Legal Business

Olswang and Grant Thornton charged £8.4m for BHS sale, Sir Philip Green claims

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CMS UKGrant ThorntonLinklaters
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Months after the collapse of BHS, Sir Philip Green has revealed that Olswang and Grant Thornton charged purchaser Retail Acquisitions Limited a collective £8.4m for the transaction.

During an investigation into the demise of BHS, MPs led by Labour MP Frank Field called on the law firms involved to disclose further details of their dealings. Linklaters and Nabarro released what they billed at £1.2m and £217,000 respectively to their clients, Green’s Arcadia Group and Taveta Group.

Olswang had refused to provide details of its fees and cited client privilege.

Speaking in his first major interview since the event to ITV News yesterday (18 October), Green (pictured), who has faced criticism for his role in BHS’s demise, said both Olswang and Grant Thornton were ‘well regarded professional firms, that weren’t afraid to charge…they charged £8.4m for their services.’

Green further stated that ‘these two companies never got interviewed by the Select Committee, or the correct people didn’t get interviewed by the Select Committee, in spite of Mr Field stating, when he was told I don’t want reserves from the bench, he never called for the two principle people from the two companies to ask they what work they had done/ hadn’t done.’

Stressing that while he wasn’t ‘making an excuse’ he felt that ‘with two prominent advisers, there were two or three other lawyers in the team…we felt they had relevant people around them, there were different letters that came, different views, letters came on finance being offered, so we thought there was a good opportunity for someone to take the business forward, with money, that was provided and give it a fresh start. Unfortunately that didn’t work out.’

Green, who chairs the Arcadia Group which includes Topshop and Burton, bought British Home Stores in 2000 for £200 million, rebranding it BHS. Having faced intense market competition in 2006, the business was eventually sold to Retail Acquisitions, led by Dominic Chappell, for £1 in 2015. Chappell told the inquiry in June he was considering legal action against Green.

A plan to turn BHS around failed and it collapsed into administration in April 2016, with many blaming Green for taking big dividends and leaving the company with a huge pension deficit.

Green has since commissioned the legal opinion of Lord David Pannick QC of Blackstone Chambers who dismissed the conclusions of the inquiry criticising Green over the fall of BHS, describing it as ‘bizarre,’ ‘unstoppable,’ and ‘beset by serious factual errors.’

It comes ahead of a House of Commons vote on Green’s conduct, which will determine whether he can keep his knighthood.

sarah.downey@legalease.co.uk

Legal Business

Pinsents and Linklaters act on latest big pharma deal as Teva sells Allergan generics business for £600m

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Corporate LinklatersPinsent Masons
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Pinsent Masons and Linklaters are advising on Teva Pharmaceutical Industries’ sale of UK and Ireland business Activas Generics for £603m as the Israeli firm seeks to divest assets following last year’s takeover of Allergan.

Israeli pharma firm Teva is selling the business to Accord Healthcare, part of Indian company Intas Pharmaceuticals, subject to final approval from the European Commission. The deal is expected to close by the end of this year.

Pinsents is advising Teva on the divestment, winning the mandate following the pharma company’s $40bn megadeal for Allergan’s generics business Activas in 2015. Life sciences specialist Allistair Booth and corporate partner Andrew Hornigold led on the deal.

Accord Healthcare is being advised by Linklaters corporate partner James Inglis and head of India Narayan Iyer. The deal sees Indian firm Intas pick up the generics business, doubling its European revenues to around $500m.

The deal comes as part of a sell off of assets required by anti-trust authorities following Teva’s $40bn acquisition which was completed in August this year. Further deals have already been agreed in Australia and Teva is expected to sell some US assets to gain regulatory approval.

Last year, Sullivan & Cromwell and Latham & Watkins both won key roles on Teva’s takeover of Dublin-headquartered Allergan’s generics business. Latham corporate partners Charles Ruck and Scott Shean advised Allergan in the US. S&C corporate partners Joseph Frumkin and Krishna Veeraraghavan advised Teva from New York.

The deal went through following Teva’s bid for rival Mylan, with S&C winning the mandate from Kirkland & Ellis in June 2015 due to conflict.

matthew.field@legalease.co.uk

Legal Business

Comment: Winning hearts and minds (but mainly hearts) at Linklaters

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The best Freshfields corporate lawyer Silk Street ever produced is now leading Linklaters, with incoming senior partner Charlie Jacobs ushering in a very different style at the City giant to the technocratic revolution pushed through by previous regimes.

The charismatic South African has long stood out, not only for a clubbable style more associated with Freshfields’ deal team but also for an entrepreneurial drive that looked increasingly exceptional amid Linklaters’ more seasoned M&A lawyers (the firm promises the next generation of M&A partners will rectify that).

With Linklaters’ partnership pushed through a series of restructurings and proddings with diminishing returns and escalating collateral damage over the years – most notably the bruising 2011 restructuring – it has become a received view in the City that Linklaters does not have the bench-strength expected of a firm of this pedigree.

