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Dealwatch: Freshfields, A&O and Travers act as Asia’s richest man buys UK rail group for £2.5bn

Travers Smith, Freshfields Bruckhaus Deringer and Allen & Overy (A&O) have won roles advising on the sale of UK’s leading rail leasing company Eversholt Rail Group for £2.5bn.

Asia’s richest man Li Ka-shing, owner of two investment vehicles Cheung Kong Infrastructure Holdings (CKI) and Cheung Kong Holdings (CKH), will purchase the rail group from its majority stake holder – a consortium that includes 3i Infrastructure, Morgan Stanley Infrastructure Partners and STAR Capital Partners – with a 50% share going to each vehicle. The deal has an equity value of around £1.1bn, giving an enterprise value of £2.5bn, and is expected to close in March 2015.

Travers Smith advised management on the sale of Eversholt Rail Group, which owns around 28% of the current UK passenger train fleet, led by corporate partner and head of private equity Paul Dolman, alongside tax partner Kathleen Russ.

Freshfields acted for the sellers with Richard Thexton leading the team alongside corporate partner Claire Wills. Partner Helen Lethaby provided tax support alongside partners Alastair Chapman on antitrust, competition and trade issues and David Pollard on pensions issues, while partner Simon Weller advised on the Hong Kong Listing Rules aspects.

Thexton said: ‘Following on from our role advising the selling consortium on the successful disposal of Porterbrook Rail in October 2014, this second deal in the sector in a short space of time clearly demonstrates our capabilities as the go-to firm for complex infrastructure M&A.’

The Porterbrook deal saw Freshfields act opposite Linklaters which advised the buyers – a group of investment funds including Alberta Investment Management Corporation, Allianz Capital Partners, EDF Invest and Hastings Funds Management.

A&O’s team consisted of a cross-border, cross-practice team of lawyers led by partners Richard Evans from London and Bernardine Lam from Hong Kong, for issues around corporate, regulatory and anti-trust.