M&A lawyers returning to the City after their Christmas holidays hit the ground running. Although January is traditionally a quiet month for the Square Mile, according to Thomson Financial, 209 deals involving any UK element and totalling $33.1bn (£18.96bn) were announced last month. In contrast, December 2005 saw 292 deals worth $43.5bn (£24.91bn) announced, while 260 deals totalling $34.6bn (£19.81bn) were announced in November.
Slaughter and May topped the January rankings by value after advising on just two deals with any UK element, valued at $22.8bn (£13.06bn). Slaughters (Frances Murphy) scooped the mandate to defend regular client BOC Group from a hostile takeover by German conglomerate Linde. The $14.9bn (£8.53bn) deal was January’s largest transaction. Freshfields Bruckhaus Deringer and Clifford Chance landed the second and third spots respectively. Freshfields led on one deal worth $14.9bn (£8.53bn) while Clifford Chance handled six deals valued at $3.1bn (£1.78bn).
Newcastle giant Dickinson Dees stormed into fifth place thanks to its role advising the target Reg Vardy on the hotly contested bidding war between Pendragon and Lookers. As The Lawyer went to press, Pendragon, the UK’s largest car dealer, looked set to clinch the purchase of North Eastern car dealer Reg Vardy after rival bidder Lookers, advised by Addleshaw Goddard corporate partner Michael Birchall, dropped out. Pendragon is being advised by a CMS Cameron McKenna team led by corporate partner Mike Jones and finance partner Will Meredith. The Dickinson Dees team is being headed Nigel Bellis.
The other bidding war that continued to fill column inches during January was the race to take over longstanding Freshfields client P&O. The deal comes to a head at 2pm today (13 February), as P&O will be holding an extraordinary general meeting to vote on DP World’s offer. Singapore-based port operator PSA, which is being advised by Slaughters head of M&A Stephen Cooke, made a 470p per share recommended cash offer for P&O on 26 January, but within 12 hours PSA’s offer was trumped by DP World, whose current offer stands at 520p a share – 77p higher than its original 443p per share offer in November. With a further offer from PSA looking increasingly unlikely, DP World is now in pole position to take over P&O.
Assuming P&O’s shareholders approve DP World’s offer, the deal will close as early as 2 March, because the Dubai-based bidder has already obtained regulatory clearance. Linklaters is advising DP World, with corporate partners David Cheyne and Jeremy Parr leading. Freshfields corporate partner Mark Rawlinson is acting for P&O.
Equity capital markets lawyers also enjoyed a busy January thanks to the boom in listings on the London Stock Exchange. Herbert Smith (Greg Mulley, James Palmer, Stephen Rayfield and Michael Walter), Simmons & Simmons (Richard May and Charles Mayo) and Freshfields (Simon Witty) all scooped roles advising the issuer, the Ministry of Defence and the underwriters respectively on the controversial £1bn QinetiQ IPO.
Although reports say investor appetite for QinteiQ stock has been unprecedented, the privitisation of the Government’s defence research agency has attracted criticism from all corners. Much of the criticism related to the windfall Carlyle Group looks set to make when it sells some of its stake in QinetiQ. The US private equity house, advised by Clifford Chance, invested £42.4m in the company in 2002. That stake is now worth around £330m.
The mood in the City is more optmistic than it has been for some time. And the feeling is that it looks set to continue – at least for the moment.
Husnara Begum, City editor
Click here for table of top 20 announced M&A deals for February with any UK involvement.