Linklaters, Osborne Clarke lead on £3.5bn Carphone Warehouse & Dixons merger

Linklaters and Osborne Clarke are thought to be advising on a potential merger between Carphone Warehouse and electrical retail chain Dixons.

Dixons has instructed its longstanding adviser Linklaters to advise on the deal. Corporate partner Aedamar Comiskey is leading on the transaction, assisted by corporate managing associate Dominic Kendal-Ward.

It is understood that Carphone Warehouse has dealt with the bulk of legal work related to the deal itself, led by company secretary and general counsel Tim Morris. However, it is thought the company has also turned to regular adviser Osborne Clarke for additional advice. The firm declined to comment.

Reports that the the two companies were in talks to secure a merger of equals broke on Monday (24 February). A combined business would have a market cap of more than £3.4bn and 2,900 shops in Europe. It would also likely secure a spot in the FTSE 100.

The boards of Carphone Warehouse and Dixons confirmed the merger speculation was correct earlier this week, noting that the talks are still at a “very preliminary” stage.

The Takeover Panel requires the companies to announce whether they intend to make an offer by 24 March.

Background to this deal:

Linklaters has advised Dixons for a number of years, having helped the company with its first foray into Europe back in 1999. At the time, former corporate partner Rupert Pearce led a team advising on its £444m purchase of Norwegian retail group Elkjop (12 June 1999).

In January this year, the firm helped to finalise the sale of Dixons’ loss-makng online store Pixmania to German industrial group Mutares. The French-based store was advised by a Linklaters team out of its Paris office, led by M&A partner David Swinburne.

Carphone Warehouse regularly turns to Osborne Clarke for legal advice. The company used to use Olswang, but switched allegiance when Olswang corporate partner Adrian Bott moved to Osborne Clarke in 2002. Bott had previously advised on the company’s flotation in 2000 alongside legacy Ashurst Morris Crisp, and had developed a strong relationship with the its management team including current chairman Charles Dustone and deputy chair Roger Taylor (8 April 2002).

More recently, Osborne Clarke equity capital markets partner Jonathan King has forged close ties with the client. Last year, King took the reins on the Carphone Warehouse’s £500m acquisition of the remaining half of its Best Buy joint venture and its financing via a combination of a new £250m debt facility and institutional placing (30 April 2013).