Legal Business

Clifford Chance handed a major role for the Co-operative Bank as A&O faces conflict

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Corporate Allen & OveryClifford Chance
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Clifford Chance (CC) has been handed a role advising the ailing Co-operative Bank on its recapitalisation due to a conflict of interest at Allen & Overy (A&O) as the bank prepares to float next year.

CC capital markets partner Iain Hunter and insurance and corporate partner Hillary Evenett are advising the bank on its recapitalisation after A&O’s dual role as adviser to the Co-operative Group and its banking arm came under question in light of bondholder action that will now see a group of hedge funds take over a 70% stake in the bank.

The Co-op has been in negotiations after it emerged in June that its bank had a £1.5bn capital deficit due to non-performing loans.

CC’s role comes after Shearman & Sterling secured a significant victory for the bondholders led by Silver Point Capital and Aurelius Capital Management, under which they take a controlling stake in the bank instead of the 25% first on offer. Shearman’s financial regulatory head Barney Reynolds, corporate partners Laurence Levy and Jeremy Kutner, acquisition finance partners Anthony Ward and Clifford Atkins and bankruptcy partner Soloman Noh led on the deal.

CC has advised the Co-op in the past, including on its £750m acquisition of Lloyds Banking Group branches. That deal involved the Co-op taking over 632 branches of Lloyds Banking Group for £350m up front with an additional contingent payment of £400m depending on performance. Evenett also led in that instance alongside corporate partner Mark Poulton.0

CC was initially called in by the Co-op to handle a shareholder relationship agreement between the bank and the Co-op Group in early October. The role has now been extended to cover other contractual provisions, an under-writing agreement and a review of other documentation. CC is viewed as strongly placed if as expected the bank conducts an initial public offering next year.

A&O will continue to advise the Co-op led by partners Mark Sterling and Richard Slynn, who were both unavailable for comment at the time of writing. The Magic Circle firm continues to advise both the group and the bank, though one adviser said that A&O’s dual role will be under further scrutiny after the reorganisation of Co-op closes in December, when 70% of the bank’s ownership goes to bondholders.

Other advisers on the deal include Linklaters, which has been involved in the project since May. The City giant had initially advised a syndicate of lending banks to the Co-op Group and has subsequently undertaken several other substantive roles for financial advisers and pension trustees. Addleshaw Goddard has provided support for the Co-op on data rooms and intra group documentation between the bank and group.

Given the change of ownership of the bank, a new general counsel (GC) is set to be appointed to start before the end of November. The Co-op has indicated that the roles of all advisers to the group and banks will be reviewed by the new bank GC and Asher. The reorganisation of the group is also set to lead to the creation of two separate in-house legal teams.

david.stevenson@legalease.co.uk

Legal Business

Deal Watch: Hogan Lovells and CC lead on AMC Networks’ $1bn buyout

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Corporate Clifford ChanceHogan Lovells
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Clifford Chance (CC) and Hogan Lovells have plugged into the renaissance in US television production after advising on a $1bn (€750m) buyout by US entertainment group AMC Networks of Chellomedia, the international content division of media company Liberty Global.

The acquisition announced on Monday (28 October) provides the entertainment group with 68 new television channels distributed to more than 390m households in 138 countries, and the opportunity to distribute its programming worldwide, including celebrated shows like Breaking Bad, Mad Men, and The Walking Dead.

CC’s TMT and tax groups worked on the deal, with City-based head of media Daniel Sandelson advising AMC Networks alongside corporate partner Ben Sibbett in New York. The firm’s tax team was led by partners Nick Mace and Philip Wagman, based in London and New York respectively.

Hogan Lovells advised Liberty Global, controlled by US tycoon John Malone, on the disposal of Chellomedia, with corporate partner Alan Greenough leading alongside corporate of counsel Keith Woodhouse in London.

Hogan Lovells had previously worked on Liberty’s European competition, pensions and employee share plan for its $24bn takeover of Virgin Media in February this year. It has also previously been retained by Chellomedia on its purchase of MGM Networks from Metro-Goldwyn-Mayer Studios in August 2012.

