Legal Business

Magic Circle duo advise on LSE’s £938m rights issue as part of £1.6bn Frank Russell acquisition

Posted on |
Corporate Freshfields Bruckhaus DeringerLinklaters
legal-business-default

Magic Circle firms Freshfields Bruckhaus Deringer and Linklaters, alongside some of the leading US firms, have advised on the London Stock Exchange Group (LSEG) rights issue for £938m to help fund a £1.6bn acquisition.

The LSEG said in late June it would acquire global asset management firm Frank Russell Company from Northwestern Mutual for $2.7bn. The fully underwritten rights issue is intended to raise net proceeds of £938m as part of the cash consideration for the buyout.

The issue will be priced at £12.95 a share, with a total issuance of around 74.3m ordinary shares or approximately 27.3% of LSEG’s existing issued share capital.

Freshfields’ advised LSEG on the acquisition and issue with corporate partner Andrew Hutchings leading alongside partners Mark Rawlinson, Mark Austin, Sarah Murphy, James Smethurst and Simon Priddis, while corporate partner Sean Rodgers and a team from Kirkland & Ellis provided US law advice to the company.

Linklaters advised the underwriting banks Barclays, RBC Capital Markets, Deutsche Bank, JP Morgan Cazenove, Banca IMI, Banco Santander, HSBC and Mitsubishi UFJ Securities.

Debevoise & Plimpton is advising Northwestern Mutual on the acquisition, led by partner Gregory Gooding and partners Kenneth Berman, Lawrence Cagney and Peter Schuur.

Skadden Arps Slate Meagher & Flom represented Russell Investments in the $2.7bn sale by Northwestern Mutual to the LSEG.

Jaishree.kalia@legalease.co.uk

Legal Business

Sidley Austin and Linklaters lead on Bank of Cyprus €1bn capital raise

Posted on |
Finance LinklatersSidley Austin
legal-business-default

The London teams of both US firm Sidley Austin and Magic Circle firm Linklaters have scored heavyweight roles advising on a €1bn capital raise for the beleaguered Bank of Cyprus, in a landmark deal completed just one year after it was saved from collapse by an international rescue package.

Sidley acted as international legal counsel to the Bank as it raised the mammoth sum through a private placement, which includes international fund managers led by US billionaire Wilbur Ross and the European Bank for Reconstruction and Development.

Led by City-based global finance partner Matthew Cahill, who was supported by capital markets partner Stephen Roith, US securities partner Bart Capeci, and capital markets counsel Shireen Khoo, the team has advised Bank of Cyprus since it was placed into resolution in March 2013.

At Linklaters, corporate partner Nick Garland and capital markets partner Jason Manketo were also instructed as placement counsel, advising HSBC and Credit Suisse while Cypriot firm Chryssafinis & Polyviou acted as local counsel.

On the progression made by the bank just 12 months into its rescue deal, Sidley’s Roith said: ‘That Bank of Cyprus has successfully raised €1bn of new share capital just 12 months after exiting resolution is a great achievement and we understand that it is likely to be beneficial to the Cypriot economy as a whole. This was an interesting deal, as it had some of the characteristics of an institutional share offering and some of a private equity sale. We look forward to supporting Bank of Cyprus through the next stages of its capital raising.’

The deal is subject to approval by shareholders at an extraordinary general meeting in late August, with new shares expected to be sold at €0.24 each.

It constitutes an important step for the bank to regain market access since it came out of resolution in July last year. The private placement involved an ‘unusual and complex arrangement’ whereby a publicly-listed company offered unlisted shares privately to a group of potential investors.

Sarah.downey@legalease.co.uk

 

For more on the Cypriot legal market post-crisis, see Making bail – getting Cyprus back on its feet

Legal Business

Ashurst, Clifford Chance, Freshfields and Linklaters advise banks on competition inquiry

Posted on |
Adviser reviews AshurstClifford ChanceFreshfields Bruckhaus DeringerLinklaters
legal-business-default

International firm Ashurst and Magic Circle trio Clifford Chance, Freshfields and Linklaters are advising the UK’s biggest banks over an inquiry into competition in the banking sector, following an investigation launched by the Competition and Markets Authority (CMA) in mid-July.

