DEAL OF THE WEEK – GRANTCHESTER HOLDINGS

KLegal, CC work on take private of Grantchester

KLegal and Clifford Chance picked up key roles on Dundonald Holding's £167.6m take-private of retail property group Grantchester Holdings. The deal saw the accountancy-tied firm, a private equity minnow, act for the leading member of the Dundonald consortium with Clifford Chance's corporate department sitting across the table for Grantchester.
The Grantchester purchase will be funded with equity from Tom Hunter's outfit, West Coast Capital, and from Uberior Investments. Bank of Scotland Integrated Finance provided the debt.
KLegal's instruction came through legacy Scottish firm McGrigor Donald, which has a Scottish private equity base. McGrigors has worked for Hunter since he instructed the firm on the sale of his business Sports Division to JJB Sports three years ago. Hunter, who also part-owns Bhs with Philip Green, set up West Coast Capital 18 months ago. McGrigors set up the fund and has done its legal work ever since.
Grantchester is West Coast's biggest deal to date, but the fund has been relatively active since its inception. Two weeks ago it also signed a £20m deal to acquire a Scottish retail site that will become part of the Dundonald portfolio.
West Coast is one of KLegal's best private equity clients, although it also acts for Aberdeen Asset Murray Johnson, 3i, former Royal Bank of Scotland fund Penta Capital and Merlin.
The KLegal team was led by West Coast relationship partner Colin Gray and London McGrigors partner Ian Binney. KLegal also brought KPMG in on the deal and West Coast used both transaction services and tax. Binney said: “On this deal we were playing across from the people we want to be involved with and this is the way we'd like to see KLegal develop.”
Grantchester generally uses Clifford Chance or Ashurst Morris Crisp for corporate and property work, but Clifford Chance is favoured and the firm's corporate partner Mark Poulton was called in to lead on the take-private. Ashursts got the consolation prize when the firm was retained by Grantchester's senior management, which is a key part of the consortium. Lovells advised the Bank of Scotland (BOS) on finance issues and the final consortium member Uberior Investments on the corporate side.
Ashursts, led by Paul Gadd and David Kershaw, also represented the Dundonald consortium in relation to the BOS finance. Gadd said: “From the management perspective, the structure of the deal was refreshingly simple.” Instead of the usual ratcheted remuneration provisions, there is a simple 75-25 profit split between the management and the investors.
The take-private has been recommended by Grantchester. However, some analysts claim the bid of 218p per share undervalues the company and it remains to be seen whether the offer will succeed. The first closing date for public acceptances is 14 September.