Legal Business

Slaughters latest to pilot AI technology in deal with Autonomy founder Mike Lynch

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Slaughter and May has teamed up with Luminance, which is being backed by Autonomy founder Mike Lynch’s investment fund, to help launch new artificial intelligence (AI) for M&A.

The elite London law firm has tested and piloted new software founded on breakthroughs in artificial intelligence at the University of Cambridge. Luminance is being backed by Invoke Capital, a technology investment fund backed by Lynch.

Created using the input of Slaughter and May lawyers, in order for the technology to ‘learn’ the most probable human decision on due diligence work on M&A, the technology allows the work to be carried out at much greater speed. The technology is anchored in Recursive Bayesian Estimation theory, which allows robots to continually update their most likely position on data and information.

Luminance chief executive Emily Foges said: ‘Luminance has been trained to think like a lawyer. With Slaughter and May’s help, we are designing the system to understand how lawyers think, and to draw out key findings without the need to be told what to look for. This will transform document analysis and enhance the entire transaction process for law firms and their clients. Highly-trained lawyers who would otherwise be scanning through thousands of pages of repetitive documents can spend more of their time analysing the findings and negotiating the terms of the deal.’

Steve Cooke, senior partner of Slaughter and May, added: ‘The legal due diligence process is ripe for the revolution that Artificial Intelligence offers. It is clear to us that the brains and technical capabilities of the Luminance team, backed by Mike Lynch and his Invoke Capital fund, are a winning combination in this area and one with which we are delighted to be collaborating.’

Slaughter and May has a long history with Lynch, with Cooke having acted as lead adviser on Autonomy’s infamous £7.1bn sale in 2011 to what was then Hewlett-Packard.

Lynch concluded: ‘It is not an understatement to say that this is an application of Artificial Intelligence that will completely transform the due diligence process, which is perhaps long overdue. Invoke is delighted to be backing Luminance and we are particularly pleased that it is collaborating with Slaughter and May – a law firm which leads the way when it comes to innovation and quality of service.’

tom.moore@legalease.co.uk

For more on artificial intelligence see the feature: ‘Deep Blue sky thinking: The cutting edge of legal AI’

Legal Business

Slaughters and Debevoise take sides as HarbourVest makes hostile bid for SVG Capital

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Slaughter and May has won repeat work for SVG Capital as the private equity house faces a £1bn hostile takeover bid from Boston-based group HarbourVest.

Long time Debevoise & Plimpton client HarbourVest made a full and final cash offer for the entire share capital of London listed SVG Capital, without the backing of its target.

Under the terms of the offer, SVG Capital shareholders will receive 650p in cash for each share they hold, valuing the entire existing issued share capital of SVG l at approximately £1bn. The final offer price represents a premium of approximately 15% on the closing price of 566.5p per SVG Capital share last Friday (9 September).

Slaughter and May’s team on the deal includes corporate partners Robin Ogle and Paul Mudie. Ogle advised in 2015 as SVG Capital disposed of its 49.9% stake in Aberdeen SVG Private Equity Manager to Aberdeen Asset Management, and again that year when it returned about £70m to shareholders.

The Debevoise team on the deal is led by London-based dual qualified partner Katherine Ashton, and includes New York partners David Schwartz and Byungkwon Lim. Tax advice was provided by London partners Matthew Saronson and Richard Ward.

Allen & Overy (A&O) is acting alongside Debevoise for HarbourVest on UK public M&A elements of the deal. The A&O team is led by London-based corporate partner Seth Jones and includes corporate partner Richard Hough.

Debevoise previously advised HarbourVest on similar acquisitions of listed private equity vehicles. It advised HarbourVest on its $806m acquisition of Absolute Private Equity in 2011, and the $1.4bn acquisition of the Conversus Capital portfolio in 2012.

victoria.young@legalease.co.uk

For more on the cut and thrust world of private equity lawyers, see ‘ABC – the brutally simple world of a private equity lawyer‘

Legal Business

Deal watch: Corporate activity in July and August 2016

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US ELITE LEAD AS VERIZON TAKES YAHOO! FOR $4.8BN

Skadden, Arps, Slate, Meagher & Flom and Wachtell, Lipton, Rosen & Katz are among a host of US firms advising on Verizon Wireless’ much-anticipated acquisition of Yahoo!. Wachtell, Gibson, Dunn & Crutcher, Covington & Burling and Winston & Strawn are acting for Verizon. Skadden, Wilson Sonsini Goodrich & Rosati and Weil, Gotshal & Manges are advising Yahoo!, while Cravath, Swaine & Moore is acting for the strategic review committee of Yahoo! as its independent legal adviser.

