Legal Business

Deal watch: Corporate activity in April 2015

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Corporate Davis Polk & Wardwell
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GE RESTRUCTURING BRINGS IN RAFT OF ADVISERS

A host of firms picked up work on General Electric (GE)’s restructuring, fielding large cross-border teams as the industrial giant sold $26.5bn of real estate assets and announced it would divest most of GE Capital’s other holdings. Hogan Lovells led for GE on the real estate sale, with buyers The Blackstone Group and Wells Fargo represented by Simpson Thacher & Bartlett and Dechert respectively.

Weil, Gotshal & Manges is advising GE on the wider restructuring, which will return up to $90bn to shareholders, alongside Sullivan & Cromwell and Davis Polk & Wardwell.

Legal Business

Significant mandates: Hogan Lovells among raft of firms on GE’s financial restructuring

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Corporate Davis Polk & WardwellDechertHogan LovellsSimpson Thacher & BartlettSullivan & CromwellWeil, Gotshal & Manges
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Hogan Lovells plus a host of US firms have won roles on GE’s major financial restructuring, including the $26.5bn sale of its real estate assets, as it tries to create a ‘simpler and more valuable company’ by selling most of GE Capital’s assets.

Under the agreement, GE will sell the bulk of the GE Capital Real Estate assets – in what has been dubbed one of the largest real estate deals on record – to funds managed by Blackstone with Wells Fargo also acquiring a portion of the performing loans at closing. The company also has letters of intent with other buyers for an additional $4bn of commercial real estate assets, totalling a $26.5bn disposal.

Hogan Lovells’ cross-border team, which comprised over 75 lawyers, advised GE on the real estate sale led by partners Warren Gorrell, Bruce Gil‎christ, Prentiss Feagles, Lauren Bellerjeau, Waajid Siddiqui and Lee Berner, based in New York and Washington DC. The GE legal team was led by former Hogan Lovells partner Mark Landis, currently executive legal counsel–M&A at the company.

On the other side was Dechert representing Wells Fargo with US based partner Richard Jones leading, alongside London-based Jeremy Trinder, Jason Butwick, Mark Stapleton plus US partners Kahlil Yearwood, Philippe Phaneuf, David Linder, Daniel Dunn and, out of France, Philippe Thomas.

Simpson Thacher & Bartlett represented Blackstone with partners Greg Ressa, Sas Mehrara and Krista Miniutti leading. Bank of America and Kimberlite Advisors provided financial advice on the real estate deal.

On the wider restructuring of the business GE took advice from Weil, Gotshal & Manges on corporate and restructuring matters with Sullivan & Cromwell advising on the regulatory aspects led by Sullivan’s senior chairman Rodgin Cohen. 

Davis Polk & Wardwell led on tax matters for the company with a team including corporate partners Richard Sandler and John Meade, tax partners Neil Barr, Michael Farber and Michael Mollerus, partners Randall Guynn and Luigi de Ghenghi handling regulatory matters and investment management partners Nora Jordan and Gregory Rowland. 

GE expects to return more than $90bn to investors through to 2018, the majority of which will come from the $50bn share repurchase program with the remainder generated from the current dividend and the spinoff of its remaining 85% stake in Synchrony. The company expects that by 2018 over 90% of its earnings will be generated by its high-return industrial businesses, up from 58% last year.

jaishree.kalia@legalease.co.uk

Legal Business

US revenue round-up: Paul Weiss and Davis Polk surpass the billion-dollar mark

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Financial results 2014 Baker BottsDavis Polk & WardwellPaul, Weiss, Rifkind, Wharton & Garrison
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US firms’ financials are continuing their positive trend, with recent releases showing revenue spikes and profit boosts including for Davis Polk & Wardwell and Paul, Weiss, Rifkind, Wharton & Garrison which both broke the billion-dollar mark in gross revenues last year.

For Davis Polk, both its revenue and partner profits were significantly higher; revenue was up 12.8% from $975m in 2013 to $1.1bn last year, while its average profits per partner crossed the three-million-dollar threshold to $3.3m, rising 12%. The positive result is a fundamental boost for the firm that was widely perceived to have drifted off course during the 2000s.

Similarly, disputes leader Paul Weiss has particularly outshone competitors enjoying its 15th record-breaking year in revenues in a row. Gross turnover surged to $1.03bn, up 11% from when the firm grossed $934.5m in 2013 and lifting average partner profits by 6% from $3.6m to $3.8m in 2014. The firm’s overall headcount rose 10% percent from 854 to 943, while partner ranks grew by just four heads to 135, a more modest 3% rise.

