Carphone Warehouse, TalkTalk demerger calls on bevy of firms

Corporate partner Jonathan King led the Osborne Clarke team that acted for longstanding client Carphone Warehouse on its split from its erstwhile fixed-line business TalkTalk.

King, assisted by ­corporate chief Adrian Bott and tax partner Michael Bell, advised the merged entity as well as the two new companies, TalkTalk ­Telecom Group and retail and distribution arm ­Carphone Warehouse.

Credit Suisse and UBS acted as joint sponsors for the transaction, with Ashurst corporate partner Steven Fox providing advice.

Carphone Warehouse’s in-house team was led by group general counsel Tim Morris, who praised Osborne Clarke for its “excellence in the corporate finance arena”.

“It was a very complicated transaction,” said King. “Tim’s recognised that you can achieve that high-level value outside the magic ­circle.”

The demerger came alongside a restructuring of both entities’ debt package, with Freshfields, which had previously advised neither Carphone Warehouse nor TalkTalk, snaring the ­mandate in both instances.

The new relationship was driven by Freshfields senior associate Sean Lacey, with finance partner Chris Howard also acting for the magic circle firm on the two separate refinancing ­transactions.

Howard commented: “They felt they needed to get additional finance support for the demerger. The unique thing for us is that we’ve had a fantastic ­financing that’s been led by an associate.”

The Carphone Warehouse refinancing took the form of a £450m working capital facility, known as a ’revolver’. A&O advised ING, which acted as agent for a syndicate of eight banks providing the five-year facility. Finance partner Simon Roberts led the A&O team.

The existing debt on the TalkTalk side of the merger was refinanced by a £225m bilateral loan, provided by RBS, and a £350m asset-based receivable facility, arranged by a Barclays-led syndicate. RBS was advised by the same Roberts-led A&O team, while DLA Piper finance partner Alex Dell acted for the Barclays syndicate.

The demerger was announced to the London Stock Exchange last month, with the deal expected to close by the end of March.