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German bank WestLB has ignored Weil Gosthal & Manges on the disposal of the Odeon cinema chain, switching back to long-term adviser Allen & Overy (A&O), which has now accepted instructions on both the buy and sell sides of this transaction.
Weil Gotshal corporate partner Mike Francies was brought in last spring by the head of WestLB’s principal finance group Robyn Saunders to advise on the private equity aspects of WestLB’s original £431m secondary buyout from Cinven.
However, WestLB has turned to A&O for the latest instalment, involving a possible auction sale. Weil Gotshal missed out on the new instruction because, according to Francies, the US firm’s relationship with WestLB was principally with Saunders, who left the bank last year to set up her own venture.
Francies said that once WestLB and Saunders had parted company, the firm’s London office did not expect to receive any future instructions from the bank.
The sale is still understood to be at a very early stage, but reports suggest that buyers may include rival cinema chains such as UCI and Cine-UK, or financial bidders that include the likes of Guy Hands’ private equity vehicle Terra Firma.
But the auction may be blocked by property tycoon Robert Tchenguiz, who has put together a bid for Odeon, backed by Icelandic bank Kaupthing and Dresdner Kleinwort Wasserstein (DKW).
A&O has won a dual role on the deal by scooping an instruction from DKW, it has emerged. Finance partner Tony Keal is advising the investment bank.
Keal is also advising Kohlberg Kravis Roberts & Co (KKR) on the banking aspects of its bid for Royal Vendex KBB, despite the fact that A&O’s Amsterdam office is running the auction for Royal Vendex. However, as revealed by The Lawyer (31 May), A&O senior partner Guy Beringer personally sought the approval of the Law Society before allowing the firm to accept the dual instruction.
Meanwhile, Iranian-born Tchenguiz, who already has an equity stake in Odeon, has instructed Linklaters on his offer, the second private equity mandate he has given to the firm. Linklaters’ private equity team won Tchenguiz as a new client after advising him on his initial investment in Odeon.
The sale of Odeon has been triggered because WestLB has been struggling to repay money it borrowed to finance the acquisition from Cinven last year.