Fee income on public M&A tumbles as deals dry up, research by The Lawyer reveals

The total fees paid to lawyers on public M&A deals over the first half of calendar year 2014 fell by 35 per cent compared with the previous six months, research by The Lawyer has found.

In total lawyers picked up around £25.4m in legal fees over the six-month period in contrast with the £38.9m they pocketed between July and December 2013. 

The year-on-year comparison is also down, with the total fee income on public M&A deals over the first half of calendar year 2013 having stood at £26.1m.

The 3 per cent drop in like-for-like fee income comes despite there having been a handful of standout matters over the past six months and signs that higher levels of activity are returning to the transactional market, particular in deals featuring private equity.

One particular deals highlight was US pharmaceutical giant Pfizer’s series of aggressive takeover bids for UK drugs company Astra Zeneca. Its final offer – valued at about £62bn – would have marked the biggest-ever foreign takeover of a British company. 

However, the bid fell flat, mirroring a wider trend in the public M&A market during the first half of 2014. Between 1 July and 31 December 2013 there were 26 firm offers made for companies publicly-listed in the UK, with a total value of £8.9bn. In the subsequent period, from 1 January to 27 June 2014, this dwindled to just 21 offers with a total value of £5.2bn. 

Multi-jurisdictional deals made a particularly big impression on the market over the past six months, largely because there were quite so many of them. According to the Office for National Statistics, the first quarter of calendar year 2014 featured fewer domestic takeovers than any year since it began publishing these statistics in 1969. 

Several of the highest-value deals during the period were made between two non-English headquartered entities, including Essar Energy’s takeover by Essar Foundation Global Limited and IG Seismic Services’ acquisition by UCE Synttech.

Since 1 January 2014, legal fees on UK public M&A have ranged from £89,500 for Parkwood Holding’s acquisition by Alston Acquisitions Limited to £5.6m for Essar Energy’s takeover by Essar Foundation Global Limited. 

For full details of the six-month data and impact on the UK’s leading corporate teams, see this week’s main feature Decline and Fall.