Cobbetts and DWF abandon merger talks in uncertain market
DWF and Cobbetts have called off merger discussions, blaming “uncertain market conditions”.
In a joint statement, the firms said: “The preliminary discussions between DWF and Cobbetts regarding a potential merger have now come to a conclusion and we have made the decision not to progress these talks any further due to the current uncertainty in market conditions.
“Growth by merger and lateral hires continues to be an option for both firms but until any discussions are brought to a conclusion, we will not be in a position to talk about them publicly.”
The two firms confirmed that they were in merger talks in January (18 January 2012), though The Lawyer reported that not everybody was said to be on board with the move – including Cobbetts’ managing partner Michael Shaw (16 January 2012).
The combination would have created a firm with around £132m in turnover and 1,798 staff.
Readers' comments (22)
Anonymous | 31-Jan-2012 12:21 pm
That statement doesn't make sense. The first paragraph says "The preliminary discussions....have now come to a conclusion". The second says "...but until any discussions are brought to a conclusion, we will not be in a position to talk about them publicly.”
Have talks concluded or not? Or are they just buying time until they get the support they need?
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Anonymous | 31-Jan-2012 12:31 pm
The explanation of "uncertain market conditions" is almost as unconvincing as blaming an "overzealous" techie for buying the domain name in November.
Whilst I have no ideal whether the merger was a good idea, taking so long to execute (compare with McGrigors/Pinsent Mason) was always asking for trouble. Cobbetts will have to pick-up the pieces as their talent is now in play.
DWF's dash for growth (being Top 30 is not a tribute to Jimmy Saville) I think is driven by Andrew Leaitherland's appetite to float/be bought-out. Yesterday's RJW announcement shows the money is gravitating to commodity legal services which can be provided by a pliable workforce and not by high-maintenance middle-aged partners. DWF's insurance practice has plenty of the former whilst Cobbetts has a surplus of the latter.
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Anonymous | 31-Jan-2012 12:43 pm
Word on the street is that DWF have massive holes in their finances which meant the merger could not move forward.
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Anonymous | 31-Jan-2012 12:46 pm
Who's Shaw calling out by LBW?
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Anonymous | 31-Jan-2012 1:28 pm
Conclusive proof - if it were needed - that turkeys do not vote for Christmas. Whilst I suspect there are some at dwf shaking their heads ruefully at an opportunity missed, there will be as many looking at news of Cobbetts' £10M worth of bank debt and heaving a sigh of relief. Few at Cobbetts will be saddened by this news. - I think dwf and all they stand for is complete anethema for many at Cobbetts.
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Anonymous | 31-Jan-2012 1:40 pm
I have worked at Cobbetts. Cobbetts are a very worthy outfit with some very committed staff. They will move on and do ok.
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Mancs Cat | 31-Jan-2012 1:43 pm
You can just imagine the guy in the photo asking:
'Are you a blue or a red'?
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Anonymous | 31-Jan-2012 1:50 pm
@12:43 - yes I'd heard that too.
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Anonymous | 31-Jan-2012 2:11 pm
DWF's appetite for growth is a bit over done, almost "alla halliwellls", just because you can put together a mass of people to make £132m a year doesnt imply the firm is going to be improving profit margins or giving better advice.
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Anonymous | 31-Jan-2012 3:31 pm
Think it is also worth pointing out that DWF approached Cobbetts. Think there has been a lot of spin by DWF that the reverse is true. Suppose if you say something enough times you believe it will happen.
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Anonymous | 31-Jan-2012 5:02 pm
Well, on 4 November 2011 it was an over zealous IT chap. Then, by 18 January 2012, they were officially talking. Now, late January 2012, it's all off. How much are we supposed to believe market conditions have become uncertain since 18 January (or even 4 November assuming the guy in IT was leading the talks)?
Their public pronouncements really are an insult to everybody's intelligence. Little wonder so many of the the staff seem miffed if this is typical of the quality and honesty of communication from management.
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Anonymous | 1-Feb-2012 8:59 am
Who has the most to lose from this PR debacle? Cobbetts - B'ham. No duplication of office and more support under the DWF brand to recruit higher earning Partners. It will be an interesting time to see what happens next....
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Anonymous | 1-Feb-2012 10:02 am
I don`t buy it that the Cobbetts Birmingham office will lose from this. All in all it is a well-performing office with distinct successes, especially in litigation and corporate.
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Anonymous | 1-Feb-2012 10:42 am
Well here's a surprise. Cobbetts dire financial performances have been all over the legal press for ages. DWF now rumoured to have massive holes in their finances as it scrambles around to buy itself bigger. A well thought out match made in heaven - no? Perhaps they could both do with remembering that "turnover is vanity, profit is sanity...". DWF seems to be randomly grappling for them and Cobbetts would probably be happy with either.
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Anonymous | 1-Feb-2012 10:55 am
Well my hunch that Dickinson Dees will end up merging with Cobbetts, still might come true.
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Anonymous | 1-Feb-2012 1:43 pm
Cobbetts are in a much better financial position than Dickinson Dees, so I doubt a merger would happen.
Especially as Cobbetts probably know which Dickinson Dees partners have already agreed to join DWF in Newcastle and Leeds.
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Anonymous | 1-Feb-2012 2:04 pm
Dicky Dees, no. Bet it's the sticker album people though they are rumored to be in a worse shape than us.
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Anonymous | 1-Feb-2012 6:02 pm
I think DWF and Cobbetts have made a good point. I'm sure that there will be a certain market soon. Then they can start chatting again.
They must rue the day that the errant IT chap purchased the domain name.
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Anonymous | 1-Feb-2012 8:27 pm
Rumours about a hole in DWF's finances are wide of the mark. Borrowings down, PEP up, Newcastle office off to a flying start. There's one reason why this merger didnt happen and that's because they didnt fancy swallowing Cobbetts' debt.
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Anonymous | 1-Feb-2012 10:54 pm
A lot of us in competition are worried about DWF's incessantly strengthening position, but DWF having holes in finances?- You're having a laugh. Just look at their figures, and their chief finance officer (who I understand is the ex chief at CMS Cameron McKenna and Baker and McKenzie) is highly respected. Come up with theories by all means, but let's at least make them plausible.
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Anonymous | 2-Feb-2012 1:19 pm
Both Cobbetts and DWF are good firms.
They have very distinct cultures. That is no bad thing.
However does this mean the negotiations are at an end? Does it mean that each is still looking at other merger options?
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Rob | 3-Feb-2012 12:04 pm
It seems more like a case of DWF, drunk on recent expansion success, were teased by a couple of Cobbetts' assets. However, having had a touch and a feel and stripped off a few layers I think what lies underneath isn't quite what they were looking for.
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