Deals round-up: Home wins

Good old British household names dominated the deals listings in September, with Ribena and Royal Mail leading the iconic pack. By Natalie Stanton

As the evenings began to draw in the City’s corporate lawyers took solace in home comforts throughout September. Last month’s deal coverage was jam-packed with household names, ranging from Ribena to Royal Mail.

Royal Mail

But the size of the transactions could not compete with the previous month’s mega-deals, which included Vodafone’s biggest deal for more than a decade – the sale of its $130bn (£84bn) stake in American mobile network Verizon Wireless – and Microsoft’s £4.6bn takeover of Nokia’s mobile phone operations.

Still, September’s deals are not to be sniffed at. First, Allen & Overy (A&O) and Clifford Chance lapped up lead roles on GlaxoSmithKline’s sale of British drinks brands Ribena and Lucozade to Japanese consumer goods company Suntory Beverage and Food for £1.35bn (see Deal of the Month).

Slaughter and May and Freshfields Bruckhaus Deringer were also busy tinkering with another great British institution, Lloyds Bank, which offloaded a 6 per cent stake worth £3.2bn, marking the first stage in the reprivatisation of the high street lender. Slaughters partner Nilufer von Bismarck advised the Government, while Freshfields partners Will Lawes, Mark Austin, Sarah Murphy and Julian Makin took the reins for the bookrunners (see Partner of the Month).

Slaughters and Freshfields also confirmed they are to take a lead role on the imminent IPO of Royal Mail. Slaughters equity capital markets partner John Papanichola is advising Royal Mail, alongside a team including corporate finance partner William Underhill. Freshfields corporate partner Tim Jones has been leading for the Department for Business, Innovation & Skills supported by a team including pensions partner Charles Magoffin. Linklaters co-head of equity John Lane and capital markets partner Tom O’Neil are thought to be advising underwriters Goldman Sachs and UBS.

In real estate, CMS Cameron McKenna scooped its first property deal for BT, advising the telecoms giant on its plans for the UK’s tallest brick-clad building in South London’s Nine Elms development. Client relationship partner Edward Benzecry will lead for CMS, assisted by planning partner Ashley Damiral and senior associate Paul Thompson.

British high street tycoon Richard Caring sold his stake in the French (but actually very English – it was founded in Wimbledon) bistro chain Côte to private equity firm CBPE Capital for £100m (see Associate of the Month). An Olswang team led by corporate partners Mark Bertram and Nick Crosbie landed a role advising the sellers, consisting of a management team led by Côte’s joint managing directors. Reed Smith corporate partner Philip Taylor led for CBPE Capital, alongside debt partner Philip Slater, property partner Jon Pike and tax partner Caspar Fox.

Meanwhile, South West firm Temple Bright’s new London office won its first instruction, advising on the acquisition of web developer Red C by brand agency FM Group. Office founder and corporate partner Tim Summers led on the deal, alongside real estate partner Justyn McIlhinney.

Further afield, Twitter’s main legal adviser Wilson Sonsini Goodrich & Rosati is pegged to act on the site’s prospective IPO while US giants Weil Gotshal & Manges and Jones Day have picked up key roles on the $29bn merger between US semiconductor equipment maker Applied Materials and Japanese rival Tokyo Electron.

Deal of the Month: GSK’s disposal of Lucozade and Ribena to Suntory
By Ed Barnett, corporate partner, Allen & Overy

Barnett

On 9 September GlaxoSmithKline (GSK) agreed to sell nutritional drinks brands Lucozade and Ribena to Suntory Beverage & Food Ltd, the Japanese consumer goods company, for £1.35bn.

GSK has three primary areas of business: pharmaceuticals, vaccines and consumer healthcare (including Lucozade and Ribena). GSK’s consumer healthcare business has been increasing its focus around a core portfolio of healthcare brands, with the emphasis on emerging markets. As part of this, GSK initiated a review of Lucozade and Ribena earlier this year, leading to a decision to divest the brands subject to the realisation of appropriate shareholder value.

Suntory has looked to expand globally in recent years from its base in Japan, including through its €2.6bn (£2.2bn) purchase of Orangina Schweppes four years ago, which increased the company’s presence in Europe. Suntory also successfully floated on the Tokyo stock exchange earlier this year, raising $4bn (£2.6bn), with the intention of funding acquisitions.

The drinks sale was triggered by Suntory’s decision to pre-empt an auction of the two brands as it seeks to expand its range of soft drinks and boost sales in markets including the UK, Asia and Africa. In an auction Suntory was expected to have faced rival acquirers including both trade buyers and private equity funds.

The deal illustrates a shift in recent months, seeing strategic trade buyers coming back to the market – something that has not been seen for several years. Prior to this shift, auctions had been pretty much the exclusive preserve of private equity funds. But trade buyers are increasingly prepared to pre-empt the auction process and pay a premium to get their hands on a chosen asset. The sale is also part of a broader trend seen in recent years – Japanese investment across the UK and Europe.

On completion of the sale, Suntory will acquire global rights to the two brands with the exception of Nigeria, where GSK Nigeria will continue to manufacture and distribute Lucozade and Ribena under licence from Suntory. Suntory will also acquire GSK’s Coleford manufacturing site, located in the Forest of Dean. Most of the employees at the site will transfer to Suntory under English employment law. 

It is expected that the transaction will be completed by the end of the year, subject to regulatory approvals.

