Legal Business

Glaxo reviews advisers as A&O & CC take lead roles on £1.35bn Ribena and Lucozade sale

As GlaxoSmithKline (GSK) reviews its preferred law firms in a decision that could see the healthcare giant create a formal panel, Allen & Overy (A&O) has won the lead role to advise on its £1.35bn sale of drinks brands Lucozade and Ribena to the Japanese consumer goods company Suntory Beverage and Food (Suntory).

A&O won the deal after a series of GSK’s preferred firms pitched for the role. The corporate team at A&O will include partners Edward Barnett and Andrew Ballheimer, with assistance from senior associate Nigel Parker and associate Matthew Appleton, alongside anti-trust partner Alasdair Balfour and employment partner Mark Mansell.

Clifford Chance is advising Suntory, led by corporate finance partner Joel Ziff, who will work alongside fellow corporate partner Robert Crothers and lead associate Katherine Moir, as well as IT partner André Duminy.

Slaughter and May is widely regarded as GSK’s go-to corporate firm, having previously advised on a string of major deals including last year’s £650m investment to increase its stake in its India and Nigeria subsidiaries; its acquisition of Maxinutrition from Darwin Private Equity in 2010; its agreement with Pfizer to create ViiV in 2009; and a €515m acquisition of the marketed product portfolio of UCB.

However, GSK also operates a list of preferred firms for its legal advice and is discussing whether to set up a formal panel. According to a GSK spokesperson the details will be confirmed at the end of this year.

A&O corporate partner Edward Barnett says: ‘We are proud and delighted to have worked with GSK on this strategic transition and contributed to achieving GSK’s stated aims of diversifying these iconic brands, provided appropriate value was realised for shareholders.’

The sale comes after GSK decided to increase its focus around a core portfolio of healthcare brands, with a particular emphasis on emerging markets, following a strategic review of Lucozade and Ribena in February this year. Annual sales of the two brands were approximately £0.5bn in 2012.

Under the agreement, Suntory will acquire global rights to the brands with the exception of Nigeria, where GSK Nigeria will continue to manufacture and distribute Lucozade and Ribena under licence from Suntory. The transaction is expected to be completed by the end of the year, subject to regulatory approvals.

jaishree.kalia@legalease.co.uk

Legal Business

Training contracts: A&O cuts 2015 intake by 15% and reveals retention rates alongside HFW and Olswang

Allen & Overy’s (A&O) decision today (15 August) to reduce its trainee intake by 15% in 2015 will be closely watched by City rivals, many of which are also considering whether to cut their trainee numbers in light of diminishing newly-qualified (NQ) roles in the medium term.

The top five LB100 firm, which achieved a modest turnover growth of 1% this year to £1,189m, is cutting its trainee numbers from 100 to 90 in 2014, followed by a further drop to 85 in 2015. A statement from the firm said the decision was taken in order to ‘match [its] expectations of NQ jobs in the medium-term.’

Graduate recruitment partner Richard Hough, added: ‘We aim to recruit for the long-term as well as providing a high quality training contract.

‘Managing our intake numbers means that we aren’t just offering our trainees excellent training and experience, but also a strong prospect of a long-term career with the firm after qualification.’

The announcement comes as A&O is also the latest and last Magic Circle firm to release its trainee retention rate, posting a figure of 72%.

A total of 45 out of 51 applicants have been made offers and 39 accepted a permanent position with the firm. This signals a dip on last autumn’s results, when the firm retained a total of 46 out of 58 trainees, giving it a retention rate of 79%.

This round the firm has posted the lowest retention rates of any Magic Circle firm, as Linklaters, Slaughter and May, Clifford Chance and Freshfields Bruckhaus Deringer all released figures upwards of 80%.

However, David Campbell, partner and training principal, said: ‘The job market for NQs continues to be tough but we are pleased to have been able to offer jobs to so many of our trainees. A number of this year’s intake decided not to accept offers, so our retention rate is lower than we expected.’

