Legal Business

Magic Circle trio land roles as London City Airport sold to Canadian consortium in £2bn deal

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Dealwatch Freshfields Bruckhaus DeringerLinklaters
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Three Magic Circle firms won positions to advise on the sale of London City Airport to a Canadian-led consortium of investors in a deal worth £2bn.

Linklaters, Freshfields Bruckhaus Deringer and Slaughter and May acted on the sale of the airport, located 6 miles from London’s financial centre at Canary Wharf, which was completed yesterday with the Canadian consortium successfully outbidding two Chinese firms.

Slaughter and May advised Global Infrastructure Partners (GIP) on its 75% interest in the airport. The multinational private equity firm acquired its interest through two successive transactions in 2006 and 2008.

Slaughters corporate partner Mark Horton, who has a focus on domestic and international corporate finance, led the firm’s team on the deal alongside finance partner Philip Snell and tax partner William Watson. Horton has advised GIP in the past, acting as the fund bought London Gatwick Airport back in 2009.

Both Linklaters and Freshfields are advising the Canadian-led consortium, which includes Alberta Investment Management Corporation, Borealis Infrastructure, Ontario Teachers’ Pension Plan Board and Wren House Infrastructure Management Limited.

Linklaters acted for the consortium on infrastructure matters with partner Ian Andrews taking the lead on the deal along with planning law partner David Watkins. The team for Freshfields’ was led by the co-head of the firm’s energy and natural resources group Laurie McFadden with corporate partner Martin Nelson-Jones. 

Andrews who understands the consortium solidified the sale with a lower offer after a competing bidder with a higher offer failed to show certainty of funds, told Legal Business he was pleased with the result.

He added: ‘It’s important to make sure the bid’s ready. [The certainty of funds failure] shows it’s really important to be ready. It’s a huge amount of work and effort, so it’s pleasing for everybody involved. London City Airport is an airport that’s got a lot of potential and I think that was why it was such an attractive asset for so many people.’

madeleine.farman@legalease.co.uk

Legal Business

Latham targets Asian private equity market with hires from Clifford Chance and Freshfields

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Strategic recruitment Clifford ChanceFreshfields Bruckhaus DeringerLatham & Watkins
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After making significant investment into its European private equity practice to transform it into one of the region’s biggest private equity players, US firm Latham & Watkins has set its sights on Asia with a triple hire and two relocations.

Having kick-started its drive into European private equity market with the hire of Clifford Chance’s private equity chief David Walker in 2013, Latham returned to the Magic Circle firm to hire Hong Kong deal doer Simon Cooke as it turns its attention to Asia. Cooke leaves Clifford Chance after two decades at the firm, the last nine of which have been as a partner.

Having so far struggled to gain a strong footing in the Asia market, Cooke arrives as part of a triple hire into Asia with Freshfields Bruckhaus Deringer counsel Amy Beckingham joining as a partner and Hogan Lovells leveraged finance partner Gary Hamp also joining in Hong Kong.

Latham, which has built its global expansion around cornerstone private equity and capital markets practices, is applying the same formula to its expansion in Asia as PE takes off in the region. Asian tycoons have historically shut out private equity firms and preferred to make direct investments but that appears to be changing, with US consultancy firm Bain reporting that PE in the Asia-Pacific region broke out of a sobering two-year slump in 2014 as deal values broke previous records and more funds were raised.

Cooke and Beckingham, M&A lawyers with a track record of selling companies through IPOs, are expected to work closely with leveraged finance specialist Hamp. Also arriving in Asia are high yield partner James Burnett and restructuring partner Josef Athanas, who relocate to Hong Kong from London and Chicago respectively.

Latham chair and managing partner Bill Voge said: ‘Latham has been deeply involved in the development of private equity and leveraged finance markets in the United States and Europe, and there are clear signs that those markets are growing and evolving in Asia. The arrival of these partners in Hong Kong, along with the talented team in London, New York and other global financial capitals, puts us in place to capitalise on these trends.’