Since the credit crunch hit, Paul Weiss is one of the few firms that has managed to keep revenues well above water. Speaking to Legal Business earlier this year, Paul Weiss chairman Brad Karp said: ‘Breaking the billion-dollar revenue mark in 2014 was a very significant milestone for us. We are very proud of what we have accomplished – not just in 2014, but in the seven years since the financial crisis began. Over that period, our revenues have increased by 60%, our profitability has increased by 50%, and our pro bono hours have increased by more than 50%.’

Also enjoying double-digit growth so far this was energy focused Houston firm Baker Botts, which recently saw its revenue shoot up 11.4% to $653m from $586m in 2013, while net income soared 22.6% to $299.3m. But it was the firms’ profits per partner that truly shone at $1.7m – a 25.5% increase on 2013’s $1.36m – this was after the firm posted flat partner profits in 2013.

‘2014 was an exceptional year,’ said the firm’s managing partner Andrew Baker. ‘We achieved these results while making sizable new investments in our long term growth in the form of substantial new marketing, business development, practice management, pricing and information technology systems.’

jaishree.kalia@legalease.co.uk

For more analysis of the surging US market see: The blessed – unheralded, Wall Street’s elite comes roaring back

Legal Business

World’s largest airport operator: Mayer Brown and Davis Polk help Spain’s €4.3bn AENA float take-off

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Corporate Davis Polk & WardwellMayer Brown
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Mayer Brown and Davis Polk & Wardwell have won roles advising Spanish airport operator Aena (Aeropuertos Españoles y Navegación Aérea) on its €4.3bn float on the Madrid Stock Exchange.

The Spanish government sold its 49% stake in Aena, the world’s largest airport operator with some 47 airports worldwide, to raise €4.3bn, giving the group a total equity value of up to €8.7bn.

Mayer Brown’s London based banking and finance partner Robert Flanigan advised Aena alongside partner George Baptista out of New York, while local firm Pérez-Llorca’s capital markets head Vicente Conde also advised the airports operator.

Madrid-based corporate partner Michael Willisch at Davis Polk advised the underwriters including Goldman Sachs, Morgan Stanley, and Bank of America Merrill Lynch while Uría Menéndez corporate partner Alfonso Ventoso also acted for the underwriters.

In what is the largest floatation on the Madrid stock market since the onset of the financial crisis, the initial public offering (IPO) has shown signs of a sustained economic recovery in Spain.

The group had originally intended to float in the fourth quarter of 2014, however the IPO was put on hold after the Spanish government decided to re-appoint an auditor through a public tender process. Following the procurement process the auditor was switched from PwC to Ernst & Young (EY) with the delay working well for the government which at the end of 2014 was expecting to raise around €3.8bn.

jaishree.kalia@legalease.co.uk

Legal Business

Slaughters, Davis Polk and Skadden cash in on Shire’s biggest ever takeover

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Corporate Davis Polk & WardwellSkadden, Arps, Slate, Meagher & FlomSlaughter and May
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Dublin-headquartered Shire, took to the January sales with the $1.5bn it received in a break-fee from US pharma giant AbbVie following the collapse of their proposed $55bn tie-up late last year, securing the acquisition of biotech firm NPS Pharma.

The company returned to Slaughter and May, which drafted the AbbVie break-fee due to the political climate around tax inversion deals, to advise on the purchase of biotech NPS for $5.2bn. The deal is Shire’s largest-ever acquisition and comes amid increased pressure to deliver shareholder value.

Legal Business

Dealwatch: Linklaters, Davis Polk, and De Brauw act on Vision Express owner’s €1bn IPO

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Corporate Davis Polk & WardwellDe Brauw Blackstone WestbroekLinklaters
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US heavyweight Davis Polk & Wardwell, Dutch firm De Brauw Blackstone Westbroek and Magic Circle firm Linklaters have all scored roles advising on the €1bn Dutch IPO of Grand Vision, the world’s biggest opticians and owner of Vision Express.

The IPO consists of a secondary offering of up to approximately 23% of GrandVision’s issued ordinary shares by founding shareholder and Caribbean-based HAL, which plans to trade on Euronext in Amsterdam next Friday (6 February). Set to be valued at between €4.4bn and €5.4bn, GrandVision said the indicative price range for shares will be between €17.50 and €21.50.

