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Deal view: Ashurst strives to reboot M&A brand but deal market is getting tougher

Ashurst’s once-admired M&A reputation has taken a pounding of late. One former partner delivers representative sentiments: ‘Corporate was the jewel in the crown. The firm has changed from what it was six or seven years ago.’ Another notes: ‘It used to be joint number one with Clifford Chance for private equity. The practice faded away as it focused outside London.’

A controversial Australia merger, a soft run of financial performance and the loss in recent years of prominent partners has taken a major toll on its brand as a serious plc deal adviser.

That is not to say that Ashurst has not boasted some solid deals recently. Corporate partners Karen Davies and James Fletcher this year led for AVEVA Group on its £3bn tie-up with Schneider Electric’s industrial software business.

Corporate infrastructure specialist Logan Mair is also credited with securing a new mandate to advise Berendsen on its £2.17bn takeover bid by Elis, taking advantage of a new chief executive to shift the client from Slaughter and May’s clutches. There were also meaty mid-market deals for Shanks Group and Cape.

But £1bn-plus deals in a lead corporate capacity are still relatively rare. Neither is there much comfort in the latest Mergermarket stats. On deal volumes for European M&A, which should be a solid proxy for Ashurst’s business, the firm is not ranked in the top 20 for the first nine months of 2017 (it does better under Thomson Reuters and Bloomberg research).

What is unclear is the extent to which Ashurst is keeping traditional plc work at the heart of its business.

There is more obvious progress in equity capital markets and bank roles. Recent mandates include advising the banks on John Wood Group’s £2.3bn acquisition of Amec Foster Wheeler, and Morgan Stanley and Credit Suisse on Vantiv’s £9.3bn merger with Worldpay. There is also substantive bank work in 2017 on Tullow Oil’s $750m rights issue and Glenveagh Properties’ float.

No-one is pretending the firm’s already bruised reputation in private equity has not taken another major knock with this year’s five-partner Paris raid by Freshfields Bruckhaus Deringer and it is conceded that its continental deal practice needs substantial work. While its buyout ambitions have been scaled right down, Ashurst maintains that its City M&A practice has never been in stronger form.

What is unclear is the extent to which the firm is keeping traditional plc work at the heart of its business or if Ashurst intends to reinvent itself as an industry house, securing deal work in target sectors – the Norton Rose option if you are feeling kind or Pinsent-Masons-with-better-banking-contacts if you are not.

Strategic hires last year from Herbert Smith Freehills of Nick Elverston and Amanda Hale as partners in Ashurst’s TMT group were noteworthy additions, with technology being an increasingly-fruitful sector for the group. Funds, energy, infrastructure and real estate are likewise talked up as core sectors.

Corporate veteran Robert Ogilvy Watson notes that 2017/18 is on course to be a second year of recovery, and is adamant that Ashurst will expand its plc client base in its core turf in the UK and Australia in the years ahead. That is a very tall order in an increasingly-crowded and price-sensitive deal market, but then that is what it is going to take to reboot its proud brand.

See our March piece: Ashurst Paris corporate team chooses Freshfields as Magic Circle firm reinvigorates offering