DEAL OF THE WEEK – TERRA FIRMA

Slaughters wins Terra Firma public bid deal


Slaughter and May has scored its first public bid for private equity giant Guy Hands’ fund Terra Firma ahead of regular adviser Linklaters.

Slaughters is advising Terra Firma on its exclusive negotiations to buy Waste Recycling Group (WRG) for a reported $1bn (£634m).

Linklaters, Hands’ main adviser when he set up the fund as a spin-off from Nomura’s principal finance group last year, was not invited to pitch.

It is understood that Clifford Chance, which also had a role on setting up the fund, was approached, but could not act as it was already advising private equity house Candover on its reported interest in WRG.

Despite its long-held ambition to build up a private equity practice, Slaughters’ profile in the field has remained low, which makes this deal so significant. Slaughters has a longstanding relationship with Terra Firma legal head Tim Pryce, himself an ex-Slaughters lawyer, who used the firm when he worked at Nomura with Hands.

One Linklaters partner said the firm was busy helping Terra Firma manage its existing portfolio and continue its fundraising activities, but admitted that it hasn’t done any “downstream” transactional work for the fund.

Terra Firma approached Linklaters for advice when it was circling the soon to be demerged leisure group Six Continents (6C), but as 6C’s main adviser, the firm was unable to act.

One lawyer close to Terra Firma expressed surprise that Slaughters got the WRG job, but put this down to Pryce’s strategy of maintaining good relations with all the best corporate firms in the City.

“Terra Firma’s strategy is not to be ‘best friends’ with one or two law firms. It is a new fund, which is going to find itself bidding for companies in an auction process where many of the best firms are already conflicted out. It needs to strike up good relationships with everyone who’s any good,” said the source.

Partner Jeff Twentyman is leading the Slaughter and May team acting for Terra Firma, while Merrill Lynch is providing financial advice. WRG is using Stephen Bottomley of Mayer Brown Rowe & Maw, alongside Deutsche Bank and Marshall Securities.