Leader

Philip Green’s audacious bid for Marks & Spencer (M&S) is kicking the new financial year off to a great start for at least three City law firms.

Freshfields Bruckhaus Deringer corporate partners are, as you can imagine, cock-a-hoop – especially old M&A hand Barry O’Brien, who’s leading the deal. It’s the biggest UK takeover bid in a year, and Green’s mandate pretty much came from nowhere – or rather, as one internal source has it, “from a friend of a friend of a friend of a friend”.

Still, Freshfields’ joy is possibly tempered by the fact that Milbank Tweed partner Tim Emmerson – a former partner at the magic circle firm – is shadowing his former colleagues.

Milbank’s debut at this level will give a major fillip to its City practice. Emmerson is advising investment banks Goldman Sachs and Merrill Lynch, but there’s an added piquancy after the Milbank raid on Freshfields’ Munich office two weeks ago. The departure of three of Freshfields’ brightest private equity stars rattled the firm, and has left its institutional relationship with Milbank somewhat tense.

There’s no doubt that the £8bn-plus debt finance mandate – thought to be the biggest in UK corporate history – is the juiciest in the City.
In the past, Green’s banks have used a variety of law firms. HBOS brought in DLA’s Simon Woolley on Arcadia, while WestLB tapped Shearman & Sterling’s Kenneth MacRitchie for the Safeway deal. But this sort of highly leveraged transaction requires massive resources, City clout and, dare one say it, a dash of top-end chutzpah.

Step forward Clifford Chance’s newly resurgent leveraged finance team, which is fielding two particularly heavy hitters in Alan Inglis and Malcolm Sweeting. Clifford Chance doesn’t have a track record with Green’s favoured bank HBOS, but its relationships with Royal Bank of Scotland and Barclays Capital would have eased its passage – and the word is that Sweeting’s connections with Goldman Sachs also played a part in securing the deal.

Silence, though, from New Change. Where on earth is Allen & Overy (A&O), either on the corporate or the debt side? Alan Paul advised Green on his last, abortive bid for M&S back in 2000, and the magic circle firm has been the entrepreneur’s preferred counsel on most transactions. Observers are scratching their heads, but the answer may lie in A&O’s role advising M&S on various financings, including lease securitisations.

Perhaps this time round the Law Society conflicts hotline just said no.