Conditional-fee deal to gift Dickson Minto £1m bonus on Barr-Britvic merger

Dickson Minto is set to receive a bonus of more than £1m from client AG Barr when the drinks company’s merger with Britvic completes after the firm agreed a conditional fee for its advice on the deal.

Corporate partner Colin MacNeill led the Anglo-Scottish firm’s team advising AG Barr, working alongside Willkie Farr & Gallagher London corporate partner Jon Lyman, who took a smaller US-related role.

MacNeill struck a deal, detailed in The Lawyer’s second review of M&A legal fees published today (14 January 2013), that saw AG Barr’s combined estimated fees to all legal advisers range from a minimum of £700,000 to a maximum of £1.75m. The £1.05m difference represents a success fee if the £1.4bn merger goes ahead.

Dickson Minto is understood to be the recipient of the vast majority of the fees and all of the conditional amount, with Willkie Farr thought to be picking up a small and fixed proportion of the basic £700,000.

Fees paid by Britvic, which was advised by a Linklaters team led by corporate partner Owen Clay (10 September 2012), are estimated at £3.25m. Linklaters received £3m of this.

Details of the fees and the billing arrangements are revealed in publicly available documents released in December by the companies. Parties in public M&A deals have been required to disclose legal spend since the introduction of the new City Code on Takeovers and Mergers, or Takeover Code, in September 2011.

Shareholders of both AG Barr, whose brands include Irn-Bru, Orangina and Rubicon, and Chelmsford-based Robinsons squash-maker Britvic ratified the merger in votes last Tuesday (8 January), but the deal is still awaiting competition approval from the OFT, which expects to give its decision this Thursday (17 January). A green light from the OFT would be the final key decision enabling the combination to go ahead.

MacNeill commented: “Although historically fees with success elements haven’t extended to public M&A legal fees, clients are very used to success-based fees with their investment banks, and with the right relationship and the right transaction it can also work for the law firm. It’s not the first time we’ve done it on public M&A but it’s the first time we’ve done it in a way that’s had to be disclosed since the rules came in.”

Today’s feature also reveals the process that saw Ashurst’s estimated fees from financial services group GlobeOp increase from up to £1.1m to a figure of up to £2.1m when a takeover offer for its client from US private equity group TPG Capital was trumped by a higher bid from SS&C Technologies.

Meanwhile, legal fees for the merger of commodities trader Glencore and mining group Xstrata have risen from £24.8m when the firms first filed disclosure documents in May 2012 (6 June 2012) to £38.9m under new deal terms published in October. Most of the fees – the highest since the new Takeover Code came in – were shared between Glencore adviser Linklaters and Xstrata adviser Freshfields Bruckhaus Deringer.

Separately, fees earned by Addleshaw Goddard, Ashurst and Nabarro for their work on joint bids from William Hill and GVC Holdings for online betting company Sportingbet are set to be revealed in the coming weeks, with Ashurst’s billings understood to be around £3m to £3.5m. The firm is advising William Hill, with Addleshaws acting for GVC and Nabarro for Sportingbet (1 October 2012).

For The Lawyer’s latest analysis of public M&A legal fees, see feature. The first M&A fee review, published in September 2012, can be read here.

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