Legal Business

US firms deployed on $43bn Worldpay takeover as Freshfields scores lead on major bank merger

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Dealwatch Freshfields Bruckhaus DeringerSkadden, Arps, Slate, Meagher & Flom

Skadden, Arps, Slate, Meagher & Flom is advising payment processor Worldpay on a proposed $43bn takeover offer by financial technology company FIS, while Freshfields Bruckhaus Deringer has been drafted in to act for Deutsche Bank on merger talks with rival Commerzbank.

The deal, announced yesterday (18 March), will see Worldpay shareholders receive $11 in cash for each of their shares. The merger gives Worldpay an enterprise value of around $43bn, including its debt, which Florida-based FIS expects to refinance.

In a joint statement, the companies said the combination greatly enhances FIS’ payment offering and ‘significantly increases Worldpay’s distribution footprint’.

The Skadden team advising Worldpay consists of New York partners Peter Atkins, David Ingles, Sven Mickisch, Joseph Penko and London-based partner Scott Hopkins. Willkie Farr & Gallagher was enlisted to advise FIS on the deal, with a team led by US partners Robert Rachofsky and Adam Turteltaub, and in the UK by Jennifer Tait and Henrietta de Salis.

It is the second major merger Worldpay has been subject to in under two years: in September 2017 it was bought by Vantiv, creating a company with a combined value of £22.2bn. Skadden was involved that time too, assisting the Cincinnati-based Vantiv, while Allen & Overy advised Worldpay.

Later this year, Worldpay general counsel (GC) Ruwan de Soyza is set to leave for a GC and executive committee role at a FTSE 100 technology company.

Meanwhile, Freshfields and German firm Hengeler Mueller have landed roles as Deutsche Bank and Commerzbank announced last Sunday (17 March) they were in merger discussions. Nevertheless, the rival banks warned ‘there is no certainty that any transaction will occur.’

In January 2016, Freshfields advised Deutsche Bank as it sold ¥25.7bn of its Chinese assets.

Hengeler Mueller is advising Commerzbank, with a team consisting of partners Johannes Adolff, Hartwin Bungert, Daniela Favoccia, Dirk Bliesener, Lucina Berger and Martin Klein.

tom.baker@legalease.co.uk

Legal Business

Dealwatch: Freshfields joins Slaughters in fight for UK plastics plc as Apax returns to Links Paris team

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Dealwatch Freshfields Bruckhaus DeringerLinklatersSlaughter and May

It has been a busy few days for the Magic Circle, as US company Berry Global trumped an offer by Apollo to secure UK plastics group RPC for £3.34bn while Apax sold its business schools to Cinven for €800m.

Corporate head Andy Ryde and partner Paul Mudie have been leading the Slaughter and May team advising the London-listed company as its board approved last Friday (8 March) the offer from the American packaging group.

Freshfields Bruckhaus Deringer’s Piers Prichard Jones and Alison Smith acted for Berry. The New York-listed manufacturer trounced a previous £3.3bn bid by Apollo, leaving the private equity house definitively out of the game.

‘The first offer from Apollo was expressed as a final offer and there were no caveats,’ Ryde told Legal Business. ‘And if you make a final offer with no reservation on a UK public takeover you are not allowed to bid again.’

A Sullivan & Cromwell team led by Ben Perry acted as lead adviser to Apollo on the UK takeover elements of the deal when its bid was initially recommended by RPC’s board on 23 January, with Paull Weiss London-based M&A partner David Lakhdhir providing additional advice to that firm’s core client in the US.

‘It’s very interesting that Berry made their competing offer on Friday, the week before the meaningful vote in Parliament on Brexit,’ added Ryde. ‘It suggests that Berry are fairly relaxed about Brexit. It is a positive sign for the UK that they were prepared to do that.’

The possibility of further bids is not ruled out but considered very unlikely. Berry’s offer will need the backing of 75% of shareholders in a meeting to be called shortly. Closing is expected in the third quarter of the year.

Freshfields saw its French team busy too, as Paris corporate partner Alan Mason led the team advising Cinven in its €800m acquisition of private higher education group Inseec, announced on Monday (11 March).

Linklaters advised seller Apax, led by Paris corporate partner Fabrice de La Morandière.

The Silk Street firm previously advised the UK private equity house when it acquired Inseec from Career Education in December 2013 for €200m.