Ashurst’s global head of competition and EU law Nigel Parr is leading a team advising Lloyds Banking Group, while Freshfields is acting for HSBC, CC is acting for longstanding client Barclays, and Linklaters for the Royal Bank of Scotland (RBS).

Freshfields has previously taken on heavyweight mandates for HSBC including advising the banking giant on its record $1.9bn fine from US authorities in a settlement over money laundering. CC has previously won large-scale finance work from Barclays, having led on the bank’s £5.8bn rights issue alongside US firm Sullivan & Cromwell, and has also advised on its £59.5m settlement with the Financial Services Authority (FSA) over the fallout from the Libor scandal.

Linklaters also counts RBS as a regular client, and sits on the banking giant’s panel alongside Freshfields and CC. RBS did, however, appoint CC to conduct an independent inquiry into the treatment received by small business customers in financial distress, after allegations that the bank deliberately drove them to collapse for its own gain.

Britain’s new competition watchdog recommended the inquiry after an investigation into the supply of SME banking services found that high street banks had market shares of over 90%. Further competition concerns raised included limited switching between providers and high barriers to entry.

Sarah.downey@legalease.co.uk

Legal Business

Slaughters and Links lead on £3bn Carillion/Balfour talks; HSF and A&O advise on BSkyB’s £7.4bn European acquisitions

Posted on |
Corporate Allen & OveryHerbert Smith FreehillsLinklatersSlaughter and May
legal-business-default

Construction group Carillion has instructed Slaughter and May’s corporate heavy hitter William Underhill and fellow corporate partner Kathy Hughes to advise on a proposed £3bn merger with UK rival Balfour Beatty, which has turned to Linklaters’ M&A veteran and longstanding adviser Iain Fenn.

The deal comes as today (25 July) also saw BSkyB conclude a £7.4bn deal to buy European sister companies Sky Deutschland and Sky Italia from 21st Century Fox, with Herbert Smith Freehills (HSF) leading for BSkyB and Allen & Overy (A&O) for Rupert Murdoch’s multinational media corporation.

If the Carillion Balfour talks are successful the merger, which is likely to be scrutinised by the UK’s Competition Commission, will create the largest construction and engineering company in the UK.

Carillion is also a longstanding client of Underhill (pictured), adviser to Royal Mail on its high profile IPO, who has handled a large slice of Carillion’s corporate work over the past decade, including its £291m acquisition of civil engineering firm Mowlem in 2005.

Slaughter and May have formed a close client relationship with Carillion, which in 2013 turned over £4.1 billion, including offering the services of Carillion’s low-cost legal arm to key client Vodafone.

Fenn, meanwhile, last year advised Balfour Beatty on its £190m sale of its UK facilities management arm to French energy group GDF Suez Energy in an attempt to reduce debt and focus on major infrastructure projects. He is well known for his work for Vodafone and advised the company on its £6.6bn acquisition of German cable group Kabel Deutschland last year.

Confirming the talks today (25 July) Balfour Beatty and Carillion said in a joint statement that they are working on a strategy and business plan for a combined entity, which will be ‘underpinned by the evaluation of achievable synergies, future financing arrangements and a number of other essential supporting workstreams’.

The construction duo now have until 21 August to complete the deal under the UK Takeover Code.

Elsewhere, BSkyB has turned to relationship partner Stephen Wilkinson to advise on the acquisition of Rupert Murdoch’s pay TV companies in Germany and Italy, creating one of Europe’s largest pay TV providers. Wilkinson, who also advised BSkyB in the £481m sale of its stake in ITV to Liberty Global earlier this week, was flanked by M&A partner Malcolm Lombers, equity capital markets partner Chris Haynes, Brussels-based competition partner Kyriakos Fountoukakos and IP partner Joel Smith.

HSF teamed up with Hengeler Muller’s Klaus-Dieter Stephan to complete the £2.9bn purchase of Sky Deutschland, acquiring a 57.4% stake from US media group Fox, with an offer put in for the outstanding shares to the remaining minority shareholders. On the £2.45bn acquisition of Fox’s 100% stake in Sky Italia, HSF worked alongside Bruno Bartocci of Italian firm Legance on local law.

