CMS Cameron McKenna, Freshfields Bruckhaus Deringer, Hogan Lovells and Norton Rose have won mandates advising on various aspects of the sale of the Tube Lines consortium to Transport for London (TfL).
The consortium, a joint venture between Amey and Bechtel, was formed as part of a controversial public-private partnership (PPP) deal to upgrade and maintain the London Underground network. The £310m transaction will see Tube Lines become a wholly owned subsidiary of TfL.
TfL turned to Camerons on the deal, which was led by relationship partner Andrew Ivison in the infrastructure and project finance practice. The team also featured corporate partners Bill Carr and David Day.
A Freshfields team led by finance partner and head of PFI/PPP Nick Bliss acted for Amey. Corporate partner Pratap Amin and competition partner John Davies also featured for Freshfields.
Corporate finance partner Alan Crookes led the Norton Rose team advising Bechtel, alongside competition partner Mark Jones and tax partner Matthew Hodkin.
Although not actively involved in negotiations on the sale of the consortium, Hogan Lovells advised longstanding client Tube Lines. Projects partner Mike Matheou led the team for the newly merged firm, with corporate partner Richard Ufland and finance partner Andrew Gallagher also featuring.
The agreement will see Bechtel exit the partnership while Amey, a subsidiary of Spanish construction giant Ferrovial, will continue to provide management and maintenance services. The deal effectively renders Amey a contractor in a traditional procurement arrangement instead of a PPP sponsor.
In a similar deal in 2007, Allen & Overy and Herbert Smith were the advisers when TfL took over Metronet Rail – another PPP vehicle set up to undertake redevelopment work for London Underground.
One source close to the current transaction said that the deal represented a recognition “that both parties should move on” from the PPP.
“In a PPP there needs to be a genuine partnership,” said the source. “When that breaks down, the right thing to do is to recognise the need to bring the relationship to an end.”
London Mayor Boris Johnson has claimed the PPP agreements between Metronet and Tube Lines have cost £400m in legal and other fees.
“The big losers are the lawyers,” he added.
The deal is expected to close in June.