Elsewhere, Holman Fenwick Willan has taken on 100% of its trainees, while at the other end of the spectrum only 54% of Olswang’s qualifying trainees have been given a position at the firm after seven of 11 were offered a permanent position and six accepted the offer.

sarah.downey@legalease.co.uk

Legal Business

Resurgence in debt and equity capital markets sees Allen & Overy claim top spot for issuer and manager roles

Allen & Overy (A&O) has topped Thomson Reuters’ table of legal advisers on global debt and equity capital markets work for the first half of 2013, landing roles on 456 deals.

The Magic Circle firm came out in first place for both manager and issuer roles, advising on 350 and 106 deals respectively.

Clifford Chance, which held the top spot this time last year for issuer roles, has fallen into second position followed by US rivals Simpson Thacher & Bartlett in third, Skadden, Arps, Slate, Meagher & Flom in fourth and Sidley Austin in fifth. Linklaters came in joint eighth position, down from fifth place at the half year in 2012, however for manager roles it claimed second place, advising on 234 deals.

Philip Smith, a capital markets partner at A&O told Legal Business: ‘It’s been an incredibly busy period since October last year until about three weeks ago. A combination of huge volumes in the emerging market space combined with a resurgent European high yield market have driven volumes. The uptick in equity markets has also driven increased activity in the equity-linked market.’

In high yield the firm has recently expanded its team by making Jeanette Cruz up to partner and high profile debt capital markets deals have included advising the Co-operative Group Limited and The Co-operative Bank on a plan to fill a £1.5bn capital deficit led by Alistair Asher, who joined the Co-op as General Counsel at the start of the month.

Boyan Wells, former head of A&O’s capital markets group and now a member of the global board, told Legal Business: ‘The past year has been one of a high level of issuance and we are delighted to have played a large part in that.’

The combined debt and equity capital markets activity was valued at $3.4tn in the first six months of the year, which is 5.9% higher than the first half of 2012. As for continued growth in the area, Wells remains cautious, commenting: ‘Market reports suggest that market level will continue to be high but only time will tell.’

 

david.stevenson@legalease.co.uk

Legal Business

After the surge a pause – expansive A&O sees a lull in growth as first Magic Circle player confirms 2013 results

After the surge a pause – expansive A&O sees a lull in growth as first Magic Circle player confirms 2013 results

Having been the stand-out City player in its weight class since the 2008 banking crisis re-shaped the global legal market, Allen & Overy (A&O) has this year seen a relative slow-down in growth as the firm becomes the first Magic Circle practice to unveil its 2012/13 results.

The 525-partner law firm saw a 0.6% increase in revenues for its year to April 2013, with income hitting £1.19bn. Profit per equity partner was also flat at £1.1m while total profits before tax were up 2% to £496.7m.

A&O managing partner Wim Dejonghe cited a noticeable improvement in the fourth quarter of the financial year with strong performances in the City firm’s emerging markets and Asian practices.

Dejonghe told Legal Business: ‘Europe’s outlook is not great so we chose to expand in the US and the emerging markets and we still want to grow further in the US. In terms of Asia, it’s all about investment such as infrastructure; there is a growing middle class so you see increased M&A activity there rather than in the established markets and this leads to arbitration work.’

He added that the firm had invested in operational and financial efficiencies. A&O’s staff costs were down from £446.8m in 2011/12 to £438.6m while its operating expenses rose to £244.3m from £238.4m in the previous financial year.

The fall in staff costs were primarily due to A&O’s Belfast support hub becoming fully operational after an initial launch in late 2011. At the beginning of 2013, the firm moved a number of support roles out of Europe and the US into Belfast, with further moves expected later this year.

In the last 12 months, the firm launched in Istanbul, Ho Chi Minh City and Hanoi, totalling 14 new offices in 11 countries since 2008. During this five-year period, turnover has grown by 7%, profit by 15% and its partnership has increased by 7%. The profit distribution will range from £627,000 for a partner with 20 profit sharing points to £1,566,000 for a partner with 50 profit sharing points. In 2012 that range was £640,000 to £1,601,000.