As we note in our cover feature this month, not only is Jacobs (pictured) putting out a very different message to his predecessors but, in pairing up with new managing partner Gideon Moore, will work alongside another figure with a rock-solid reputation as a pragmatic practice builder.

The sales pitch is plain: in place of a remote leadership team, the pair are speaking the same language as the regular partners who have grown increasingly distrustful of Linklaters’ c-suite.

There is a lot to get done. As much as the firm strived to maintain an image of effortless progression, the late 1990s and mid-2000s were a turbulent period for Linklaters, beset by controversies, clashing views and some strategic bets that failed to pay off in Europe.

Tony Angel’s innovations in metrics, performance management and slicker infrastructure were ahead of their time. Such shifts unsettled the firm in a profound manner but at its boom-time peak, Linklaters appeared to have established itself as the pace-setter of the Magic Circle, combining the high-end class of Freshfields with the first-mover dash of Clifford Chance (CC) in its prime.

Since the banking crisis, the best you could say is that Linklaters has played a great hand indifferently. It remains a world-class operator with fantastic assets and heritage but no longer looks like a world-beater. Its business is also underweight in contentious areas, and the less said about the US practice the better. The soap opera in private equity has also not been great for the brand.

An early test of the new leadership’s ability to constructively finesse Linklaters onwards will come with the review of its lockstep, which definitely should be undergoing some substantive changes to reflect that the legal industry has moved on since 1999.

But, however that vote plays out, on paper Linklaters should be primed for revival. The firm has suffered some reverses but nothing like the structural issues that have hit CC. If Jacobs and Moore can win the hearts and minds they are so clearly pitching for – and, despite considerable differences in style, it is hard to imagine a better pair for that purpose – Linklaters can quickly get back to making life hard for its rivals, rather than its own partners.

alex.novarese@legalease.co.uk

For more on Linklaters please see ‘Rain men – goodbye Harvard Kool-Aid, hello plain speaking at Linklaters’ c-suite’

Legal Business

Linklaters latest firm to review remuneration model as US pay pressure mounts

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With Magic Circle rivals Clifford Chance, Allen & Overy and Freshfields Bruckhaus Deringer having recently remodelled their remuneration structures following pay pressure from more profitable US firms, Linklaters has plans of its own.

Gideon Moore, who became managing partner of Linklaters at the start of the year, is currently drawing up proposals to put to the partnership next month.

While the firm has yet to finalise its plans, current indications are that Linklaters is considering the use of discretionary gates and more flexibility to move partners around its ten-year lockstep.

Linklaters currently has a relatively pure lockstep model running from 10-25 points, with country variable ‘discounts’ used in some foreign markets like Germany and Belgium (respectively equivalent to 90% and 70% of UK partners).

According to one senior partner the firm is considering bringing in a gate around the eighth year of progression and making it easier to move partners down the ladder, with a review triggered five years after the top of the equity has been reached.

Like many London firms, Linklaters has been affected by predatory raids from US law firms, while the compressed and rigid nature of lockstep makes it hard to operate profitably in many foreign jurisdictions.

Current indications are that Linklaters is less focused on ushering in ‘super-point’ deals above its core equity ladder to attract and retain high performers as the model has been divisive when used by City rivals. A more consensual approach would allow Linklaters to increase profits-per-point and operate more flexibly.

Top of equity partners pull in around £1.86m, with profit per equity partner currently £1.4m.

One Linklaters partner commented: ‘It’s maths. It will be consensual when people move down. It’s a good thing, people need to manage their careers and, if anything, this will extend the careers of many people. The only tool we had before was to restructure when too many people got to the top of equity.’

Moore (pictured) said: ‘We keep our partner profit-sharing arrangements under review to ensure that they remain appropriate. Lockstep is part of our DNA and underpins our culture. We are considering some adjustments to our current model and a proposal is under development.’

tom.moore@legalease.co.uk

Read more on the new leadership in the feature: ‘Rain men – goodbye Harvard Kool-Aid, hello plain speaking at Linklaters’ c-suite‘

Legal Business

Rain men – goodbye Harvard Kool-Aid, hello plain speaking at Linklaters’ c-suite

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With high-billing duo Charlie Jacobs and Gideon Moore taking the helm at Linklaters there is renewed swagger on Silk Street. Will it be enough to revive the City leader after a troubled post-Lehman run?

For a young South African who saw law as a stepping stone to business, Charlie Jacobs has had quite a journey. Something of an anomaly at Linklaters in the early 1990s, when even by the standards of the City elite, the firm was ‘stiff and English’, Jacobs found the place ‘a bit intimidating’ in the early years. But if he truly lacked confidence then, he hid it well. Now, after nearly a decade as Linklaters’ unrivalled corporate star, the youthful-looking 50-year old has this month begun his role as the City giant’s new senior partner for a five-year term.

Legal Business

Winning hearts and minds (but mainly hearts) at Linklaters

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Comment Linklaters
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The best Freshfields corporate lawyer Silk Street ever produced is now leading Linklaters, with incoming senior partner Charlie Jacobs ushering in a very different style at the City giant to the technocratic revolution pushed through by previous regimes.