 

Legal Business

All bets are off: Magic Circle duo and Norton Rose act as William Hill rejects takeover bid

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Slaughter and May, Allen & Overy (A&O) and Norton Rose Fulbright have all taken key roles as William Hill has rejected a £3.6bn takeover bid from Rank Group and 888 Holdings.

Slaughter and May advised William Hill on the offer, while Allen & Overy corporate partners Ed Barnett and Annabelle Croker advised 888 Holdings. Rank Group was advised by Norton Rose Fulbright EMEA corporate head partners Raj Karia and partner Chris Randall.

The deal would have seen the creation of BidCo, merging Rank and 888 and acquiring William Hill for a cash offer and shares in the new company.

William Hill rejected the deal, which offered an 11% premium on the betting groups latest share price. A statement from William Hill chairman Gareth Davis said the deal ‘substantially undervalues William Hill’ and was ‘a very complex three-way combination at a low premium involving substantial risk for William Hill shareholders’.

A&O’s Barnett and Croker previously acted for 888 opposite Freshfields Bruckhaus Deringer in July 2015 in its bid to takeover FTSE 250 gambling firm Bwin.Party Digital Entertainment for £898m. 888’s bid was ultimately rejected in favour of a deal from GVC, advised by Addleshaw Goddard, for £1.1bn.

Gambling has been a lucrative sector for law firms in recent years after a spate of mergers and acquisitions. Last August Freshfields and Arthur Cox lined up on the merger between Paddy Power and Betfair for a £5bn deal. Freshfields partners Edward Braham and Oliver Lazenby led on the Betfair side, while Paddy Power turned to longstanding adviser Arthur Cox and corporate partner Maura McLaughin, as well as A&O’s Antonio Bavasso for antitrust advice.

In July 2015, Slaughters acted on Ladbrokes £2.3bn tie-up with bookmakers Gala Coral, advised by Ashurst. Slaughters corporate chief Andy Ryde led on the deal, alongside M&A partner Mark Zerdin and finance partner Ian Johnson.

matthew.field@legalease.co.uk

 

 

Legal Business

Latham strikes again: US firm takes Slaughters finance partner Warna-kula-suriya

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In what is arguably the most high-profile partner exit from Slaughter and May in recent history, Latham & Watkins has hired the Magic Circle firm’s former head of structured finance Sanjev Warna-kula-suriya in the City.

Warna-kula-suriya, who is listed as one of the 35 leading individuals for derivatives and structured products work in the City, joins Latham after nearly three decades at the Magic Circle firm.

His appointment comes just four days after Latham sealed the arrival of Allen & Overy’s Stephen Kensell, one of London’s most high-profile banking banking lawyers and a recent contender to become the Magic Circle firm’s next senior partner before being pipped to the post by Wim Dejonghe in March.

Having made partner in 1997, Warna-kula-suriya has built up a strong practice advising on capital markets, derivatives, restructuring, securitisation and structured finance work. He counts the likes of Deutsche Bank, Nordic bank Nordea and US private equity giants Apollo Management and Fortress Investment Group as clients.

While securitised financial products, such as RMBS, CMBS, CLOs and Synthetic CDOs, fell out of fashion following the financial crisis in 2008 – they have returned to the financial playbook in recent years following a heavy rebrand. Indeed, with banks keen to offload chunks of their residential mortgage-backed security portfolios, Warna-kula-suriya led a team from Slaughter and May that advised Deutsche Bank on the £396m sale of residential mortgage loans in March to Rochester Mortgages, a subsidiary of OneSavings Bank.

‘Sanjev’s technical prowess and deep market knowledge places him among a select group of practitioners at the vanguard of the European structured finance market,’ said Witold Balaban, global co-chair of Latham & Watkins’ financial institutions group. ‘He has an exceptional reputation in the City and he will play a key role in the continued expansion of our capabilities in offering financial institution clients an integrated top tier global platform for their cross-border transactional needs.’

Partner exits are something of a rarity at Slaughter and May, the UK’s most profitable law firm, but have become more frequent of late with the firm’s former head of derivatives Mark Dwyer departing for DLA Piper at the end of last year and long-serving tax partner Graham Iversen leaving in September 2014 to join Greenberg Traurig Maher as head of its London tax practice.

The move shows that even Slaughter and May is not immune from the advances of Latham & Watkins, which has driven its international expansion through its strong finance and private equity capability, after a string of raids on the Magic Circle.

