Freshfields Bruckhaus Deringer has muscled in on longstanding Linklaters client Scottish & Newcastle (S&N), as revealed in Grapevine, part of The Lawyer’s weekly email newsletter. The magic circle firm has landed instructions to advise the brewer on the lion’s share of the work generated from S&N’s announcement last week that it is looking to expand.
S&N, which historically has a very close relationship with Linklaters, has appointed Freshfields to advise on the sale of its retail division for an estimated £2bn. Meanwhile, Linklaters has been appointed to act on the brewer’s recommended bid for HP Bulmer, the struggling UK cider maker that owns the Strongbow brand, for £278m.
It is understood that Freshfields has been touting itself to S&N over the past couple of years. A Freshfields source said the firm eventually won instructions from S&N in connection with its potential bid for the pub and hotel group Six Continents (6C), because Linklaters was conflicted out as it was acting for 6C on the demerger at the time.
A Linklaters source said S&N’s pub disposal is a continuation of the 6C deal, which fell over when 6C’s shareholders voted to continue with the demerger, and claimed that it was perfectly natural for S&N to stick with Freshfields on the pubs side.
The auction sale, which will include 1,450 pubs, restaurants and lodges, has already generated a huge amount of interest from private equity buyers. Hugh Osmond, the high-profile entrepreneur who returned to Slaughter and May from Clifford Chance on his unsuccessful bid for 6C, is thought to be interested.
Additionally, CVC Partners, which has historically instructed Ashurst Morris Crisp, Clifford Chance and Linklaters, as well as Dickson Minto client BC Partners, are also both expected to make a bid for S&N’s retail business.
Allen & Overy may also get a chunk of the action if Mitchells & Butlers, the pub company that was spun out of the 6C demerger, makes a bid, although the newly-formed company probably has enough on its plate without taking on S&N’s pubs.
S&N’s decision to sell its retail division represents a U-turn at the company, which tried to release capital from its pubs estate through a ‘sale and manage-back’ agreement for part of the estate. But an S&N spokesperson said it had “become increasingly apparent that a number of credible and well-funded groups have an interest in investing” in the retail estates.
In a further blow for Linklaters, S&N has appointed Lawrence Graham to handle the property work on the disposal of its retail business. Historically, S&N has farmed out property work to both firms on a case-by-case basis. Lawrence Graham’s S&N relationship partner Paul Walker said: “What attracts clients to Lawrence Graham is that we know how to get an army together to work to a standard that will get the job done.”
The Freshfields team is being led by corporate partner Sundeep Kapila. Meanwhile, Caroline Goodhall, head of corporate at Herbert Smith, is acting for HP Bulmer in connection with the S&N bid, and corporate partner Matthew Middleditch is leading the Linklaters team.