Legal Business

Slaughters confirms highly-symbolic legal tech incubator launch as another start-up secures $13m investment

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Innovation Slaughter and May

The burgeoning legal technology scene has seen Slaughter and May confirm it will launch a legal technology incubator in the next year, while highly-rated start-up Tessian raises £9m.

In a highly symbolic move for the industry, Magic Circle firm Slaughters has confirmed the launch of a law tech programme it flagged earlier this year, to sit alongside its existing Fast Forward fintech incubator.

The new incubator will focus on developing legal tech and is expected to open by mid-2019, joining the lengthening list of law firms with similar initiatives. Slaughters holds a 5% stake in legal tech darling Luminance, but the firm does not expect to take further equity stakes in start-ups through the new initiative.

Slaughters head of technology Rob Sumroy told Legal Business: ‘We are now firmly on the path of designing a second incubator, which will be based on the first one, but will be more focused towards legal tech. When we created fintech Fast Forward, we were open to legal tech applicants, but some of the legal tech start-ups have shied away from applying to it.’

Magic Circle counterpart Allen & Overy has its own legal tech space called Fuse while Mishcon De Reya and Dentons have similar ventures. Earlier this year, banking giant Barclays entered the legal tech space through its Eagle Labs programme.

Elsewhere, email security artificial intelligence (AI) company Tessian has announced a new funding round of £9m. The company helps prevent sensitive emails being sent to the wrong person, and has more than 70 UK law firm clients. Balderton Capital led the round with existing investors Accel, Amadeus Capital Partners, Crane, LocalGlobe, Winton Ventures and Walking Ventures.

The latest funding means the company has raised about £12m since its founding in 2013. Tessian, formerly known as CheckRecipient, has expanded its team from 13 to 50 people in that time. As part of the latest investment, Balderton partner Suranga Chandratillake and Accel partner Luciana Lixandru will join the board.

Tessian chief executive Tim Sadler commented: ‘It’s human nature to fear scary things like hackers or malware, but we often don’t think twice about the dangers behind something as familiar and ingrained as sending an email. In reality that’s where an overwhelming threat lies.’

Rounding up a busy few days for technology announcements, cloud-based legal spend management and analytics start-up Apperio has secured mobile-only bank Monzo as a client. With a customer base of over 700,000, Monzo will be another key client for Apperio who already count Dentons, Network Rail and Deliveroo as clients.

Headed up by chief executive Nicholas D’Adhemar, Apperio focuses its offering on in-house legal teams and has raised £3.4m in investment, with the company looking towards expanding its team size in the future.

thomas.alan@legalbusiness.co.uk

Legal Business

Deal watch: Slaughters tunes into Sky bidding war as Links and Ashurst waste no opportunity on Cory Riverside disposal

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Corporate AshurstLinklatersSlaughter and May

Slaughter and May has been drafted in by the Walt Disney Company on its Sky News bid while Linklaters and Ashurst took the lead as infrastructure investors scoop UK waste management business Cory Riverside Energy.

The latest twist in the multi-billion pound takeover of Sky has seen a team led by Slaughters corporate partner Richard Smith advising Disney on a bid for Sky News. This after a UK government decision last week (5 June) that Rupert Murdoch-owned 21st Century Fox could pursue its £18.5bn bid for the 61% of Sky it did not already own on the condition it sells Sky News.

UK culture secretary Matt Hancock said he agreed with the Competition and Markets Authority (CMA) that divesting Sky News to Disney, or to an alternative suitable buyer, with an agreement to ensure it is funded for at least ten years, is likely to be the most proportionate and effective remedy for the public interest concerns that have been identified.

21st Century Fox, advised by Allen & Overy (A&O), had put its bid in for Sky in December 2016, valuing the UK-listed media and telecoms giant at £10.75 a share.

But then earlier this year, Philadelphia-headquartered broadcasting heavyweight Comcast threatened to thwart that deal, offering what it called a ‘superior’ £22bn cash proposal of £12.50 a share, a 16% increase in value on 21st Century Fox’s offer.