The legal line-up:

For GSK: Allen & Overy partners Ed Barnett, Andrew Ballheimer, Alasdair Balfour, Mark Manell, Paul McCarthy, Maria Stimpson, Christopher Harrison, Adam Cleal and Matthew Townsend.

For Suntory: Clifford Chance partners Joel Ziff, Robert Crothers, Andre Duminy, Alex Nourry, Mike Crossan, Liz Pearson, Clare Hoxey, Nicholas Mace and Nigel Howorth.

GSK’s in-house team: Associate general counsel Neil Laventure, and counsels Katie Turney and Antony Boyce.

 

September deals with UK involvement 

A raft of nine firms romped home furlongs ahead of the pack – $127.7bn (£79.4bn) ahead, in fact – thanks to their roles on the enormous $130bn Vodafone/Verizon deal announced at the very 

start of September. Jones Day and Slaughter and May beat the leading bunch by a nose. The latter’s success was partly due to the firm’s role on the sale of a 6 per cent stake in Lloyds Bank (see
Partner of the Month).

Of the firms that did not win a spot on the coveted Verizon job, Clifford Chance and Allen & Overy recorded strong results in the wake of their work on the GSK/Suntory deal (see Deal of the Month). Clifford Chance’s results were also bumped up thanks to advising the Jardine Lloyd Thompson Group on its acquisition of the reinsurance brokerage business of New-York based Towers Watson & Co for $250m.

Meanwhile, Freshfields Bruckhaus Deringer and German firm Trummer & Thomas recorded $770.6m apiece for their roles advising on Bridepoint Advisers’ acquisition of AHT Cooling Systems from Quadriga Capital Beteiligungsberatung for €585m in a secondary buyout transaction.

Rank Firm Value including net debt ($m) Market share Number of deals
1 Jones Day 130,287.8 91.7 4
2 Slaughter & May 130,110.9 91.5 3
3* Macfarlanes 130,100.0 91.5 2
3* De Brauw Blackstone Westbroek 130,100.0 91.5 1
3* Debevoise & Plimpton 130,100.0 91.5 1
3* Davis Polk & Wardwell 130,100.0 91.5 4
3* Weil Gotshal & Manges 130,100.0 91.5 1
3* Wachtell Lipton Rosen & Katz 130,100.0 91.5 1
3* Simpson Thacher & Bartlett 130,100.0 91.5 2
10 Clifford Chance 2,444.8 1.7 4
11 Allen & Overy 2,119.0 1.5 2
12* Freshfields Bruckhaus Deringer 770.6 .5 3
12* Trummer&Thomas Rechtsanwaelte GmbH 770.6 .5 1
14 Hogan Lovells 420.4 .3 2
15* Souza, Cescon, Barrieu & Flesch Advogados 266.0 .2 1
15* Bryan Cave LLP 266.0 .2 1
15* Sullivan & Cromwell 266.0 .2 1
18 Hengeler Mueller 214.8 .2 2
19 Mattos Filho Veiga Filho Marrey Jr 169.0 .1 1
20 Eversheds 142.4 .1 1

Source: Thomson Reuters   *joint

 

Austin

Partner of the Month: Mark Austin

Firm: Freshfields

Position: Partner, capital markets

Age: 39

Austin advised JP Morgan, BoA Merrill Lynch and UBS as bookrunners in relation to the sale of a 6 per cent stake in Lloyds Bank. He worked in a team with partners Julian Makin and Sarah Murphy (capital markets), while Slaughter and May partner Nilufer von Bismarck (corporate) advised UK Financial Investments (UKFI).

What was your role on this deal?

I was part of a team, along with fellow capital markets partners Julian Makin and Sarah Murphy, advising JPM, BAML and UBS as bookrunners on English and US law in relation to the placing.

How did you win the mandate?

JPM are privatisation strategy advisers to UKFI and for a while we had been discussing ideas with them that could swing into action if and when a sell-down by UKFI of its stake in Lloyds took place.

What was unique about the nature of the deal?

The deal parameters were driven by the fact that UKFI was the seller and this was the first step in returning Lloyds fully to the private sector. Placings such as this usually happen very fast – this one took extra planning and thought.

What was the first deal you worked on as a trainee or lawyer?

My first seat as a trainee was sitting with Julian and my first deal was helping him – in some small way – with the spin-off and listing of O2 from BT.

What’s your most memorable moment on a deal?

I remember as a trainee going to a closing where I was responsible for checking the deliverable documents. The lawyer on the other side produced each document printed on acetate and overlaid it on each original document to check that it hadn’t changed. I still think that was genius.

Gilks

Associate of the Month: Emma Gilks

Firm: Reed Smith

Position: Associate, corporate

Age: 27

Gilks had a key role on CBPE’s acquisition of Côte Restaurants. The Reed Smith team was led by partner Philip Taylor, with support from senior associate Oliver Harker (corporate), partner Philip Slater and associate Nick Williams (finance), senior associate James Cross (private equity), partner Jon Pike (property) and partner Caspar Fox and associate Annette Beresford (tax). 

What was unique about the nature of the deal?

The sale of the Côte business generated a lot of interest and we made it over the finishing line in just a few weeks. 

What other deals have you recently worked on?

This is the third deal I’ve worked on for CBPE this year. We also completed the £85m acquisition of Xafinity from Advent-owned Equiniti. In addition to this I recently worked on Bauer Media’s acquisition of Absolute Radio from the Times of India Group.

What was the first deal you worked on?

Harris Corporation’s $397.5m acquisition of Schlumberger’s Global Connectivity Services business across some 45 jurisdictions kept me busy throughout my training contract.