Kensell and Warna-kula-suriya are the latest in a long line of high-profile hires for a rampant Latham, with the firm landing rising arbitration star Sophie Lamb from Debevoise & Plimpton, restructuring partner Simon Baskerville and financial regulatory partner Rob Moulton from Ashurst and real estate finance specialists Jeremy Trinder and Quentin Gwyer this year.

tom.moore@legalease.co.uk

Legal Business

Slaughters, Linklaters and RPC win places on RSA’s reduced legal roster

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Slaughter and May, Linklaters and RPC have all won spots on insurance giant RSA Group’s legal roster, following a review which saw the number of panel firms reduced from five to three.

The group legal panel, which was last reviewed in 2011 had also included Allen & Overy, Ashurst and Norton Rose Fulbright.

RPC already sits on the group’s separate UK panel which handles smaller projects and niche insurance work, alongside Pinsent Masons and Hogan Lovells. The firm will continue work across the two panels.

The process was led by managing counsel Jonathan Cope, with assistance from chief legal officer and company secretary Charlotte Heiss, and head of financial crime Peter Townsend. The length of term of the panel, which had a delayed review following a shake-up of the insurer’s senior management team, has not been finalised.

Speaking to Legal Business, Cope (pictured) said that that pitches were limited to two per law firm:

‘We kept it short, the process, the pitches and the documents, we wanted to keep it as short and as focused as possible.

‘One was focused on the law firm more generally, we had a discussion of various issues, focused on the relationship with RSA including non-chargeable benefits, secondees, training, diversity, technology, online portals, what know how and free chats we could have. That provided a good opportunity to meet the key people from each law firm and have an informal discussion about topical issues and understand how RSA can get the benefit of a range of services they can offer.

The second pitch was more technical and was focused on specific areas of expertise we think will be more relevant to RSA in the short to medium term.’

In February this year RSA’s longstanding group general counsel and company secretary Derek Walsh exited the company after six years, with Heiss succeeding him in the new role of chief legal officer and company secretary.

Heiss joined the group executive team and reports to Hester, while group chief risk officer William McDonnell assumed responsibility for the compliance function.

Featured as a rising star in the Legal Business 2014 GC Power List, Linklaters-trained Heiss joined the company as legal counsel in 2010 and was rapidly promoted to the position of head of group legal by September 2011.

In other recent panel news, Standard Life Investments (SLI) added two firms to its real estate panel, with Maples Teesdale and Shepherd & Wedderburn joining CMS Cameron McKenna, Herbert Smith Freehills and Addleshaw Goddard. Meanwhile, a quintet of firms including Cleary Gottlieb Steen & Hamilton and Sullivan & Cromwell won places on publishing giant Pearson’s US corporate M&A panel.

kathryn.mccann@legalease.co.uk

Legal Business

Slaughters and Davis Polk face off as MasterCard buys UK payments firm

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Slaughter and May rubbed shoulders with Davis Polk & Wardwell in the second major announced deal this week, this time opposite the Wall Street firm on the acquisition of British payments system company VocaLink by New York-based MasterCard.

MasterCard said it will buy a 92% stake in VocaLink, for around £700m, in a bid to strengthen its presence in the UK. London-based VocaLink offers payment processing services, including the LINK cash machine network.

VocaLink was owned by several banks, including Barclays, Royal Bank of Scotland, Lloyds, Santander and HSBC, which were told by the Payments System Regulator to sell their stakes in February this year.

The FCA subsidiary said the banks’ ownership of VocaLink, which processes over 90% of salaries, more than 70% of household bills and almost all state benefits, was harming competition and innovation.

Slaughters team on the deal was led by corporate partner Rebecca Cousin with the newly-promoted Victoria MacDuff and M&A head Roland Turnill. IP and IT partner David Ives, tax partner Jeanette Zaman and head of pensions Jonathan Fenn also acted on the takeover, along with real estate partner Jane Edwarde and finance partner Azadeh Nassiri.

The Magic Circle firm already advised VocaLink in April as the company separated its LINK network of cash machines from VocaLink and renegotiated VocaLink’s processing contract with LINK and its members.

Davis Polk’s team was led by Will Pearce with executive pay advice from Jeffrey Crandall, IP and IT advice from Pritesh Shah and regulatory guidance from Angela Burgess. Tax partner Jonathan Cooklin also acting on the deal.

Similarly Davis Polk advised MasterCard last year on its $600m acquisition of cloud-based analytics firm Applied Predictive Technologies.

Hogan Lovells advised the senior executive management of VocaLink with a team led by global head of PE Tom Whelan with partners Keith Woodhouse and Nick Atkins.