Liberty Global, the largest cable company in Europe, will retain its Dutch premium channel business, consisting of its Film1 and Sport1 channels.

Greenough commented: ‘We are pleased to have advised on this high profile and strategically important transaction for our clients which is attractive from both a valuation and liquidity perspective. It will allow Liberty Global to simplify its business and focus on its core markets and more strategic programming opportunities.’ The transaction is expected to close in the first quarter of 2014.

sarah.downey@legalease.co.uk

Legal Business

Deal Watch: CC and DLA Piper step up on £300m Dr Martens buyout

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Corporate Clifford ChanceDLA Piper
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It has become a cliché among deal professionals to say that – even in these risk-averse times – there is still the confidence and financing to make acquisitions with a solid story. Securing one such deal are DLA Piper and Clifford Chance (CC), who have taken lead roles advising on the £300m sale of Dr Martens – the iconic footwear brand – by the shareholders of parent group and licensee of the brand R Griggs Group. The company was sold to an investment vehicle backed by London-based private equity house Permira.

DLA fielded a Birmingham-based team for R Griggs, the majority of which is owned by the Griggs family who have run the brand for more than 50 years. DLA’s team was led by partner Noel Haywood and included senior associate Ceri Williams-Jones and associates Simon Wright and Rosie Hendon.

CC advised key private equity client Permira on the acquisition, which is expected to complete in January 2014 adding to Permira’s portfolio of fashion labels like Hugo Boss and New Look.

A heavyweight line-up of corporate partner Jonny Myers and global corporate head Matthew Layton led the City giant’s team. Layton advised Permira on its €3bn (£2.5bn) sale of frozen foods business Iglo Group last year, while Myers previously led on its €220m (£194m) acquisition of a majority stake in Irish healthcare equipment manufacturer Creganna.

DLA’s Haywood commented: ‘This was a great transaction to be involved with. Dr Martens is an iconic and authentic brand that has millions of customers worldwide. Griggs is also a cherished and longstanding client of DLA Piper so we were delighted to have advised the shareholders on this important transaction.’

This is the second time Dr Martens has been put up for sale in the last two years, after the family-owned R Griggs held an auction that failed to attract enough bids. Chief executive David Suddens said the family was selling for personal reasons to invest their money elsewhere.

Dr Martens boots were invented in 1947 by Klaus Martens, a German doctor who had a foot injury and created the air cushioned sole. Once favoured among workmen, the company, which is headquartered in Northants on the original site of the factory, now sells in 63 countries, principally in the US, Asia, Europe and the UK. Last year Dr Martens posted sales of £160.4m and a pre-tax operating profit of £22.9m, which it expects to grow to more than £30m in 2013.

Permira, one of Europe’s leading private equity houses, focuses its investment in five core sectors: consumer, financial services, healthcare, industrials and TMT. The buyout house – one of CC’s top corporate clients – handles funds with total committed capital of around €22bn.

Francesca.fanshawe@legalease.co.uk

Click here for an assessment of CC’s private equity practice

Legal Business

As foreign advisers size up Africa, CC linked to alliance bid in South Africa

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Middle East and Africa Clifford Chance
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South Africa has faced more than its fair share of economic and social challenges in recent years, but with foreign investors and international law firms attempting to tap into the wider region, the queue of firms looking to enter the country is lengthening.

Recent years have seen DLA Piper and Baker & McKenzie enter the market, while Norton Rose and Linklaters have tied up with top tier local advisers. Now the word in Joburg is that Clifford Chance (CC) is aiming to strike a similar deal to the alliance between Webber Wentzel and Linklaters, which went live on 1 February.

According to several local lawyers, CC’s discussions have focused on Bowman Gilfillan. An alliance with Bowman would offer a tie-up with a top tier South African firm and one of the leading finance practices in Africa. The full service Bowman is also a leading player in corporate and litigation and has offices across four African states, as well as an associated firm in Nigeria. Bowman chair Jonathan Scholsberg, however, denied the firm was in discussions with CC.

Local lawyers have also linked CC to Routledge Modise, the firm that was previously allied to Eversheds, though Bowman is seen as a more credible tie-up for the London firm. Partners at three separate major South African firms stated their belief that CC had investigated securing a South African partner, with one claiming the City giant’s bid was ‘the worst kept secret’ in the local profession. Another head of a local firm told Legal Business: ‘It’s well known that CC has been looking for a partner in the market.’

