Legal Business

Freshfields and Baker Botts steer CVC and Liberty through £6.4bn Formula One deal

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Corporate Baker BottsFreshfields Bruckhaus Deringer
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Freshfields Bruckhaus Deringer and Baker Botts have won spots advising as CVC Capital Partners looks to sell off Formula One (F1) to Liberty Media Corporation for £6.4bn.

News of the deal comes after the London-based private equity house celebrated ten years since it first bought into the sport earlier this year in what has been described as the most lucrative private equity deal in history. If the acquisition goes through, the move would see F1 listed on Nasdaq.

There has been some turbulence over the past 12 months with the spotlight on CVC and F1’s owner Bernie Ecclestone after a revolt from supporters and F1 drivers alike following a debate around pay television after Sky secured a six-year deal from 2019 with only the British Grand Prix to be shown free-to-air.

CVC turned to its long-time adviser Freshfields, which earlier this year acted for CVC on its bid to acquire a majority stake in Germany’s largest private sports betting group Tipico Group with a team including Germany-based Juliane Hilf and Georg Roderburg with London partners Alex Mitchell and Rob Carlton. The firm also guided CVC through its £800m acquisition of Sky Bet in 2014 after advising on its £551m acquisition of insulation solutions company Paroc with a team led by corporate partner Tim Wilmot.

Freshfields has strong ties with CVC, with the founder of the Magic Circle firm’s London private equity practice Chris Bown moving to CVC in 2013 to advise its deal teams.

Meanwhile, Baker Botts is acting for Liberty Media for the second time this year after a team lead by Michael Calhoon acted on a lawsuit between Liberty and media company Vivendi Universal. A jury sitting in the Southern District of New York found Vivendi liable for breach of contract and securities fraud and awarded Liberty Media €765m.

The US firm also advised Liberty Interactive on its acquisition of e-commerce company Zulily for $2.4bn in 2015.

Macfarlanes also acted on the deal, advising members of Formula One’s senior management with a team including corporate head Ian Martin, corporate partner Stephen Drewitt and tax partner Peter Abbott.

madeleine.farman@legalease.co.uk

Legal Business

Reassuringly expensive: Freshfields and Linklaters take biggest gulp from $260m legal fees on AB InBev deal

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Corporate Freshfields Bruckhaus DeringerLinklaters
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City lawyers have taken a handsome share of the $1.94bn in advisory fees generated by Anheuser-Busch InBev’s (AB InBev) $108bn takeover of SABMiller, with law firms receiving $261m in fees from the biggest deal in British corporate history.

The deal, which sees Stella Artois, Corona and Budweiser owner AB InBev takeover brewing rival SABMiller, has generated some of the biggest advisory fees in UK history. The details were released in the scheme document for SABMiller shareholders today (26 August 2016).

AB InBev’s professional services fees accounted for $1.73bn of the $1.94bn windfall for bankers, lawyers and accountants. Of that, $725m was spent on financing arrangements, $185m on legal fees and $135m on corporate and financial brokering advice. The legal process was made more complex by a string of beer brand disposals across the US, Europe and Asia to ease the regulatory approval process with competition authorities around the world.

Freshfields Bruckhaus Deringer will take the lion’s share of AB InBev’s $185m legal fees, which the scheme circular states is based on completion of the deal, with Wall Street firms Cravath, Swaine & Moore and Sullivan & Cromwell next in line having handled the US law element. SullCrom ran the brewer’s filing with the US Securities and Exchange Commission and the US firms handled several disposals.

Clifford Chance has also been sluiced with fees, having handled AB InBev’s financing arrangements. A long list of law firms around the world were also instructed to handle local competition and tax issues.

It’s a fine swansong for Freshfields’ deal veteran Mark Rawlinson, who is departing the Magic Circle firm in October to become chairman of UK investment banking at Morgan Stanley, having led the firm’s legal advice to AB InBev alongside London head of corporate Simon Marchant and antitrust partner John Davies.

Linklaters will take the biggest share of the $76m in legal fees spent by SABMiller. Hogan Lovells should be next in line having advised the brewer on certain aspects of the deal. Hogan Lovells, which has long been SABMiller’s go-to law firm, were thought to be overlooked to run the deal, with Linklaters deemed to have more M&A firepower. Cleary Gottlieb Steen & Hamilton are regular advisers on SABMiller’s US tax issues. M&A partner Nick Rumsby and Charlie Jacobs, who was recently chosen by the Linklaters partnership to succeed Robert Elliott as senior partner later this year, led the advice to SABMiller.

