Legal Business

Slaughter and May leads as Freshfields and Paul Weiss take key roles on £900m Michael Kors buyout of Jimmy Choo

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Adviser reviews Freshfields Bruckhaus DeringerPaul, Weiss, Rifkind, Wharton & GarrisonSlaughter and May

Slaughter and May, Freshfields Bruckhaus Deringer, Paul, Weiss, Rifkind, Wharton & Garrison and Skadden, Arps, Slate, Meagher & Flom are all advising on Michael Kors’ £900m offer for luxury British fashion company Jimmy Choo.

Under the agreement, the shoemaker would become a wholly-owned subsidiary of Michael Kors. Its shareholders will receive £2.3 in cash for each of their Jimmy Choo shares, 36p above the £1.68 share price the day before Jimmy Choo’s parent JAB Luxury announced it would launch a formal sale process in April.

Slaughter and May acted for Michael Kors in the UK, while Paul Weiss advised the company on US corporate and financing aspects. The Slaughters team is comprised of London-based corporate and commercial partner Jeffrey Twentyman, competition partner Lisa Wright and tax partner Sara Luder.

Paul Weiss team’s team was led by New York-based corporate partners Justin Hamill and Tom de la Bastide, alongside co-head of North America capital markets and securities John Kennedy.

Freshfields acted for Jimmy Choo via corporate partner Christopher Mort, with support from corporate partner Alison Smith, employment partner Nick Squire and antitrust partner Alex Potter.

Skadden represented Goldman Sachs and JP Morgan as financial advisers. The Skadden team included M&A New York-based partner Paul Schnell and Washington-based partner Jeremy London, as well as London-based corporate partner Scott Hopkins and banking partner Clive Wells.

The boards of directors of both companies have approved the transaction but has yet to be voted in by Jimmy Choo’s shareholders.

The deal will be subject to regulatory approvals in the EU, US and Russia and is expected to complete in the fourth quarter of 2017.

When Jimmy Choo floated on the London Stock Exchange in 2014, the issuer, private investment firm JAB Holdings owned by the German billionaire Reimann family, instructed Freshfields with Mort as leading partner. Hogan Lovells acted for Jimmy Choo at the time on its long-term incentive plans, while Linklaters advised on refinancing matters.

The Michael Kors offer is part of a string of foreign takeovers generating work in the city this year as foreign buyers take advantage of the drop in the value of the pound since Britain voted to leave the EU.

Georgiana.tudor@legalease.co.uk

Legal Business

Santander appoints firms including Slaughters and Ashurst to UK legal roster

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Adviser reviews AshurstSlaughter and May

Spanish banking giant Santander has appointed a host of firms including Slaughter and May, Ashurst and Reed Smith to its UK legal panel for three years.

Eversheds Sutherland and Taylor Wessing are also on the new roster, following a review managed by Santander subsidiary Aquanima.

Santander needed panel firms to work across nine practice areas including M&A, consumer finance, non-contentious regulation, contentious regulatory, capital markets, real estate finance and real estate, Legal Business understands.

One partner from a City firm re-selected to the panel told Legal Business that the process was very straightforward, ‘refreshingly so.’

The Spanish bank ‘wanted to make sure the firm had the right expertise across the areas they are looking for, and only chose firms who ticked the boxes in all areas they needed work in.’

‘Then we had a straightforward meeting with them on pricing, our offer on secondments – which are very important to them – value we can add, how we can work with them on things like pro-bono, training and thought leadership’, the partner added.

The City parter told Legal Business that it was ‘also good [Santander] abandoned the idea of Dutch reverse auction, which some banks still use,’ adding that the bank avoided having different panel tiers for different type of work, which some banks still do.

Legal counsel John Collins, the bank’s director of legal, compliance, regulatory affairs and anti-money laundering, leads the 35-strong legal team at the bank.

Collins is a new addition to the team, having joined in 2016 from Royal Bank of Scotland where he was general counsel (GC), after less than a year.

Last November, Legal Business reported that Bank of Ireland’s GC had moved on from the role after three years to serve as Santander’s chief operating officer and senior counsel for legal and regulatory.

Santander last carried out a legal panel review in 2014. The bank is currently reviewing its global legal panel, run by general secretary and board secretary Jaime Perez Renovales at the bank’s headquarters in Madrid.