One CC partner contacted stating that the Magic Circle firm would not look to open its own office in Africa’s largest economy but declined to comment on a potential alliance partners or Bowman. CC opened its first office in Africa last year after launching a branch in Morocco.

A CC spokesperson declined to comment on individuals firms but provided the following statement: ‘We have been advising on significant Africa-related matters for over 30 years and are widely recognised for the breadth and quality of our expertise in the continent. Africa is an exciting and dynamic market for us and for our clients, so we continue to invest in developing our own capabilities and in deepening the privileged relationships that we have forged with a strong network of independent counsel across the continent, for example, through the recent launch of Clifford Chance’s Africa Academy.’

Expectations of more tie-ups between international firms and South African practices come amid a fluid period for the local legal market, historically the dominant hub in the region. Foreign advisers are regarded to have had considerable success moving into the market, while South African firms have widened their practices to increasingly focus across the continent.

International investors are also increasingly focusing on a host of fast-growing African states drawn by high demand for natural resources, infrastructure projects and modernising economies. While South Africa had previously dominated inward investment, foreign companies now looking to states like Nigeria, Kenya, Mozambique, Ghana and Botswana.

See the November edition of Legal Business for a special focus on Africa.

david.stevenson@legalease.co.uk

Legal Business

Major milestone for CC global MP elections as Layton, Wehrli and Carnegie go forward

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Leadership Clifford Chance
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Clifford Chance (CC) has reached the first major milestone in its global managing partner elections, with the nominations stage now closed and global head of corporate Matthew Layton, Paris managing partner Yves Wehrli and real estate finance partner Andrew Carnegie confirmed as the three candidates going forward.

Hustings will begin shortly and the first round of voting will occur in early to mid-November. Partners will expect to receive the candidates’ manifestos in the next few days.

Layton is widely tipped as the favourite for the top role, as one ex-partner told Legal Business in early October: ‘It’s a slam dunk – it’s going to be Matthew Layton. Everyone said if Matthew stands, he would be elected. He’s perceived to have done a very good job, in very difficult circumstances. People put aside their views on any particular practice area.’

The successor will take over on 1 May 2014 from Childs, who himself took over as managing partner on 1 May 2006 and has been widely credited with taking a more pro-active stance than his predecessor Peter Cornell, particularly in taking tough decisions to co-ordinate and manage its international offering.

Names put forward as possible candidates for the managing partner role had included CC’s corporate finance partner David Harkness and high-profile head of litigation and dispute resolution Jeremy Sandelson, who in early October was re-elected for a further four-year term in an uncontested election.

CC declined to comment.

sarah.downey@legalease.co.uk

Legal Business

CC on Singapore’s naughty step as Asia markets keep playing the tactical liberalisation game

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Asia Clifford Chance
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Back in the boom years, international law firms talked confidently regarding how liberalisation would soon be coming to major legal markets in the Asia Pacific region. This week provides another reminder that in reality such emerging jurisdictions have been rather more tactical – and protectionist – than starry-eyed managing partners believed back in the go-go days.

The incident in question has seen Clifford Chance (CC) publicly criticised by the Singapore justice minister for having the temerity to announce that it was offering litigation services via a formal association set up last year with the boutique Cavenagh Law.

The deal was structured under the Formal Law Alliance (FLA) regime, which allows foreign and local firms to operate an integrated platform.

Minister for law K Shanmugam earlier this month told the Singapore parliament that quotes from managing partner David Childs in July saying that it is ‘the first full-service firm in Singapore offering litigation advice’.

This, Shanmugam said, also citing an earlier press release in circulation in December 2012, ‘could be read to mean that a foreign law firm can now practice litigation in Singapore’ which would ‘not be accurate. Their representations to the public and media should be clear as to what their FLA is and is not. I think clever word game should be avoided.’ 

Shanmugam added that his officials had called in the partners of CC and local law firm Cavenagh Law, informing them ‘that their statements conveyed an inaccurate picture and should be stopped’.

