Water deals were flavour of the month in October. The long-running auction by Germany’s RWE regarding the £8bn disposal of Thames Water resulted in victory for Macquarie Bank. The acquisitive Australian bank has relationships with an endless number of legal advisers, including the likes of Berwin Leighton Paisner (BLP), Clifford Chance and Milbank Tweed Hadley & McCloy. But for the Thames Water deal Macquarie turned to an A&O team led by partners Alan Paul, Jeremy Hunt, Christopher Thornes and Keith McGuire. The losing bidders included Qatari Investment Authority, which teamed up with UBS, advised by Herbert Smith, Australian utilities company Alinta, advised by Clifford Chance and Terra Firma, represented by Freshfields Bruckhaus Deringer. Slaughters acted for RWE, a longstanding client of the firm’s German best friend Hengeler Mueller. Meanwhile, BLP advised Thames Water’s board.
Elsewhere in the sector, Freshfields scooped a second major water deal, advising the Colonial First State-led consortium on its £2.2bn bid for AWG, the owner of Anglian Water. Partner David Higgin led the Freshfields team acting for the Colonial consortium, with finance partner Marcus Mackenzie advising on securitisation aspects. As well as Colonial, the consortium comprised Canada Pension Plan Investment Board, 3i and Industry Funds Management (IFM). Lovells, led by corporate partner Steve Bryan, advised IFM. The deal represented the largest corporate transaction for IFM to date. In addition to Freshfields, Linklaters has been handed roles on both the AWG bid and the Thames Water sale. Linklaters acted for its panel client AWG, with corporate partner Shane Griffin leading the team.
Linklaters continued its dominance in the mining sector, with the firm understood to be advising Peruvian silver miner Hochschild Mining on its proposed IPO and listing on the London Stock Exchange (LSE). Linklaters corporate partners Charlie Jacobs and Stuart Bedford were in Peru last month at the same time as Hochschild announced that it was planning to float on the LSE this month.
Jacobs had just completed the advice to Russian aluminium mining giant Sual on its $30bn (£16.05bn) three-way tie-up with Rusal and Glencore to create the world’s largest aluminium miner. Linklaters is expected to battle it out with Ashurst, which advised Rusal, for the planned IPO and LSE listing for the merged company. It looks as if it is going to be a bumper Christmas for M&A lawyers across the City.
The Court of Appeal last month upheld the OFT’s decisions in two landmark cases involving cartel activity. In separate cases, JJB Sports and Littlewoods (both DLA Piper and Brick Court Chambers clients) were fined by the OFT in 2003 for price-fixing. JJB received a penalty of £8.4m for allegedly fixing the price of England shirts, while Littlewoods and Argos received fines totalling £22.6m for fixing the price of Hasbro toys. In 2005 the CAT reduced the fines levied against both companies but upheld the OFT’s general decisions.
Over at Clifford Chance, financial regulation is behind a push to refocus strategy, with financial regulatory partner Tim Plews telling The Lawyer: “It’s a strategic necessity to have a leading global regulatory practice from west to east, spanning the US, Europe, the Middle East, Russia and Asia. Only a handful of firms focus on this on a global level.”
Its financial regulatory team made a rare lateral hire by poaching Simon Gleeson from Allen & Overy. In September Clifford Chance hired Carlos Conceicao, a former co-head of enforcement at the FSA, as director of regulatory enforcement.
His team will work closely with Clifford Chance’s litigation team, which has a new London head, effective from January, in the shape of Nicholas Munday, who was London head of insurance.
Other firms were also keen to beef up their regulatory offerings this month, including DLA Piper, which hired the European Commission’s prinicpal trade negotiator to the World Trade Organisation Miriam Gonzalez as a senior consultant.
Firm: Herbert Smith
Key clients: Tata, VSNL
Landing the mandate for Indian conglomerate Tata’s £5.45bn (£3.65bn) acquisition of Anglo-Dutch steel giant Corus represents one of Herbert Smith’s most significant corporate instructions this year. Senior consultant and head of thefirm’s India practice Nimi Patel is in no small part responsible for institutionalising Tata as a Herbert Smith client. In 2000 Patel advised subsidiary Tata Tea on its £280m purchase of Tetley Group’s share capital and the subsequent £187m refinancing, and in 2004 she led the team that advised telco Videsh Sanchar Nigram (VSNL) on its $130m (£68.53m) acquisition of Tyco Global Network. Tata happens to be VSNL’s largest shareholder.
As India head “Nimi is doing a tremendous job”, said Herbert Smith head of corporate Michael Walter, adding: “India’s very important to the firm, with huge investment coming out of the country.