Dejonghe said the firm had seen a growing volume of inter-Asian investment flows. ‘There are a number of matters that have a cross border element and links to the number of offices we have opened. ‘Nevertheless, the European market is still of great importance in terms of generating the firm’s total revenues.’

The firm reported a 2.7% drop in half-year revenues at the end of October 2012, but has seen activity pick up since the start of 2013. On the current outlook, Dejonghe commented: ‘The last couple of weeks, the global markets have gotten a little nervous again on the back of stock markets dropping and quantitative easing stopping, so the early signs of recovery have been shaken. But based on the initial months, we are confident we will have an encouraging year in terms of performance.’

A&O’s results set the scene for its City peers, though it is clear that elite London firms have generally faced challenging trading conditions through 2012/13 after a painfully slow period during the summer of 2012. A&O has been the best relative performer in London’s big four international Magic Circle firms over the last five years, maintaining a heavy investment programme while its peers have generally retrenched.

See Legal Business’ Global 100 special on Friday (5 July) to find out how A&O matches up to the world’s largest law firms.

Jaishree.kalia@legalease.co.uk.

Legal Business

Visa Europe’s GC joins A&O’s global antitrust practice

Allen & Overy (A&O) has hired Visa Europe’s general counsel (GC), executive vice president and company secretary Vanessa Turner as a partner in its global antitrust practice.

Turner will be based in the Magic Circle firm’s Brussels office, advising European and international clients dealing with EU and other regulators on merger clearance, cartels and other antitrust and competition matters.

Legal Business

A&O finance veteran joins Co-op

Alistair Asher takes on GC role as firm acts on major bank rescue

Securing a major deal and having one of your partners take a senior role with the same client is a nice trick to pull off but Allen & Overy (A&O) appeared to have managed that last month after securing a lead role on the Co-op’s rescue plan and ‘donating’ a veteran partner to the lender’s management team.

On 18 June, A&O confirmed that global financial institutions head Alistair Asher is leaving to join the Co-operative Bank as its new general counsel.

Asher will advise on the restructuring of the mutually owned lender and help speed up its management overhaul under its new chief executive Euan Sutherland. Asher retired on 1 July after 34 years with the Magic Circle firm and took on the new role immediately. The veteran partner had previously advised the Co-op on its 2009 merger with Britannia Building Society.

Legal Business

Two birds, one stone – A&O finance veterans joins Co-op team as GC as firm acts on rescue

Two birds, one stone – A&O finance veterans joins Co-op team as GC as firm acts on rescue

Securing a major deal and having one of your partners take a senior role with the same client is a nice trick to pull off but Allen & Overy (A&O) appears to have managed that this week after securing a lead role on the Co-op’s rescue plan and ‘donating’ a veteran partner to the lender’s management team.

A&O today (18 June) confirmed that global financial institutions head Alistair Asher is leaving the law firm to join the Co-operative Bank as its new general counsel.

Asher will advise on the restructuring of the mutually-owned lender and help speed up its management overhaul under its new chief executive Euan Sutherland. Asher will retire from the Magic Circle firm on 1 July after 34 years with A&O and will take on the new role immediately. The veteran partner had previously advised the Co-op on its 2009 merger with Britannia Building Society.

The news comes as A&O this week advised on the lender’s high stakes rescue deal, for which Asher was one of the lead partners.

The Co-op will raise a total of £1.5bn in capital using a ‘bail-in’ process, where its bondholders will exchange £1bn in debt for a minority equity interest in the bank, ahead of its London Stock Exchange listing. Under the deal, £1bn will be contributed this year with the remaining £500m being paid next year.

The bail-in was launched after Co-op disclosed a number of problem loans, leading bank regulators to demand it significantly bolster its capital.

Three A&O partners will lead on the bank’s restructuring and share listings including global restructuring and insolvency managing partner Mark Sterling, corporate finance partner David Broadley and debt capital markets partner Matthew Hartley.

