Three months ago, the completion of Whitbread’s £2.8bn attempt to buy the Allied Domecq retailing arm seemed assured.
Both sides were fighting to meet the completion date of 2 August.
But rival Punch Taverns had sold a stake in its company, giving it £180m cash it would eventually use towards a £2.925bn bid to beat Whitbread’s cash and share offer. And after one of the most protracted, bloodiest bidding wars seen in recent years, Allied recommended the bid from Punch as Whitbread withdrew its offer after a referral to the Competition Commission.
Simon Barratt, company secretary and legal affairs director at Whitbread, says: “Obviously the last stage was a huge disappointment. But I think what the department, on a professional basis, went through in those six months was actually fantastic.”
While the small in-house legal team led the complex corporate work involved in the deal, Barratt says the majority of day-to-day work, including licensing, debt collection or property conveyancing, is outsourced to external advisers.
Barratt says: “A lot of people say it works out cheaper to have in-house lawyers, but a lot of the time it depends on what your capital expenditure programme is.
“The structure we have in place means if we only need 50 licenses next year, we use external lawyers to cover, rather than having a fixed number of people inside.”
The company has a panel of 10-11 firms, including many local practices, which is reviewed every year in a legal directory published in February.
The directory includes a detailed breakdown of fee rates to enable those dealing with legal issues in the divisions to make informed management decisions on which firm is best to use.
If, and when, Barratt gets involved, the directory also helps him to decide on a course of action without having to worry about the expense.
Barratt says the firms on the panel remain fairly static: “Maybe one or two firms drop off, but with those that do drop off one year, then two years later we are happy to put them back on again.”
The panel, as it stands, is significantly different in terms of number compared to when Barratt began working at the company eight years ago.
“When I started we used to have 35 firms dotted around the group. We aimed to get it down to about 10. You work with the people in, for example, the property function and see who you get on with best.
“We find the best people to do that work for the division at the best price.
“So it is regional firms we tend to use, not people from the City, so we can get the best value.”
While Barratt stresses local firms will be used for more standard work, the larger corporate deals will always be handled by bigger City players like Clifford Chance and Slaughter and May.
“I think it is acknowledged that [local practices] shouldn’t be trying to copy the City firms, but instead asking “what can we do differently and better than city firms?’.
“The most difficult thing for us is that people are constantly ringing up saying “We’ll be as good as Clifford Chance’.
“I’d rather people were particularly honest with themselves and say “Well actually what can I offer that is different?’.” he says.
Company secretary and legal affairs director
|Sector||Restaurants, pubs and breweries|
|FTSE 100 ranking||70|
|Legal function||Four lawyers|
|Head of legal||Simon Barratt|
|Reporting to||David Thomas, chief executive|
|Main location for lawyers||London|
|Main law firms||Corporate lawyers for Whitbread: Clifford Chance, Slaughter and May. Firms used by Whitbread subsidiaries: Blake Lapthorn, Cobbetts, Field Fisher Waterhouse, Forbes & Partners, John Gaunt & Partners, Morgan Cole, Paisner & Co, Rickerby Watterson, Semple Fraser, Wake Smith, Weightmans|