City analysis: Star signs

From Coronation Street to Legoland to Serie A football – glamorous transactions were grist for the mill last month, gilding the lily of big energy and infrastructure deals

A flurry of media, entertainment and sport deals helped usher in autumn, adding a star-studded sheen to a background of hefty energy and infrastructure transactions.

Shoosmiths and Irwin Mitchell deserved a pint in the Rovers, having taken lead roles for Allied London and ITV respectively in the sale of the studios where Coronation Street was filmed for nearly 30 years. Shoosmiths’ real estate team included partners Vaqas Farooq, Kirsty O’Connor, James Brodie and Lisa On-Iam. Irwin Mitchell’s team advising the sellors was led by real estate partner Claire Quinn.

From Weatherfield to Albequerque. Clifford Chance and Hogan Lovells advised on the €750m (£629.9m) purchase of Liberty Global’s international content division Chellomedia by AMC Networks, which owns hit shows Breaking Bad, Mad Men and The Walking Dead. Corporate partner Daniel Sandelson co-led for Clifford Chance, with Ben Sibbett in New York. Partner Nick Mace advised on tax in London with Philip Wagman in New York. Hogan Lovells advised Liberty Global on the sale-side, led by the firm’s corporate of counsel Keith Woodhouse and private equity co-head Alan Greenough.

legoland

Field Fisher Waterhouse won one of its biggest roles for Nintendo, advising on the UK launch of its online store. Palo-Alto based relationship partner Phil Lee led on the deal, supported by partners Paul Graham, David Bond and Leonie Power.

On a global level, Jones Day and Cleary Gottlieb Steen & Hamilton scored lead roles on the first major Asian investment in Italy’s Serie-A football – advising FC Internazionale Milano (Inter) and its majority shareholder Internazionale Holding on an agreement to sell a 70 per cent stake in the football club to three Indonesian businessmen.

Ashurst got stuck into the long-awaited IPO of Merlin Entertainments, owner of attractions including Legoland, the London Eye and Madame Tussauds. Corporate partners Mark Sperotto, Jonathan Parry and Nicholas Holmes led the team for Ashurst, while Freshfield Bruckhaus Deringer partner Chris Mort led the team advising the banks.

Meanwhile, Byron Hamburgers became the latest restaurant chain to sell to a private equity firm. Hutton Collins Partners paid £100m for the meaty eatery, with advice from Dickson Minto. Travers Smith corporate partner Ian Shawyer led the team advising Byron alongside corporate partner Chris Hale and tax partner Russell Warren, while the chain’s former owners Gondola instructed Freshfields corporate partners Adrian Maguire and Andrew Craig, with real estate partner Alex Watts, tax partner Jill Gatehouse and IP associate David Brooks.

It wasn’t all fun, however. Herbert Smith Freehills and Slaughter and May took lead roles on French energy company EDF’s £16bn deal to build the UK’s first nuclear power plant for a generation in Somerset (see Partner of the Month).

In banking, Lloyds continued its epic sell off, relinquishing its Australian operations to Aussie bank Westpac for £900m. Allen & Overy and Minter Ellison acted as joint legal advisers to the Lloyds Group, led by Sydney-based corporate partners Michael Parshall and Victoria Mathewson respectively. Westpac was advised by Australian firm Gilbert + Tobin, led by corporate partner Peter Cook and competition partner Gina Cass-Gottlieb.

Last but not least, the month featured some notable bond offerings from unlikely sources. DLA Piper and A&O advised on Turkish bottler Coca-Cola Icecek’s inaugural offering of five-year bonds worth $500m (see Associate of the Month), while Russian metals giant Norilsk Nickel instructed Debevoise & Plimpton, Linklaters and Irish firm Arthur Cox on one of its first debt instruments open to US investors – a seven year Eurobond worth $1bn (see Deal of the Month).

Deal of the Month: Norilsk Nickel’s $1bn seven-year Eurobond offering
by James C Scoville, corporate partner, Debevoise & Plimpton

Scoville
Scoville

On 28 October, OJSC MMC Norilsk Nickel, the largest diversified mining and metals company in Russia and the world’s largest producer of nickel and palladium, closed a $1bn (£622m) seven-year Eurobond offering with an annual coupon rate of 5.55 per cent.

The size of the deal is enough in itself to make headlines, but Eurobond issuances from Russian corporates aren’t as much of a rare sighting as they were a couple of years ago. In the first three quarters of 2013, 34 US dollar-denominated offerings had been made by Russian corporates for a value of $17.75bn. 

However, the Russian Eurobond market had been quieter of late, and the hope is that the success of this offering will spark further activity in the sector.

This wasn’t the first Eurobond offering Norilsk Nickel has closed – as recently as April, it closed a $750m issuance – but it was the first Eurobond that the company opened up to qualified US investors by way of a tranche offered pursuant to the Rule 144A exemption. 

In fact, it is the first bond instrument of any kind that Norilsk Nickel has offered to US investors in almost a decade.

That US aspect of the deal was perhaps the most interesting part of working on it. It comes on the back of a great deal of education and bridge-building in recent years between the Russian corporate world and Western investors, with the latter increasingly waking up to the opportunities of deals such as this one. 

Norilsk Nickel already has a large number of US equity investors but this was an important introduction to US debt investors, making the prospectus even more critical than usual.

The transaction also had to be timed carefully, given the uncertainties in the market this autumn, not least the debt ceiling negotiations in the US Senate. This required a great deal of co-ordination across the company, bank and advisory teams, as well as side-by-side working across several time zones.