The fees by far surpass the £206m in fees Japan’s SoftBank and UK chip-maker ARM Holdings paid their financial advisers, lenders, lawyers and accountants on the £24.3bn deal they agreed in July. SoftBank’s legal advisers at Morrison Foerster and Freshfields received £5.5m, while ARM paid Slaughter and May and Davis Polk & Wardwell £9m for their legal advice.

tom.moore@legalease.co.uk

Where did the fees go? 

SABMiller

Financial and brokering advice: $113m

Legal advice: $76m

Accounting advice: $2m

Public relations advice: $9m

Other costs and expenses: $2m

Total: $202m

AB InBev

Financial arrangements: $725m

Financial and corporate broking advice: $135m

Legal advice: $185m

Accounting advice: $15m

Public relations advice: $20m

Other professional services (including management consultants, actuaries and specialist valuers): $180m

Transaction taxes, other costs and expenses: $475m

 

Legal Business

‘The biggest gun in town’: MasterCard picks Freshfields to defend landmark £14bn class action

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Litigation Freshfields Bruckhaus DeringerQuinn Emanuel Urquhart & Sullivan
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MasterCard, which is facing a £14bn lawsuit in the first major US-style class action in the English courts, has replaced its longstanding legal team at Jones Day with Freshfields Bruckhaus Deringer as it looks to add firepower to its defence.

MasterCard has hired Jon Lawrence, one of the UK’s leading competition litigators, to duel with Quinn Emanuel Urquhart & Sullivan as the US litigation powerhouse prepares to bring a £14bn claim against the financial services giant on behalf of British consumers hit with ‘illegal’ charges.

Nick Cotter, a litigation partner at Jones Day, was originally handling MasterCard’s defence but the firm has been replaced in favour of Freshfields. Jones Day has been one of MasterCard’s go-to firms for its mounting pile of litigation over interchange fees, and while the firm continues to act on many of these claims, it missed out to Freshfields in a tender process for this case. A leading City litigator told Legal Business: ‘MasterCard has brought in the biggest gun in town to defend them.’ Lawrence’s client list includes the London Stock Exchange, Lloyd’s of London and Ericsson.

The claim, over anticompetitive fees MasterCard charged to process card payments, was originally thought to be worth £19bn but has since been adjusted with the estimated damage to UK consumers now believed to be between £14bn and £15bn.

The biggest claim in UK legal history is expected to be filed within the next fortnight. It will be one of the first to be filed under the Consumer Rights Act 2015, which allows ‘opt-out’ class action-style claims to be brought for the first time in the UK. It was previously hard to bring consumer claims against corporates in the UK as each individual would have had to ‘opt-in’ to the claim.

The case stems from interchange fees MasterCard charged British retailers to process card payments, which the claim alleges were passed onto customers through higher prices. If the claim is successful, every UK consumer stands to be eligible for hundreds of pounds in compensation, unless they explicitly opt-out of the lawsuit. These US-style class actions require a representative, which in this case is former chief financial services ombudsman Walter Merricks.

Quinn Emanuel, which has brought similar claims in the US, has been handed a £40m war chest by Chicago-based Gerchen Keller Capital, the world’s largest litigation funder, to bring the landmark class action. Gerchen Keller Capital will therefore take a slice of any potential damages. Boris Bronfentrinker, a star hire by Quinn Emanuel in 2014 from London competition litigation boutique Hausfeld & Co, is the lead partner working on the claim. He is working alongside Kate Vernon, a recent addition from DLA Piper.

MasterCard lost a decade-long legal battle over interchange card fees in 2014 when Europe’s top court, the Luxembourg-based European Court of Justice, ruled the company had breached competition rules by abusing its dominant market position with the charges. Because MasterCard’s fees have already been found to be illegal by the European Commission, this follow-on claim needs to prove the damage consumers suffered as a result of MasterCard’s anticompetitive behaviour.

tom.moore@legalease.co.uk

Legal Business

Freshfields and Foley Hoag face off as Venezuela ordered to pay Canadian miner more than $1.2bn

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Litigation Foley HoagFreshfields Bruckhaus Deringer
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Freshfields Bruckhaus Deringer and Foley Hoag have advised as an international tribunal has ordered Venezuela to pay more than $1.2bn to Vancouver’s Rusoro Mining following its ruling that Venezuela unlawfully expropriated the company’s goldmines.