Acting for Comcast on its bid for Sky is a London-based Freshfields Bruckhaus Deringer team, as well as Davis Polk & Wardwell out of New York. Meanwhile, Skadden, Arps, Slate, Meagher & Flom and Simpson Thacher & Bartlett are advising 21st Century Fox on its bid, while Sky is advised by Herbert Smith Freehills.

Sky has been coveted for years. In 2010, News Corp made an £8bn takeover bid for Sky, only to withdraw a year later because of the phone-hacking trial. Regulatory concerns regarding media ownership have also been raised around combining Murdoch’s News Corp media giant with Europe’s largest pay-TV broadcaster.

HSF and A&O also led for Sky and 21st Century Fox in 2014, when Sky (then called BskyB) concluded a deal worth up to £7.4bn to buy European sister companies Sky Deutschland and Sky Italia from 21st Century Fox.

In another big-ticket deal, an Ashurst team led by partners Jason Radford and Nick Rainsford advised an infrastructure investor consortium fronted by Dalmore Capital on its acquisition of Cory Riverside Energy, the owner of the UK’s largest energy-from-waste plant in London, for more than £1.5bn.

The consortium, including Canadian fund manager Fiera Infrastructure, Semperian PPP Investment Partners, and Swiss Life Asset Managers – the investment arm of insurance company Swiss Life – is buying all of Cory.

The sellers, distressed debt investor Strategic Value Partners, EQT Credit, Commerzbank and other shareholders, were advised by a Linklaters team led by partner Ben Rodham.

Strategic Value Partners, Commerzbank and EQT Credit took over Cory in 2015 amid a debt-to-equity restructuring which also saw Cory sell its non-core businesses in waste collection and landfill & gas to refocus on its core energy recovery facility. Cory’s debt was then restructured last year with £540m of debt facilities.

Cory’s energy-from-waste plant in Belvedere, east London, has been operational since 2012 and has an annual capacity of around 750,000 tonnes of residual waste.

Financial advisers on the sell-side were JP Morgan and Credit Suisse while Macquarie Capital and Rothschild advised the buyers.

Further afield, but also notable because of its size, a Bain Capital-led consortium’s US$18bn acquisition of Toshiba’s semiconductor business also kept a host of advisers busy.

The deal saw the Bain Capital consortium, which includes Apple, Seagate, Kingston, Hoya, Dell Technologies and SK Hynix, acquire the Japanese conglomerate’s Toshiba Memory business.

A Ropes & Gray team led by private equity partner Tsuyoshi Imai advised Bain Capital and a Dechert team led by Hong Kong corporate partner David Cho ‎and London finance partner John Markland advised SK Hynix.

A Morrison & Foerster team advised Toshiba, led by Tokyo managing partner Ken Siegel, corporate partner Ivan Smallwood, TTG partner Stuart Beraha and litigation partner Louise Stoupe.

Linklaters advised the banks – SMBC, MUFG, Mizuho Bank on their provision of 600bn yen ($5.5bn) of senior facilities for the acquisition. The Linklaters team was cross-jurisdictional and multi-practice, led by Zenya Onishi, banking counsel of Linklaters Tokyo and Davide Mencacci, banking partner of Linklaters Hong Kong.

nathalie.tidman@legalease.co.uk

Legal Business

Slaughters’ high-profile move for ex-SFO chief hits watchdog’s review

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Litigation Slaughter and May

Slaughter and May’s high stakes move on former Serious Fraud Office (SFO) director David Green QC is being held up by regulatory approvals, which could delay his hire by up to two years.

Slaughters is the frontrunner to secure the highly-coveted Green, who stepped down as SFO director in April. He has considerable expertise following his six-year stint at the SFO, raising ethical questions around how quickly he should be allowed to move into private practice.

The hire has hit a stumbling block in the form of the Advisory Committee on Business Appointments (ACOBA), because its clearance is required before Green can swap public office to work in the private sector. The agency, which is expected to reach its determination in a matter of days, was set up to vet moves by ministers and civil servants into commercial roles for conflicts.

