Freshfields in securities alliance with Debevoise

Freshfields plans joint assault on Euro capital markets;CC to fight for top spot in IPO wars

Freshfields Bruckhaus Deringer is in talks with New York firm Debevoise & Plimpton on a plan to work together on securities work.

The two firms are looking to team up on transactions, as Freshfields is keen to boost its capability on US securities transactions in Europe.

A source at Freshfields claims that the firm is discussing a similar move with New York practice Cleary Gottlieb Steen & Hamilton, but Cleary managing partner Peter Karasz denies any talks. However, one European Cleary partner says it is possible that an individual partner has talked with Freshfields about the possibility of a link-up.

An alliance with Debevoise would give Freshfields access to the firm’s four-partner-strong US securities practice in Europe. The firm has two US securities partners in London and two in Paris.

Freshfields has three US securities partners based in London, with a further two in Europe. However, the practice suffered a blow this week with the departure of partner John Chrisman, who is moving to Australia (see page 4).

The deal is being engineered by Freshfields head of US securities Tom Joyce and Debevoise London and Paris managing partner James Kiernan.

Confirming the talks, Freshfields senior partner Anthony Salz says: “We have our own high-quality US securities group. But as a much larger firm in Europe when equity markets are very active, we have rather more work for that group than we can comfortably handle.”

Kiernan says: “I confirm that we’ve had preliminary discussions with Freshfields about European cooperation in capital markets work, as we have had discussions with other firms about cooperation in other areas.”

The Bruckhaus side of the practice is most in need of extra US capability, says a Freshfields source. It has developed one of the leading practices in Neuer Markt offerings, with initial public offerings (IPOs) such as Lycos Europe.

The principal competitor is Shearman & Sterling, which has handled a number of dual listings. However, it is rated lower on the debt securities side, according to German legal magazine JuVe Rechtsmarkt, behind Cleary and Oppenhoff & Rädler.

According to The Lawyer IPO 2000 survey, Freshfields acted on 10 UK flotations between January 1999 and June 2000, placing it fifth in the volume table (The Lawyer, 18 September) and third in value terms, after Linklaters & Alliance and Slaughter and May.

Debevoise’s recent securities work includes advising Goldman Sachs and Morgan Stanley on the $1.45bn (£1bn) IPO by United Pan-Europe Communications and Portuguese company PT Multimedia on its $450m (£306.6m) global offering. In debt, it has acted on a number of high-yield issues, such as Telia’s $200m (£136.3m) offering last year.

At the same time, Clifford Chance is launching an assault on the securities market by setting up a top-level equity capital markets taskforce to target US investment banks.

The four-partner taskforce comprises Clifford Chance Milan-based managing partner Nick Wrigley, New York-based partner Kevin Kelley, who is relocating to London, and corporate partners Adam Signy and Michael Cuthbert. Wrigley will remain based in Milan but will travel to London one day a week as part of the initiative.

The taskforce has been set up as a response to serious concern within Clifford Chance following its poor showing in The Lawyer IPO 2000 survey, which showed that it was lagging behind rivals Freshfields, Linklaters and Slaughter and May on UK IPOs.

In the period January 1999-June 2000, it was eighth in terms of volume and sixth in terms of value. “It’s not a defensive move, it’s aggressive,” says Signy. “There’s no doubt that it’s aimed at setting the record straight, but it’s also an aggressive attempt to increase market share, which is perhaps not as large as it should be in the UK.”

Global head of securities Bob King says: “We need to distinguish what ‘lagging behind’ means. If you’re looking at UK league tables, yes; but when we looked across our European practice we became a lot more excited. [In Europe] we might not be starting as far behind as everyone thinks.”

The move marks an extraordinary volte-face in the firm’s corporate strategy, which has so far focused on M&A.

In the first six months of this year, Clifford Chance’s equity capital markets business turned over £17m worldwide, with the bulk of that being sourced from Europe. Its debt securities practice turned over £15m in the same period, with the securitisation practice generating £22m.