Cooke added: ‘Latham has had significant success in its other markets and the firm’s commitment to achieve the same market stature in Asia, together with its incredibly strong finance platform, is very attractive to me.’

Bryant Edwards, Latham’s Asia chair, said the firm ‘saw strong growth in private equity and related finance in London and Europe 10 years ago’ and is ‘seeing the same patterns in Asia today, in particular where high yield has grown to become a significant part of leveraged finance’.

tom.moore@legalease.co.uk

Legal Business

Merger take-three: Freshfields and Linklaters advise as LSE and Deutsche Börse re-visit talks

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Dealwatch Freshfields Bruckhaus DeringerLinklaters
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Nearly 16 years since talks first began, the London Stock Exchange (LSE) and German rival Deutsche Börse are engaged in merger discussions again, and Magic Circle duo Freshfields Bruckhaus Deringer and Linklaters have won roles advising on the potential combination.

Both stock exchanges confirmed yesterday (23 February) they are in negotiations about an all-share merger with Freshfield partners Andrew Hutchings, Mark Rawlinson and London M&A co-head Piers Prichard Jones leading the firm’s team to represent LSE.

Linklaters corporate partner Roger Barron is acting for Deutsche Börse along with Simon Branigan in London; Ralph Wollburg and Staffan Illert in Germany. The Magic Circle firm had advised the stock exchange when it set up a clearing house in Singapore in 2015, as well as the acquisition of foreign exchange trading platform 360T Beteiligungs GmbH in July last year for €720m.

The London and Frankfurt exchanges said they were in ‘detailed discussions about a potential merger of equals’, which if it goes ahead, will create a European trading powerhouse under a new holding company that would give Deutsche Börse shareholders a 54.4% stake and LSE shareholders 45.6%.

However, both exchanges said in their respective statements that ‘there can be no certainty that any transaction will occur’.

The decision to combine comes after both stock exchanges first attempted to merge back in 2000, and tried to form a new company called iX but the deal collapsed, resulting in both listing their own stock separately instead. In December 2004, Deutsche Börse made a £1.3bn approach for the LSE but saw its offer rebuffed.

Under the terms of the potential merger however, LSE shareholders would receive 0.4421 new shares in exchange for each LSE share, and Deutsche Börse shareholders would receive one new share in exchange for each Deutsche Börse share. The combined group would have a unitary board composed of equal numbers of LSE and Deutsche Börse directors.

Discussions between the parties remain ongoing regarding the other terms and conditions of the potential merger.

jaishree.kalia@legalease.co.uk

Legal Business

Baker & McKenzie acts for Bain and Brakes Group again as food distributor sells to US firm in $3.1bn deal

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Dealwatch Baker McKenzieFreshfields Bruckhaus Deringer
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Baker & McKenzie and Freshfields Bruckhaus Deringer have picked up roles as US company Sysco Corp moves to buy London food distributor Brakes Group from Bain Capital.

Magic Circle firm Freshfields is advising Sysco, the largest food distributor in the US, on a $3.1bn deal to buy the European food distributor and expand its presence to the United Kingdom, Ireland, France, Sweden, Spain, Belgium and Luxembourg.

Freshfields’ cross-border mergers and acquisitions specialist Piers Prichard Jones advised Sysco Corp from London, with assistance from Freshfields’ US head of corporate Matthew Herman.

Brakes Group and Bain Capital has engaged Baker & McKenzie to act on the deal. The firm’s head of private equity David Allen is leading a team on the transaction.

Baker & McKenzie has previously advised Bain Capital and Brakes Group on a number of transactions, including the merger of Fresh Direct with the M&J Seafood, Pauleys and Wild Harvest divisions of Brakes. The firm also advised Bain Capital and Brakes Group’s acquisition of Davigel from Nestlé.

The deal, subject to regulatory review by European Union competition authorities, is expected to be completed before the end of Sysco’s fiscal year in July 2016.

The combined companies are expected to generate annualised sales of approximately $55bn, with Sysco agreeing to take on the repayment of approximately $2.3bn of Brakes Group’s financial debt.

