Philip Green’s bid for Arcadia is probably the most high-profile deal to close this year. And, as you would expect, the magic circle was not far from the action. Allen & Overy and Dechert advised Green, while Clifford Chance acted for Arcadia. However, before you lose interest, there is a more unusual angle: the Bank of Scotland, which did the financing, chose to instruct DLA.
What a coup. Manchester-based partner Simon Woolley, who led the team, said that it was probably the most visible deal he had worked on. The instruction came from BoS’s Edinburgh office, which has a strong relationship with DLA. No pitch, no competition, the work was simply handed over. Woolley received a call at 4pm on Tuesday 3 October and the team had just 13 hours sleep over the next seven days. Not an experience one would usually welcome, but under the circumstances, clearly worth it.
Winning the work prompts an interest in the practice as a whole. A year ago DLA’s main competitors in finance were judged to be Pinsent Curtis Biddle and Hammond Suddards Edge. And while it still sees both firms on the other side of the table, it has moved its practice up a notch so that it now competes with firms such as Lovells and Denton Wilde Sapte.
National firms have the advantage that they can advise their clients up and down the country – and for those companies not based in London, this is clearly a benefit.
DLA has leveraged off its position nicely, relying on its client relationship management programme to broaden its relationships. BoS, the Royal Bank of Scotland and Barclays are its biggest clients, but others worth mentioning are Northern Rock, Bradford & Bingley, GMAC and Axa Investment Managers. The strategy now is to increase the size and profile of the deals and to broaden the type of instructions the firm receives. The relationships with BoS and RBS are strongest in leveraged finance so the challenge now lies in developing the same strength elsewhere. The Barclays relationship, on the other hand, is further along the road and the links are strong in PFI, real estate finance and leveraged finance.
DLA is also making headway with some US investment banks and has started to get to know BNP Paribas, Deutsche Bank on the PFI side and Credit Lyonnais on the leveraged finance side. There are also plans to expand the practice in Europe and the Far East. In Hong Kong, Grant Docherty recently joined from Deacons, while the merger with Andersen’s Belgium firm Caestecker & Partners means banking partner Yves Brosens is now based in the firm’s Brussels office. On the back of this, DLA is focusing its attention on the three leading Belgium banks – KBC, ING and Fortis.
The banking practice is split between leveraged finance, real estate finance, asset-based lending, PFI and securitisation. Unlike firms with more developed banking practices, DLA has not split banking and capital markets.
In fact, such a move would be premature given that the firm’s debt capital markets practice is still in its infancy. Last November it poached securitisation partners Jeanne Bartlett and Conor Downey from the London office of Orrick Herrington & Sutcliffe. Bartlett has set up an issuer-based practice and her strategy is to introduce current DLA clients to the merits of securitisation. A year on and the department is busy with deals, including a media deal, a securitisation of a new asset in the insurance sector and a synthetic transaction for AIG.
DLA seems to be mirroring the strategy of its top tier rivals Allen & Overy and Clifford Chance as it strives to create a lender-based practice. Clearly it still has a long way to go, but thanks to BoS it is now on the map. Only time will tell whether Arcadia was a one-off.