News that Admiral’s £700m-plus flotation is on track has been greeted in some quarters as an indication that the UK’s new issues market is about to get a much-needed kick up the backside.
A quick straw poll of City lawyers indicates that many of you are dubious about an IPO revival, but Admiral’s confidence will certainly be good news for Norton Rose.
The City firm has scooped the prime role advising Admiral on its IPO, beating Clifford Chance to the job in a competitive tender, according to one source. Clifford Chance did not respond to calls for comment.
Clifford Chance apparently has the consolation of a secondary role advising the issuer, but the really interesting question is just how much the law firms will get paid.
Corporate partners are in absolute agreement that fee levels are nowhere near their heyday of 2001.
According to the Financial Times, Admiral is expected to be valued at between £634m and £776m.
One head of corporate at a magic circle firm estimated that, on the float of a £500m company, a law firm would get a mere few hundreds of thousands of pounds in fees, unless there was a lot of complex pre-IPO reorganisation work. On an abort, you could expect a lot less.
So talk of an IPO revival seems premature, so capital markets lawyers need not cancel their holidays just yet. Ask Herbert Smith, which is a now a long way down the track with a trade sale of holiday group Saga, with the earlier option of an IPO all but abandoned.
Which brings us to The Lawyer’s 2004 IPO survey.
We would love to hear from anyone out there with views on which firms have performed well, who the clients hate and who has been undercutting. Email any tidbits to IPOsurvey@thelawyer.com in complete confidence. The survey will be published in the autumn.
Meanwhile, if you can bear to tear your eyes away from the US presidential elections, the City’s own Lovells can provide you with a managing partner contest ,which is just as drawn out, just as convoluted and could get just as nasty.
Partners received a first shortlist of candidates a couple of hours ago. This is a list of partners who have been nominated or have self-nominated.
The firm now has until October to come up with a final shortlist of three, who will be put to the vote. But in the interim, any new candidates can join the first shortlist, or any candidate can leave. Got that?
The big news so far is that head of litigation Patrick Sherrington and head of property Bob Kidby are not on the list, but then it’s not too late for them to join either.
New to the list are John Davidson, a top corporate partner who manages the SAB-Miller relationship, and two German partners already on the management team, Roland Bomhard and Harald Siesler.
As we predicted, head of finance David Harris, head of Asia Don Kelly, Western Europe managing partner John Pheasant and head of commercial Andrew Skipper are also up for the job.
Voting is set for late November. Only another three months on the hustings then…