Freshfields had a bumper year in M&A last year, with Dealogic’s 2015 league tables recording the firm secured 190 deals worth $587.6bn. Freshfields also retained its title as top firm in the European attorney rankings, advising on $418.4bn worth of deals.

madeleine.farman@legalease.co.uk

Legal Business

Freshfields top-paid member takes home £3.2m in 2015, 68% more than year before

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Salaries Freshfields Bruckhaus Deringer
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Freshfields Bruckhaus Deringer‘s highest-paid LLP member took home 68% more last year, pocketing £3.2m at the end of the 2014/15 financial year, compared to £1.9m the previous year.

The firm’s LLP accounts said the profit and remuneration for the top-paid member includes payments in relation to that member’s retirement from the firm.

The increase in pay is a stark difference to what was paid in the 2013/14 financial year when the filings revealed that the highest paid member, including payments relating to retirement, took a 24% drop from £2.5m in 2013 to £1.9m. In 2014, Freshfields had 334 members on average.

In 2014/15, fee earning staff headcount rose 2.7% to 2,640 while secretarial and support staff increased 3.5% to 2,119. Overall headcount grew by more or less the same mark from 4,621 to 4,759 by 3%.

Overall staff costs at the firm increased by 2.7% from £547.7m to £562.7m despite salary and social security costs falling 1% and 5% respectively, while other staff costs rose 24% from £48.5m to £60.2m.

Revenue at the firm was more or less flat around the £1.3bn mark, while profit for the year before members’ remuneration and profit shares rose very slightly to £511.8m from £509.7m. However the profit available for discretionary division amongst members fell 13% from £552.1m to £481.3m, while profit for the year before partner annuities also dropped 4% to £506.3m from £527.6m.

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

jaishree.kalia@legalease.co.uk

Legal Business

Lockstep transfer: Freshfields Japan partners face profit cut as part of global review

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Freshfields Bruckhaus Deringer is set to transfer partners in its Tokyo office from its traditional lockstep to its second-tier lockstep as part of a global profit review, Legal Business understands.

The move is expected to affect seven partners, including four practice heads, from the 31-strong office.

The review, which kicked off last year, was initially set to affect partners in non-core practice areas and smaller offices globally, is to also impact equity partners at the firm’s Fleet Street headquarters, notably in the employment and IP practices.

The move comes after the partnership approved the introduction of a second tier lockstep two years ago. The second ladder runs from 10-30 points and sits alongside the traditional 17.5-50-point ladder, which the majority of partners are currently on.

At that time, Freshfields – which had more than 400 partners – abolished its non-equity partner roles and transferred them on to the second ladder, which affected around 35 salaried partners. This increase in equity partner numbers drove down the firm’s profit per equity partner for the 2014/15 financial year by 8% to £1.37m. The change came as LB100 firms reviewed their partnership models following HMRC rule changes for LLPs. 

One partner at the Magic Circle firm said the profitability drive was not performance based but directed at certain practice areas and geographies. ‘There are some local offices that would love to pay less and be able to grow their office. Not everyone wants to be paid more because then they can’t hire or promote anybody,’ said the partner.

The profitability drive comes after the firm rejected the idea of introducing three separate profit pools for the UK/Europe, Asia and the US in 2014, to allow smaller and less profitable offices to set more realistic targets in accordance to market conditions.

Freshfields would not comment on the changes.

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

jaishree.kalia@legalease.co.uk

Legal Business

Taking silk: Quinn, Gibson and Freshfields heavyweights among new QCs in 107-strong round

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The Bar Freshfields Bruckhaus DeringerGibson, Dunn & CrutcherQuinn Emanuel Urquhart & Sullivan
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A trio of City heavyweights has been appointed among 107 new Queen’s Counsel (QC) announced today (11 January), an increase on last year’s round of 93. 

Of the nine solicitor advocates who applied, there were three successful candidates, a drop on 2014/15 when five solicitor advocates were appointed. This year’s appointments include Quinn Emanuel Urquhart & Sullivan arbitration head Stephen Jagusch (pictured), Gibson, Dunn & Crutcher international arbitration group co-chair Penny Madden, and Freshfields Bruckhaus Deringer London arbitration head Nigel Rawding.

