Herbert Smith is advising the syndicate of banks providing the finance for Kohlberg Kravis Roberts’ (KKR) proposed takeover of Alliance Boots, The Lawyer understands.
The US private equity house, alongside Alliance Boots deputy chairman Stefano Pessina, is receiving financial advice from lead advisers UniCredit Markets & Investment Banking, JPMorgan Cazenove and Merrill Lynch.
However, JPMorgan Cazenove, Citigroup, Deutsche Bank, Royal Bank of Scotland, Barclays Capital, Bank of America and HypoVereinsbank are collectively providing the equity for the buyout, with Herbert Smith acting for the collective. The firm has acted for a number of the banks individually in the past.
Herbert Smith refused to comment, but The Lawyer understands that the firm has not acted on this kind of deal in the past. The concept of banks syndicating the equity for a private equity buyout is thought to be unusual.
In general, private equity houses are expected to partner other private equity firms to raise capital for such deals. For example, KKR was part of the CVC Capital Partnersled consortium, which was advised by Clifford Chance and included Blackstone and Texas Pacific Group, looking to bid for J Sainsbury earlier this year. KKR pulled put of the consortium earlier this month.
Herbert Smith’s relationship with KKR began in January 2003, when it was instructed on the private equity firm’s aborted bid for Safeway.
This also represented the law firm’s first foray into the private equity arena. KKR’s main legal adviser on that deal, as with the current Alliance Boots bid, was Simpson Thacher & Bartlett, which is said to have a close relationship with Herbert Smith in terms of referral work.
KKR also has relationships with Clifford Chance and Slaughter and May, the latter acting on its £1.6bn shared bid for UK pharmaceuticals group Warner Chilcott in 2004.