Ashurst lands Terra Firma after Linklaters conflicted

Ashurst has secured its first instruction from Terra Firma thanks to a conflict at Linklaters, advising the private equity house on the separate auctions of the UCI and Odeon cinema chains.

Linklaters advised on the establishment of the Terra Firma fund, although subsequently Clifford Chance, Freshfields Bruckhaus Deringer and Slaughter and May have won the bulk of the legal work.

However, it is understood that Linklaters had to turn down Terra Firma’s instruction because the firm was already advising Iranian property tycoon Robert Tchenguiz, who was a rival bidder during the Odeon auction.

Tchenguiz already owns 35 per cent of the cinema chain and Linklaters private equity partner Raymond McKeeve picked up a mandate from him last March when he bought the stake.

Ashurst won the instruction from Guy Hands’ investment vehicle Terra Firma through corporate and private equity partner Charlie Geffen. Geffen led the team alongside corporate partner Nigel Stacey.

The firm has also been retained to advise on competition issues arising from the acquisitions, which give Hands an estimated 45 per cent stake in the UK’s cinema market.

However, the Office of Fair Trading has given no indication so far that a competition inquiry is in the offing and it is believed that a formal inquiry is unlikely given that the cinema market is a regional one.

Shearman & Sterling advised longstanding clients Viacom and Vivendi as sellers on the UCI sale, while Macfarlanes acted for the vendors in the Odeon sale. The debt provider, Barclays Capital, was advised by Clifford Chance.

The deals, which were signed within hours of each other, are still subject to clearance from the Competition Commission before being finalised. It is expected the process will take between four and six weeks.