SLAUGHTER & MAY has chalked up a hat trick by taking an advisory role in the proposed £1.35 billion merger between the Abbey National and National & Provincial.
Slaughters is acting for N&P in the negotiations, which are set to run for at least a year as the two societies thrash out the terms of the transaction.
The firm can claim a strong expertise in the area, having acted for the only other two flotations or acquisitions under the Building Societies Act: Abbey's flotation in 1989 – the first under the provisions of the Act – and the acquisition of the Cheltenham & Gloucester by a subsidiary of Lloyds Bank, due to be finalised next month.
A fourth major transaction – the merger between the Halifax and the Leeds Permanent (using Linklaters & Paines and Allen & Overy respectively) – is not an acquisition, and the newly joined societies are for the moment still within the building society sector.
Legislative complexity meant the Halifax deal and two of the others, the C&G and the Abbey flotation, ended up in court.
But according to John Macaskill, who is a commercial partner at Slaughters and is acting in the Abbey and N&P merger, the court hearings broke new ground and lawyers are now surer on their feet when it comes to handling this kind of work.
He says that the firm now has a grip on the procedures involved and adds: “I think it's fair to say we have unrivalled expertise in this area,” says Macaskill. His team included fellow commercial partners Oliver Wareham, Christopher Saunders, Christopher Smith and tax partner Fiona Ferguson. The in-house work at N&P was headed by Tony Gartland.
The Abbey and N&P transaction has to be put to the vote at N&P and approved by the Building Society Commission, but the deal is expected to be concluded by next summer.
Announcing the proposed merger last week, N&P chair Lord Shuttleworth said the society had considered a range of potential partners earlier this year. He said all the proposals had been analysed and, “with the support of our financial advisers”, Abbey National was selected. Under the deal N&P's 1.34 million eligible savers and borrowers will get at least £500 in Abbey shares.
Slaughters also acts for Abbey but the conflict in this case meant the work was done by the society's other big-league adviser Freshfields.
Alan Newton, of Freshfield's building society group, is lead partner in the negotiations and works with partner Mark Rawlinson. The team also includes David Trott and Julian Makin and is calling on the help of Anthony Salz, a highly experienced corporate partner. Freshfield's is also advising Abbey on its bid for First National Finance Corporation.
Newton says of the work involved: “It was a challenge because N&P said there were a number of people interested in partnership with them.” However, he declines to confirm whether one of those interested parties was the Nationwide, widely reported as a major bidder to win N&P's hand.
Speculation about the rate of further building society mergers is rife, with a question mark hanging over major players like Nationwide, The Woolwich and the Alliance & Leicester.
Adam Bennett, the head of Leeds-based Booth & Co's building society unit, says: “Certainly the lawyers at the big firms in the City of London are taking the view that the industry is completely under review and there's potentially a lot of work out there.”
Bennett says Booth & Co, which acts for 34 building societies in England and Wales, is working for medium-sized societies which are “reviewing their strategies” in line with the changing face of the sector.