BSkyB’s in-house team was spearheaded by deputy general counsel Andrew Middleton and principle legal adviser Sianne Walsh.

Wilkinson told Legal Business: ‘The deal was a complex, marrying the German public offer system with a private acquisition and stitching the transactions together as an integrated deal.’

For 21st Century Fox the A&O team was led by London corporate partners Andrew Ballheimer and Simon Toms, with a team made up of London corporate partners and German corporate partners Oliver Seiler and Hans Diekmann and the firm’s co-head of competition Antonio Bavasso. Milan-based corporate partner Paolo Ghiglione worked alongside Italian firm Duccio Regoli of Mazzoni e Associati to complete the Italian end of the deal.

Tom.moore@legalease.co.uk

Legal Business

Trainee retention rate at Linklaters up to 93%

Posted on |
Trainee retention Linklaters
legal-business-default

Linklaters has kept on 93% of qualifying trainees in its latest cohort, up on the 86% spring 2014 retention rate.

The Magic Circle firm made offers to 54 of 57 qualifying trainees, with 53 lawyers accepting a position, up on the 50 trainees in a 56 lawyer cohort that were kept on earlier this year. 

Linklaters upped its salary bands for junior-level solicitors earlier this year, increasing first year pay 1.26% to take it to £40,000 and second year pay to £45,000. The firm also boosted newly-qualified (NQ) lawyer salaries by 1.6% to £65,000 earlier this year. Slaughter and May was the first Magic Circle firm to post its reviewed pay for junior solicitors this year, upping trainee, NQ and first to third year PQE by 3.2% as rival Allen & Overy froze pay for junior lawyers. 

Top tier firms have been preparing to up their associate levels after restrained intake following the financial crisis. Linklaters’ retention rate dipped to 73% in March 2010 but the firm has stepped up its hiring, with a retention rate in March and September last year standing at 86% and 87%, respectively, while this latest round represents the Magic Circle firm’s highest retention rate since September 2011.

Of the Spring 2014 qualifying trainees, Freshfields achieved an 80% retention rate, keeping on 35 of 44 trainees, while Clifford Chance retained the highest number of trainees, offering roles to 45 of 48 lawyers, or 94%.

Tom.moore@legalease.com

Legal Business

‘Sharpening its corporate offering’ – Middleditch is Linklaters new corporate chief as Wiggins takes on sector role

Posted on |
Corporate Linklaters
legal-business-default

Asia-based Matthew Middleditch has today (14 July) been named Linklaters‘ new head of corporate, replacing current incumbent Jeremy Parr, as Sarah Wiggins takes on the role of global head of client sectors.

Middleditch (pictured), who specialises in advising corporate clients and investment banks on mergers and acquisitions, is currently the firm’s Hong Kong-based head of corporate in Asia and has been a partner at the firm since 1990. His practice, which is largely built upon advising banks and insurance companies, also includes primary and secondary equity issues, including acting on IPOs, rights issues and placing.

He begins a four-year term in September, when London-based Parr, who is the senior relationship partner for BP, Lloyds Banking Group, United Technologies Corporation, Novartis, Unilever, RSA and Greene King, will return to full-time client work after four years at the helm of the group.

Middleditch will remain based in Hong Kong for the time being, although a spokesperson for the firm said that it was possible that he would relocate once his successor in Asia is found.

Wiggins, who was appointed as head of the London corporate practice in May, is promoted to the global role of head of client sectors. Wiggins is a senior corporate partner with a specific focus on the energy sector, having completed a secondment to BP’s head office last year. She succeeds Fiona Hobbs, who will also return to full time client work after completing her four year term. Wiggins is also on the steering committee of 30% Club, the influential body promoting greater gender diversity in senior management roles at UK companies.

