CORPORATE FINANCE

Simmons & Simmons spent an enormous amount of time last year trumpeting its place as adviser to Wal-Mart on its acquisition of Asda. And why not? The deal was impressive, since Simmons had to do some serious manoeuvring to shoe-horn the US retail giant into the right position in order to leapfrog Kingfisher’s seemingly definitive offer.

It was only a matter of time before Wal-Mart ended up at Simmons’ door. According to a source, a trip around the City by Wal-Mart yielded only conflicted firms. So Simmons won a new client. Then it all went a bit quiet.

Simmons will argue that it’s worked on a million amazing deals since Wal-Mart. Indeed, competition partner Peter Freeman supplemented Lovells’ corporate team on Barclays Bank’s buy of Woolwich, which was advised by Clifford Chance. It also acted for long-time client Booker on its merger with Iceland Group. But what news of Wal-Mart? Well, apparently the firm has only picked up “bits and pieces” from it because, Simmons argues, Wal-Mart hasn’t really undertaken any other major deals in the UK since Asda.

Let’s face it, these deals are hardly going to keep Slaughter and May awake at night. Thank goodness for Interbrew then. Simmons has acted for Interbrew since 1977 when it advised it on gaining the licence to produce Stella Artois. One can almost hear Simmons’ head of corporate finance Stuart Evans thanking the heavens for attending all those client care courses. Simmons must have leapt for joy when the Belgium brewing group announced that it wanted to buy Bass’ brewing business. Oh, and by the way, it also wouldn’t mind getting its mitts on Whitbread’s brewing business.

Interbrew paid out £400m for Whitbread’s 250-year-old brewing business, and shortly after bought Bass’ beer operation for £2.3bn. The corporate finance team was led by Evans, who also acted with barrister Selina Sagayam on the Whitbread side, and partner Charles Fuller and senior associate Tim Field on the Bass negotiations. The team had to do some nifty footwork – one wrong move would have thrown the whole deal into a tailspin.

Bass and Whitbread were unaware that they were both being courted by the same suitor, and there was the risk that if either side found out what Interbrew was doing, both may have abandoned the deal. The sensitivity of the situation was heightened by Bass’ auction method. Instead of undergoing one round of talks with potential buyers before choosing who would gain exclusivity to go ahead and bid for the deal, Bass decided to hold three – yes, three – rounds of negotiations with three different bidders.

Freshfields had the “enviable” task of managing this, and from the sound of it, the whole process was like Chinese water torture – slow, unerring and never-ending. The bidders, reported to include Carlsberg and Heineken, were tempted along by the vague promise that one of them could just be the winner. And let’s not forget, it also helped to keep the price climbing – if you want something badly enough you’ll pay through the nose to get it.

Interbrew now owns both companies, which gives it around 30 per cent of the UK brewing market. Due to this, the UK Competition Commission is looking into Interbrew’s share of the UK market, which may be a headache for the Belgium brewer, but means lots of lovely extra work for Simmons.

So why, when Simmons can acquit itself so well on a complex deal such as this, has it not undertaken more deals of this magnitude?

It is not short on resources – in the pure corporate field it has 162 lawyers, including 26 partners. But two major deals in just over a year is not something to shout about. Is Simmons being beaten in the pitching process? Is it just unlucky than none of its traditional clients are very active at the moment? And if that is the case, isn’t there other business out there?

While it may be a tad unrealistic to compare it to Slaughters, Simmons is not beginning to give Lovells, or even Ashurst Morris Crisp, a fight. It will need a few more deals like Interbrew to get back into the running.

dearbailj@thelawyer.co.uk