Kathryn.mccann@legalease.co.uk

Legal Business

Freshfields, Slaughters and Morgan Lewis act as Bertelsmann buys further stake in $3.55bn Penguin Random House

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Corporate Freshfields Bruckhaus DeringerMorgan, Lewis & BockiusSlaughter and May

Freshfields Bruckhaus Deringer, Slaughter and May, Morgan Lewis & Bockius and Davis Polk & Wardwell all returned to act as co-owner Pearson agreed to sell a further 22% stake in Penguin Random House (PRH) to Germany’s Bertelsmann, with the UK education company aiming to recapitalise the business to generate net proceeds of around $1bn.

Bertelsmann said the transaction would give it a total 75% stake in the company, valued at $3.55 billion. 

Pearson said that deal was designed to strengthen its balance sheet and return £300m of surplus capital to shareholders under a share buyback scheme, retaining a 25% stake in the consumer publisher to generate further income. 

The firms also led in 2013 when PRH was formed through a £2.4bn tie-up between Pearson’s Penguin Books and Bertelsmann’s Random House, creating the world’s largest book publisher by revenue.

The transaction is subject to approval by the relevant authorities and is expected to close in September.

Freshfields led for Pearson on all UK matters, with a team including M&A partner Simon Marchant and tax partner Paul Davison, both based in London.

Slaughters advised long-standing client Bertelsmann on UK matters, with a team led by M&A partner Craig Cleaver, competition partner John Boyce and tax partner Tony Beare.

Davis Polk & Wardwell advised Bertelsmann in the US on its acquisition of its 22% stake from Pearson, led by New York-based partners Michael Davis, Michael Mollerus, and Frank Azzopardi.

The Morgan Lewis team advising Pearson in the US included New York and Philadelphia-based M&A partners Charles Engros and Benjamin Wills, and New-York tax partner Richard Zarin.

Freshfields, Slaughters, Morgan Lewis and Davis Polk, alongside Cooley, all previously advised on the 2013 deal. Freshfields’ Simon Marchant, Slaughters’ Craig Cleaver and Morgan Lewis’ Benjamin Wills and Charles Engros all led on the transaction at the time.

As Pearson reduces its holding in PRH from 47% to 25% to recapitalise its business, German media company Bertelsmann increased its stake in the joint venture from 53% to 75%. 

Pearson announced earlier this year it would shrink its 47% stake in PRH due to a decline in the FTSE100 company’s revenues, after it issued its fifth profit warning in four years. The $1bn proceeds from this transaction include a planned £300m share buyback to return excess capital.

Bertelsmann operates in 50 countries and includes broadcaster RTL Group, Penguin Random House, Gruner + Jahr, BMG, Arvato, Bertelsmann Printing Group, Bertelsmann Education Group and Bertelsmann Investments. Penguin Random House is comprised of 250 individual publishers.

Georgiana.tudor@legalease.co.uk

Legal Business

Magic Circle: Slaughters first to announce 91% trainee retention rate

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Magic Circle Slaughter and May

Slaughter and May has announced today (12 July) that it will retain 91% of its second-year trainees for newly qualified (NQ) lawyer positions at the firm this autumn.

The firm is the first of the Magic Circle to post its retention rates this year, having been the last in autumn 2016. Of a 32-strong cohort, 30 qualifiers put themselves forward and the firm made 30 offers, of which 29 were accepted.

Slaughters’ autumn trainee retention figures are down 9% from its spring 2017 rates, which saw the City heavyweight keep 100% of its 25 trainees in NQ positions at the firm.

Commenting on the result in a statement, the firm said the retention rate remains in line with previous years.

‘We remain encouraged by our consistently high retention rates and are confident that all these talented lawyers will make a strong contribution to the firm,’ a spokesperson stated.

This spring, Freshfields Bruckhaus Deringer and Allen & Overy (A&O) announced they would retain 84% and 82% of their trainees respectively, while Linklaters kept on 86% to become NQ lawyers. All the other Magic Circle firms surpassed Clifford Chance (CC) in retention rates, which held on to 67% of its spring trainees earlier this year.

In autumn 2016, Linklaters posted the highest trainee retention rate of the Magic Circle firms, with 91% trainees kept on to NQ posts, while Freshfields posted a 95% retention rate, and A&O retained 86% of its NQs.