“We’re very supportive of the contacts Nimi is building up over there.”
Bidder: Macquarie Bank
Thames Water – Berwin Leighton Paisner (Patrick Somers, Andrew Sherratt, John Hurdley).
RWE – Slaughter and May (Charles Randell, William Underhill, Simon Phillips).
Macquarie – Allen & Overy (Alan Paul, Jeremy Hunt, Keith McGuire, Christopher Thornes); Clifford Chance (David Walker, Robert Smith, Emma Danks).
Macquarie was the eventual victor in the closely fought auction for Thames Water, the UK’s largest
water provider, which saw bids from Terra Firma, Alinta and the Qatari Investment Authority with UBS.
German utilities group RWE sold Thames off.
Bidder: Tata Iron and Steel
Corus – Slaughter and May (Anthony Newhouse, Gary Eaborn, Simon Nicholls); Shearman & Sterling (Laurence Levy, Bonnie Greaves); De Brauw Blackstone Westbroek (Lodewijk Hijmans van den Bergh, Jan Marten van Dijk, Colette de Bel, Jeroen Vossenberg).
Tata – Herbert Smith (David Paterson, Nimi Patel, Clive Barnard, Malcolm Lombers); Stibbe (Allard Metzelaar, Gerhardt Vels, Maarten de Bruin, Paul Vestering).
India’s largest private steel company offered 455p a share for the Anglo-Dutch steel giant (and Europe’s
second-largest steel producer), which if successful will make it the largest foreign takeover by an
India-based company. The deal is being financed through Tata equity and new debt.
Bidder: Banca Poplare di Verona e Novara (BPVN)
BPI – Chiomenti Studio Legale (Michele Carpinelli, Marco Maugeri).
BPVN – Gitti e Pavesi (Carlo Pavesi).
After a desperate search for a partner, BPI — at the centre of last year’s wire-tapping affair that brought
down former Bank of Italy governor Antonio Fazio — finally acquiesced to BPVN’s all-share offer of 0.43
new holding shares per BPI share, making BPVN Italy’s fourth-largest bank.
Bidder: Russian Aluminium (Rusal)
Glencore – Linklaters (Owen Clay).
Sual – Linklaters (Charlie Jacobs).
Rusal – Ashurst (Andrew Edge, David Kershaw, Geoffrey Green); Gibson Dunn & Crutcher (Dennis Friedman, Nicholas Aleksander, Malcolm Pfunder); Egorov Puginsky Afanasiev (Dimitry Afanasiev, Allen Thomas, Nikita Sokolov, Grigory Chernyshov, Alexei Rodionov, Maria Miroshnikova, Ekaterina Medeyko).
By merging their aluminium assets, Rusal, Sual and Glencore have created the largest aluminium
producer in the world, operating in 17 countries. Rusal’s shareholders will own 66 per cent of the new
company, with Sual’s shareholders owning 22 per cent and Glencore’s 12 per cent.
Bidder: Crédit Agricole
Banca Intesa – Studio Pedersoli (Giovanni Pedersoli).
Cariparma/Friuladria – Studio Maffei & Alberti.
Crédit Agricole – Bonelli Erede Pappalardo (Sergio Erede, Luca Picone, Simone Monesi).
The disposal sees Banca Intesa selling off its regional subsidiaries, the Cassa di Risparmio di Parma e
Piacenza (CariParma) and the Banca Popolare FriulAdria, in addition to 193 Intesa branches across the
peninsula to its shareholder Crédit Agricole.
Citigroup – Paul Weiss Rifkind Wharton & Garrison (David Lakhdhir, Paul Ginsberg, Jeff Samuels); Pekin & Pekin (Ahmed Pekin).
Akbank – White & Case (Emre Derman, Taylan Baykut).
As proof of growing foreign direct investment in the Turkish banking sector, due in no small part to the
Turkish government’s regulatory drive, Akbank, Turkey’s largest private bank, sold a 20 per cent equity
stake to Citigroup.
Bidder: Blackstone and PAI
United Biscuits – Allen & Overy (David Wootton, Mark Gearing, Gordon Milne).
Cinven/MidOcean – Freshfields Bruckhaus Deringer (David Higgins, Farah Ispahani).
Blackstone/PAI – Herbert Smith (James Milne, Mark Geday); Simpson Thacher & Bartlett (Michael Wolfson, Euan Gorrie).
Gartmore – Freshfields Bruckhaus Deringer (Robert Stirling, David Rouch, David Winfield), SJ Berwin.