Others advising are A&O’s building societies and mutual head Richard Slynn, partner Etay Katz on regulatory issues, Vimal Tilakapala on tax and Dana Burstow on pensions. Meanwhile, insurance head Philip Jarvis will lead on the announced plan to dispose of the group’s general insurance business.

It is understood that Linklaters has also been instructed to advise on an area of the shake-up, with the firm fielding a team under finance partner David Ereira. The firm declined to comment.

Sterling said: ‘In a major corporate deal which involves new equity, new debt and new regulation, you need a full team on board with around three or four partners leading.’

Nice work to have in a turbulent market.

 

jaishree.kalia@legalease.co.uk

Legal Business

Visa Europe’s GC joins A&O’s global antitrust practice

Allen & Overy (A&O) has hired Visa Europe’s general counsel (GC) and executive vice president and company secretary Vanessa Turner as a partner in its global antitrust practice.

Turner will be based in the Magic Circle’s Brussels office, advising European and international clients dealing with EU and other regulators on merger clearance, cartels and other antitrust and competition matters.

Prior to joining Visa Europe, Turner was a special adviser at the Office of International Affairs of the U.S. Federal Trade Commission in Washington D.C. and New York and was a member of the cabinet of the EU Commissioner for competition policy.

Dirk Arts, head of A&O’s Brussels antitrust practice, said: ‘We are delighted to welcome Vanessa to our team. She brings a wealth of experience from the European Commission and the financial services sector. Vanessa will boost the capacity of our Brussels team, as part of our global network, to coordinate and handle issues relating to multi-jurisdictional transactions and cartel investigations.’

Turner added: ‘Allen & Overy’s international practice is a great fit for my European and U.S. experience and I’m delighted to join their excellent EU competition law team. I look forward to returning to private practice to advise international clients on their EU and global antitrust strategies using my experience gained at the Commission and as a general counsel.’

High profile cases that A&O’s antitrust and competition team have advised on include Sun Microsystems $7bn merger with Oracle, Seagate Technology on the merger control aspects of its $1.4bn acquisition of the hard disk drive business of Samsung Electronics, and Mubadala Development Company (as the largest investor in the Sony consortium) on its joint acquisition of the EMI music publishing business.

caroline.hill@legalease.co.uk

Legal Business

Revolving Doors: Chadbourne, A&O, Trowers and Pinsent Masons boost City offering

London dominated the lateral hiring scene over the past week with firms including US Chadbourne & Parke, Allen & Overy (A&O), Eversheds and Pinsent Masons strengthening their City offering.

Chadbourne’s 36-lawyer London office, which acts a hub for the firm’s emerging and developing markets practice, has hired banking and finance partner Partha Pal from the City arm of top 15 US firm Sidley Austin.

‘Strengthening Chadbourne’s banking and finance capabilities in London is critical to enhancing our ability to execute emerging-markets transactions governed by English law,’ said newly-elected regional managing partner Adrian Mecz.

Pal was a partner in Sidley’s global finance group, focussing on banking and structured finance transactions and related restructurings and dispute resolution.

The good news story for the firm’s London office comes days after its New York counterpart lost a three-partner litigation and arbitration team to Hogan Lovells Manhattan office.

Elsewhere, A&O has hired Goldman Sachs lawyer Denise Gibson as a banking partner in its leveraged finance practice. Gibson left the Magic Circle firm two years ago as a senior associate to join the US investment banking giant.

A&O has regularly advised Goldman Sachs as a joint lead arranger on deals such as Tesco Plc’s series of credit-linked CMBS-style financing, led by structured finance partner Christian Lambie and real estate finance partner Arthur Dyson. The sixth in the series, worth £490m, was announced in February this year and involved Goldman Sachs and Barclays as joint lead managers.

In other hires, Eversheds equity capital markets (ECM) head Neil Matthews is leaving to join Field Fisher Waterhouse (FFW) as a partner in the firm’s London corporate practice. Matthews, who will join FFW in August, has been at Eversheds since 1989, making partner in 1996 advising on IPOs for companies including Abcam, Ilika, May Gurney, Norcon and Plusnet.

