Burges Salmon wins West Coast for FirstGroup as Eversheds, Herbies advise

Burges Salmon advised longstanding client FirstGroup on the tender process, which saw the company beat off competition from current operator Virgin Trains amid reports that the winning bidder offered a significantly higher rate for the lucrative rights. Bristol-based commercial partner Simon Coppen led the Burges Salmon team.

Eversheds advised the Department for Transport (DfT) on the tender process, fielding rail partner Anne Harris.

Herbert Smith acted for Virgin, with the team led by energy and infrastructure partner Adrian Clough.

Ashurst rail partner Naomi Horton advised another unsuccessful bidder, Abellio, a subsidiary of the Dutch state rail operator.

The DfT today awarded FirstGroup the contract, worth roughly £900m per year in revenues. Virgin has operated the line since 1997.

Virgin is considering launching a judicial review to appeal the decision, but a company spokesperson said it was considering a number of options.

The company’s founder Sir Richard Branson said in a statement the decision was “extremely disappointing”.

Background to this deal:

Burges Salmon has advised First and its predecessors on deals since the 1980s and a string of franchise bids including its successful attempt to operate the Greater Western and the Thameslink and Great Northern franchises in 2005, with Coppen leading (15 December 2005). Burges Salmon had previously advised the company on a 2003 joint venture with Keolis and its UK subsidiary Via GTI UK to operate the TransPennine Express passenger rail service (19 August 2003).

Eversheds’ Harris advised Directly Operated Railways, a company set up by the DfT to run the East Coast mainline franchise, on National Express’ handover of the line’s operation to the DfT in 2009 (11 November 2009). She also advised the DfT on the East Midlands passenger rail franchise tender in 2007, with Herbert Smith’s Clough advising winning bidder Stagecoach (16 July 2007).

Although Allen & Overy was not on this deal, the magic circle firm is a longstanding adviser to the Virgin Group, notably advising Virgin Money on its acquisition of nationalised bank Northern Rock last year (17 November 2011).