It’s a challenge we met through the make-up of our team – Moscow-based partners working with US and UK-qualified partners in London, all of whom had, by background and experience, a deep understanding of both the Russian corporate environment and the priorities of the international investors being targeted.

The legal line-up:

For Norilsk Nickel: Debevoise partners Alan Kartashkin, James C Scoville and Peter Hockless, with associates Dmitry Karamyslov, Robert Manson and Timur Ochkhaev. Arthur Cox partner Glenn Butt acted as Irish counsel to the issuer.

For the joint lead managers: Linklaters partners Cecil Quillen, Jasper Evans, Andrew Burge and Dmitry Dobatkin, with counsel
Simon Few and associates Robert Ludwig and Vladimir Gogokhia 

October deals with UK involvement

Kirkland & Ellis took the top spot largely thanks to a pair of acquisitions for private equity house KKR, which picked up manufacturing assets Crosby and Acco for $1.01bn (£630m). Chicago-based corporate partner Jeffrey Fine led for Kirkland, alongside Gavin Gordon in London, Jon Balls in Chicago and US debt finance partner Linda Myers. Simpson Thacher picked up instructions from Melrose, led by London corporate partners Adam Signy and Derek Baird. London credit partner Euan Gorrie, antitrust partner David Vann and New York tax partner Gary Mandel also advised.

Clifford Chance stood out among UK firms due to its work on the AMC Networks deal. Meanwhile, A&O took fifth position thanks to its advice for Campbell Soup Company, which signed a definitive agreement for the leverage buyout of its European simple meals business to private equity house CVC for €400m (£248.8m). Simpson Thacher was instructed by CVC.

 
Rank Legal Advisor
 Full to
Each Advisor 
Ranking Value inc.
Net Debt
of Target ($ Mil)
Mkt.
Share
Number of
Deals 
1 Kirkland & Ellis 1,701.2 8.6 8
2 Gilbert + Tobin 1,466.8 7.4 2
3 Clifford Chance 1,433.9 7.3 2
4 Simpson Thacher & Bartlett 1,010.0 5.1 5
5* Cleary Gottlieb Steen & Hamilton 541.0 2.7 2
5* Ernst & Young Societe d’Avocats SELAS 541.0 2.7 1
5* Allen & Overy 541.0 2.7 1
8 Goodwin Procter LLP 516.2 2.6 1
9 Arnold & Porter 440.0 2.2 1
10 Slaughter & May 431.0 2.2 3
11 Hogan Lovells 407.4 2.1 3
12* Garrigues 399.8 2.0 1
12* Uria Menendez 399.8 2.0 1
14* Cravath, Swaine & Moore 388.8 2.0 1
14* Brown Rudnick Freed & Gesmer 388.8 2.0 1
14* Brooks, Pierce, McLendon, Humphrey & Leonard 388.8 2.0 1
17 Linklaters 378.4 1.9 2
18 Shearman & Sterling LLP 246.1 1.3 1
19 Stikeman Elliott 208.7 1.1 1
20* Pinsent Masons 117.5 .6 1

Source: Thomson Reuters    *joint 

Partner of the Month: Julia Pyke

Pyke

Firm: Herbert Smith Freehills

Position: Partner, co-head of nuclear

Pyke advised long-standing client French energy company EDF on its £16bn deal to build a nuclear power plant at Hinkley Point C in Somerset, assisted by associates Matthew Warren and Shekhar Sumit. Partner Lode Van Den Hende and of counsel Michael Sanchez-Rydelski advised on state aid. Slaughter and May’s head of finance Paul Stacey advised the Department of Energy and Climate Change.

What was your role on this deal?

I am the lead partner for the Herbert Smith Freehills team, which advises on issues across the project (including real estate, planning, construction, electricity market reform and the contract for difference, funded decommissioning programme, contract for waste transfer, financing and the equity arrangements), working very closely with the EDF in-house legal team.

How did you win the mandate?

We were appointed to advise on the project in 2006 and were reappointed to the EDF panel in 2012, both following tender processes.

What was unique about the structuring or nature of the deal?

Advising on the first contract for difference in the context of the developing electricity market reform programme has been fascinating, and the deal also involves the first funded decommissioning programme to be developed under the Energy Act 2008, the first contract for the transfer of waste and the first UK financing of privately built nuclear reactors – so a lot of unique features.

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

Looking after some of the final pieces of the British Coal privatisation. The EDF offices in Grosvenor Place are built on the site of the former British Coal headquarters, and I often think about the symmetry of the UK coal industry declining and the revitalisation of nuclear.

Associate of the Month: Alexander Kolmakov

Kolmakov

Firm: DLA Piper

Position: Senior associate, corporate

Kolmakov was part of a team advising Coca-Cola Icecek, a soft drinks bottler, on its inaugural offering of five-year bonds worth $500m. The DLA team was led by capital markets partner George Barboutis and corporate partner Ekin Gokkilic from associated Turkish firm YKK. Capital markets counsel Sarah Kight, and YKK associates Ceren Berispek and Hazal Korkmaz assisted. A&O capital markets partner Sachin Dave advised the banks, with Omer Collak from Turkish firm Paksoy.

What was unique about this deal?

The offering coincided with new regulations adopted by the Capital Markets Board in Turkey, protests in Turkey, civil war in Syria and general instability in the region.

Which other deals have you played a significant role in?

I worked on the team that advised one of Turkey’s leading banks Akbank on its first Turkish lira Eurobond offering, 

What was the first deal you worked on?

The merger between two public US companies Invitrogen Corp and Applied Biosystems Inc. It was exciting as I could learn about capital markets and M&A.