Freshfields advises consortium of bidders on Drax acquisition talks

Freshfields Bruckhaus Deringer has landed a plum role acting for a consortium of bidders on its ongoing negotiations over the possible acquisition of energy giant Drax.

Partners Will Lawes and Karen Fountain are understood to be leading the work for consortium BCHP, which comprises energy solutions provider Constellation Energy and private equity firms Blackstone, Perry Capital Management and Hellman & Friedman.

Last week, the Drax board rejected a £2.2m offer from the consortium, but said it was continuing to engage with the bidders in an effort to improve the valuation. The company is also pursuing a refinancing programme due to culminate in an IPO on 15 December.

As revealed by The Lawyer (4 July 2005), Norton Rose is acting for Drax, with Allen & Overy (A&O) representing existing and new lenders to the company. Linklaters is acting for financial adviser Deutsche Bank.

Linklaters, alongside Latham & Watkins, is also acting for Goldman Sachs and Credit Suisse, the lending banks to the consortium.

A trio of US firms is advising the consortium members. Simpson Thacher & Bartlett is acting for Blackstone, Sullivan & Cromwell is representing Perry Capital and Vinson & Elkins has the mandate from Constellation.

In 2003, Drax’s £1.3bn debt restructuring landed UK firms millions of pounds in fees. A&O picked up £10m in fees, while Norton Rose was paid £6m and the bondholders’ counsel Milbank Tweed Hadley & McCloy netted £2m. Norton Rose was instructed after Drax’s US parent AES, represented by Slaughter and May, withdrew from the process.

Freshfields and Linklaters declined to comment.