A move to Slaughters could be potentially problematic given the firm’s role advising the SFO on a legal wrangle triggered by a botched raid against the Tchenguiz brothers . The Magic Circle firm also advised Rolls-Royce on its deferred prosecution deal with the SFO, which was viewed as one of Green’s key wins at his term heading the agency.

A spokesperson for ACOBA declined to comment on Green’s case specifically, but told Legal Business the maximum job restriction period they can apply on future employment is two years. However, such lengthy restrictions are very rare. Two years ago, ACOBA imposed a three-month waiting period on ex-Chancellor George Osborne’s plans to become a speaker with the Washington Speakers Bureau. If the same period were to apply to Green, he would be clear to join Slaughters from next month.

It is possible that the 64-year-old Green will be joining the law firm as a consultant, given that Slaughters’ partnership terms have a mandatory partnership retirement age of 60. It is unclear if there is enough flexibility in Slaughters’ partnership for Green to be handed equity status following a specific endorsement by the entire partnership, though many peers have such scope.

It is believed Green is still mulling an offer from another leading City firm, though Slaughters appears the most likely to secure his services.

Among Green’s major accomplishments were the deferred prosecution agreements struck with Tesco and Rolls-Royce, the latter of which was worth £497.3m. His expected arrival would follow other ex-prosecutors taking top private practice jobs, most recently when Linklaters hired the UK’s former director of public prosecutions, Alison Saunders.

This week, Green’s replacement was finally named as former FBI deputy general counsel Lisa Osofsky following a two-month delay. The lag in naming the successor drew criticism from senior lawyers.

While senior moves between public office and major law firms are common in the US, they have until recently been rare in the UK. Potential controversies with Saunders and Green are early indications that such recruitment can bring additional complications for City law firms.

tom.baker@legalease.co.uk

Legal Business

Magic Circle duo secure key mandates as Novartis sells its €13bn stake to GSK

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Dealwatch Freshfields Bruckhaus DeringerSlaughter and May

Slaughter and May and Freshfields Bruckhaus Deringer have landed pivotal roles on a $13bn deal which sees GlaxoSmithKline (GSK) acquire the remaining 36.5% stake in its consumer healthcare joint venture with fellow pharma giant Novartis.

Slaughters is advising GSK with a team comprising corporate partners Simon Nicholls and David Johnson, alongside tax specialist Dominic Robertson, competition partner Bertrand Louveaux, and finance partners Guy O’Keefe and Oliver Storey. Meanwhile Freshfields is advising Novartis, fielding a team led by corporate partners Julian Long and Jennifer Bethlehem, accompanied by tax partner Paul Davison and antitrust partner Rod Carlton. The in-house legal team at GSK was led by senior vice president and head of legal corporate functions Chip Cale, and associate general counsel Antony Braithwaite.

Legal Business

Deal watch: Magic Circle duo lead on Vodafone’s €18.4bn buyout of Liberty Global European Assets

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Corporate Freshfields Bruckhaus DeringerSlaughter and May

Slaughter and May and Freshfields Bruckhaus Deringer have landed key roles on Vodafone’s €18.4bn buyout of Liberty Global European assets, as Vodafone expands its European services.

The transaction includes the acquisition of US cable giant Liberty’s Unitymedia business in Germany, as well as its UPC brand businesses across Hungary, Romania and the Czech Republic, as Vodafone looks to accelerate consolidation in key markets.

Slaughter and May is advising Vodafone, with a team lead by corporate partners Roland Turnhill and Susannah Macknay, accompanied by tax partner Steven Edge, finance partner Oliver Storey and employment partner Jonathan Fenn. Jane Edwarde and Duncan Blaikie are advising on real estate and IP/IT matters respectively, and Claire Jeffs and Kerry O’Connell on competition concerns.

