The struggling M&A market last week saw a glimmer of hope as Lovells helped sell off retailer Littlewoods to the reclusive billionaire Barclay brothers.
The deal, which signals the end of the Moores family’s 80-year ownership of Littlewoods, is worth £750m and adds to Sir David and Sir Frederick Barclay’s stable of companies, which includes The Ritz Hotel (London) as well as a plethora of newspaper titles such as The Scotsman.
As a long-time adviser to the Barclay brothers, Lovells provided the lion’s share of advice, with PricewaterhouseCoopers (PwC) Corporate Finance brought in near the end of the deal to issue the offer document.
Corporate partner Marco Compagnoni led the Lovells team.
One source said: “The Barclay brothers aren’t wet behind the ears when they’re doing deals. They don’t have to pay for an investment bank to hold their hand when all they need is lawyers and someone qualified to do work such as issuing the offer document under the Financial Services and Markets Act.”
Littlewoods, which was represented by Herbert Smith, turned to Schroder Salomon Smith Barney for financial advice on the transaction.
Simon Woolley, banking partner at DLA, acted for HBOS, which backed the Barclay brothers bid through the provision of £840m worth of senior debt. Lovells banking partner Adam Freeman also worked closely with DLA on the funding aspects of the deal.
Although Littlewoods is passing from one family to another, this element caused one of the most complex issues during the transaction.
Sir John Moores, the founder of Littlewoods, set up the company so that it would be passed on to his descendants and could not be sold off without the approval from each family member.
Prior to the Barclay brothers’ bid, Herbert Sm-ith, led by corporate pa-rtner Step-hen Wilkinson, was involved in a potential bid to sell off high street shops for £300m. But the firm was then contacted by the company over the change in strategy.
Due to the takeover, Herbert Smith’s relationship with Littlewoods, which it has advised on £2bn worth of deals since 1995, may be hanging in the balance.
However, the current Littlewoods board, including company secretary Neil Ogilvie, who is responsible for choosing the law firms that Littlewoods uses, is expected to remain in place.
The transaction arrives as the corporate market, specifically in M&A, continues to flounder under the weight of economic uncertainty.
According to Thomson Financial, for the first nine months of 2002, the number of European deals fell to 6,593 compared with 9,660 for the same period last year. Also, the aggregate value of deals plunged to $337bn (£215.53bn) compared with $432bn (£276.29bn) in the first three quarters of last year.