The group has since grown to a collection of schools in Europe, the USA and China enrolling more than 25,000 students.

marco.cillario@legalease.co.uk

Legal Business

Deal watch: Big cheeses land £975m Dairy Crest deal as Slaughters acts on £1.3bn Provident hostile takeover

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Dealwatch Eversheds SutherlandFreshfields Bruckhaus DeringerSlaughter and May

The UK buyout market had an uncharacteristically frenetic week with City M&A counsel taking the lead on a £1.3bn unsolicited bid for doorstep lender Provident Financial and the £975m recommended offer for UK cheese and spreads stalwart Dairy Crest Group on the same day.

The hostile bid for sub-prime lender Provident was launched at 7am this morning (22 February) by Non-Standard Finance (NSF), with Slaughter and May corporate head Andy Ryde and fellow partner Paul Mudie leading the charge.

NSF was set up in 2015 by former Provident chairman John van Kuffeler, who had previously enlisted Slaughters while at Provident and carried on the relationship at NSF, including on its IPO.

In a rare case of a hostile takeover not leaking beforehand, the target company called up to enlist Clifford Chance on Friday morning when the bid went public. Corporate partners Lee Coney and Mark Poulton are leading the team advising Provident, with the latter having previously advised the client on its strategic review and £331m rights issue.

Shareholders who collectively own more than 50% of the company, including Woodford Investment Management, Invesco and Marathon Asset Management, are understood to be in favour of the offer, given disgruntlement with chief executive Malcolm Le May following a series of profit warnings.

The bid turned hostile after Provident last year rebuffed an approach from NSF. Given heavy regulation of subprime lenders, mainstream banks are unlikely to put in a rival offer for Provident, although the company could be a private equity play.

NSF is planning to demerge its home credit business, Loans at Home, to satisfy the competition authority.

Also benefiting from a long-standing relationship was Eversheds Sutherland  partner Aleen Gulvanessian, who led a team advising Dairy Crest on its £975m sale to Canadian dairy company Saputo.

Dairy Crest is the manufacturer of products including Cathedral City cheddar, Country Life butter – a favourite of former Sex Pistols frontman John Lydon – and Clover spread.

Freshfields Bruckhaus Deringer, led by energy and natural resources head Laurie McFadden and corporate partner Stephen Hewes, advised the buyer. An Ashurst team led by partner Karen Davies advised Lazard as buy-side financial adviser.

The Canadian counterpart is using the acquisition, its first foray into Europe, as a foundation for growth in the UK.

Eversheds Sutherland has advised longstanding client Dairy Crest on a string of deals, including its €430m sale of French cheese spread company St Hubert to Montagu Private equity in 2012, the £80m sale of its dairies business to Müller in 2015 and a recent £70m fundraising.

Gulvanessian told Legal Business that the quality of the buyer was an important consideration in the sale process. ‘It is an excellent brand and business. The directors were keen to ensure that not only was the offer good for shareholders but also for all other stakeholders – the farmers, other suppliers, customers and of course employees.’

Elsewhere, Travers Smith leveraged its long-standing relationship with Ancala Partners to advise its joint venture – Leep Utilities – on the acquisition of SSE Water Limited from SSE plc.

Leep Utilities is a joint-venture of Ancala, the mid-market infrastructure investment manager, and the real estate and infrastructure investor the Peel Group. Long-time relationship partner Spencer Summerfield advised the buyer.

SSE Water is the largest new appointments and variations (NAV) company operating in the UK water sector, owning water networks that supply around 20,000 customers across 28 sites in southern England and Wales.

nathalie.tidman@legalease.co.uk

Legal Business

Deal watch: Latham joins Freshfields and A&O on €5.7bn European buyout as Eversheds acts on €590m UK takeover

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Dealwatch Allen & OveryFreshfields Bruckhaus DeringerLatham & Watkins

Continental Europe provided rich pickings to the global legal elite this week, as Blackstone and Hellman & Friedman agreed to one of the largest ever takeovers of a German listed company by a private equity group.

It was a busy week for the UK market too, as Eversheds Sutherland joined Allen & Overy (A&O) on the €590m takeover of a British chemical business by a New York-listed company.

Latham & Watkins and Freshfields Bruckhaus Deringer acted for Hellman & Friedman and Blackstone as the two PE houses announced a bid to acquire German online business Scout24, which was advised by A&O.

The cash offer for the entirety of the Frankfurt Stock Exchange-listed company is €46 per share, valuing Scout24’s equity at €4.9bn and giving the company an enterprise value of €5.7bn.