Venezuela took over the Canada-based company’s investments in the South American country as part of a nationalisation of the gold industry in 2011.

After a four year battle, Rusoro has been awarded damages exceeding $967m plus interest. The tribunal has also ordered Venezuela to contribute $3.3m towards Rusoro’s arbitration costs.

Rusoro’s claim was upheld by the International Centre for the Settlement of Investment Disputes (ICSID) after a four year battle. Rusoro claimed Venezuela breached its obligations under the Canada-Venezuela Bilateral Investment Treaty.

Freshfields global international arbitration head Nigel Blackaby worked with the Magic Circle firm’s Paris international arbitration head Noah Rubins to advise Rusoro on the dispute while Foley Hoag acted for Venezuela.

Rusoro issued a statement saying the firm expects that Venezuela will comply with its international obligations and make prompt payment of the award.

The Rusoro win is the latest in a string of high-profile arbitration cases Freshfields has acted on including its role advising Canadian miner Crystallex International at the ICSID which concluded earlier this year. Blackaby led on the Freshfields side to represent Crystallex which was awarded the $1.38bn bilateral treaty arbitration opposite Gibson, Dunn & Crutcher which advised Venezuela.

The Magic Circle firm also acted opposite Skadden, Arps, Slate, Meagher & Flom in one of the biggest cases for the London Court of International Arbitration (LCIA) this year, as Tokyo telco NTT Docomo pursued $1.2bn in damages from a Tata Group linked company for a breach of shareholder agreement. Freshfields acted for Tata Group company Tata Sons.

madeleine.farman@legalease.co.uk

Legal Business

HSF appoints Freshfields’ co-head of power and utilities as it ramps up German push

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Europe Freshfields Bruckhaus DeringerHerbert Smith Freehills
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Herbert Smith Freehills (HSF) has landed M&A partner Christoph Nawroth from Freshfields Bruckhaus Deringer in Dusseldorf.

Nawroth co-headed the Magic Circle firm’s global power and utilities group and its infrastructure funds group during his time at the firm. The high-profile hire by HSF follows a contrasting time for the London rivals in Germany, with Freshfields shrinking its presence in the country after closing its Cologne office, whereas HSF has rapidly scaled up since launching in Frankfurt and Berlin in 2013.

Since 2013 HSF has grown to more than 55 lawyers, including 16 partners, across three offices. The firm launched in Dusseldorf in March with the arrival of former Clifford Chance arbitration partner Thomas Weimann.

Nawroth is not the first Freshfields partner depart for HSF in Germany, with the firm’s former co-head of energy and natural resources Dirk Hamann switching two years ago in a blow to the Magic Circle firm.

Scott Cochrane, HSF’s head of corporate, said: ‘Christoph will help us further enhance our offering to our clients in Germany, a crucial market for us given the size and strength of its economy and more widely EMEA, a key region for our firm.’

Ralf Thaeter, Germany managing partner, added: ‘According to Thomson Reuters, acquirers listed in Germany were EMEA’s most acquisitive companies for Q1 2016, with a combined total of almost $85 billion in offers. We anticipate a steady flow of M&A deals to continue and the strategic hire of Christoph, a highly respected practitioner with an outstanding reputation for handling complex transactional work for blue chip clients, aligns to our ambition to be a leader in the market.’

tom.moore@legalease.co.uk

Legal Business

Freshfields and Eversheds make up bulk of applications as Irish admissions reach over 300

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Ireland Eversheds SutherlandFreshfields Bruckhaus Deringer
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Freshfields Bruckhaus Deringer and Eversheds have made up the bulk of UK admissions to the Irish bar so far in 2016, as the number soared to over 300 after the Brexit vote.

Freshfields has registered approximately 130 lawyers so far this year, while Eversheds has had about 100 lawyers admitted. Although the Irish Law society would not comment on specific firms, it did reveal that there have been a total of 319 admissions in 2016 – up from the figure of 186 before the vote.

According to the Irish Law Society, since the referendum, it has received approximately 30 initial queries per day from UK solicitors.

In a statement the society added: ‘We have had informal discussions with some of the major international law firms whose England and Wales-qualified solicitors have in recent weeks been taking out an additional qualification by seeking and gaining admittance to Roll of Solicitors in Ireland. We have learned from these informal discussions that the motivation for this move has been a concern to protect their status as lawyers qualified in an EU member state and the rights that such a status confers.

