Deals of fortune: M&A keeps rolling through the downturn
20 February 2012 | By Joshua Freedman
8 August 2013
31 January 2014
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7 August 2013
Our roundup of the biggest deals so far of 2012 points to healthy activity.
The world economy had not collapsed completely at the time of going to press, so the M&A market is not quite dead yet. In fact, the early part of 2012 has seen a startling array of chunky deals. Bloomberg’s ‘2012 Global M&A Outlook’ report pointed to “cautious optimism” for the year after 2011 saw global deal count and total value surpass 2010’s levels.
The undoubted standout deal of the year so far is commodities trader Glencore’s blockbuster merger with mining company Xstrata, first reported as an $80bn (£51bn) transaction, but estimates since have been edging up towards the $90bn mark. The deal may still stall unless Xstrata shareholders are appeased (two major shareholders complain that it undervalues it); but advisers Freshfields Bruckhaus Deringer and Linklaters have already clocked up plenty of hours for their respective clients.
Xstrata has hired a Freshfields team led by frequent adviser Julian Makin alongside senior associates Richard Thexton and Richard Blair and an in-house team led by general counsel Benny Levene.
Glencore, meanwhile, turned to regular advisers at Linklaters, where the team was headed by corporate partner Charlie Jacobs. Other lawyers in the team were corporate partner David Avery-Gee, who featured in The Lawyer Hot 100 this year, as well as associate Kay Moon. General counsel Richard Marshall led the in-house team alongside company secretary John Burton.
The merger of banking software duo Misys and Temenos is dwarfed by mining’s mega-deal, but in any other month it would have commanded top billing.
Allen & Overy (A&O), Herbert Smith and Swiss firm Homburger won roles on the deal. A&O corporate partners George Knighton and Jeremy Parr and associate Lee Noyek advised longstanding client Misys, while Herbert Smith partner Will Pearce advised Temenos, also an established client of the firm. Corporate partner Dieter Gericke of Zürich’s Homburger acted as Swiss counsel to Geneva-based Temenos.
Vodafone’s confirmed cash offer for Cable & Wireless Worldwide (CWW) is understood to have given other roles to Herbert Smith and Linklaters, with Herbert Smith partner Christopher Haynes thought to be leading for CWW. Linklaters
is a frequent corporate adviser to Vodafone and is believed to have won this mandate too.
Big and clever
Global capacity certainly helps at times like these, but it is Asia in particular that offers opportunities. Linklaters managed to leverage its Asian connections to win the lead role for China Investment Corporation (CIC) on its acquisition of a stake in Thames Water parent company Kemble Water. The value was not disclosed, but press reports suggest that it is at least £500m.
The matter was handled for CIC by corporate partner Matthew Middleditch, who moved to the Hong Kong office at the beginning of this year. Linklaters corporate managing associates Tom Matthews in London and Judie Ng-Shortell in Hong Kong were also involved on the mandate.
Clifford Chance advised seller Santander, fielding teams in Madrid and London. Madrid partner José María Fernández-Daza and City partner David Pudge advised alongside Madrid associates Luis Alonso and Didac Severino, as well as London associates Melissa Fogarty and Daniel Royle.
DLA Piper capitalised on its Kuwait presence to beat off other international firms in winning a mandate from the Kuwait Capital Markets Authority on the privatisation of the Kuwait Stock Exchange, one of the largest in the Middle East. DLA Piper Middle East regional managing partner Abdul Aziz Al-Yaqout, who is based in Kuwait, is leading on the deal with assistance from Middle East corporate head Murad Abida.
Japan was the origin of the acquiror when Sumitomo Mitsui Banking Corporation picked up RBS’s aviation unit, RBS Aviation Capital, for £4.7bn. US firm Milbank Tweed Hadley & McCloy won the buy-side mandate with a team led by global transportation finance chair Elliot Gewirtz alongside corporate partner Roland Hlawaty.
Clifford Chance snatched the role for RBS, whose well-documented relationship with Linklaters is not exclusive. David Pudge led this team alongside fellow corporate partners Joel Ziff and Simon Tinkler and aircraft finance partner William Glaister. The team also worked in conjunction with tax partner Jonathan Elman and competition partner Greg Olsen, plus a wider team from the New York, Tokyo, Sydney and Shanghai offices.
2012 has broken all records for mentions of the acronym ‘IPO’ in Facebook statuses, with the social media giant finally filing documents for its long-awaited stock exchange debut.
Fenwick & West corporate partner and firm chairman Gordon Davidson, corporate partner Jeffrey Vetter and corporate associate James Evans advised Facebook, while fellow US firm Simpson Thacher & Bartlett acted for the underwriters, which included Morgan Stanley as lead bank, JPMorgan in second position and Goldman Sachs in third, with Bank of America Merrill Lynch, Barclays Capital and Allen & Company also on the roster.
Simpson Thacher Palo Alto corporate partners William Hinman and Daniel Webb were named as the lawyers for the investment banks.
It was not only Facebook producing work for law firms: a vibrant deal market following the introduction of alternative business structures (ABSs) in the UK meant lawyers were keen to snatch roles acting for, or opposite, fellow practitioners.
The standout deal was private equity house Duke Street’s investment in insurance firm Parabis Group, the first-ever leveraged buyout of a law firm. SJ Berwin advised Duke Street, a longstanding client, fielding relationship partner Tim Wright alongside partner Ed Harris, while Hogan Lovells banking partner Stuart Brinkworth advised banks RBS, Lloyds Banking Group, Santander and Ares on the deal. To make things more exciting, it was Brinkworth’s first deal opposite SJ Berwin since leaving the silver circle firm in 2010.
In another ABS deal, LG and Macfarlanes were the chosen firms for listed Australian firm Slater & Gordon’s takeover of UK firm Russell Jones & Walker (RJW).
LG corporate head Christopher Tite and partner David Ponsford acted for Slater & Gordon on the A$80m (£53.8m) deal, while Macfarlanes partner John Dodsworth advised the RJW partnership.
Under the deal Slater & Gordon, the world’s first listed law firm, pays RJW a £36.4m cash consideration, of which £8.8m will be handed over at a later stage, dependent on certain performance targets, while £10.3m will go towards repaying bank debts.
Elsewhere in the legal profession A&O, Herbert Smith and Weil Gotshal & Manges advised on the potential sale of the College of Law (CoL). A&O is understood to have won the role for the CoL, an established client, while Herbert Smith and Weil acted for buyers Pearson and Providence Equity Partners respectively.
Boom in bust
In the wake of the collapse of broker MF Global the big restructuring cases were still coming thick and fast for lawyers lucky enough to have chosen to specialise in insolvency.
Bingham McCutchen, Kirkland & Ellis, Linklaters and SNR Denton all won roles on Petroplus Refining & Marketing’s UK administration. Linklaters and SNR Denton both acted for administrators PricewaterhouseCoopers, with corporate partner Chris Howard leading the Linklaters team and global restructuring and insolvency co-head Nigel Barnett in charge at SNR Denton. James Roome and James Terry at Bingham advised certain bondholders, as did a Kirkland team led by partners Kon Asimacopoulos, Partha Kar and Elaine Nolan in London and Leo Plank and Bernd Meyer-Lowy in Germany.
Gers a job
Biggart Baillie, meanwhile, advised the administrators of Rangers FC on the Scottish soccer giant’s woes.
HM Revenue & Customs relied on in-house advice.
There is sometimes more to practising law than £50bn mining mergers.