Legal fees plummet to £26m in quiet first half for public M&A

Legal fees on public M&A in the UK fell to just £26.1m in the first six months of 2013 after a relatively buoyant 2012, according to research by The Lawyer.

In total 18 takeover offers for publicly listed companies were made between January and the end of June, with fees on individual deals ranging from £21,000 to £6.85m.

This contrasts with the estimated £50.1m spent on lawyers for 15 deals in the last four months of 2012 alone, when the Glencore mining merger with Xstrata propped up the overall figures with £38.9m of fees (14 January 2013).

Full details are unveiled in The Lawyer’s third in-depth review of M&A legal fees, published today (22 July), which also looks closely into the sizeable gap between lawyers’ fees and those earned by financial advisers and brokers on takeovers.

The biggest deal in the first half of 2013 by fees was William Hill and GVC Holdings’ £485m takeover of gambling group Sportingbet, which yielded an estimated £1.35m for Sportingbet’s legal advisers, including Nabarro, and £5.5m for the buyers’ lawyers, including Ashurst and Addleshaw Goddard (28 January 2013).

The second biggest was Schroders’ acquisition of investment manager Cazenove Capital, which gave £1.45m to Cazenove’s lawyers, headed by Herbert Smith Freehills, and £1.58m for the team acting for Schroders, led by Slaughter and May.

Across the whole of 2012, the ten biggest deals by fees alone generated £86.6m, largely thanks to Glencore-Xstrata and the takeovers of GlobeOp Financial Services (£7.1m in fees) and Aegis Group (£7.06m), with the three transactions giving roles to firms including Freshfields Bruckhaus Deringer, Linklaters, Ashurst, Clifford Chance and Slaughter and May.

The Lawyer’s research only includes M&A for which a document for shareholders has been published and includes transactions such as the Cazenove takeover which were not public deals but which still required detailed filings under Takeover Panel rules due to the nature of the deal.

Legal fees are revealed in these shareholder filings issued by the parties under the Takeover Code, which since September 2011 has required detailed disclosure of fees and expenses on takeovers of UK-listed businesses.

For more on this read our feature: Lawyers vs bankers