The UK buyout market had an uncharacteristically frenetic week with City M&A counsel taking the lead on a £1.3bn unsolicited bid for doorstep lender Provident Financial and the £975m recommended offer for UK cheese and spreads stalwart Dairy Crest Group on the same day.
The hostile bid for sub-prime lender Provident was launched at 7am this morning (22 February) by Non-Standard Finance (NSF), with Slaughter and May corporate head Andy Ryde and fellow partner Paul Mudie leading the charge.
NSF was set up in 2015 by former Provident chairman John van Kuffeler, who had previously enlisted Slaughters while at Provident and carried on the relationship at NSF, including on its IPO.
In a rare case of a hostile takeover not leaking beforehand, the target company called up to enlist Clifford Chance on Friday morning when the bid went public. Corporate partners Lee Coney and Mark Poulton are leading the team advising Provident, with the latter having previously advised the client on its strategic review and £331m rights issue.
Shareholders who collectively own more than 50% of the company, including Woodford Investment Management, Invesco and Marathon Asset Management, are understood to be in favour of the offer, given disgruntlement with chief executive Malcolm Le May following a series of profit warnings.
The bid turned hostile after Provident last year rebuffed an approach from NSF. Given heavy regulation of subprime lenders, mainstream banks are unlikely to put in a rival offer for Provident, although the company could be a private equity play.
NSF is planning to demerge its home credit business, Loans at Home, to satisfy the competition authority.
Also benefiting from a long-standing relationship was Eversheds Sutherland partner Aleen Gulvanessian, who led a team advising Dairy Crest on its £975m sale to Canadian dairy company Saputo.
Dairy Crest is the manufacturer of products including Cathedral City cheddar, Country Life butter – a favourite of former Sex Pistols frontman John Lydon – and Clover spread.
Freshfields Bruckhaus Deringer, led by energy and natural resources head Laurie McFadden and corporate partner Stephen Hewes, advised the buyer. An Ashurst team led by partner Karen Davies advised Lazard as buy-side financial adviser.
The Canadian counterpart is using the acquisition, its first foray into Europe, as a foundation for growth in the UK.
Eversheds Sutherland has advised longstanding client Dairy Crest on a string of deals, including its €430m sale of French cheese spread company St Hubert to Montagu Private equity in 2012, the £80m sale of its dairies business to Müller in 2015 and a recent £70m fundraising.
Gulvanessian told Legal Business that the quality of the buyer was an important consideration in the sale process. ‘It is an excellent brand and business. The directors were keen to ensure that not only was the offer good for shareholders but also for all other stakeholders – the farmers, other suppliers, customers and of course employees.’
Elsewhere, Travers Smith leveraged its long-standing relationship with Ancala Partners to advise its joint venture – Leep Utilities – on the acquisition of SSE Water Limited from SSE plc.
Leep Utilities is a joint-venture of Ancala, the mid-market infrastructure investment manager, and the real estate and infrastructure investor the Peel Group. Long-time relationship partner Spencer Summerfield advised the buyer.
SSE Water is the largest new appointments and variations (NAV) company operating in the UK water sector, owning water networks that supply around 20,000 customers across 28 sites in southern England and Wales.