11 March 2013 | By Joshua Freedman
6 February 2013
7 April 2008
17 September 2001
9 June 1999
21 January 2002
Big product names are in the frame again in our regular round-up of the deals and legal personalities of the month, including the sales of Dell and baked bean superstar Heinz
February mirrored the January gloom in many ways: high-profile administrations continued, with Linklaters partner Richard Bussell and DLA Piper partners Richard Obank and Colin Ashford advising the administrators of fashion chain Republic. Brown Rudnick partner Louise Verrill is advising Republic’s board and Cleary Gottlieb Steen & Hamilton partners Simon Jay and David Billington are acting for private equity house TPG, which bought the company in 2010.
RPC partner Karen Hendy advised Sports Direct on its acquisition of the Leeds group from the administrators, which were advised on the sale by DLA Piper partners Ashford and Mark Jackson and senior associates Clare Christopher and James Morris.
The collapse of North West law firm Cobbetts and pre-pack sale to DWF gave advisory roles to Pinsent Masons for the administrators and Walker Morris for Cobbetts’ lender Lloyds TSB (see Deal of the Month).
Deals coming out of the US took a promising upturn, although the bulk of the legal work was confined to the US. The $24bn (£16bn) leveraged buyout of computer giant Dell, announced on 5 February, saw Debevoise & Plimpton New York partners Jeffrey Rosen, William Regner and Michael Diz advise a special committee of Dell’s board of directors. Hogan Lovells partners Richard Parrino and Kevin Greenslade in Washington DC and Northern Virginia respectively led for the company and Simpson Thacher & Bartlett Palo Alto partner Rich Capelouto guided Silver Lake, which jointly acquired Dell alongside Wachtell Lipton Rosen & Katz client Michael Dell, its founder. Weil Gotshal & Manges partner Michael Aiello in New York led for Evercore Partners, the financial adviser to the special committee.
Wachtell also advised the transaction committee of Heinz’s board of directors on the food giant’s $28bn takeover by 3G Capital and Warren Buffett’s Berkshire Hathaway. The Wall Street firm fielded partners Edward Herhily and David Shapiro. Davis Polk & Wardwell partners Arthur Holden, John Bick and Michael Davis and associate Lee Hochbaum advised Heinz. Kirkland & Ellis partners Stephen Fraidin, William Sorabella and David Feirstein advised 3G, while Munger Tolles & Olson partner Bob Denham led for Berkshire Hathaway.
Closer to home there were more acquisitions of UK companies by Asian buyers, including Japanese group ORIX Corporation’s €1.9bn purchase of Dutch asset manager Robeco Groep from Rabobank. Linklaters partners Hiroya Yamazaki in Tokyo, Pieter Riemer in Amsterdam and David Holdsworth in London led for ORIX, while Dutch firm De Brauw Blackstone Westbroek fielded partners Arne Grimme
and Gaby Smeenk on Rabobank’s side. De Brauw also referred local work to firms including the US’s Davis Polk, led by New York partner Gregory Rowland, and Japanese firm Anderson Mori & Tomotsune, led by Tokyo partner Taro Tsunoda.
And Allen & Overy, Fried Frank Harris Shriver & Jacobson, Milbank Tweed Hadley & McCloy, Latham & Watkins, Ropes & Gray and Shearman & Sterling were all instructed in various ways on Liberty Global’s $23.3bn takeover of Virgin Media (see Partner of the Month).
Deal of the month: pre-pack sale of Cobbetts to DWF
By Steve Cottee, restructuring partner, Pinsent Masons
Cobbetts was a well-respected mid-tier UK law firm with 73 partners and 439 employees operating out of offices in Manchester, Leeds, Birmingham and London. It also had a subsidiary Incasso, which provided debt recovery services from offices in Leeds.
In 2011/12 the firm’s turnover was £45m. At the height of the economic boom in 2007/08 it was nearly £60m.
By mid-January 2013 the firm that had been established in Manchester in the early 19th century was facing serious cashflow pressures and on 28 January the LLP had no alternative but to file a notice of intention to appoint KPMG as administrators. The firm had found itself in the squeezed middle of UK law firms, which face an increasingly difficult legal market and often have high fixed costs.
Within a day of the notice of intention being filed there was considerable press interest. The challenge KPMG and our team faced was to sell substantially the whole of the business to DWF in a matter of days. The longer we took, the greater the risk that the firm would start to fragment, which could have led to an intervention.
