THE IPO SPECIALISTS: AN ANALYSIS
18 September 2000
Allen & Overy Had a good year, which culminated in the formation of a dedicated equity capital markets group earlier this month, headed by Richard Cranfield (The Lawyer, 11 September). It spent much of the year getting out and about in an attempt to forge relationships with the investment banks - and it seems to be paying off. It advised longstanding client Morgan Stanley on Canary Wharf, but two of its most recent IPOs - Eyretel and Orchestream - both came via its bank client, UBS Warburg. During the summer it worked on another two for the bank, Carphone Warehouse and Zen Research. Its ongoing relationship with UBS Warburg has been helped by corporate finance partner Kerry Spooner, who is particularly close to the finance house. On the issuer side, A&O won a float from under the noses of magic circle rivals Linklaters and Freshfields. It was selected by BT (which has used both of the other firms, particularly Linklaters) to handle its planned flotation of the e-commerce business Yell.
Ashurst Morris Crisp A variety of IPO work with little discernible pattern, but a decent balance between issuers and mid-market corporate finance houses such as WestLB Panmure and Hoare Govett.
Berwin Leighton Has acted only for issuers, although these include major deals such as QXL.com and the Bell Group.
Brobeck Hale and Dorr The US firm provided advice on dual listings, including the £1.21bn float of Bookham Technology, which it represented alongside Morgan Cole. Shortly after, it set up its own Oxford office, poaching three partners from Morgan Cole along the way (The Lawyer, 17 April).
Brough Skerrett The four-partner firm has muscled its way into league tables by acting for a clutch of trusts, with values ranging from the £6m mark to £200m.
Clifford Chance A disappointing showing. According to information provided by the firm, it worked on just five floats. Subsequent research initiated by The Lawyer indicates a handful more; its IPOs from January 2000 total eight. It handled a slew of investment trusts but few big-ticket floats. The exception was the IPO of long-time client Canary Wharf, as well as some major non-UK listings. What is more surprising, given the firm's strong position among City institutions, was the paucity of work for underwriters - and even then, most of that work has been for the smaller houses. But the magic circle giant remains unfazed, instead choosing to keep its eye firmly on M&A. It has also suffered, like most firms, from the recent market slump. In total, 15 planned IPOs it was working on have been shelved. Still, Clifford Chance is not a firm ever to be written off.
Dickson Minto The Scottish firm has benefited from a key relationship with fellow Scottish corporate finance house Brewin Dolphin Securities.
Eversheds A general corporate practice has provided Eversheds with an entry into the IPO issuer market. Notches on the belt include acting for Kingston upon Hull County Council on the Kingston Communications IPO.
Freshfields Bruckhaus Deringer Although not showing as high up as Linklaters, Tim Emmerson's team at Freshfields can be satisfied with its IPO work over the last 18 months. On the issuer side, it has acted on some key flotations, including Thus and the 365 Corporation. The group has a nice variety of investment bank clients: it has advised Morgan Stanley, Dresdner KB, Deutsche Bank, Merrill Lynch and Nomura on a range of UK IPOs since January 1999. The team is unlikely to evolve into a dedicated group. It is highly improbable that Freshfields will abandon its strategy of all-round corporate finance advice.
Gouldens Continued to farm its long-term relationships with the smaller houses, particularly Investec Henderson and Collins Stewart.
Herbert Smith Given its corporate client base, Herbert Smith's issuer practice is not as stellar as one might have thought. Rather, it is dominated by investment trusts - not a surprise, given the firm's track record in this area. But it has made some inroads into the investment banks, and has worked hard on its relationship with key client Credit Suisse First Boston, which it advised on the Freeserve and QXL.com flotations.
Lawrence Graham Very strong in acting for issuers on trust flotations.
Lovells Acted on only two IPOs between January 1999 and June 2000 - but what a selection. It acted for Goldman Sachs on the recent flotation of internet bank Egg (although Slaughter and May landed the role for the issuer, Lovells' Prudential links and knowledge of Egg snared it the role of advising Goldman) and for issuer South African Breweries, which floated with a market capitalisation of £3.3bn.
Maclay Murray & Spens Another Scottish firm which has a relationship with Brewin Dolphin Securities.
Nabarro Nathanson Demonstrated its close relationships with smaller corporate finance houses such as Peel Hunt and Corporate Synergy (Redstone Telecom and the StatPro Group). A longstanding practice in AIM flotations has given the firm the leverage it needed to go for the larger listings.
Norton Rose A respectable showing for issuers, but the firm's real strength this year has been advising a range of banks - HSBC, Dresdner KB and Collins Stewart, for example - on a clutch of deals.
Olswang Lots of chunky issuer work - the Wireless Group and Netstore, for example - plus some fascinating frills. It handled two investment trust listings through personal relationships with individuals at Jupiter, courtesy of media/defamation partner Julia Palca.
Osborne Clarke Acted on only three IPOs, but one of those was Redstone Telecom, which floated with a market capitalisation of £102.7m and which is one of the few new economy companies riding out the market wobble. Being retained for the StepStone float underlined Osborne Clarke's strong showing. One to watch.
Ozannes The Guernsey firm has, as to be expected, worked on a handful of investment trusts since January 1999.
Shepherd & Wedderburn As with Dickson Minto, the firm has benefited from a close relationship with Brewin Dolphin Securities.
Simmons & Simmons A thin showing for the firm, which acted on only one flotation, the trust BGI Endowment Fund.
SJ Berwin Acted on two IPOs for the issuers, but both - Future Network and Interactive International Investor (iii) - were major deals, with a combined market capitalisation of £772.38.
Slaughter and May A balanced practice in terms of issuers
and underwriters. No surprises at the firm's institutional relationships: Cazenove & Co, Hoare Govett and Dresdner KB all feature.
Stephenson Harwood A solid showing on investment trusts and strong relationships with mid-market houses such as Collins Stewart and Greig Middleton & Co.
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