Freshfields forms utilities niche with Anglian Water deal

Freshfields Bruckhaus Deringer has scooped its second major water deal in as many weeks, announcing today that it is acting for the Colonial First State-led consortium bid of £2.2bn for AWG, the owner of Anglian Water.

The news comes in the wake of the discovery that the Magic Circle firm is also acting for Terra Firma in its bid for the other big water deal of the moment, RWE’s disposal of Thames Water for £7bn (as first reported in The Lawyer, October 2).

David Higgins is leading the team at Freshfields, with finance partner Marcus Mackenzie advising on the securitisation aspects. Higgins told The Lawyer that the firm was approached by the consortium following its work on two other standout consortium bids in the utilities sector recently, the sale of ABP Ports and the takeover of BAA.

As well as Colonial, the consortium comprises Canada Pension Anglian Water deInvestment Board and 3i. The offer is priced at £15.55 per share, with Deutsche Bank and Lexicon advising.

In addition to Freshfields, Linklaters has a role in both the AWG bid and the Thames Water sale.

Linklaters is acting for its panel client AWG, with partner Shane Griffin leading the corporate team. Capital markets partner Julian Davies is advising on securitisation. The Magic Circle firm is also advising Goldman Sachs in the RWE sale.

Lovells has also picked up a choice instruction on the AWG deal, acting for another party in the consortium, Industry Funds Management. Corporate partner Steve Bryan leads the team.

The firms’ involvement in the deals mirrors growing interest by pension funds and private equity houses in the water sector. City lawyers commented that regulated utilities present a safe target for investors, yet promise higher yields than bonds.