FFW managing partner Michael Chissick said the appointment was part of a wider recruitment programme largely covering corporate, which he described as ‘underweight.’

Meanwhile, top 20 UK firm Pinsent Masons has appointed Bircham Dyson Bell’s head of major projects Robbie Owen to head its infrastructure planning and government affairs division within the firm’s planning & environment team, which will now include a parliamentary agency capability at Westminster.

Owen, who will join Pinsents City office later in the summer, is an authorised ‘Roll A’ parliamentary agent authorised by parliament to act as an agent for those promoting and opposing private bills and hybrid bills. He is currently advising on projects including the London Underground’s Northern Line extension and the high-speed HS2 rail line.

Elsewhere, top 50 firm Trowers & Hamlins has hired RadcliffesLeBrasseur’s tax and private client head Simon Goldring as head of private wealth. Goldring has been a partner at RadcliffesLeBrasseur since 2008 before becoming department head in 2009.

Trowers & Hamlins senior partner Jennie Gubbins said: ‘Private wealth is proving an increasingly integral part of our service offering, and with his reputation and experience, Simon is perfectly placed to lead the charge in taking our practice to the next level.’

In a further London hire, City firm Fox Williams has strengthened its employment team with the appointment of Pinsent Masons partner Helen Farr.

Farr has extensive experience in the application of TUPE and has advised on a variety of TUPE transfers, including business acquisitions, mergers, private sector outsourcing and PPP/PFI projects within the private and public sectors.

Jane Mann, head of the employment practice, said: ‘Helen’s expertise across all areas of employment law and her involvement within the financial and professional services sectors make her a brilliant fit for our firm. We are experiencing increased demand from clients in the financial and professional services sectors and are able to offer them a broad range of contentious and non-contentious advice across our specialist teams.’

francesca.fanshawe@legalease.co.uk

To be included in future Revolving Door round-ups send your lateral hire announcements to caroline.hill@legalease.co.uk

Legal Business

A&O falls behind on associate pay table as it announces a freeze

Allen & Overy (A&O) has become the latest of the Magic Circle to reveal that it is holding its associate salaries at last year’s levels, meaning its associates will rank as the lowest paid of its rivals so far.

The firm will continue paying newly-qualified (NQ) lawyers £61,500; £1,500 less than Slaughter and May, £2,500 less than Linklaters and £3,500 less than Freshfields Bruckhaus Deringer.

A&O’s first-year post-qualification experience (PQE) pay will remain unchanged at £68,500, as will second and third-year PQE salaries at £74,500 and £86,000 respectively. Last year the firm announced associate pay increases of between £500 – £1,000, following a hold on pay in 2011-2012.

The decision places the firm at the bottom of the associate pay table after Linklaters this year announced it is to increase NQ pay from £61,500 to £64,000. Freshfields, on the other hand, chose to hold associate pay but still tops the table, awarding career milestones foundation (the equivalent to NQ) lawyers between £65,000 and £72,500. Genevieve Tennant, global director of HR at A&O said: ‘I think the bonus pool is very important in this discussion – our NQ’s will receive a £5,000 bonus this year and this keeps us at a competitive position. This year we have differentiated bonuses up the PQ level. We focus on total rewards and make adjustments where appropriate.’

On the other hand, trainee salaries at A&O went up last month for the first time in three years after the firm bumped up first year trainee pay by £1,000 to £39,000, while second year’s got to take home an extra £800 totalling £44,000. The salaries now match its Magic Circle peer group for trainee wages, aside from Linklaters, which award its first year trainees £500 more.

Clifford Chance remains the last Magic Circle firm to reveal its associate pay bands for 2013-2014.

Associates at City firms have seen their salaries drop by around 15% in real terms post the collapse of Lehman in 2009, which saw many firms cutting pay packets for NQ lawyers by around £6,000. Aside from Freshfields with its new career milestones arrangement, firms are still below the £66,000 pay bracket for NQs.