Clifford Chance, after announcing in 2016 that it would cull its trainee intake by 20% by 2018, again posted the lowest autumn 2016 retention rate, although it still retained 82% of its second-year trainee cohort.

Georgiana.tudor@legalease.co.uk

 

 

 

Legal Business

Magic Circle pay watch: Links edges up associate salaries, Slaughters holds and CC gets coy

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Salaries Clifford ChanceLinklatersSlaughter and May

Pay rises continue to ripple through the top-end legal services market despite the uncertain outlook for the City. The latest to go is London giant Linklaters, which has nudged up its base rate for junior lawyers by £1,000, handing newly-qualified (NQ) solicitors £82,000.

Elsewhere, Slaughter and May has just elected to hold mid-year associate salaries following a previous pay boost in January, while Clifford Chance (CC) has brought its pay for junior lawyers up only to match inflation… while coming over uncharacteristically coy on the subject.

NQ lawyers at Linklaters can now earn a total package of £90,000 including bonuses. This is up from last year’s £81,000, according to a breakdown the firm provided in 2016.

Linklaters confirmed that in 2016/17, 1PQE associates would earn a minimum of £90,000, with 2PQE and 3PQE associates’ pay at least £100,000 and £111,000 respectively. High-performing lawyers could receive substantially more, with some 1PQEs earning £101,000. High-performing two year PQEs earned £119,000 and high-performing three year PQEs earned £130,000. However, Linklaters declined to confirm the new packages for 2017/18 beyond newly-qualified level.

Slaughters had previously boosted associate base salaries by 10% as of 1 January 2017. NQ pay increased 9% to £78,000, while 1PQE salaries rose 10% to £87,000. The firm this month opted to hold associate pay bands for the coming year.

CC, meanwhile, has brought its junior lawyers’ base rate pay up to match the UK’s 2.7% jump in inflation, which for a newly-qualified base rate of £85,000 would suggest increases of over £2,000 for junior associates.

In an unusual move, given that it has for years been established practice for major law firms in Wall Street and the City to disclose pay bands for junior lawyers, CC declined to comment, confirm or deny any specific figures when contacted.

Last year, however, CC issued a press statement on 1 May confirming its 2016/17 pay bands for NQ lawyers, with the inclusion of bonuses bringing NQ pay to £85,000 compared to £70,000 before bonuses in 2015.

One CC partner told Legal Business that they did not understand why the firm is keeping its cards close to its chest, as ‘the increase has been received positively by junior lawyers, and that the growth is “high numbers” all-around in terms of pounds and pence’.

The fiddling with associate compensation comes as City leaders are caught between contrasting forces of disapproving general counsel on one hand and US-based law firms, which are continuing to hike salaries for junior lawyers, on the other.

It appears that one response for London leaders struggling to match the US dollar is to be less transparent on associate comp and hope the core talent pool does not notice the difference. If so, the odds do not look great.

georgina.tudor@legalease.co.uk

Legal Business

Gibson Dunn, Latham, Slaughters win roles on Ensco’s $839m buyout of Houston’s Oceanics

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Corporate Gibson, Dunn & CrutcherLatham & WatkinsSlaughter and May

Gibson, Dunn & Crutcher, Latham & Watkins and Slaughter and May have won places advising on London-based offshore drilling contractor Ensco’s $839m acquisition of Houston, US’ Atwood Oceanics.

The deal, which creates a combined company valued at $6.9bn, will create the largest jackup fleet in the world with 37 offshore oil rigs.

Atwood Oceanics’ acquisition gives it current operations and drilling contracts across six continents in markets spanning the Gulf of Mexico, Brazil, West Africa, Middle East, North Sea, Mediterranean and Asia Pacific.

Latham & Watkins advised Ensco with a team lead by Houston-based energy partners Sean Wheeler and Debbie Yee. Ensco also turned to Slaughter and May corporate partner Hywel Davies for advice.

Atwood Oceanics was advised by Gibson Dunn with a team including London-based corporate partner Jonny Earle and tax partner Nicholas Aleksander. Houston based Tull Florey lead the team.

In February, Gibson Dunn confirmed it had opened a new Houston office with the firm later taking on six energy partner hires from Baker Botts. Florey, Gerry Spedale, Hillary Holmes, Shalla Prichard, and James Chenoweth joined Gibson Dunn alongside Dallas and Houston based partner Doug Rayburn.

