Seven firms share £2.4m fees on Scottish-Irish oil merger

CMS Cameron McKenna, DLA Piper and Herbert Smith were among seven firms to win roles on the merger of Scottish oil group Melrose Resources and Irish rival Petroceltic International, a deal that gifted an estimated £2.36m in external lawyers’ fees.

AIM-listed Petroceltic agreed a £170m bid for Edinburgh-based Melrose in mid-August, with the combined company planning to float on the London Stock Exchange’s main market within a year. It will almost double Petroceltic’s size, giving it access to the target’s business in Bulgaria and African countries including Algeria. It also involved a new AIM admission for the merged company.

DLA Piper London-based EMEA international securities head Alex Tamlyn led for Melrose, which also instructed legacy adviser Tods Murray. The Scottish firm’s team was led by Edinburgh corporate senior associate Stephen Chan, largely handling matters such as procuring foreign lawyers.

Irish firm A&L Goodbody advised Melrose on Dublin, fielding corporate partner Sheena Doggett.

Herbert Smith was the primary corporate adviser to Petroceltic, putting forward City corporate partners Greg Mulley and Mark Bardell.

Petroceltic hired longstanding adviser McCann Fitzgerald as Irish counsel, with Dublin-based corporate finance head Barry Devereux and Dublin corporate finance partner Stephen FitzSimons leading.

Herbert Smith also advised Petroceltic on a $300m (£189m) bridge facility from HSBC to finance the deal, with the bank instructing Wragge & Co London finance partner Kieron Dwyer. Melrose turned to CMS City finance partner Keith Ham for advice on the financing arrangement.

Deal documents filed on 24 August show that Melrose’s estimated fees for the transaction were £1.12m, while Petroceltic estimated fees totalling £1.24m.

Background to this deal:

Petroceltic’s legacy relationship is with McCann Fitzgerald, which took on the client in 2008. Devereux and FitzSimons held on to the link for the latest deal, working alongside City outfit Herbert Smith. DLA Piper frequently works with Tods Murray on Melrose matters, with the international firm generally handling stock exchange regulatory matters and Tods Murray focusing on banking and corporate work. Tods Murray senior associate Chan led for Melrose on the firm’s part of the mandate following the retirement of veteran relationship partner Granger Brash.