Under Singaporean law, strict conditions are imposed and specific domestic law work is ring-fenced, including litigation, family law and conveyancing which can only be handled by Singapore law firms through lawyers called to the Singapore Bar.

Other liberalisation measures in addition to the FLA occurred in 2008 when Singapore introduced Qualifying Foreign Law Practice licences (QFLPs), a further step than the previous – and unpopular – joint venture regime. The first set of QFLPs were awarded to CC, Allen & Overy (A&O), Herbert Smith, Norton Rose, Latham & Watkins and White & Case. A second set was granted in February this year to Linklaters, Gibson Dunn & Crutcher, Sidley Austin and Jones Day.

A CC spokesperson issued this statement: ‘The Formal Law Alliance between Clifford Chance and Singapore litigation boutique, Cavenagh Law, allows the two firms to provide the broadest range of Singapore and international law services from one platform, ‘Clifford Chance Asia,’ with Singapore litigation representation provided through Cavenagh Law. The FLA, approved by the Ministry of Law and the Attorney General’s chambers, has at all times fully complied with all applicable regulations and will continue to do so.

‘Clifford Chance has a long-term commitment to Singapore. Since opening our office over 30 years ago, the office has advised on a number of landmark deals from Singapore across Asia Pacific and beyond and has invested in creating opportunities for Singaporean lawyers and in supporting our local legal and broader communities. Singapore has a great future as a global business and legal hub and we are proud to play our part in supporting the Republic in achieving its ambitions.’

In truth the bizarre incident – no one can seriously doubt CC’s compliance with local Bar rules and Singapore ministers must have better things to focus on – is another reminder of the tactical protectionist terms that many legal markets in emerging economies continue to employ. While India is the obvious hard-line hold-out to foreign lawyers, there has been little of the hoped for additional liberalisation in China, while Brazilian bars have generally become less open in the last three years.

The obvious question is this: as foreign jurisdictions achieve increasing levels of economic and legal sophistication how long can Western bars maintain an open door policy despite the glaring absence of reciprocal arrangements?

sarah.downey@legalease.co.uk

alex.novarese@legalease.co.uk

Legal Business

Rising star: Latham hires Clifford Chance private equity partner Tom Evans

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Strategic recruitment Clifford ChanceLatham & Watkins
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Latham & Watkins has secured another heavyweight hire in London with the announcement that Tom Evans, a newly made up partner in Clifford Chance’s (CC) private equity group, is joining the firm’s corporate department.

Evans, who has been tipped as a rising star in the private equity field, follows David Walker, former global head of private equity at CC, who left to join Latham in May. The 2033-lawyer US firm has also made a series of other high profile lateral hires this year, including Dean Naumowicz, former head of derivatives at Norton Rose Fulbright, and Simon Bushell, former co-chair of corporate fraud at Herbert Smith Freehills.The London office now has 250 lawyers including 60 partners.

Nick Cline (pictured), Latham’s London managing partner, said: ‘Tom is widely regarded as a rising star and has a broad range of experience that will make him an excellent addition to the firm and particularly our private equity practice.

‘While we have seen improvements in liquidity in European leveraged finance bank lending, accessing the high yield and US bank finance markets is increasingly attractive for European private equity deals. We have a very strong global platform and a leading financing practice that presents exciting opportunities for us to grow our top tier private equity practice.’

‘Tom’s arrival will further strengthen our presence in London, a key market for our global private equity and corporate practice,’ added Daniel Lennon, global chair of Latham’s corporate department.

Latham’s private equity clients include The Carlyle Group, Advent International, BC Partners, KKR, Charterhouse, Nordic Capital and PAI Partners. Walker’s hire was widely believed to be part of Latham’s drive to cement its relationship with the Carlyle Group in Europe, as the fund is a major client of the veteran CC lawyer.

Recent private equity deals for Latham’s London office include The Carlyle Group’s acquisitions of Addison Lee and Chesapeake Packaging, BC Partners’ acquisition of Allflex Holdings and Leonard Green & Partners’ acquisition of Topshop.

david.stevenson@legalease.co.uk

Legal Business

Election fever: Sandelson re-elected as disputes chief as global MP vote draws near

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Leadership Clifford Chance
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Set against the wider backdrop of its global managing partner contest, Magic Circle firm Clifford Chance has re-elected Jeremy Sandelson as global head of the firm’s litigation and dispute resolution practice in an uncontested election.

