team out of New York represented AstraZeneca, comprising corporate partners Marc Williams and Brian Wolfe, partner Edmond FitzGerald for compensation advice, tax partner Neil Barr and Joel Cohen on antitrust and competition issues

ZS Pharma instructed Simpson Thacher with corporate partners Kevin Kennedy and Kirsten Jensen, employment partner Tristan Brown, tax partner Katharine Moir and IP partner Noah Leibowitz.

The transaction is expected to close by the end of 2015.

AstraZeneca has used a range of firms in the past, including RPC on its move to a new headquarters in Cambridge in 2013, and Covington & Burling when it purchased Spanish healthcare group Almirall for $2.1bn in 2014.

jaishree.kalia@legalease.co.uk

 

 

 

Legal Business

The conservation game – up close with New York’s original inner circle

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Amid a changing global legal market, three storied Wall Street firms retain commanding reputations. Legal Business assesses New York law’s enduring inner circle.

‘Almost all absurdity of conduct arises from the imitation of those whom we cannot resemble.’
Samuel Johnson