Freshfields Bruckhaus Deringer and Linklaters are the kings of the London Stock Exchange (LSE) after it emerged that the two firms worked on more IPOs than anyone else this year.
According to statistics compiled by Thomson Financial, Linklaters advised on five of the top 10 IPOs completed in London over the first six months of 2005. Linklaters advised Dresdner Kleinwort Wasserstein on the £5bn PartyGaming listing – the biggest IPO in London since Orange made its £29bn LSE debut in 2001. The firm also acted for the issuers on the IG Group, Mapeley and Caliber Global Investment listings.
Meanwhile, magic circle rival Freshfields worked on four deals, including advising PartyGaming on the online poker business’s high-profile float as well as acting for the banks on the Inmarsat, Evraz, Mapeley and Caliber Global Investment IPOs.
PartyGaming turned to Freshfields in favour of its longstanding legal adviser Berwin Leighton Paisner (BLP) in relation to its high-profile offering because the company wanted to instruct a firm with more experience of dealing with big IPOs.
Indeed, Freshfields, which has been targeting the burgeoning gaming sector, is well placed to land the advisory role on BLP client Betfair’s anticipated £700m float. Additionally, Cassava, another Freshfields client, which operates 888.com, is also reported to be planning a listing later in the year.
Freshfields corporate partner Christopher Mort says: “I think the busiest people in our corporate department have been those partners who do IPO work.”
The surge of activity in the gaming sector has given the LSE’s main list a much-needed boost, with the number of IPOs on the senior bourse jumping to its highest level in almost four years last month.
The LSE reported that the number of new issues in the first three months ended June 30 2005 more than doubled to 37. Indeed, there were 15 IPOs in June alone, making it the best month for new listings since July 2001 in terms of money raised and the most IPOs since November 2000.
Linklaters corporate partner John Lane is optimistic that the recovery will continue. “I get the sense that the momentum is building and think the second half of the year will also be strong – we’re getting to a point where it’s not impossible to envisage that, by the end of 2005, we’ll be experiencing something similar to the dotcom boom,” he says.
However, both Lane and Mort agree that there is a big difference between today’s IPO market and what the equities market witnessed during the dotcom boom. In stark contrast to most of the online businesses that came to the market in the late 1990s, gaming companies have a trading history and are profitable.
The LSE has also prevailed as the preferred bourse for an increasing number of foreign companies seeking listings. Indeed, Russia’s largest grocer Pyaterochka’s decision to list on the LSE is a further fillip for the exchange in the battle with New York to attract Russian issuers.
Lane says Linklaters has recently seen more non-EU companies floating in London, whereas in the past such issuers would have sought a listing in the US.
Mort agrees with Lane and argues that the post-Enron regulatory environment and the Sarbanes-Oxley Act are discouraging a number of companies from floating on the New York Stock Exchange (NYSE).
But despite the LSE’s achievement in luring Russian companies, UK firms have had mixed success in securing instructions to advise the issuers. Latham & Watkins in particular is dominating Russian floats, having advised Russian conglomerate Sistema on is $1bn (£570m) float. The New York-based firm is also advising Russia’s largest independent gas company Novatek on its proposed LSE listing, while Skadden Arps Slate Meagher & Flom is understood to be acting for the co-lead arrangers.
Meanwhile, Linklaters is establishing itself as the firm of choice to advise underwriters on Russian IPOs. In addition to its role on the Pyaterochka float, the firm advised the underwriters on both the Sistema and Lukoil IPOs.
Overall, the future looks bright for the LSE’s main list, which appears to be gaining an edge over the NYSE and indeed other European bourses. And with the recent wave of IPOs in the gaming sector, corporate finance lawyers look set for another strong six months.
|AIM and LSE-listed top IPO deals|
|Issuer||Currency||Amount raised $m (£m)||Issuer’s legal counsel||Manager’s legal counsel|
|Sistema JSFC||$||1,556.8 (890.9)||Latham & Watkins||Linklaters|
|Inmarsat||£||740.1 (423.5)||Clifford Chance||No Lawyer|
|Evraz Group||$||485.2 (277.7)||Cleary Gottlieb Steen & Hamilton||Freshfields|
|Prodesse Investment||$||286.1 (163.7)||Clifford Chance||No Lawyer|
|IG Group||£||270.5 (154.8)||Linklaters||Allen & Overy, Freehills|
|Trading Emissions||£||257.6 (147.4)||No Lawyer||No Lawyer|
|Foseco||£||202.3 (115.8)||Ashurst Morris Crisp||Rosenblatt (Burmah Castrol)|
|Caliber Global Investment||$||150.0 (85.8)||White & Case, Linklaters, Carey Olsen||Freshfields|
|Source: Thomson Financial|