London private equity partners David Walker and Huw Thomas led the Latham team advising on the M&A, debt and equity finance aspects of the deal. The team also saw two of Latham’s most recent hires from the Magic Circle feature: Düsseldorf corporate partners Nikolaos Paschos and Tobias Larisch. The former joined the US firm from Linklaters in August 2017, the latter from Freshfields in March last year.

Larisch’s former colleagues, Freshfields partners Stephan Waldhausen and Arend von Riegen, advised the bidders on M&A matters, while A&O’s Christian Eichner and Hans Diekman acted for Scout24.

Latham previously advised Hellman & Friedman and Blackstone on the acquisition of Scout24 in 2013, and then on the company’s listing in 2015.

‘This is a major deal for the European private equity market,’ Walker told Legal Business. ‘There is, of course, uncertainty about the impact of Brexit, and indeed the general economic climate, but there continues to be a very healthy appetite for high quality assets and this deal shows that.’

The offer is subject to a minimum acceptance threshold of 50% plus one share and was brought forward to Pulver BidCo, a holding company jointly controlled by the two private equity houses.

A&O was busy north of the channel too, as London corporate partner Stephen Lloyd led the team advising Swedish chemicals company Perstorp as it sold its UK chemicals division Capa to US rival Ingevity.

Eversheds corporate partner Nicola Brookes led the team advising New York Stock Exchange-listed Ingevity, while Swedish firm Mannheimer Swartling provided Sweden law advice to Perstorp.

‘The special thing about this deal for our client is that it is their first acquisition outside of the US,’ Brookes told Legal Business.

The deal comes at the end of a competitive process, with private equity house Cinven also showing interest towards the end of last year.

Brookes said that Brexit was something ‘we had to deal with in terms of due diligence. The parties discussed Brexit and how they would protect themselves given that their suppliers are based across Europe.’

marco.cillario@legalease.co.uk

Legal Business

The Women in Law debate: The challenge of you

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Gender diversity Freshfields Bruckhaus Deringer

Building on last year’s cover feature on the City’s star female deal counsel, Legal Business teamed up with Freshfields Bruckhaus Deringer for a reception celebrating the strides made… and steps still to be taken. The 80 senior lawyers across in-house and private practice that gathered at The Ned in late November heard from a panel of general counsel (GCs) and partners talking frankly about careers, life and changing aspirations.

***

Natasha Good, Freshfields Bruckhaus Deringer: I was going to ask our panellists to start by telling us about the challenges they have faced on their career journeys.

Legal Business

Buyout star Adrian Maguire to join Kirkland in body blow to Freshfields

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Corporate Freshfields Bruckhaus DeringerKirkland & Ellis

One of the most touted private equity names in the City, Adrian Maguire, has quit Freshfields Bruckhaus Deringer to join Kirkland & Ellis just over a year after his former colleague David Higgins made the same move.

Freshfields-bred and regarded as a loyalist to the firm, Maguire is leaving the Magic Circle outfit after more than two decades in what will be seen as a notable setback for its attempts to limit the damage of Higgins’ $10m move in December 2017.

For Kirkland it is another significant step forward in its attempts to bulk up its European M&A firepower. Clients of the highly-regarded Maguire include Cinven, Carlyle and Advent International.

The US firm, which last year became the highest grossing in the world as turnover hit $3.165bn, recently made another step in this direction, recruiting a corporate duo from Linklaters to launch its second continental base in Paris.

The firm’s profit per equity partner now sits at $4.7m, giving it the chance to offer huge packages to marquee deal partners.

Coupled with the hire of Higgins, Maguire’s move also sees the Chicago-based giant turn to more mainstream deal advisers, a move reflected in the anointment of Jon Ballis as chair, who is expected to usher a more consensual style than current chair Jeffrey Hammes when he takes over in 2020.

A spokesperson for Freshfields said: ‘Adrian has been a valued friend and colleague over the course of his career with us and we wish him all the best in his new role. We have had a phenomenal year advising clients in 2018, and the strength and depth of our private equity practice is second to none. Adrian’s departure does not change that.’

Maguire took a six-month sabbatical from Freshfields from June to November last year, and a partner at the Magic Circle firm pointed out that the team had its best year ever despite Maguire’s absence. Highly-rated players still at the firm include partner Charles Hayes.