Magic Circle counterpart Freshfields is advising Liberty Global on the deal, in a team spearheaded by M&A partner David Sonter and IP lawyer partner David Brooks. Antitrust advice is being led by Sascha Schubert, tax advice by Peter Clements, while Jochen Ellrott is providing German corporate advice.

Freshfields’ team also includes German regulatory partners Frank Röhling and Klaus Beucher, and employment partners Alice Greenwell and Boris Dzida.

Sonter commented on the deal: ‘Telecoms consolidation around Europe has been a big thing. It’s a very fragmented market and you will continue to see more of these deals in the market.’

Latham & Watkins is advising Liberty Global on German antitrust matters, while Ropes & Gray is advising on the financing aspects of the deal in a team led by partner Jane Rogers. CMS Cameron McKenna Nabarro Olswang (CMS) is advising on Hungarian and Czech legal affairs and Shearman & Sterling on the US legal aspects of the transaction.

In acquiring Unitymedia in Germany, Vodafone takes on Germany’s second-largest cable operator in what is Vodafone’s largest market. UPC Czech and UPC Hungary, meanwhile, are the largest cable operators in the respective countries, and UPC Romania the second largest cable provider there.

The deal is subject to review and approval from the European Commission, though Vodafone anticipates the purchase will be completed by the middle of 2019.

thomas.alan@legalease.co.uk

Legal Business

Deal watch: International firms find cure for Takeda’s £46bn pharma takeover as CMS and Pinsents tie up giant wind farm disposal

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Corporate LinklatersSlaughter and May

Slaughter and May, Linklaters, Davis Polk and Ashurst are among the firms to have won major mandates on Japanese pharmaceutical giant Takeda’s £46bn takeover of Irish drug-maker Shire, while CMS and Pinsent Masons led on the sale of the UK’s £2bn Neart na Gaoithe offshore wind farm.

Takeda’s recommended offer is the culmination of a drawn out takeover process which has seen Japan’s largest pharma company make multiple bids for London Stock Exchange-listed Shire over recent months.

Under the terms of the acquisition, shareholders in Shire will be entitled to receive $30.33 in cash, a deal which values the entire share capital of the company at roughly £46bn. Takeda’s acquisition is part of its strategy to expand internationally and add to its cancer, stomach and brain drug portfolios.

Linklaters advised Takeda with a team led by corporate partner James Inglis, including global chairman of corporate Matthew Middleditch and corporate partners Aisling Zarraga, Sarah Flaherty, Tom Shropshire and Hiroya Yamazaki. Japan’s Nishimura & Asahi and offshore firm Ogier also advised Takeda.

Meanwhile, Slaughters and Davis Polk & Wardwell acted for Shire. The Slaughters team included corporate partners Martin Hattrell and Christian Boney, pensions and employment partner Jonathan Fenn, competition partners John Boyce and Claire Jeffs and tax partner Dominic Robertson. The Davis Polk team was led by partners Gar Bason, Bill Chudd and Daniel Brass.

Ashurst advised Evercore, JP Morgan and Nomura as the financial advisers to Takeda with a team led by corporate partners Robert Ogilvy Watson and Tom Mercer and banking partner Tim Rennie. Fried, Frank, Harris, Shriver & Jacobson also advised Evercore with a team including partners Philip Richter and Scott Luftglass. The acquisition will create a leading global biopharmaceutical company incorporated in Japan.

Noted one partner on the merger: ‘Banks since the financial crisis no longer splash the cash around with gay abandon; they have become a lot more cautious.  Share for share mergers – deals with a significant paper element – are more common and enable such big-ticket transactions, where raising enough debt would otherwise be difficult.’

They added: ‘The cash and paper deal is harder to execute and, as usual with these transactions, gave rise to negotiations on the percentage of shares that will be owned by Shire shareholders. Eventually it was agreed that Shire shareholders will own around 50% of the combined company.’