Blackstone and PAI were left as sole bidders for United Biscuits, which owns McVitie’s and Jaffa Cakes,
when Premier Foods backed out of the running in September. The deal will be financed through equity
split equally by PAI and Blackstone, as well as debt financing.
Gondola – Linklaters (Jeremy Parr).
Cinven – Freshfields Bruckhaus Deringer (David Higgins, Julian Long, Adrian Maguire).
Cinven’s bid for Gondola, which owns the Pizza Express and ASK restaurant chains, comes less than a
year after the company’s float, which makes it one of the shortest stock market appearances. The offer
is 415p a share. Paternoster, Cinven’s newco, intends to delist Gondola but retain the management.
Bidder: AIG and GIP
London City Airport – William Fry (Ken Casey).
AIG/GIP – Linklaters (Richard Youle, Jeremy Parr); Macfarlanes (Charles Martin, Stephen Drewitt, Rachel Bond);Weil Gotshal & Manges (Mike Francies).
US financial services company AIG and Global Infrastructure Partners, a private equity joint venture
between Credit Suisse and GE Infrastructure, will hold 50 per cent equal stakes in the airport.
Unsuccessful bidders are understood to have included Balfour Beatty, Spanish infrastructure group
Sacyr Vallehermoso, ABN Amro and German company Fraport.
Linklaters acted on the acquisition financing facility for MAN’s public offer to acquire all the issued share capital of Scania, the Swedish truckmaker. MAN’s €10.3bn (£6.9bn) hostile takeover bid for Scania, which had the support of Volkswagen, the largest investor in both Scania and MAN, was rejected by the Swedish firm. Linklaters, led by banking partners Stephen Lucas and Marc Trinkaus, represented Citigroup Global Markets and Royal Bank of Scotland (RBS) as bookrunners, with Citigroup Global Markets, RBS, BayernLB, WestLB, Handelsbanken Capital Markets and Svenska Handelsbanken acting as mandated lead arrangers. Freshfields Bruckhaus Deringer’s Frankfurt-based finance partners Yorck Jetter and Andreas Konig advised MAN on the financing side. German giant Hengeler Mueller advised MAN.
In a sign of things to come once the Japanese market opens fully to new lines of credit, Japanese telco SoftBank offered a €500m (£333.6m) high-yield bond issue, only the second ever by a Japanese company (SoftBank also did the first in 2004). White & Case and Paul Hastings Janofsky & Walker benefited, with White & Case advising Deutsche Bank as sole initial purchaser and Paul Hastings as the company’s counsel. Banking partners Rob Mathews and Christopher Kandel led for White & Case, with finance partner Toshio Dokei in Tokyo. Kandel has built up the firm’s underwriting work for Deutsche Bank. Paul Hastings’ instruction represented a switch of legal adviser for SoftBank, which in 2004 instructed Sullivan& Cromwell. At Paul Hastings, capital markets partner Nori Hashimoto led out of Tokyo with Hong Kong-based capital markets counsel Andrew Hutton.
Although there was no great surprise in Cravath Swaine & Moore’s and Canadian firm Stikeman Elliott’s appearance for Royal Dutch Shell on the company’s acquisition of the minority interests it did not already own in Shell Canada, some eyebrows were raised at Shell Canada’s choice of legal adviser. Ogilvy Renault – not an energy stalwart – scored an instruction from Shell Canada’s independent special committee. Shell Canada has historically used energy specialist Bennett Jones (and then moved withrelationship partner Bob Desbarats to Osler Hoskin & Harcourt). The C$7.7bn (£3.64bn) acquisition was led for Royal Dutch Shell by London-based corporate partner William Rogers at Cravath, with employment partner Patricia Geoghegan and litigation partner Rory Millson. On the Canadian aspects, Stikeman corporate head Will Braithwaite and Calgary-based energy partner Glenn Cameron led the team for Royal Dutch.
Pharma company Sanofi-Aventis’s €183m (£122.7m) disposal of its stake in chemicals group Rhodia to BNP Paribas generated Willkie Farr & Gallagher its first instruction for the French pharmaceutical giant since it advised shareholder Total on the €57.7bn (£38.6bn) merger that formed the company. The Rhodia shares came from the 2004 Sanofi-Synthélabo and Aventis merger, one of the largest in French history. Corporate partner Laurent Faugérolas led for Willkie, while Skadden Arps Slate Meagher & Flom advised BNP Paribas. Corporate partner Pierre Servan-Schreiber led Skadden’s team. BNP Paribas sold the shares in a private placement immediately after acquiring the stake.