De Brauw Amsterdam-based corporate partner Joost Schutte is acting as lead counsel to Hal and Grand Vision on Dutch law, while Davis Polk is advising Hal on US and UK law with a team led by London corporate partner John Banes.

Linklaters provided US, UK, and Dutch legal counsel to the underwriters including ABN Amro and JP Morgan, which are acting as joint co-ordinators on the deal, with US qualified London-based capital markets partner Jason Manketo leading the team.

GrandVision, which achieved revenue of €2.6bn in 2013, operates over 5,600 stores in 43 countries throughout Europe, Latin America, the Middle East and Asia.

sarah.downey@legalease.co.uk

Legal Business

‘The pharma sector is very busy’: Slaughters, Davis Polk and Skadden win roles on Shire’s $5.2bn acquisition

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Corporate Davis Polk & WardwellSkadden, Arps, Slate, Meagher & FlomSlaughter and May
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Slaughter and May was called upon by longstanding pharmaceutical client Shire on its biggest acquisition to date as it purchased biotech NPS Pharma, represented by Skadden, Arps, Slate, Meagher & Flom, for $5.2bn.

Slaughter and May corporate partner Martin Hattrell, who handled Shire’s collapsed $55bn sale to US pharma giant AbbVie late last year, led on deal to buy the New Jersey-based rare disease drug maker. Shire will acquire all the outstanding shares of NPS Pharma, which manufactures drugs to treat short bowel syndrome and is seeking to register Natapara to treat hypoparathyroidism, for $46 per share in cash.

Hattrell, who is relationship partner for the Dublin-based pharma company, worked alongside finance partner Mark Dwyer on the deal. US legal advice was provided by Davis Polk & Wardell corporate partners Bill Chudd and George Bason, with the New York-based duo also instructed on the collapsed sale to Abbvie.

Shire’s chief executive, Flemming Ornskov, said: ‘The acquisition of NPS Pharma is a significant step in advancing Shire’s strategy to become a leading biotechnology company. We look forward to accelerating the growth of the NPS Pharma portfolio based on our proven track record of maximizing value from acquired assets and commercial execution.’

Skadden M&A partners Eileen Nugent, based in New York, and Boston-based Graham Robinson represented NPS Pharma.

Shire secured a $850m short-term bank facility, which, in addition to Shire’s cash and cash equivalents, and its existing $2.1bn five-year revolving credit facility, will finance the transaction plus fees and expenses. In due course, the company plans to refinance the short-term bank facility through new debt issuances. Commenting on the deal, Hattrell said: ‘Much of the work was financing work, and it was primarily a US deal.’

He added: ‘Shire has been a very active client in the last 12 months. The pharma sector is very busy at the moment and I expect that to continue.’

tom.moore@legalease.co.uk

Legal Business

Dealwatch: Davis Polk and Linklaters act on UBM’s £565m rights issue

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Corporate Davis Polk & WardwellLinklaters
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Corporate partner Simon Witty, who Davis Polk & Wardwell hired from Freshfields Bruckhaus Deringer in 2012 to launch its English law practice, has been selected by FTSE 250 events company UBM to run a £565m rights issue to fund the purchase of trade show organiser Advanstar.

Witty and corporate partner Jeffrey O’Brien are handling the issue of 196.7 million shares, which represents about 80% of its existing issued share capital. Witty said: ‘We’ve had a busy year. A few things didn’t complete, which was disappointing, but activity levels have been high.’

Should shareholder approval be received, the rights issue will be complete by Christmas and the deal for Advanstar finalised by the end of January. The purchase of Advanstar, which owns men’s fashion event PROJECT NYC and runs a 10-city motorcycle show that attracts 600,000 visitors a year, will cost UBM £599m and makes it the number one fashion events company in the US.

Linklaters‘ John Lane, who heads the Magic Circle firm’s equities practice, is advising joint brokers and underwriters for the rights issue JP Morgan and Credit Suisse. A £100m bridge facility has been established to support the acquisition.

Lane, who recently handled the IPO of over-50s insurer Saga, was supported on the rights issue Patrick Sheil, a partner in Linklaters’ London-based US practice.

On the acquisition itself Morgan, Lewis & Bockius led for UBM with a team including international managing partner Charles Engros, co-head of M&A partner Jonathan Morris and London-based partners Iain Wright and Matthew Howse. Advanstar was advised by Slaughter and May led by partners Stephen Cooke and Bertand Louveaux and a team from Paul, Weiss, Rifkind, Wharton & Garrison including partners Thomas de la Bastide and Tarun Stewart.

