Premier Foods brings in longstanding adviser Slaughters on £1.1bn refinancing plan

Wragge & Co has been overlooked by Premier Foods in its £1.1bn capital refinancing plan, with Slaughter and May picking up the core mandate on the deal.

While Wragges remains a preferred adviser to Premier Foods on commercial matters, general counsel Andrew McDonald said the firm had missed out because of the size and complexity of the deal.

Instead the company, which is behind household brands such as Hovis, Mr Kipling, Ambrosia and Oxo, drafted in big-ticket corporate adviser Slaughter and May on the transaction.

The complex refinancing package was pieced together with the aim of helping the debt-laden food group return to financial health. 

The plan involved four key components: a £353m rights issue, a high yield bond issue of £475m maturing in 2020/21, a £300m new revolving credit facility which matures in 2019, and an updated pension scheme arrangement. 

This latest refinancing has enabled the group to axe its net debt from £831m to £513m. 

Slaughters fielded a team led by client relationship partners Michael Corbett and Robert Byk, who were assisted by Slaughter’s corporate associates Filippo de Falco, Ross Davies, Nick Hyde and Shawn Carrington and financing associates Susan Hughes, Oliver Storey, Daniel Tan and Norah Ali.

Partner Mike Lane advised on tax matter, alongside associate Shofiq Miah, while pensions and employment partner Roland Doughty was supported by associates Katherine Flower and Sarah Ferguson. Finally, partner John Nevin advised on real estate matters alongside associate Roopa Modi. 

Herbert Smith Freehills was instructed by the underwriters, led by corporate finance partner Mike Flockhart, capital markets partner Alex Bafi and corporate partner Gillian Fairfield. 

Allen & Overy advised the banks on the revolving credit facility, led by finance partner Melissa Samuel. 

For pensions advice Premier Foods’ pension scheme looked to its longstanding adviser Linklaters, in particular pensions partners Isabel France and Rosalind Knowles, and finance partner Edward Chan. 

Freshfields Bruckhaus Deringer took a role for private equity giant Warburg Pincus, the company’s largest shareholder, led by corporate partner Adrian Maguire. Maguire is already known to McDonald, having worked on the sale of British sandwich filler Branston Pickle to Japanese vinegar manufacturer Mizkan in 2012 (30 October 2012). 

Cravath worked in partnership with Slaughters on the high yield aspects of the transaction led by corporate partner David Mercado. Meanwhile, Latham & Watkins won a role advising the banks involved in the placing of the high yield bond, fielding partner Jennifer Engelhardt. 

“It was a highly complex deal with lots of moving parts,” said McDonald. “We were trying to fix our balance sheet at the same time as working on the joint venture of our bread business and providing a long term solution for our pensions schemes.” 

He continued: “We view this as our break out. We’ve done a lot of divestments, and this is our second refinancing in just two and a half years. This deal means we become a normal company focused on growing our brands and the top line.” 

Earlier this year, Slaughters took a lead role advising Premier Foods on the £30m sale of a 51 per cent slice of Hovis to US private equity house Gores Group (28 January 2014).