City Report

Despite the mass exodus from the City during the festive period, M&A lawyers experienced a relatively busy end to 2005. According to Thomson Financial, 292 deals involving any UK element and totalling $43.5bn (£24.7bn) were announced in December 2005. In contrast, November saw 260 deals totalling $34.6bn (£19.6bn) announced.

Magic circle firm Clifford Chance topped the December rankings by value after advising on seven deals with any UK involvement, valued at $10.3bn (£5.8bn). Meanwhile, Slaughter and May and Freshfields Bruckhaus Deringer landed the second and third spots respectively. Slaughters led on six deals worth $6bn (£3.4bn), while Freshfields handled 13 deals valued at $4.8bn (£2.7bn).

As we march into 2006, the potential takeover of the London Stock Exchange (LSE) is no closer to completion. Last month, the LSE humiliated acquisitive Australian lender Macquarie Bank after its 580p-a-share offer was flatly rejected by the exchange as being “wholly inadequate”. As first reported by The Lawyer (28 November 2005), Baker & McKenzie scooped the lead role advising Macquarie because the majority of City firms were unable to act for the bank due to conflicting roles in relation to the LSE (see below). Linklaters also popped up on the deal after landing a role acting for Macquarie’s financial backer Goldman Sachs, alongside Milbank Tweed Hadley & McCloy.

Incidentally, for those of you who are struggling to keep up with which other firms are involved, the line-up is as follows: Freshfields (Graham Nicholson) is advising the LSE; potential rival bidders Euronext and Deutsche Börse are being advised by Slaughters (Frances Murphy, Nilufer von Bismark) and Ashurst (Adrian Clark) respectively; Cleary Gottlieb Steen & Hamilton (John Brinitzer) is advising Euronext on competition and regulatory issues; and Clifford Chance (Jonny Myers) is acting for LCH Clearnet.

Lovells’ corporate practice was celebrating after it landed its first M&A transaction for UK clearing bank Lloyds TSB. The top 10 City firm, led by corporate finance chief Hugh Nineham, advised Lloyds TSB on the sale of its credit card brand Goldfish to Morgan Stanley International for $1.7bn (£96m). The transaction was undoubtedly welcomed by Lovells’ mainstream corporate practice, which is desperately trying to emerge from the shadows of the firm’s stellar private equity group. Meanwhile, Morgan Stanley instructed regular adviser Sidley Austin Brown & Wood (John Casanova).

The start of December saw Clifford Chance secure its first successful M&A deal for Punch Taverns. As first reported on (1 December), the magic circle firm, led by partner David Pearson, advised the UK-listed pub company on the acquisition of Spirit Group. Punch instructs Slaughters on virtually all of its M&A transactions, but turned to Clifford Chance because Slaughters had decided to accept an instruction from Spirit.

Elsewhere, Ashurst received an early Christmas present after landing its first corporate deal from longstanding Travers Smith client NTL. Ashurst (Robert Ogilvy Watson) and Fried Frank Harris Shriver & Jacobson (Bob Mollen) are acting as NTL’s UK and US corporate counsel respectively on the cable operator’s £817m bid for Virgin Mobile. The latter firm is also advising NTL on the financing aspects of the potential tie-up, while Travers (Alasdair Douglas) is handling tax-related matters for the bidder. Virgin Mobile, which floated on the LSE in 2004, has instructed Allen & Overy (Helen Harrison-Hall). Meanwhile, Herbert Smith (Gareth Roberts) is understood to be advising Virgin Group.

As partners returned to the City after Christmas the mood remained upbeat. The vast majority report that their order books are full. Looks like being a happy new year.

Deals Volume

View table: Top 20 Announced M&A Deals For December – with any UK involvement