Linklaters and Freshfields have almost certainly scooped the top two spots in the M&A league tables for 1998 by advising on opposite sides of the £67.5bn BP-Amoco merger – the world's biggest ever industrial merger.
BP is a long-standing client of Linklaters, but for Freshfields, US client Amoco is a new instruction.
However, the structure of the deal – with BP making an agreed takeover offer in the US for Amoco, means that the UK firms will do less work and earn less fees than their US counterparts – Sullivan & Cromwell for BP, and Wachtell Lipton Rosen & Katz – America's most profitable law firm -for Amoco,.
Nevertheless, both Linklaters and Freshfields are using large teams – five partners at Linklaters and seven at Freshfields. The firms had to negotiate and draft a complex US-style “poison pill” provision to ward off rival bids for Amoco.
There is a $1bn break fee payable if either side accepts a rival offer or if their shareholders reject the deal. If there is a bid for Amoco, BP has an option to buy almost 190 million shares at $41 per share, a big discount on its own offer of $51 per share.
A similar clause in the BT-MCI merger left BT with a $7bn cash profit when MCI accepted a rival bid from WorldCom.
Linklaters corporate partner David Cheyne, leader of the team, said that poison pills were “becoming much more common in UK takeovers”.
Freshfields corporate partner Neil Radford, added: “It is fair to say that they are an American invention but it is certainly true to say that they are increasingly used here.”
Radford, together with corporate partner Will Lawes is leading Freshfields' team.
Both Linklaters and Freshfields have also wheeled out their senior partners, Charles Allen-Jones and Anthony Salz, to take active, if background, roles to help co-ordinate the deal.