Stub snub

It’s a case of third time unlucky for Freshfields Bruckhaus Deringer. The stub equity structure used in Ferrovial Group’s €11.7bn (£8.06bn) hostile takeover of BAA was touted as one of the reasons for the airport operator’s board eventually recommending the Spanish construction group’s bid.

But the innovative structure, which has become something of a trademark for Ferrovial’s adviser Freshfields, turned out not to be as popular as the parties had originally anticipated. Indeed, because there wasn’t sufficient appetite for the stub equity, the structure was abandoned. For Freshfields this must be frustrating, as it has deployed this structure on a number of previous high-profile deals, including Brascan’s unsuccessful bid for Canary Wharf and Philip Green’s failed takeover of Marks & Spencer. Although, if it’s of any comfort, at least the Ferrovial deal was a success.Get the latest news and an irreverent commentary delivered to your desktop every Wednesday by subscribing to Lawyer News Weekly.

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