The charismatic South African has long stood out, not only for a clubbable style more associated with Freshfields’ deal team but also for an entrepreneurial drive that looked increasingly exceptional amid Linklaters’ more seasoned M&A lawyers (the firm promises the next generation of M&A partners will rectify that).

Legal Business

What goes up: Linklaters to vote next month on new partner pay model

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Moore pulls together proposals for flexible model as lockstep set to evolve

With Magic Circle rivals Clifford Chance, Allen & Overy and Freshfields Bruckhaus Deringer having recently remodelled their remuneration structures following pay pressure from more profitable US firms, Linklaters has plans of its own.

Legal Business

Life during Law: Aedamar Comiskey, Linklaters

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Life During Law Linklaters
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I’m the fifth of six children. By child five, your parents are very relaxed. You can do what you want! I grew up in a small town in Ireland. I was trying to decide whether to do law or medicine and two sisters were junior doctors, working through the night. I thought: ‘That looks hard – I’ll become a lawyer!’ Some irony there.

Legal Business

Magic Circle duo act on major post-Brexit IPO as ConvaTec lists

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Linklaters and Freshfields Bruckhaus Deringer are advising medical products company ConvaTec on its anticipated $1.8bn initial public offering (IPO).

Freshfields is acting as lead adviser to ConvaTec, which announced its intention to float on the London Stock Exchange (LSE) yesterday (3 October) by late October or early November this year.

London corporate partner Christopher Mort is leading the Freshfields team. He has previously advised on the IPOs of more than 30 FTSE companies including Hastings Insurance, Merlin Entertainments and Saga.

The IPO will be the largest on the LSE since the Brexit vote on 23 June. The market has been slow in the months since the vote, with waste management firm Biffa planning to raise £270m and Pure Gym aiming for a £190m float. ConvaTec’s business had revenues of $1.65bn for 2015 employing more than 9,000 people.

Linklaters is acting for the banks on the deal, with corporate partners James Wootton, Dan Schuster-Woldan and Mike Bienenfeld leading the team.

Recent major IPO mandates in the UK mostly pre-date the Brexit vote. Linklaters and Clifford Chance (CC) both took roles on the £400m float of Metro Bank in March. Linklaters capital markets partner Jason Manketo led for the bank while CC capital markets head Adrian Cartwright led for sponsor RBC Europe.

The largest IPO to push ahead this year was on the Hong Kong Stock Exchange, as Davis Polk & Wardwell advised Postal Savings Bank of China in September on its $8bn float, with CC leading for the underwriters.

matthew.field@legalease.co.uk

Legal Business

Clifford Chance scoops Murdoch hacking litigation from Linklaters

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Litigation Clifford ChanceLinklaters
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Clifford Chance has won the high-profile instruction to defend Rupert Murdoch’s News Group Newspapers (NGN) in its hacking litigation from Linklaters, constituting the fourth time the media giant has switched its lawyers for this case.

First reported in Private Eye, NGN initially instructed Farrers as its solicitors for the dispute, then switched to Olswang and then Linklaters.

Last Friday (23 September) Clifford Chance became the latest firm gifted with the instruction when claimants received notice of the change.

The move is a major blow to Linklaters which took over from Olswang to advise the media giant on all outstanding civil litigation claims relating to the phone-hacking scandal at now-defunct Sunday tabloid News of the World in 2012. Olswang was taken off the case after a number of civil cases settled in that year, leading to a drop in advisory work.

Linklaters was then instructed to handle any outstanding litigation against the company on top of its existing role advising parent company News Corporation’s management and standards committee.

The dispute relates to long running civil litigation at London’s High Court against NGN over claims of phone hacking. The media giant has previously settled more than 1,000 claims including a number of cases brought against the now-defunct News of the World. In April the Court held that claims against its sister tabloid, The Sun, by phone hacking victims could go ahead.

A ruling handed down by Mr Justice Mann allowed four claimants to amend their cases to include the tabloid for the first time in proceedings against NGN. Those suing NGN include EastEnders actors Christopher Parker and Brooke Kinsella, Coronation Street actor Kym Marsh, designer Pearl Lowe and her musician husband Danny Goffey and Leslie Heseltine, known as actor and comedian Les Dennis.

Other firms used by NGN previously includes Burton Copeland to review emails and Simon Muirhead Burton for smaller scale litigation.

More recently Harbottle & Lewis partner Lawrence Abramson was fined £20,000 last year by the Solicitors Disciplinary Tribunal for acting ‘unprofessionally’ by failing to read an email containing evidence of widespread hacking at the News of the World.

NGN, or News UK, this year bolstered its in-house legal capacity with high profile Kingsley Napley partner Angus McBride as its general counsel just months after its decision to re-hire former Sun editor Rebekah Brooks as chief executive.

Read more in the feature: ‘Shock and Flaw – is Leveson workable?’

sarah.downey@legalease.co.uk