‘We have been told that this is simply contingency planning and that the firms concerned do not intend to establish offices in Ireland. The majority of solicitors that are transferring are from large London-headquartered firms including at least one of the so-called ‘Magic Circle’ firms, one of the ten largest law firms in the world. Many of these solicitors specialise in EU and competition law.’

Freshfields has the largest competition practice in London, while Eversheds already has a full-service offering in Dublin, after re-branding local firm O’Donnell Sweeney in 2011.

It is understood that fellow Magic Circle firms Clifford Chance and Linklaters have also registered some of their lawyers in Ireland due to Brexit, alongside a long list of firms which includes Herbert Smith Freehills, Hogan Lovells, Berwin Leighton Paisner, Simmons & Simmons and Norton Rose Fulbright.

Last week Legal Business revealed that Pinsent Masons was eyeing up a Dublin base, to complement its existing offering in Belfast and provide a full UK and Ireland presence for the firm.

Similarly it is understood that a number of UK firms are considering a Dublin base following Britain’s decision to leave the EU, with financial services and funds being two areas becoming especially lucrative following the Brexit vote.

While a full merger with an Irish firm is likely to be the preferable option for UK firms, Irish firms are unlikely to want to cut off profitable referral relationships with other UK firms.

Both Freshfields and Eversheds declined to comment.

kathryn.mcann@legalease.co.uk

Legal Business

Freshfields makes real estate partner Johnson global finance head

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Leadership Freshfields Bruckhaus Deringer
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Freshfields Bruckhaus Deringer has appointed real estate finance partner Simon Johnson as its new global head of finance following a ‘recalibration’ of its finance team.

Johnson will replace real estate finance partner David Trott who will return to client work after a four year term.

Appointed by senior partner Edward Braham following a consultation within the finance practice,  Johnson has a wide range of experience advising banks and other financial institutions, sponsors, investors and corporations of real estate finance transactions. He trained at the firm and has previously held the role of graduate recruitment partner.

Johnson told Legal Business his priority would be to bed in the firm’s DCM and high-yield investments, and emphasis the international aspect of the firm’s finance practice.

‘That’s our real trump card. The international nature of the firm and the practice is crucial and I want to drive closer integration, and have more depth in our relationships. We want clients to trust two to three partners in the practice,’ Johnson said.

The shift will see more turbulence for the Magic Circle firm’s real estate finance practice which in June saw Jeffrey Rubinoff move to White & Case.

The appointment follows a ‘recalibration’ of Freshfields’ finance department made in May, which saw the firm create a separate leveraged finance group to give the practice four departments.

The firm broke its lockstep last year, bringing in heavy hitting high yield partner Ward McKimm from Kirkland & Ellis. His hire came after the firm pushed through provisions to allow it to pay a small band of recruits over the top of its City lockstep, primarily to back strategic recruitment in US law.

McKimm now heads up leveraged finance alongside co-head Alex Mitchell, while the rest of banking and treasury has now moved into the corporate finance team headed up by Martin Hutchings. Former Shearman & Sterling partner Tim Pick now leads the energy, transport and infrastructure finance team, while restructuring and insolvency is now led by Richard Tett.

Financially, Freshfields was the standout performer of the Magic Circle for 2015/16 in a muted year for City firms. The firm unveiled a 7% revenue increase from £1.245bn to £1.327bn, while profits per equity partner (PEP) now stand at £1.473m, an increase of 8% on last year’s figure of £1.37m.

madeleine.farman@legalease.co.uk

For more on finance practices in the City see: ‘Golden goodbyes – changing faces and fortunes at the City’s top banking teams’

For more on Freshfields management see: ‘The last champions – meet the leaders intent on sealing Freshfields’ place in the global elite’

 

Legal Business

Q&A: Alan Mason – Freshfields ‘rest of continental Europe’ managing partner on Brexit, cross border M&A and more

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Leadership Freshfields Bruckhaus Deringer
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Following his appointment as Freshfields Bruckhaus Deringer‘s first regional managing partner for the ‘rest of continental Europe’ – for offices excluding Germany, Austria and central and eastern Europe – Paris-based corporate partner Alan Mason (pictured) speaks with Madeleine Farman about his plans to shape the role.

Why was a separate managing partner needed for offices such as Paris, Amsterdam, Brussels and Madrid?

It’s a question of bringing the business together. That’s what our clients are telling us. In this market segment we’re seeing a shift away from the country-by-country approach. Our clients are looking at investment opportunities or risks that they’re worrying about on a regional basis.

Why Freshfields?