Elsewhere, CMS advised London-headquartered developer Mainstream Renewable Power on its sale to EDF’s renewables subsidiary, EDF Energies Nouvelles, of the £2bn Neart na Gaoithe offshore wind farm in Scotland. Pinsent Masons acted for EDF and Byrne Wallace provided Irish legal advice to Mainstream.

The CMS team advising the seller was led by London partners Charles Currier and Munir Hassan and included Bill Carr, Aaron Fairhurst and Alison Woods.

Meaning ‘strength of the wind’ in Gaelic, Neart na Gaoithe has a capacity of 450MW and is located in the Firth of Forth off the east coast of Scotland. The project, which is underpinned by a 15-year contract for difference (CFD) from National Grid, is slated to be operational by 2023.

nathalie.tidman@legalease.co.uk

Legal Business

‘Synergies and cost savings’: Links, Slaughters and Gibson Dunn advise as Sainsbury’s takes over Asda to create supermarket giant

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Corporate Gibson, Dunn & CrutcherLinklatersSlaughter and May

Linklaters, Slaughter and May and Gibson Dunn & Crutcher have won key roles as Sainsbury’s agreed to merge with Asda in a landmark £3bn deal which will create Britain’s biggest supermarket chain.

The deal announced today (30 April) will establish one of the largest employers in the country, worth £51bn in revenue, operating around 2,800 stores and controlling 31% of the market, a larger share than current leader Tesco.

It sent shockwaves throughout the industry, with Sainsbury’s shares jumping around 20%, while the company was at pains to stress that the deal will lead to a significant reduction in consumer prices without any job cuts or store closures.

‘The driver behind all this is to generate synergies and cost savings, so that the parties can compete better with Aldi and Lidl and give consumers what they want – quality and convenience at a lower price,’ a partner close to the deal told Legal Business, adding that job cuts or store closures ‘would not fit within the rationale of the deal’. Both Sainsbury’s and Asda will keep their brands.

Linklaters’ corporate partners Iain Fenn and Michael Honan are advising Sainsbury’s, which will acquire Asda from US giant Walmart for £2.97bn. UK head of competition Nicole Kar and antitrust partner Simon Pritchard have also acted on the deal, which values Asda at £7.3bn.

The Magic Circle firm sits on Sainsbury’s legal panel, which was last reviewed in August 2017 and includes ten other firms.

Meanwhile, corporate partners Sally Wokes, Victoria MacDuff and Nigel Boardman led the large Slaughters’ team advising Walmart and Asda, alongside finance partner Guy O’Keefe. Tax expert Steve Edge also acted on the deal, with Jonathan Fenn and Charles Cameron advising on employment aspects, Cathy Connolly on IP and tech, Jane Edwarde on real estate and Ben Kingsley on financial regulation.

Gibson Dunn advised Walmart and Asda on the competition aspects of the deal, led by partners Ali Nikpay and Deirdre Taylor. Review of the deal by the Competition and Markets Authority is expected to take a while, with the deal unlikely to close before the autumn of 2019.

marco.cillario@legalbusiness.co.uk

Legal Business

Slaughter and May return to Hong Kong for third-ever lateral hire

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Strategic recruitment Slaughter and May

The lateral-phobic Slaughter and May has returned to the market barely a year after its first London foray with its third-ever partner hire, adding investigations and litigation lawyer Wynne Mok to its Hong Kong office.

Mok joins from the Hong Kong Securities and Futures Commission (SFC), where she has been a director of enforcement since 2016. Her experience there includes complex litigation, enforcing good governance and shaping regulatory policy. She was previously a disputes resolution partner at Norton Rose Fulbright from 2012.

Slaughters Hong Kong senior partner Peter Brien said Mok would play a key role in building the Asian practice, focusing on regulatory inquiries and investigations, including multi-jurisdictional investigations undertaken by the firm’s global investigations practice. He added: ‘She is a highly respected practitioner who brings a combination of regulatory experience at the highest level and an outstanding track record of advising clients on complex litigation and investigations.’

The firm’s co-head of global investigations Jonny Cotton commented on the hire: ‘This is a great appointment for our global investigations team and our wider international contentious practice.’

