Freshfields gets in on Midlands sale

Freshfields Bruckhaus Deringer is involved in the increasingly complex battle for control of Midlands Electricity after Dundas & Wilson client Scottish & Southern Energy (SSE) backed out of a billion-pound takeover.

It is understood that Freshfields is acting for E.ON-owned Powergen in its attempt to buy Midlands for £1.2bn after a group of bondholders owed £600m, represented by Cadwalader Wickersham & Taft, rejected a £1.1bn offer by SSE.

The original bidder’s offer of 86p of every £1 owed to the bondholders was rejected. Reports say the bondholders want full value for their debt after also objecting to SSE’s proposals to pay the US owners of Midlands £43m in cash as well as assuming £502m in other debt.

Since Midlands’ owners, the US energy groups Aquila and First-Energy, put the subsidiary on the block earlier this year, the deal has turned into a roll-call for the legal sector’s great and good.

Jones Day Gouldens is representing the seller. The firm’s client is a pre-merger relationship for Jones Day Reavis & Pogue, which had in the past advised FirstEnergy.

Since then the London office won work from FirstEnergy when it acted on the company’s sale of part of a stake in Midlands to Aquila.

Orrick Herrington & Sutcliffe‘s fledgling bankruptcy and debt restructuring group in London originally won the mandate to act for some of the Midlands bondholders.

However, the firm was subsequently replaced by Cadwalader when law firms were asked to repitch as more bondholders entered the fray. Close Brothers is also acting for the bondholders.

Midlands is being advised by Linklaters corporate partner John Goodwin and banking and restructuring partner Tony Bugg. The firm has represented the company since 1996.

Acting alongside Dundas on the aborted deal, headed by corporate partner Ewan Robertson, was Clifford Chance, which was charged with overseeing bondholder issues. Clifford Chance banking and finance partner David Steinberg headed up the transaction.

Jones Day Gouldens corporate partner Peter Faber led a team for Aquila and FirstEnergy.

For Powergen, it is believed that Freshfields corporate partner Peter Streatfeild, the client relationship partner at the firm, is overseeing a group of lawyers on the discussions.

Powergen and Freshfields declined to comment.