I spent my first day back at the firm in 1995 as a summer student, so it’s been a few years since I’ve been asked that question. At the time I wanted to find a firm that was very well-known and credible in London, but also in France. I’m fighting in the European corner now, not just in the French corner, but before I took on this role in every interaction I’ve had with the firm it’s always been very clear that the firm’s leadership has been incredibly internationally minded.

Have you ever thought of moving firms?

I did a summer placement in a number of different firms, I trained at Freshfields and I’ve been here ever since. Choices of firms can be quite a personal matter depending on who you work with, the type of work you do, the types of clients you work for, but everything I’ve looked for in my career I’ve always found at Freshfields.

What’s been the reaction to Brexit in continental Europe?

Anyone who’s predicting things now with any degree of certainty is quite brave. We would say that having a strong European presence, which is not just focused in one particular country or one particular market, means we’re incredibly well placed to help our clients as they navigate this next market event which is as challenging, or perhaps more challenging, than the financial crisis.

Where are the opportunities in continental Europe?

When you look at it from the outside you could think Eurozone crisis, low growth, but it is an exciting place at the moment for foreign investors and this is before we know what the full impact of Brexit will be. You have excellent worldwide groups headquartered in Europe so people are trying to invest. You have human capital, we have a very well trained workforce. You also have some great groups that want to expand themselves internationally. When you’re thinking about Europe and investing into Europe, you need to think beyond the country where the investment is made, you look at the region and what that group can do on the world stage.

What does it take to build a successful cross-border M&A team?

You need to have the right people; good client lawyers in the right places. That doesn’t mean you need a leading practitioner in every single market for a client to call. That simply would not work because we see the volume of deals in the M&A market in certain countries. In effect what you’re doing in your office, you should be able to do anywhere in Europe.

madeleine.farman@legalease.co.uk

Legal Business

Slaughters, Freshfields and MoFo chip in on £24.3bn ARM takeover

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Corporate Freshfields Bruckhaus DeringerSlaughter and May
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Slaughter and May, Freshfields Bruckhaus Deringer, Davis Polk & Wardwell and Morrison & Foerster have scored roles on Japanese telecoms group SoftBank’s £24.3bn deal to acquire UK tech flagbearer ARM Holdings. It is the largest public M&A deal in the UK in 2016 so far.

A long-time adviser to ARM, Slaughter and May led as the chip designer agreed a deal that becomes the largest ever acquisition of a European tech business. ARM turned to M&A heavyweight Steve Cooke to advise it on its historic deal. Cooke, who became Slaughter and May’s senior partner on 1 May, is a longstanding adviser to the Cambridge-based microchip maker.

London-based corporate lawyer Chris McGaffin, who was promoted to partner at Slaughter and May just a year ago, and Brussels-based competition partner Jordan Ellison also advised on the deal. Davis Polk & Wardwell are also listed as legal counsel to ARM. Davis Polk’s team on the deal included managing partner Thomas Reid and Reuven Young.

Morrison & Foerster, a longstanding adviser to SoftBank, again acted for the Japanese bank along with Freshfields Bruckhaus Deringer which was drafted in to provide London M&A muscle.

Ben Spiers, Freshfields’ global co-head of M&A, and corporate partner Stephen Hewes acted for SoftBank.

Ken Siegel, Morrison & Foerster’s Tokyo managing partner, has represented SoftBank in over $50bn worth of M&A transactions since 2010. He led MoFo’s legal advice to SoftBank alongside Graeme Sloan, the firm’s London head of corporate and a global chair of M&A.

Cleary Gottlieb Steen & Hamilton also won work on the deal, advising The Raine Group, one of the financial advisers to SoftBank. The Cleary team was led by London partner Simon Jay. White & Case also scored a role acting for Mizuho Securities, a financial adviser to SoftBank , with a team led by Jun Usami in Toyko and Philip Broke in London.

Softbank has said ARM will remain an independent business within SoftBank and continue to be headquartered in Cambridge. As part of the transaction, SoftBank has said it intends to at least double the number ARMs UK employees over the next five years.

tom.moore@legalease.co.uk

Legal Business

Freshfields leads the pack as London’s big four continue flat financial trajectory

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Financial results 2015/16 Freshfields Bruckhaus Deringer
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Firm posts impressive 8% PEP hike and 7% revenue increase despite headcount drop

With the unaudited results of firms in, Freshfields Bruckhaus Deringer has produced the standout 2015/16 financial performance in what was another muted year for the City’s most powerful law firms.