Yet the symbolism of the move for the City legal scene is hard to overstate. If even a Magic Circle loyalist like Maguire can be persuaded to switch to a US rival, fresh questions will be raised about the London elite’s ability to retain key talent. Freshfields had in 2017 gone through a shake-up of its partnership designed to help it keep its star partners from the clutches of higher-paying US rivals. This latest departures suggests it was too little, too late.

marco.cillario@legalease.co.uk

For more on Kirkland & Ellis’ meteoric rise, see ‘Wrecking ball’ (£)

Legal Business

Deal watch: Busy year-end as Japanese group buys Swiss power grid and Malaysian funds invest in Battersea

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Dealwatch Addleshaw GoddardBaker McKenzieFreshfields Bruckhaus DeringerLinklaters

City deal teams are having a busy run-up to Christmas, with Baker McKenzie, Freshfields Bruckhaus Deringer, Addleshaw Goddard and Linklaters leading on two multibillion-dollar deals.

Bakers’ London private equity head David Allen and corporate partner Jannan Crozier led a team advising Hitachi as the Japanese conglomerate acquired 80.1% of Swiss giant ABB’s power grid division for around $6.4bn.

Hitachi’s largest ever acquisition, with an enterprise value of $11bn including net debt, saw Freshfields’ M&A partners Piers Prichard Jones and Stephen Hewes advise ABB, which will retain control of 19.9% of a business spread across more than 100 countries and employing over 130,000 people.

‘The impact of this deal will be felt for generations to come,’ Crozier told Legal Business, pointing to the ability of the Japanese group to combine its technology with the infrastructure acquired from ABB and bring energy to areas of the world where it is more difficult to get to. ‘They will be able to revolutionise the way power is brought to consumers.’

Swiss firm Homburger’s M&A partners Claude Lambert and David Oser also acted for ABB, which is looking to simplify its business structure and focus on automation technology.

The Swiss group is able to require Hitachi to buy the remaining 19.9% of the power grid business in three years’ time. Under a so called ‘put and call’ provision, Hitachi will also be able to require ABB to sell its remaining stake in the business.

‘In the short term we will provide the maximum stability to the company through this joint venture, but in three years’ time we will have the flexibility to do that,’ Crozier said. The Bakers team was supported by Tokyo partners Akifusa Takada and Yutaka Kimura.

The acquisition caps off a busy 2018 for Bakers, which was active on numerous large deals over the last few months. Earlier in December the firm acted for Unilever on its £3.1bn acquisition of malted drink brand Horlicks from GlaxoSmithKline.

Elsewhere, the redevelopment of Battersea Power Station in London provided rich pickings for a trio of City firms as Malaysia’s asset manager Permodalan Nasional Berhad and state pension fund The Employees Provident Fund took a £1.6bn stake in the £9bn project.

Addleshaws’ real estate partner Simon Tager led the team acting for Battersea Power Station Development Company on the sale of the commercial assets of phase two of the project, including a six-acre site hosting the former coal power station on the south bank of the river Thames. Addleshaws’ Leona Ahmed, Luke Harvey, Hugh Lauritsen and Lee Sheldon also worked on the deal, while the buyers instructed Linklaters’ real estate partner Patrick Plant.

Phase two, which will include Apple’s new UK headquarters, is due to complete by the end of 2020.

marco.cillario@legalease.co.uk

Legal Business

Comment: Women redefining City law – a few teachable moments and the odd necessary evil

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Gender diversity Freshfields Bruckhaus Deringer

When high-profile GCs still talk of being mistaken for a PA (as BT’s Sabine Chalmers was not that long ago), it’s a reminder of how much more progress needs to be made to clear the path to the top for women in law.

Yes, there has been improvement over the last ten years. According to the panel of female partners and in-house speakers taking part in last month’s Legal Business/Freshfields Bruckhaus Deringer reception championing women in law, the grip of the boy’s club in the City is loosening. Slowly.

While women are exposed to less blatant harassment and marginalisation in the workplace than even five years ago, the striking lack of diversity at the upper echelons of the profession highlights how little change there has been in private practice.

True, the situation is very different at in-house teams, which are the direct beneficiaries of law firms haemorrhaging talented mid-level associates for careers that offer more autonomy and recognition. While it’s easy to imagine that in a decade female GCs in the FTSE 100 will outnumber men, leading law firms will be lucky to get to 30% female partnership ratios by then.

Insight on what these dynamics mean came from our all-star panel at The Ned in late November in a debate in front of more than 80 guests. Our panellists – Chalmers, Freshfields partner Natasha Good, Funding Circle GC Lucy Vernall, Travers Smith partner Lucie Cawood and CVC legal head Lauren Livingston – put forward a range of thoughts which will be fully reported in the next issue of Legal Business.