However the Queen’s Counsel Selection Panel has said the number of females applicants taking silk remains ‘stubbornly low’.

A report on the 2015/16 competition showed there were 25 successful women applicants of the 48 who applied – the same amount as last year when 25 out of 43 female applicants were successful.

Nine applicants aged over 50 were appointed, the same as last year and the youngest successful applicant is 34 years old and the oldest is 57. One of the four applicants who declared a disability was successful. In 2014-15 three applicants who declared a disability were appointed. There were nine successful applicants who declared an ethnic origin other than white out of the 32 who applied, a dip on last year in which 10 applicants out of 24 were appointed.

Figures recorded since 1995 show that while applications have fallen, the success rate of those applying has vastly improved – two decades ago only 14% of all allocations for QC were successful while today the figure stands at 45%.

Justice Secretary Michael Gove will preside over an appointment ceremony at Westminster Hall on 22 February.

Chairman of the selection panel Helen Pitcher said: ‘We remain concerned that the number of female applicants remains stubbornly low, but I am pleased that of those women who did apply, 52% were successful. While I was pleased to note a rise in BAME applicants to 14% of applications it is disappointing that the success rate for BAME applicants was lower than that for applicants as a whole.’

Other high profile names to take silk include One Crown Office Row human rights barrister Marina Wheeler, the wife of Boris Johnson, public law barrister, Shaheed Fatima from Blackstone Chambers, 39 Essex Chambers’ Justine Thornton, and Wilberforce Chambers’ Tim Penny, who recently moved to the set from the now-dissolved 11 Stone Buildings.

Roche general counsel and company secretary, Funke Abimbola, who recently published a paper on social mobility and diversity in the profession with Byfield Consultancy, tells Legal Business: ‘The talent pool of those awarded silk is generally made up of the elitist of the profession. The process of application is biased towards to those with great networks and weighty referees – and not everyone will have the time to invest in the application process. Also, the blending of the roles of solicitor-advocate and the barrister hasn’t gone far enough – there are few differences between both roles now.’

‘As for the female diversity stats, this is just evident of stats at the senior end of the Bar generally. The Bar is, however, trying a lot to improve but such improvement in the next few years will continue to be marginal.’

sarah.downey@legalease.co.uk

The full list of Queen’s Counsel, by order of seniority:

