The City’s bored corporate lawyers must be rubbing their hands and hoping that the Hollinger deal turns into a feeding frenzy – just as Safeway did this time last year.
With big deals still pretty thin on the ground, a sale of Hollinger’s main UK asset The Daily Telegraph could attract so many bidders that there might be scraps for firms such as Denton Wilde Sapte and Norton Rose, which are outside the M&A top flight.
Three major corporate firms – Herbert Smith, Slaughter and May and Lovells – are already on the deal for Hollinger International, its financial adviser Lazard and the Barclay brothers respectively.
There are numerous rival bidders for the newspaper: Richard Desmond’s Northern & Shell and The Daily Mail and General Trust Group are certainly interested, with a host of private equity bidders led by Candover and 3i also reportedly tempted.
In terms of legal advisers, Desmond and Candover are the most interesting. Candover is the perennial flirt of the private equity world, playing off its external legal advisers almost as well as Hugh Osmond. Candover used Ashurst and Clifford Chance almost exclusively until a few years ago, and Linklaters is pushing to get more work from the house.
Two years ago, Candover also used Macfarlanes on the sell-off of Regional Independent Media, so partner Charles Martin may be hoping for a call. However, the word on the street is that Candover will use Clifford Chance for corporate advice if it decides to bid.
Desmond has a rather more rocky relationship with his external advisers. Last October, The Lawyer reported that the media mogul had launched a claim against Linklaters, alleging that the firm negligently advised him on the acquisition of Express Newspapers in 2000. Linklaters told The Lawyer at the time that it would defend itself vigorously, but it is a fairly good bet that Desmond will not be instructing the firm again. Sources say he is in fact using Ashurst, his usual adviser before the Express Newspapers deal.
It is a fascinating struggle, but a risky prospect for all the suitors of The Daily Telegraph. How far their legal costs will be covered by Hollinger and Lazard is unclear. Getting an instruction on a deal such as this one is obviously great, but if you have to do it on a ‘no win, no fee’ basis, it is bound to take off some of the shine.