Having been in the role since 2009, Sandelson will serve a second four-year term. His pedigree in management with the firm is long-established, as the disputes chief previously acted as managing partner of the London litigation practice in 2003, and regional managing partner for the UK and the Middle East from 2005.

Sandelson’s appointment confirms that the rated litigator is not running for the role of global managing partner, as David Childs prepares to step down in May next year, with head of corporate Matthew Layton tipped to be in the lead.

On Sandelson’s re-appointment, Childs said: ‘Jeremy has done a terrific job as global head of the firm’s litigation and dispute resolution practice since his election soon after the start of the financial crisis, overseeing revenue growth of nearly 30% in that time. I am confident that we will see this pre-eminent practice go from strength to strength over the next four years.’

Sandelson added: ‘We will continue to invest in our strong global network, with market-leading practices in each of the world’s financial centres, and the cross-border collaboration our clients increasingly rely on as they face new challenges in a fast-changing world.’

The sounding process for global managing partner nominations is currently is expected to wind up this month, after which partners will vote on the shortlist.

sarah.downey@legalease.co.uk

Legal Business

Layton leads the field as CC set for managing partner election

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Leadership Clifford Chance
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The race to fill the shoes of Clifford Chance (CC)’s longstanding global managing partner David Childs has reached a decisive stage, with the initially reluctant Matthew Layton widely cited as the favourite as the firm takes soundings on potential candidates.

Layton is widely tipped to be running alongside three other likely candidates: Paris-based office managing partner and M&A corporate specialist Yves Wehrli; global head of tax, pensions and employment David Harkness; and City-based banking and finance partner Andrew Carnegie.

With the sounding process for nominations open, sources, including a number of ex-partners, say Layton, the firm’s global head of corporate, is the most obvious candidate for the role and one commented: ‘It’s a slam dunk – it’s going to be Matthew Layton. Everyone said if Matthew stands, he would be elected. He’s perceived to have done a very good job, in very difficult circumstances. People put aside their views on any particular practice area.’

Partners can put themselves forward to be nominated, after which the three with the greatest number of nominations will be put to a majority vote.

The successor will take over on 1 May 2014 from Childs, who himself took over as managing partner on 1 May 2006 and has been widely credited with taking a more pro-active stance than his predecessor Peter Cornell, particularly in taking tough decisions to co-ordinate and manage its international offering.

Childs led CC through a turbulent period in which its core financial services client base was ravaged in the wake of the banking crisis, contributing to a 4% fall in revenues over the last five years.

The election process has created a period of unrest for the partnership, as insiders say there has not been an obvious successor to the well-regarded Childs.

An ex-partner said: ‘He hasn’t got anybody who is going to be an obvious leader. Childs was in a way groomed by Peter Cornell and at the time was a chief operating officer. But there’s nobody who I can think who is preparing now for that role. It won’t be a litigator – there’s no way Clifford Chance would ever have a litigator running the firm.’

Based on this view CC’s high-profile global head of litigation and dispute resolution Jeremy Sandelson – another name put forward as a possible candidate – could be out of the running.

Other early contenders now viewed as unlikely to run include global head of finance Mark Campbell, and managing partner for the London and Middle East region David Bickerton, who is said to have felt he has sufficient responsibility in his current role.

The sounding process will wind up during October, after which partners will vote on the shortlist.

Legal Business

Layton leads the field as CC set for managing partner election

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Leadership Clifford Chance
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The race to fill the shoes of Clifford Chance (CC)’s longstanding global managing partner David Childs has reached a decisive stage, with the initially reluctant Matthew Layton widely cited as the favourite as the firm takes soundings on potential candidates.

Layton is widely tipped to be running alongside three other likely candidates: Paris-based office managing partner and M&A corporate specialist Yves Wehrli; global head of tax, pensions and employment David Harkness; and City-based banking and finance partner Andrew Carnegie.