Simon Paul Steven Cairnes

Jayne Margaret Adams

Kim Franklin

Kennedy Vernon Talbot

Michael Charles Anthony Bedford

Terence Edward Bergin

Peter Anthony Makepeace

Marina Wheeler

James Michael Scott Ramsden

Paul David Ozin

Steven Suppiah Perian

Timothy Charles Penny

Andrew John Moran

Henry James Witcomb

Jonathan Charles Ashley-Norman

Derek Anthony O’Sullivan

Ian James Clarke

Ian Francis Henderson

Sarah Joanne Lee

Cathryn Margaret McGahey

Michael Joseph Ivers

Kerry Louise Bretherton

Michael Andrew Horne

Andrew David Norton

Cyrus Rais Larizadeh

Aidan Patrick Casey

Douglas James Campbell

Richard Julian Henshaw Edwards

Nicholas John Grundy

Mark Eliot George Harper

Emma Rebecca Deacon

Adam John Weitzman

Katharine Susannah Gollop

Adam Sebastian Feest

Justine Thornton

Caroline Mary Shea

Siobhan Grey

Richard William Scott Ground

John Foster Harrison

Alan Grant Johns

Louise June Sweet

Gemma White

Nicholas James Johnson

Catrin Miranda Evans

Simon James Fox

Daniel Nicholas Tatton-Brown

Richard Duncan Atkinson

Philip Evans

Simon Charles Kilvington

William Laurence Latimer-Sayer

Daniel Lightman

William Owain Thomas

Aidan Vine

Thomas Charles Weekes

Jeremy Rupert Daniel Hyam

Oliver Edwin James Glasgow

Alexander Frederick Hickey

James Herbert Maxwell-Scott

Thomas Moody-Stuart

Tobias Augustine William Riley-Smith

Ben Matthew Valentin

Stephen Richard Jagusch

Giles Francis Sacheveral Cockings

Clodagh Maria Bradley

Richard Colin Wilson

Benjamin Roger Collins

James Ewins

James Abrahams

Bridget Maura Dolan

Thomas Richard Hinchliffe

Simon Spiro Malynicz

Kama Louise Melly

Peter Skelton

Clare Adele Sibson

David Ian Head

Stephen Moses

Harry David Glyn Steinberg

Julian Hector Marriott Kenny

Sudhanshu Swaroop

Richard Thomas Kimblin

Hannah Markham

Adam Charles Prest

Daniel Bayfield

Salim Abdool Hamid Moollan

Anya, Lucie, Victoria Proops

Rosalind Jayne Phelps

Daniel Benjamin Squires

David Niaz Mohyuddin

Jonathan Michael Cohen

Brian Anthony Kennelly

Paul Stuart Mitchell

John Dempster McKendrick

Guy Luke Vassall-Adams

Maya Elizabeth Jane Lester

David Stewart Mumford

Alexander Henry Spencer Booth

Lisa Virginia Busch

Riaz Hussain

Gerald Carlo Facenna

Shaheed Fatima

Laurent Charles Sykes

Jonathan Michael Davey

Jonathan Adam Hilliard

Andrew Smith

Nigel Kenneth Rawding

Thomas Plewman

Penelope Jane Madden


Legal Business

Skadden and Freshfields top global deal tables as M&A figures reach record heights

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Corporate Freshfields Bruckhaus DeringerSkadden, Arps, Slate, Meagher & Flom
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In a record year for global M&A, US firm Skadden, Arps, Slate, Meagher & Flom and Magic Circle firm Freshfields Bruckhaus Deringer were the top performers in the US and Europe respectively, according to Dealogic’s 2015 league tables.

As worldwide deal volumes surpassed $5trn for the first time, global attorney rankings for corporate advisory work show Skadden was top of the class, advising on 293 deals worth over $1trn, beating out rivals including Wachtell, Lipton, Rosen & Katz which came second with 130 deals valued at $733.1bn, Latham & Watkins which came third with 302 deals totaling $590.2bn, followed Freshfields with 190 deals worth $587.6bn.

Skadden also came out on top in US attorney rankings, advising on 203 deals valued at $881.9bn. Notably Weil Gotshal & Manges has fallen several places. While the firm had taken the top spot in the global attorney rankings and US attorney rankings in 2014, it now sits in sixth and fourth place respectively for these categories.

Meanwhile, Freshfields retained its title as top firm in the European attorney rankings, advising on $418.4bn worth of deals, while other Magic Circle firms Linklaters, Clifford Chance and Slaughter and May came third ($228.8bn), fourth ($221bn) and sixth place ($200.3bn) respectively. New entrants in Europe’s top ten lawyer rankings included Cleary Gottlieb Steen & Hamilton in seventh place (2014: 12th) and Hogan Lovells in ninth (2014: 15th).

De Brauw Blackstone Westbroek leapt to eighth place from 38th in 2014. Major deals for the Dutch firm last year included Shell’s £47bn acquisition of BG Group alongside Slaughter and May and Freshfields, as well as the $1bn IPO of Grand Vision, the owner of Vision Express, alongside Linklaters and Davis Polk & Wardwell.

EMEA targeted deal flow accounted for 22% ($1.13trn) of global M&A, a record low and well below the average for the last ten years which stood at 35%. One of Europe’s biggest deals was in the food and beverage industry, with Anheuser-Busch InBev’s £71bn proposed takeover bid for SABMiller, an agreement which a host of firms including Freshfields and Linklaters advised on.