Ahead of that, here is some of their key advice for aspiring female lawyers:

  1. Have faith in your own abilities. Male dominance is not the only obstacle women face: imposter syndrome is a reality for many women – even some of the most successful.
  2. Don’t feel you need to fundamentally change who you are to succeed. Partners, GCs and law-firm leaders have many different styles and experiences.
  3. Do self promote – it may be an evil of modern business life but it’s a necessary evil.
  4. When there are difficulties, take control of what you can change yourself and don’t wait for the company/a white knight to fix things for you.
  5. Build a support network and ask for help when you need it.
  6. Don’t take everything on to prove yourself – it will be taken for granted and soon forgotten anyway. Instead, learn to prioritise and delegate. High-flying careers require work on high-impact projects.
  7. Find a role model or mentor – male or female. Men can have a big positive impact on your career, whether that’s colleagues championing you internally or husbands or partners putting their own career on the back burner to look after children.
  8. Clients and law firms remain in a stand off on the related issues of gender diversity, flexible working and deadlines. The profession will only move past that if there is frank dialogue and compromises on both sides. For example, GCs should accept that discounted business-as-usual work should come with more flexible expectations on response times. Law firms, meanwhile, should get better at providing genuine team-coverage for key clients, rather than deferring to one or two senior-lawyer contacts who cannot always be available.

What remains clear is that this debate is far from over and that patience among younger lawyers with the pace of progress is fast running out. Let’s all do better.

georgina.stanley@legal500.com

Legal Business

Stars and stripes in their eyes – assessing the US ambitions of A&O and Freshfields

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Magic Circle Allen & OveryFreshfields Bruckhaus Deringer

Nathalie Tidman looks at the struggle for the City elite as US players dominate home and away

‘People like me, making the switch from the Magic Circle to a US firm – a Kirkland, a Latham, a White & Case – did so because being a powerhouse in the US is critical to becoming a truly global law firm.’

Legal Business

‘Going gangbusters’: Freshfields’ woes continue as corporate partner Qureshi joins Fried Frank

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Strategic recruitment Freshfields Bruckhaus DeringerFried, Frank, Harris, Shriver & Jacobson

A further exit from Freshfields Bruckhaus Deringer’s City bench has seen corporate and capital markets partner Ashar Qureshi join the London offices of Fried, Frank, Harris, Shriver & Jacobson.

The move sees the well-respected Qureshi leave the Magic Circle firm after four years as a partner in its global transactions practice.  The US securities veteran was seen as a significant string to the bow of Freshfields’ US-qualified offering when he joined in 2014.

At Fried Frank, Qureshi will head the EMEA global transactions team in a move designed to bolster the firm’s cross-border transactional capability. His focus will be on international corporate transactions, including capital markets, M&A and corporate finance.

Qureshi is well-versed in acting for financial institutions, corporates and governments on IPOs, equity and debt securities, including high-yield, as well as hedge fund and private equity transactions and structures, rights offerings restructurings and privatisations.

Mark Mifsud, managing partner of Fried Frank’s London office, told Legal Business: ‘Ashar is an extremely talented lawyer with ambidextrous skills spanning transactions and capital markets. His hire allows us to provide bandwidth and flexibility to the corporate practice, which is going gangbusters at the moment.

Mifsud added: ‘We consider ourselves best in breed for asset management advisory and want to achieve the same thing with capital markets and transactional. We have more irons in the fire – more hires are anticipated – so watch this space.’

Before Freshfields, Qureshi worked in several client-side roles, as a director at Hanson Asset Management, founding partner of NAYA Capital, and executive vice chairman and CEO of Renaissance Group and Renaissance Asset Managers, respectively.

He was also a partner at Cleary Gottlieb Steen & Hamilton for more than a decade, with a total of 20 years under his belt at the Wall Street firm.

Freshfields has in recent months become no stranger to highly-regarded partner exits. Earlier this month, Freshfields-bred Reza Mohtashami QC quit after 19 years to pursue a career at litigation boutique Three Crowns.

Another high-profile departure for the City giant saw high-yield heavyweight Ward McKimm exit after three years to re-join his old firm, Shearman & Sterling, in July. The move came not seven months after buyout star David Higgins exited for Kirkland & Ellis, despite the Magic Circle firm overhauling its partnership model in a bid to keep its top performers.

The firm also in June lost veteran corporate partner Martin Nelson-Jones, who had been at the firm since 1991, to DLA Piper in London.

For its part, Fried Frank hired corporate real estate partners Darren Rogers and Patrick Williams from Ashurst last year and more recently in July, Sam Wilson from Simpson Thacher & Bartlett for its asset management practice.

nathalie.tidman@legalease.co.uk