The issues we faced were the negotiation of the sale contract with DWF, finalising with our QC an application to court for the administrators’ appointment, dealing with the appointment of a solicitor manager and a mechanism for the transfer of client files and monies, and co-ordinating the court appointment and proposed sale. To get all this completed in a very short timeframe our team and KPMG worked with little sleep for over a week alongside the DWF management team, their advisers Deloitte, the executive management team at Cobbetts and our QC and junior counsel, while keeping the SRA fully involved. Once the order was made and the sale completed our reward was to spend the rest of the week and following weekend working on the sale of Incasso.
The legal line-up:
For KPMG administrators Brian Green, Mark Firmin and Howard Smith: Pinsent Masons (lead partner Steve Cottee; partner Jonathan Jeffries; senior associates Dawn Allen, Claire Sharf and Nick Gavin-Brown); barristers Peter Arden QC of Erskine Chambers and Martha Maher of St John’s Chambers
For DWF: in-house (managing partner Andrew Leaitherland and national banking head Andrew Gregory)
For Incasso acquirer HL Legal: Taylor Wessing (partner Tom Cartwright)
For the SRA: Bevan Brittan (partner Iain Miller)
For Cobbetts’ lender Lloyds TSB: Walker Morris (partner Simon Clark; solicitor Natalie Knowles)
February deals with UK involvement
Of 50 UK-related deals attributed by Thomson Reuters to February, three passed the $1bn milestone. The largest was Onexim Group’s $3.6bn (£2.4bn) sale of a 38 per cent stake in Polyus Gold to two investors. Herbert Smith Freehills partners Alexei Roudiak in Moscow and Mark Bardell in London advised Onexim. Clifford Chance partner Leonard Cleland led for the buyers’ lenders, VTB Capital.
Linklaters partner Aedamar Comiskey advised UK-registered HSBC Latin America Holdings on its $2.1bn sale of HSBC Panama to Bancolombia, which was advised by Sullivan & Cromwel and Panama firm Tapia Linares y Alfaro.
Ireland’s Matheson advised the country’s government on the $1.8bn sale of Irish Life, advised by A&L Goodbody. Arthur Cox and McCann Fitzgerald advised buyer Canada Life and its parent company Great-West Lifeco.
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Partner of the Month: Jane Rogers
Firm: Ropes & Gray
Position: Partner, finance, London
Jane Rogers led for Liberty Global on the financing of its $23.3bn (£15.5bn) acquisition of Virgin Media alongside fellow London finance partners Maurice Allen, Mike Goetz and Matthew Cox, corporate partner Kiran Sharma and tax partner John Baldry. Virgin Media was advised by Fried Frank Harris Shriver & Jacobson on corporate matters and Milbank Tweed Hadley & McCloy for finance. The arranging banks were advised by Allen & Overy and Latham & Watkins, while Hogan Lovells advised Liberty on European competition, pensions and share schemes matters.
How did you win the mandate?
We have a longstanding relationship with Liberty Global and have been fortunate to have had the opportunity to work with them on their financings, which are always complex and interesting.
What was unique about the structuring or nature of the deal?
The financing for the transaction involved a number of components - bank debt, high-yield bonds, bridge facilities and additional, more bespoke loans - and it was critical to ensure all the pieces worked together.
What was the first deal you worked on as trainee or lawyer?
I was thrown into the junior role on an intense financing for a large-cap leveraged buyout. It seems that not much has changed over the years.
What is the most memorable moment on a deal you’ve worked on?
The public announcement of this deal with the financing package in place ranks high on the list.
Associate of the Month: Graham Kirk
Position: Senior associate, corporate
Graham Kirk advised Aqueduct Capital and its shareholders on the sale of Sutton & East Surrey Water to Japan’s Sumitomo Corporation and managed the hotly contested auction. Other advisers were partners Claire Wills and Martin Nelson-Jones, associate Jason Varney and in-house counsel Jeremy Smith at iCON Infrastructure.
What was your role on the deal?
I provided a package of advice from structuring the deal to running the auction process, drafting and negotiating the documents, and dealing with a signing and closing process. I also co-ordinated a team from across several practice groups.
What was unique about it?
We had bidders from various backgrounds including private equity and industrial or strategic buyers from across the globe, participating until a late stage. So there were a lot of balls to keep in the air. The period from receiving final bids to agreeing the SPA was a little over 48 hours.
Which other deals have you led?
Since returning from two years in the Tokyo office in 2010 I have been working mainly on mining deals such as Receza’s acquisition of a $1.85bn (£1.23bn) stake in Polyus Gold, which just completed, and spent 10 months on secondment to BHP Billiton.
What was the first deal you worked on as trainee or lawyer?
Working for Alliance & Leicester on the sale of its credit card business. Although I was a first-seat trainee I had a distinct role.