Simon Davies, Linklaters managing partner, said: ‘The firm has made huge progress in recent years in sharpening its corporate offering and deepening its broader sector expertise and credentials. Matthew and Sarah bring tremendous experience to these roles with their extensive cross-border expertise, deep sector-based knowledge and commitment to supporting our clients with their most complex and critical matters.’

tom.moore@legalease.co.uk

Legal Business

Linklaters former DCM partner Nigel Pridmore joins Ashurst Hong Kong

Posted on |
Strategic recruitment AshurstLinklaters
legal-business-default

Linklaters former finance partner Nigel Pridmore has joined Ashurst in Hong Kong, following in the footsteps of London debt capital markets (DCM) colleague Francis Kucera, who left the Magic Circle firm for Ashurst in December 2013.

Pridmore, who has been a partner at Linklaters since 1998 and was based in Hong Kong between 2006 and 2010 before relocating to London, specialises in advising investment banks, corporations and sovereigns on complex DCM transactions. He left the 2,536-lawyer firm in February.

Pridmore has over 25 years’ experience working in both developed and emerging markets across the Asia Pacific, Western Europe, the Americas, Russia, various CEE and CIS countries, and Africa. Paul Jenkins, co-head of Ashurst’s global finance division, said: ‘[Nigel’s] appointment, as well as the recent appointment of Jennifer Schlosser in Sydney, adds further depth to our DCM and structured DCM offering, not just in Hong Kong and the Asia Pacific but globally. In this we are responding to, and supporting, our clients’ increased focus on capital markets solutions.’

Anna Delgado, head of the global debt capital markets team at Ashurst, added: ‘As global banks shrink their balance sheets to meet new capital adequacy requirements, DCM plays a significantly greater role as a funding source. In the last few years, we have made considerable investment into strengthening our practice, having recently hired Francis Kucera from Linklaters and Derwin Jenkinson from Clifford Chance. Given Nigel’s expertise and reputation in the market, this appointment will greatly enhance our core capital markets practice in the Asia Pacific. We are confident that he will make a substantial contribution to the global team.’

Jaishree.kalia@legalease.co.uk

Legal Business

Linklaters corporate heavyweight Charlie Jacobs leads on Carlyle’s circa £2bn RAC exit talks

Posted on |
Corporate Latham & WatkinsLinklatersRAC
legal-business-default

Linklaters senior corporate partner Charlie Jacobs is leading for Carlyle Group on the US buyout house’s early stage discussions to exit UK roadside recovery service RAC for a sum reported to be in the region of £2bn.

An IPO remains Carlyle Group’s preferred route for RAC, which the private equity house acquired from British insurer Aviva for £1bn in 2011, but it is understood that no decision has yet been taken and talks are reported to have taken place with potential buyers including Apax and BC Partners.

Carlyle Group is a longstanding Linklaters client, with relationship manager and private equity partner Alex Woodward having advised on its £600m acquisition of Integrated Dental Holdings and Associated Dental Practices in a move that created a combined entity with 450 dental practices. However, the group is also a major client for Los Angeles-founded US firm Latham & Watkins, which last year advised Carlyle on its acquisition of Chesapeake Packaging from private equity house Irving Place Capital and funds managed by Oaktree Capital Management, and later on Chesapeake’s merger with Multi Packaging Solutions, led by former Clifford Chance partner David Walker.

Latham earlier this year hired senior Carlyle counsel Tom Alabaster as a partner in London.

Jacobs, who is the relationship partner for many of Linklaters international clients including mining groups Gold Fields and Implats, last year advised Glencore on its $45bn merger with Xstrata, having advised the mining giant on its 2011 IPO, in a listing on the London and Hong Kong exchanges valued at £7.3bn.

Carlyle discussions to dispose of RAC follows the recent IPO of rival roadside recovery group the AA, which private equity owners CVC and Permira floated in June for £1.4bn.

Revenue at RAC, which has over seven million members and attends 2.5m breakdowns every year, increased by 6% to £486 million in 2013.

Tom.moore@legalease.co.uk

Legal Business

CC edges ahead in growth as Linklaters and Freshfields unveil financial results

Posted on |
Financial results 2014 Clifford ChanceFreshfields Bruckhaus DeringerLinklaters
legal-business-default

Clifford Chance has emerged as the strongest-performing Magic Circle firm financially for 2013/14, as the UK elite all unveiled unaudited sterling figures to coincide with the launch of the Global 100 this month.

