Increase in bids raises hopes of a rise in UK M&A work
M&A partners are predicting that the UK could soon see an increase in lucrative hostile takeovers after the first five months of this year saw unsolicited bids globally hit their highest value since May 2007, standing at a total of $273.4bn.
Bids, whether pending, completed, withdrawn or rejected, are up significantly on the $70.6bn announced in 2013, according to figures from Dealogic, largely driven by Pfizer’s unsuccessful $122.6bn approach for the UK’s AstraZeneca, announced on 2 May, in what is the third largest hostile M&A bid on record.
While Magic Circle firms have so far notably acted on relatively few hostile deals this year, Freshfields Bruckhaus Deringer advised Pfizer, led by London managing partner Julian Long, opposite Skadden, Arps, Slate, Meagher & Flom, led by New York-based corporate partners Paul Schnell, Sean Doyle and Michael Chitwood.
Of the six hostile bids emanating so far from the US, Skadden advised on three, including Valeant Pharmaceuticals’ $62.4bn attempted takeover of botox maker Allergan, the third biggest hostile deal of the year. M&A partner Stephen Arcano, banking partner Robert Copen, antitrust partner Steven Sunshine and tax partner David Rievman are leading the deal.
Skadden was also enlisted by US insurer Endurance Specialty on its $4.2bn bid for the UK’s Aspen Insurance, advised by Willkie Farr & Gallagher, in the sixth largest hostile M&A of the year.
The Wall Street giant in total secured a role on eight of the top 25 hostile bids, including advising Canada’s Osisko Mining on a failed hostile takeover bid by mining rival Goldcorp in a deal worth $3.2bn.
However, it was Kirkland & Ellis, in the form of New York duo Jason Kanner and Christian Nagler, which led Charter Communications’ $62.6bn pursuit of Time Warner Cable, the second largest hostile bid this year.
‘UK companies working behind the scenes are more willing to launch hostile bids.’
Patrick Sarch, Clifford Chance
Paul, Weiss, Rifkind, Wharton & Garrison’s chairman of corporate Robert Schumer, deputy chairman of corporate Ariel Deckelbaum and partner Ross Fieldston advised the media group on the bid, which was withdrawn in April. Paul Weiss has also been selected by US hedge fund Elliott Management Corp in its attempt to acquire the 91.5% share that it doesn’t own in computer-network company Riverbed Technology for $3.4bn, the seventh largest hostile M&A this year.
Sparking roles for the Magic Circle was Canada’s Waterton Global Resource Management’s $53m bid for Chaparral Gold in the US on which Allen & Overy advised, while rival Clifford Chance (CC) led by Frankfurt-based partners Wolfgang Richter and Johannes Perlitt advised Germany’s Porsche Automobil Holding on its $9.1bn bid for Swedish truck maker Scania.
CC corporate partner Patrick Sarch said: ‘Hostile bids are mostly senior work, especially in the early stages. It’s so critical to keep it tight because of the timeframes involved and the need to keep plans secret so not to trigger the 28-day put-up-or-shut-up period prematurely.’
However, the uptick in corporate work in Australia has meant Herbert Smith Freehills is the UK firm with the most hostile mandates, advising Australian targets Treasury Wine Estates, bread maker Goodman Fielder and mining group Bullabulling Gold.
With US trends typically spreading to Europe, if the vogue towards hostile bids does materialise, UK advisers will welcome one of the few areas where pricing pressures are put to one side.
Nick Rumsby, a corporate partner at Linklaters, said: ‘The high-profile nature of the work means that general counsel are going to focus on getting the right team. In the UK at the moment, this is particularly the case given the increased questioning of high-profile takeovers by the government, all political parties and the press. In that context, takeovers are not the best time to be looking for the cheapest advice.’
Sarch adds: ‘UK companies working behind the scenes are more willing to launch hostile bids than they were last year.’
DEAL WATCH: CORPORATE ACTIVITY IN JUNE
CMS leads on BG Group North Sea gas pipeline sale
CMS Cameron McKenna’s capability in Aberdeen has seen it selected ahead of fellow BG Group panel law firms Freshfields Bruckhaus Deringer and Clifford Chance to lead the energy producer’s £562m sale of a North Sea gas pipeline to Anglo-French fund manager Antin Infrastructure Partners. The sale is being led by CMS’ Aberdeen-based oil and gas specialist Norman Wisely, alongside London-based head of UK private equity, James Grimwood.
Herbert Smith Freehills is advising Antin led by corporate partner James MacArthur, working alongside finance partner Will Nevin, global head of tax Isaac Zailer and corporate partner Henry Davey.
Freshfields and Linklaters advise on SSP float
Freshfields Bruckhaus Deringer and Linklaters are advising on the float of SSP Group, the owner of Millie’s Cookies and Upper Crust, on the London Stock Exchange. Freshfields corporate partner Mark Austin, who earlier this year advised high street retailer Poundland on its £750m float, is representing SSP alongside the firm’s co-head of international capital markets, Sarah Murphy. Linklaters corporate partners David Avery-Gee and Patrick Sheil are advising the joint sponsors and bookrunners Goldman Sachs International and Morgan Stanley.
Clifford Chance and Herbert Smith Freehills lead Shell sell-off
Sydney-based Clifford Chance partner Lance Sacks has been selected by Anglo-Dutch oil major Shell to advise on the $5.7bn sale of its majority stake in Australia’s Woodside Petroleum. Sacks worked alongside in-house lawyer Sean Ashley in a move that reduces Shell’s holding to 4.5% from 23.1%.
The Australian energy producer was advised by Sydney-based Philippa Stone and Perth-based David Gray of Herbert Smith Freehills.