Tim Cobbold, CEO of UBM, said: ‘In addition to being financially attractive, it strengthens UBM’s core events business while balancing and complementing UBM’s strong events portfolio in emerging markets. UBM will become the largest events organiser in the US – the biggest events market in the world.’

Davis Polk’s London office was involved in one of Europe’s biggest IPOs this year when it advised the underwriters on the €7bn float of Dutch insurer NN Group and in a nod the City, made up its first London partner in five years with the promotion of corporate lawyer Reuven Young this summer.

tom.moore@legalease.co.uk

Legal Business

Davis Polk and Cleary advise on RBS float of Citizens as Alibaba US IPO generates $15.8m in legal fees

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Corporate Cleary Gottlieb Steen & HamiltonDavis Polk & WardwellThe Royal Bank of Scotland
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US firms Davis Polk & Wardwell and Cleary Gottlieb Steen & Hamilton are advising on Royal Bank of Scotland’s sale of its US subsidiary Citizens Financial Group.

RBS is floating 25% of its holding in Citizens in a bid to raise $3.5bn. The sale involves 140 million shares in its US retail bank with an expected price of between $23 and $25 each, the lender has also been granted a 30-day over-allotment option of up to an additional 21 million shares.

Davis Polk’s corporate partners Nicholas Kronfeld and Luigi De Ghenghi are advising Citizens Financial, while Cleary Gottlieb partners Leslie Silverman and Derek Bush are representing the underwriters which include Morgan Stanley, Goldman Sachs and JPMorgan.

The bank’s decision to float comes as RBS plans to sell its non-core assets in a bid to increase finances as UK regulators increasingly press the bank to re-focus its domestic operations. Last year, RBS said it would sell up to a quarter of Citizens by the end of 2014.

The legal fees for the initial public offering (IPO) were revealed in US Securities and Exchange Commission filings as being $6.7m, considerably lower than the legal fees of Chinese e-commerce giant Alibaba’s IPO, published on 5 September, which have totalled $15.8m.

US firm Simpson Thacher & Bartlett advised Alibaba on US federal securities and New York State law with China head Leiming Chen and partners Daniel Fertig and William Hinman advising, while Sullivan & Cromwell partners William Chua, Jay Clayton and Sarah Payne are advising the underwriters. Maples and Calder advised on Cayman Islands law while Chinese law was covered by Fangda Partners for Alibaba and King & Wood Mallesons for the underwriters.

Amid much market speculation over roles and particularly the levels of fees that will be commanded, the US firms won lead roles to advise on the deal after Magic Circle firm Freshfields Bruckhaus Deringer was understood to be advising the China e-commerce giant on the IPO.

jaishree.kalia@legalease.co.uk

Legal Business

A&O and Davis Polk London line up on €7bn IPO of NN Group

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Corporate Allen & OveryDavis Polk & Wardwell
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Billed to be the largest initial public offering (IPO) in Europe to date this year, Allen & Overy (A&O) and the London office of Davis Polk & Wardwell are advising on the sale of up to 77m ordinary shares in NN Group, valuing the Dutch insurer at €7bn and bringing in proceeds of €2bn for ING.

The spin-off, required as part of the terms of the €10bn public bailout ING received in 2008, is being led for ING by A&O Netherlands-based corporate partner and longstanding legal adviser to the Dutch-founded financial services company Charles Honée, as well as corporate partners Tim Stevens and Gerbrand Visser.

Davis Polk is representing the underwriters JP Morgan, Morgan Stanley and Deutsche Bank, led by the US firm’s London-based European financial institutions group head Jeffrey Oakes.

The Wall Street firm’s London office has secured a role on a number of recent IPO’s including the £1.2bn float of esure Group, where Oakes also advised.

Oakes said: ‘I’ve been doing work for ING since 1997 and have a long-standing relationship. We were very pleased to be involved in what has turned out to be a very successful transaction.’

The sale of 77 million shares in the IPO and the exchange of the €450m subordinated notes into NN Group shares reduces ING’s ownership in NN Group to 71.4% at the settlement of the IPO.

A&O can expect further work from the spin-off as after the IPO, ING intends to reduce its shareholding in NN Group to below 50% before 31 December 2015 and divest the remaining stake before 31 December 2016.

Jaishree.kalia@legalease.co.uk