The 3,000-lawyer firm has revealed a 7% rise in revenues to £1.36bn, up from £1.27bn in 2013. Profit per equity partner (PEP) has increased significantly to push average partner drawings back to over £1m after a blip last year, up a trend-busting 16% to £1.14m from £983,000.

Senior partner Malcolm Sweeting told Legal Business that a revitalised domestic market was a key component of the firm’s success: ‘We had a very strong year in London, which is connected to the EMEA region. The idea that growth is dead in the original key territories is wrong. Performance this year for the firm would suggest that.’

This was a point echoed by Allen & Overy (A&O) global managing partner Wim Dejonghe, whose firm has performed the strongest of the Magic Circle firms over a five-year period. A&O has announced a 2% revenue increase for 2013/14 to £1.23bn, while PEP was up 7% to £1.12m. A factor in the increase in profitability has been the success of A&O’s Belfast office, opened in 2011, which Dejonghe said contributed seven-figure costs savings during the last financial year.

‘We expect further growth in London – there was a nice pick-up in revenues there over the last year,’ he added. ‘Banking and litigation are very strong; corporate is recovering. Capital markets was busy up until the end of 2013 and softer in the first quarter of 2014, but has now picked up again.’

Meanwhile, Linklaters turned in a much stronger performance in 2013/14, revealing solid 5% turnover growth to £1.26bn, while PEP increased by 6% to £1.39m. Managing partner Simon Davies also attributed the success to a revitalised European market, particularly in Germany and the UK.

Freshfields Bruckhaus Deringer, last year’s leading Magic Circle performer, experienced a slightly muted year in 2013/14. Its turnover increased by 1% to £1.23bn and PEP increased by 6% to £1.48m.

A renaissance in domestic markets, particularly for corporate work, is a prevailing theme of this year’s Global 100 report, published on pages 29-81. And while the UK Magic Circle performed impressively in their home currencies, in dollar terms – thanks to a weaker pound in 2013 and a dominant US market – these firms continue to be outpaced by US rivals. The Wall Street elite have seen an impressive return to form on the back of big-ticket M&A mandates, with Simpson Thacher & Bartlett the most impressive performer of all in 2013 with turnover increasing 15% to $1.13bn, alongside double-digit profit increases with profit per lawyer up 18% to $701,000 and PEP up 19% to $3.17m.

The Global 100 as a whole managed 4% growth in total revenues to $88.63bn, a figure somewhat flattered by a number of transformative mergers coming online, such as Norton Rose Fulbright, the tripartite combination that created Dentons a year ago and the full integration of Ashurst with its Australian business in 2013.

Total profit was $33.95bn, an increase of 5%.

mark.mcateer@legalease.co.uk

Legal Business

Freshfields and Linklaters lead on SSP Group’s float

Posted on |
Corporate Freshfields Bruckhaus DeringerLinklaters
legal-business-default

Freshfields Bruckhaus Deringer and Linklaters are advising on the float of SSP Group, the owner of Millie’s Cookies and Uppercrust, on the London Stock Exchange.

Corporate partner Mark Austin, who earlier this year advised high street retailer Poundland on its £750m float, is representing SSP alongside the Magic Circle firm’s co-head of international capital markets Sarah Murphy.

Corporate partners at Linklaters, David Avery-Gee and Patrick Sheil, are advising the joint sponsors and bookrunners Goldman Sachs International and Morgan Stanley.

London-headquartered SSP, which operates almost 2,000 food outlets across 30 countries – largely at airports and railway stations, is looking to raise £500 million from the float. Despite volatility in the London IPO market, with low cost airline Wizz Air and clothes retailer Fat Face having both pulled out of listings in the last two months, SPP’s recently installed chief executive Kate Swann, who ran stationery chain WH Smith for 10 years until 2013, is looking to fund expansion at transport hub redevelopments across Europe.

Swann said in a statement: ‘SSP is a leader in the fast growing international travel food and beverage market and is focused on the more rapidly growing sectors of air and rail.

‘An IPO is the appropriate next step for a business of SSP’s calibre, size and international scale and we believe that we are well-placed for life as a listed company.’

SPP’s partner brands include Starbucks, Burger King and M&S Simply Food.

tom.moore@legalease.co.uk