B&M conflict sees Linklaters De Bandt score Belgacom IPO

Linklaters De Bandt score Belgacom IPO” />Linklaters De Bandt has muscled in on the consortium of advisers picked for Europe’s biggest stock market flotation in three years, after Baker & McKenzie was conflicted.

The initial public offering (IPO) has a potential value of e10bn (£6.86bn). Linklaters has been selected to advise Belgacom on the deal together with Belgian firm Eubelius, Belgacom’s principal corporate counsel, and Landwell’s Belgian member Bogaert & Vandemeulebroeke.

It is understood that Baker & McKenzie (B&M) originally pitched jointly with Eubelius, but its existing relationship with Flemish telecommunications company Telenet is likely to have made the firm a difficult choice for Belgacom. It is also less well known to the banks than Linklaters.

Linklaters made its own separate pitch, but willingly teamed up with the domestic firms on Belgacom’s request. Allen & Overy also took part in the beauty parade, while Stibbe and Herbert Smith made a joint pitch.

The Belgian government, Belgacom’s majority shareholder, cleared the way for the privatisation last month. It will retain its controlling interest and assume responsibility for Belgacom’s e5bn (£3.43bn) pension liabilities. Belgacom will buy back e1.3bn (£892.2m) of shares owned by the three industrial shareholders, SBC Commun-ications of the US, Singapore’s SingTel and TDC of Denmark, which have been pushing for the IPO, hoping to divest their combined 49.9 per cent stake.

Sullivan & Cromwell is advising underwriters Leh-man Brothers and Goldman Sachs and Cleary Gottlieb Steen & Hamilton is advising the Belgian government.

Doing it the Belgacom way
Belgium’s top law firms have been waiting for months for Belgacom secretary-general and general counsel Michel Vermaerke to appoint counsel for this high-profile deal. He invited firms to pitch in the summer, but his hands were then tied as Belgium’s new government, elected in May, took a non-commital stance on the proposed initial public offering (IPO).

Now that the green light has been given, Vermaerke’s choice shows a strong loyalty to his longstanding domestic advisers. After all, Linklaters could have handled the entire deal. Instead, he has paired the magic circle firm with Belgacom’s principal corporate counsel Eubelius and pensions adviser Bogaert & Vandemeulebroeke.

Eubelius corporate and litigation partner Ludo Cornelis, who brought Belgacom over to the boutique when he moved from Stibbe, has longstanding ties with the phone company. However, it is commercial partner Dieux Geens who is likely to be most involved.

Linklaters will work with Eubelius on the IPO and provide the extra international coverage that the deal demands.

The appointment remains a coup for Linklaters, which has never worked for Belgacom before. Allen & Overy (A&O) would have been an obvious alternative for Vermaerke, but its existing relationship with KPN would not have helped the magic circle firm’s chances in the beauty parade. Linklaters is also slightly stronger than A&O domestically in Belgium.

Linklaters Benelux managing partner Jean-Pierre Blumberg will play a key role in the deal. His credentials include advising Agfa on its IPO, while the firm also advised Interbrew on its float.

Bogaert, which has recently suffered a spate of departures as it revises its strategy in relation to the accountancy-tied network, has built up considerable expertise in relation to Belgacom’s pension arrangements. The firm will be particularly involved in the transfer pension liabilities to the government, leaving the phone operator virtually debt-free.