Hot property

Irish law firms are a hotbed of activity with most sectors showing growth from M&A work to property development

“The whole area of corporate and commercial law is quite electric at the moment. Apart from the high-profile deals, there is a constant flow of other work – joint ventures, inward investment and huge developments in areas such as computers and telecoms and financial services,” says Anthony Collins of Eugene F Collins.

Mergers and acquisition work continues apace in the Irish market. Will 1998 be a halcyon year for this type of activity? Brian O'Donnell, managing partner of William Fry which was involved in some 28 deals worth around IR£2bn last year, says that so far 1998 is looking good.

The firm, which is currently involved in the $11bn merger of Irish Packaging company Jefferson Smurfit with US packaging company Stone Container, completed transactions worth around £2bn in the past 12 months.

“The Irish M&A market continues to be extremely active this year and we have certainly seen the same level of activity as last year,” says O'Donnell.

One factor is the reduction of capital gains tax from 40 per cent to 20 per cent, which, he says, is already having an impact and “helped motivate some people with family companies to sell”.

A trend for the future, O'Donnell predicts, is the likelihood of a number of flotations. “Some of the companies are looking at flotation because the stockmarket is going very well,” he says.

Other trends included a significant number of acquisitions of Irish companies by UK/US companies such as Tesco's acquisition of Quinnsworth/ CrazyPrices/Stewarts in a deal worth IR£630m and US company GE Capital's acquisition of Woodchester Investments, represented by A&L Goodbody. William Fry represented the acquirer.

Indeed, all of the major law firms were busy on the merger front as a survey conducted by Finance magazine reveals.

Arthur Cox advised on 54 deals worth over IR£3.2bn while A&L Goodbody advised on 36 worth just over IR£3.1bn. William Fry recorded a total of 28 worth nearly IR£2bn while LK Shields was involved in 21 worth IR£383m and Matheson Ormsby Prentice advised on 16 worth IR£300m. Beauchamps acted in eight worth IR£41m while Mason Hayes & Curran advised on 14 worth IR£77m.

Collins says that one interesting aspect of the M&A table is the major presence of Clifford Chance which acted for 10 acquirers in transactions worth IR£1.59bn.

Commercial property was a particularly booming area for most law firms in the past year, with office prices shooting up and demand out pacing supply. Property development is at a premium with estimates that one new hotel a month is opening in Dublin.

Donal Roche, managing partner of Matheson Ormsby Prentice, says his firm was particularly busy on this front. He reckoned that in the first quarter of 1998, the firm had been involved in projects worth over IR£175m including a substantial new office development for Citibank and AIG in the extended IFSC area totalling over 300,000 sq ft.

Robert Ryan of Beauchamps also reports much activity on this front including a deal for Compaq Computers, “the largest single corporate letting”, for 160,000 sq ft of space. It is also acting for the developers of Belfield Office Park in a 350,000 sq ft office development.

The International Financial Services Centre is still proving a success with some 350 financial institutions located in this offshore operation. Law firms have been active advising on the funds aspects. A&L Goodbody topped the most recent Fitzrovia survey for the year 1996-1997 for advising 230 Dublin domiciled subfunds. Arthur Cox is in second place advising 175. Dillon Eustace takes third place with 162, nine less than the previous year, a factor which is attributed to the significant number of Korean funds which have been wound up between June 1996 and 1997.

McCann Fitzgerald, which is located in the IFSC, advised 95. William Fry and Matheson Ormsby are steadily building up their practice in this area; William Fry has jumped from 13 to 120 in a three-year period and Matheson Ormsby has risen from 18 to 58.

Others are also getting involved in IFSC work. Mason Hayes & Curran, for example, is making a play for this work with the recruitment of a director of financial services to specifically develop the practice.

Competition law is also a fast growing area. According to Frank O'Riordan, the emphasis is changing from it being regarded as burdensome to being seen as a tool. His firm A&L Goodbody is now acting for a number of companies which are using it in a proactive way to penetrate markets. In the past year, the firm has acted for Ryanair in relation to the Competition Authority and the travel agents. It has also advised Segrams and Irish Distillers on the Guinness Grand Met merger; advised Heinkein and Irish Distillers in relation to objections to the Guinness acquisition of United Beverages; advised the Office of the Telecommunications Regulator in Ireland; and advised various entities in connection with EMU.

Other areas which are showing growth include intellectual property and information technology. Firms are considering issues such as the millennium bomb, particularly relevant to Ireland which is home to many of the world's top information technology companies. Matheson Ormsby opened an office in Paulo Alto two years ago in a bid to make contacts with software companies planning to come to Ireland. Roche says it is now beginning to bear fruit.

Reports of the death of the Irish film industry are premature. Paul White, head of A&L Goodbody's media and entertainment unit reports that recent proposed changes in the Finance Bill are not expected to have an adverse effect on production levels. Among the films he has worked on are The Fifth Province directed by Frank Stapleton, St Ives, directed by Harry Hook and Columbia Tristar's The Devil's Own and most recently Denis Bradley's film Sunset Heights.