The team joined founding partners Mike Darden, who joined from Latham & Watkins, and Justin Stolte who joined from Apache Corporation. Stolte joined Apache from Latham & Watkins in 2014. The pair previously worked at Baker Botts.

Madeleine.farman@legalease.co.uk

Legal Business

‘Some firms do it very well’: Top City outfits embrace flexible working

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DLA PiperNorton Rose FulbrightSlaughter and May

The City’s leading firms have formally embraced flexible working, with the percentage of fee-earners working part-time at the top ten of the Legal Business 100 ranging between 2% and 10%.

Our quality of life survey, published this month, found all of the UK’s top ten law firms have policies around flexible working. Many of the partners interviewed said their firms also allowed teams to develop their own strategy of flexible working, with partners asked to use their own discretion as to whether members of their team needed time off.

The survey found DLA Piper has 10% of its UK fee-earners working part-time, followed closely by Hogan Lovells, which has 9% of its fee-earners working less than full-time hours. One fifth and 16% respectively of these firms’ business support staff also have similar arrangements.

In the Magic Circle, respondents surveyed generally had lower statistics for part-time workers. Freshfields Bruckhaus Deringer has the largest reported amount of part-time fee-earners in the group, with 6% on such arrangements. Sixteen percent of the firm’s business services staff also work part-time, while the firm has also taken on a flexible and informal agile working policy.

Linklaters and Allen & Overy (A&O) both have 4% of their fee-earning staff on part-time working arrangements, while just 2% of Slaughter and May’s lawyers work part-time. Clifford Chance did not disclose the proportion of its fee-earners or staff with part-time working arrangements.

Slaughters, however, has the largest percentage of business support staff working part-time at 25%. Linklaters has 23%, while A&O has 19%.

Meanwhile, Norton Rose Fulbright said 17% of its total staff work part-time. Both Herbert Smith Freehills and CMS Cameron McKenna Nabarro Olswang did not disclose figures.

Millnet managing director and former director of general counsel services at RPC Consulting, Julia Chain (pictured), said: ‘A lot of law firms now are looking with sympathy at flexible working and working from home. If I am really honest, there are some firms who do it very well. But a lot of law firms have yet to really embrace this fully, allowing people to work flexibly or trusting them to work from home more. It’s a model that will become increasingly important.’

madeleine.farman@legalease.co.uk

For more on agile working, read our Quality of Life report, released this month (£)

Legal Business

Linklaters wins Bovis mandate over Freshfields as Slaughters and Camerons advise bidders

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Corporate CMS UKLinklatersSlaughter and May

In response to a pair of competing takeover bids, Linklaters won the mandate to advise the target Bovis Homes, taking the role from regular adviser Freshfields Bruckhaus Deringer.

CMS Cameron McKenna advised prospective buyer Galliford Try, while Slaughter and May won a place acting for rival bidder Redrow.

Legal Business

The quality of life report: Pursuits – Steve Cooke, Slaughter and May

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Profile Slaughter and May

‘We have a reasonable word-of-mouth reputation as purveyors of miserable music for gut-wrenching films.’

 

Many City lawyers have outside interests, few combine being at the very top of their profession with another career outlet. But Slaughter and May senior partner Steve Cooke is one such individual. Since 1993 the M&A veteran has worked with cartoonist Russell Taylor – famed for creating the comic strip Alex – to produce soundtracks for over 50 films and documentaries. Among others, they composed the music for Bafta-winning and Bafta-nominated documentaries such as The Lost Girls of South Africa, China’s Stolen Children, Chosen, Orphans of Nkandla, and the recent BBC series about Country Life magazine titled Land of Hope and Glory. Cooke plays and composes on the keyboards and guitar.

Legal Business

Magic Circle duo land £2.2bn energy deal as antitrust concerns surface

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Corporate LinklatersSlaughter and May

Linklaters and Slaughter and May have taken lead roles as UK energy services giant Wood Group is to acquire its struggling rival Amec Foster Wheeler for £2.2bn amid market competition concerns.

The deal was announced in March and is expected to close in the second half of 2017. Under the terms, Scottish company Wood Group is offering £5.64 per Amec share, for 56% ownership of the combined group.