Mok is Slaughters’ third lateral in its history. It first broke the duck four years ago with another Hong Kong appointment in John Moore, while the second came last year with the hire of pensions partner Daniel Schaffer in London from Herbert Smith Freehills (HSF).

Partner exits from Slaughters remain a relatively rare occurrence as well, with finance partners Sanjev Warna-kula-suriya and Mark Dwyer and tax partner Graham Iversen being among the few departures from the firm in recent years.

Last month, Slaughter and May announced four new partners were being made up in a reduced promotion round.

thomas.alan@legalease.co.uk

Legal Business

Promotions dip again as Slaughter and May announces four new partners

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Partnership promotions Slaughter and May

As the latest firm to unveil its new partners, Slaughter and May has announced four promotions, a drop from last year’s round of seven.

The promotions were equally distributed between corporate and disputes, with Nicholas Pacheco assuming a corporate role and Camilla Sanger and Holly Ware being promoted from disputes. Clara Choi meanwhile will become a corporate partner in Slaughter’s Hong Kong office. The promotions take effect on 1 May.

The four promotions are down from seven last year and a significant drop from a bumper 2016, when the firm made up ten new partners. However the promotion of Clara Choi to the Hong Kong office is in keeping with last year’s round, which saw two promotions in the firm’s international offices.

Steve Cooke, senior partner, said: ‘We are pleased to announce the election of four new equity partners. The firm has a strong pipeline of talent, which is reflected in the fact that we have promoted lawyers from the contentious and non-contentious sides of the business.’

That three of the four new partners are women is a strong reflection of the diversity within the firm at a senior level, although last week the firm released its statutory gender pay gap statistics that showed the firm pays male employees almost 55% more in bonuses compared to women.

thomas.alan@legalbusiness.co.uk
Slaughter and May promotions in full:

Clara Choi, corporate, Hong Kong

Nicholas Pacheco, corporate, London

Camilla Sanger, disputes, London

Holly Ware, disputes, London

 

Legal Business

Progress but still work to do on Bunhill Row as Slaughter and May discloses gender pay disparity

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Gender diversity Slaughter and May

Slaughter and May has become the latest magic circle firm to reveal a difference in pay between its male and female fee-earners, placing it ahead of Linklaters but behind Allen & Overy for overall gender disparity on pay.

The firm today (14 March) published its statutory disclosures. The numbers reveal Slaughter and May pays male employees almost 55% more in bonuses compared to women. Men also earned 14% more than women on average, with the gap widening to 38.5% when the figures were considered on a median basis.
The figures have been released ahead of the 4 April deadline under the Equality Act 2010 that requires law firms to disclose their gender pay figures.

Slaughter and May’s figures are marginally better than Linklaters, which announced a 39.1% median pay gap in favour of men and a sizeable 60% more on average in bonuses earlier this month. However, both firms lag significantly behind A&O, who revealed its median pay gap stands at 27.4% earlier this week, while the median bonus figure lies at 23%.

The reports come against the backdrop of growing scrutiny towards the treatment of women in law. Executive partner Paul Stacey said in a statement ‘Our analysis of the underlying figures shows that our one-firm culture remains strong, with the gender pay gap for associates and business services professionals yielding encouraging results.’

However, when staff ranks are broken down by quartile, the results are more positive. The gender pay gap for associates is particularly encouraging, with associate women paid marginally more than men on a mean basis and are on par from a median perspective. The upper-middle quartile of staff, which includes associates, shows a pay gap of 2% in favour of women on a median basis. In the upper quartile, which includes senior associates and where 46.7% of staff are women, the median pay gap is 1.6% in favour of women.

The disparity between genders shifts to a median figure of 9.33% in favour of women in the lower quartile, where women make up 72.3% of the workforce.  However men still make up 53.3% of the upper quartile workforce at Slaughters, where Slaughters fare better than A&O with a pay gap that narrowly favours women by 1.58%.

thomas.alan@legalease.co.uk