MasterCard is currently facing the biggest UK legal claim ever as Quinn Emanuel Urquhart & Sullivan leads a US-style class action worth £19bn on behalf of British debit and credit card users hit with ‘illegal’ charges.

The sale of VocaLink to US owners follows Cambridge-based ARM Holdings announcing its takeover by Japanese telecoms group Softbank for £24.3bn.

victoria.young@legalease.co.uk

Legal Business

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

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

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

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

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

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

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

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

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

tom.moore@legalease.co.uk

Legal Business

Boardman on Brexit: Not good news but the City’s edge won’t reverse in an instant

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We’ll be bringing you reaction throughout the day, but this just in from Slaughter and May corporate heavyweight Nigel Boardman:

‘I was a Remain vote. In the short-term one only has to see the impact on sterling and the stock market to see that it’s not good news. Medium to long-term, it’s to be proved. It depends upon the degree that we’re successful at negotiating new deals with foreign countries. With the EU there is an issue about them not wanted to create a precedent of an easy exit but, on the other hand, we’re a major trading partner.

‘We’ve heard from banks of some contingency plans that wouldn’t be good for London if they implemented them. They’re in London for a variety of reasons, one of which is that we’re in the EU. If you go back to 1987 when we had the Big Bang, London was not an obvious financial centre and Frankfurt, Brussels and Paris could all claim to be close to London’s level. London has pulled ahead during the intervening period and it’s unlikely that would reverse in an instant, as it would take time to build up the infrastructure elsewhere. It would be possible to do a significant amount of reshuffling within the existing structure and then over time one would have to see whether London remained a competitive and suitable place.

‘Nothing happens immediately. The major issue is the uncertainty as to what will happen, rather than certainty of particular outcomes. Usually uncertainty is not bad for financial markets as people make money by movement of prices rather than stable prices and for lawyers times of uncertainty mean more work.

‘We will have a new prime minister and that will have an impact on the way in which we run ourselves. We will probably have a referendum in Scotland, we may have a referendum in Northern Ireland. We have seen a degree of anti-establishment vote at very high levels and it’s difficult to see a government not responding in some way to the disenchantment that the vote has shown. Politicians have focused too much on Westminster and not enough on noises in their own constituencies. That doesn’t necessary mean anti-business but it does mean listening to the concerns of the electorate.’

tom.moore@legalease.co.uk

For more analysis see: ‘The profession reels as shock Brexit vote sends UK crashing out of EU… and into years of uncertainty’

You can click here and here to see our two-part Insight special on Brexit.


Legal Business

Easy as Pi: Magic Circle duo acts on £615m deal as Swiss manufacturer buys Premier Farnell

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Allen & Overy (A&O) and Slaughter and May have advised on the acquisition of British electronics company Premier Farnell by Swiss manufacturing giant Dätwyler for £615m.

London-listed Premier Farnell manufactures the Raspberry Pi (pictured), a single-board computer the size of a credit card. The mini PC, which is intended for teaching code and computer science in schools and developing countries, has sold more than eight million units, making it the best-selling UK computer.

Dätwyler, which makes engineering and industrial parts, confirmed the purchase on Tuesday (14 June). Investors will receive 165p per Premier Farnell share, an increase of more than 50% on Friday’s closing price. The deal values the British firm at an enterprise value of £792m.

A&O’s team advising Premier Farnell was led by corporate partners Richard Browne and Annabelle Croker, with support from corporate partner Seth Jones, anti-trust partner Alasdair Balfour, incentives partner Paul McCarthy and employment partners Mark Mansell and Inge Vanderreken.

Slaughter and May’s team acting on the deal included senior partner Steve Cooke, corporate partner Martin Hattrell and the recently promoted Murray Cox.

Meanwhile, Ashurst is advising UBS Switzerland on the financing aspects of the deal with a team led by finance partner Mark Vickers. Corporate partner Tom Mercer is also advising on the transaction, which is expected to be completed in the fourth quarter of 2016.

A&O is a longstanding adviser to Premier Farnell, having acted in 2013 on its £18m funding arrangement for its pension scheme. The Magic Circle firm has previously advised on major electronics deals, including German chemical group Merck’s takeover for £1.6bn of Luxembourg-based AZ Electronics Materials in 2013.

Other high-profile public M&A deals for the firm include advising US tech firm Computer Sciences Corporation on the acquisition of British outsourcing company Xchanging for approximately £480m in 2015 and acting for Lone Star Real Estate Fund IV on its recommended £745m cash offer for Quintain Estates and Development last year.

matthew.field@legalease.co.uk