Slaughters wins Permira’s WHSmith bid over CC

Slaughter and May has scored a major coup for its fledgling private equity practice after being chosen ahead of Clifford Chance to act for Permira on its bid for retailer WHSmith.

The private equity house’s 375p per share bid for WHSmith, valuing the retailer at £939.4m, is still in its early stages, and as yet no formal offer has been made for the company.

Permira is traditionally associated with Clifford Chance, but it is understood that it has been contemplating dual-sourcing its legal advisers for around six months.

Slaughters has often been Permira’s law firm of choice when Clifford Chance has been conflicted out of a deal. In 2002, it was retained by Permira, then known as Schroder Ventures, on its £397m management buyout of Hogg Robinson.

However, the potential WHSmith deal strengthens Slaughters’ position as secondary legal adviser to Permira.

Slaughters corporate partner Robin Ogle is leading the deal
for Permira. Linklaters, led by corporate partner Mark Stamp, is continuing its role as main adviser to WHSmith, a position the firm has enjoyed for more than five years.

WHSmith also uses Herbert Smith for both commercial and competition advice, specifically for its newspapers and magazines wholesale distribution division.

Clifford Chance’s highly rated Mathew Layton is the client partner for Permira, where Ian Sellars, a former lawyer with the law firm, resides as a partner.

Sellars is understood to be part of the Permira team on the WHSmith bid, although the deal originator is Martin Clarke, a former director with PPM Ventures, which is another client of Clifford Chance.

Clarke was also the deal originator on Permira’s last high-profile consumer division deal, involving its ultimately unsuccessful bid as part of a consortium for Debenhams.

On that deal, Clifford Chance acted for Permira alongside Slaughters, which represented Goldman Sachs PIA. Blackstone Group, which retained Simpson Thacher & Bartlett, was the third member of the consortium.

It is understood that Clifford Chance lost out on collecting full legal fees for the Debenhams deal. Often in these circumstances a law firm will take a bath on fees for a failed bid, based on the proviso that the private equity house will instruct it on its next deal.

The consortium was paid an inducement/abort fee totalling £8.5m by Debenhams, which would have been shared out among the lawyers, accountants and bankers.

Clifford Chance and Slaughters were unavailable for comment.