US targeted M&A volume reached a record high of $2.47trn, up 59% on the year before, from $1.55trn . Healthcare was the top ranked sector in 2015 with $724.4bn, up 66% from 2014 ($436.4bn) and technology came closely behind with record high volume and activity of $715.7bn via 9,367 deals, over double the 2014 total ($327.4bn).

sarah.downey@legalease.co.uk

Legal Business

Checking in: Freshfields and Stephenson Harwood advise on £1.3bn sale of the Priory

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Dealwatch Freshfields Bruckhaus DeringerStephenson Harwood
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Freshfields Bruckhaus Deringer and Stephenson Harwood have led on the sale of the Priory, the rehab clinic known for its celebrity clients, having treated the likes of supermodel Kate Moss, pop star Robbie Williams and rocker Pete Doherty.

US private equity group Advent International sold the Priory to Acadia Healthcare for £1.3bn, after buying it in 2011 for £925m. Priory’s management was advised on the 2011 transaction by DLA Piper. 

The Priory, which has a hospital in Roehampton, London, operates more than 300 facilities with approximately 7,200 beds. The group is expected to produce around $865m in revenue in 2015 with profit of approximately $196m.

Freshfields advised Advent International, with rising private equity star Adrian Maguire leading on the deal alongside corporate partner Julian Pritchard.

The Magic Circle firm has previously advised Advent International on its 2012 acquisition of Cytec Industries Inc for $1.15bn, and its sale of Domestic & General to CVC back in 2013. 

Stephenson Harwood’s head of corporate Andrew Edge led for Acadia, with support from corporate partner Andrew McLean, corporate finance partner Karima Hudson, real estate partner Simon Brading and employment partner Anne Pritam. Nashville-headquartered law firm Waller Lansden Dortch & Davis acted for Acadia in relation to its financing of the transaction.

Acadia will pay cash consideration of approximately £1.3bn, including approximately £925m used to repay Priory’s outstanding debt.

Brent Turner, Acadia’s president, told Legal Business: ‘We’ve been in the UK for a year and a half and the Priory acquisition gives us expanded scale and service lines across the mental health spectrum in the UK. We’re very excited to help the Priory continue to grow. Given the continuing increase in demand for behavioural services, the market is expanding.’

tom.moore@legalease.co.uk

Legal Business

Dealwatch: Freshfields acts for Deutsche Bank as it sells ¥25.7bn of Chinese assets

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After winning a place on Deutsche Bank’s global legal panel last year, Freshfields Bruckhaus Deringer is representing the German bank on the sale of ¥25.7bn of its Chinese assets.

The firm has advised the German banking giant on the sale of its stake in Chinese financial institution Hua Xia Bank, which is set to raise nearly $4bn.

Under the terms of the transaction, Deutsche Bank will sell its entire 19.99% stake in Hua Xia to Chinese insurer PICC Property and Casualty Company for between ¥23bn and ¥25.7bn ($3.54bn and $3.96bn), subject to final price adjustment at closing. PICC Property and Casualty Company was advised by Linklaters with a team led by Beijing Corporate partner Pui Hong Chik. 

Freshfields’ team was led by corporate partners Melissa Thomas and Alan Wang based in Shanghai, and Heiner Braun in Frankfurt.

In 2010, Freshfields advised Deutsche Bank on the increase of its stake in Hua Xia, from 17.12% to 19.99%, the maximum single foreign ownership level permitted by regulators at the time. The German bank had a stake in Hua Xia since 2006. 

Freshfields was among several firms awarded positions as Deutsche Bank’s go-to advisers after the bank finalised its global legal panel in July last year. Allen & Overy, Hogan Lovells, White & Case, Cleary Gottlieb Steen & Hamilton and Latham & Watkins were also named on the panel which divides the firms regionally between Europe, the Middle East and Africa; the US; and Asia.

In April last year Deutsche Bank was fined £1.7bn for Libor rigging and suffered a fall in profits after setting aside litigation expenses of €1.5bn in the first quarter of that year. Its litigation reserves were €4.8bn at the end of the fourth quarter of 2014.

jaishree.kalia@legalease.co.uk