Legal Business

Clifford Chance, Covington and Skadden lead on £930m AA IPO

Clifford Chance, Covington and Skadden lead on £930m AA IPO

Clifford Chance (CC), Covington & Burling and Skadden, Arps, Slate, Meagher & Flom are advising on the £930m flotation of over two thirds of vehicle breakdown group the AA to City investors.

CC, led by M&A partner David Pearson is advising the AA on the accelerated stock market listing. Covington and Burling’s corporate partner Paul Claydon is advising Cenkos Securities as sole co-ordinator and bookrunner.

The Covington team also includes partners Simon Amies, Natalie Walter, Kristian Wiggert and Charlotte Hill.

Daniel Tricot, of Wall Street’s Skadden, Arps, Slate, Meagher and Flom, is acting for Greenhill, financial advisor to the transaction.

Speaking to Legal Business, Clayton said: ‘Cenkos are a regular client and we have [also] worked together on a few IPO’s in the last twelve months. The last one involved the flotation of Rightster Group. We acted for Rightster Group and Cenkos acted as the broker, separately represented.’

The AA announced its intention to proceed with a sale and flotation on 6 June, with 69% of shares sold to a management buy-in team led by executive chairman Bob Mackenzie and backed by leading institutional cornerstone investors, including Aviva, Blackrock, Invesco and CRMC. A share price of £930 million has already been agreed, with the admission total expected to reach £1.4bn in the second half of June.

In a statement Mackenzie said: ‘The AA is a very successful organisation with a strong record of serving its members and the needs of the UK motorist. We believe there are significant opportunities to grow the business, a sentiment shared by the high quality leading cornerstone investing institutions who have already committed over £930 million to the transaction.’

Kathryn.mccann@legalease.co.uk

Legal Business

Making a splash – partners from Shearman, Covington and Jones Day join breakaway Freshfields arbitration boutique

Making a splash – partners from Shearman, Covington and Jones Day join breakaway Freshfields arbitration boutique

As brand new start-ups go, the Freshfields Bruckhaus Deringer-breakaway arbitration boutique set up by heavyweight arbitrators Constantine Partasides, Paris-based Georgias Petrochilos and former arbitration co-chair Jan Paulsson earlier this month is making quite a splash.

Following news of its launch on 17 February, the latest announcement today (26 February), less than ten days later, is that Shearman & Sterling Paris international arbitration partner Todd Wetmore, Covington & Burling’s London-based international arbitration co-chair Gaetan Verhoosel, and Washington-based Jones Day litigation partner Luke Sobota have all resigned to co-found the new venture.

To say the boutique is making a name for itself already would be somewhere between hyperbole and irony, not least because it has yet to be given a name, however, the weight of the partners behind it means it has already been noticed by FTSE 100 companies, with a spokesperson for one major energy company recently remarking in an unofficial capacity that the boutique is of interest for being free of the conflicts that often dog established private practice arbitration practices.

All six named partners will be co-founders of the new firm, which will be run out of three major financial hubs: London, Washington and Paris.

Timothy Hester, chair of Covington’s management committee said: ‘We thank him [Verhoosel] for his contributions to our award-winning international arbitration practice, and wish him well in this next chapter of his career. We expect to continue to work closely with Gaëtan on existing as well as new matters, and we see a bright future for this practice.’

Shearman & Sterling’s head of international arbitration Emmanuel Gaillard added: ‘I have enjoyed working with Todd and seeing him develop into a great arbitration specialist. I have great respect for his work and have no doubt that he will continue to be successful in his new practice. I am thankful for his contribution and I am sure that we will continue working together in the years to come.’

Jones Day declined to comment.

jaishree.kalia@legalease.co.uk

Legal Business

Deal watch: drugs are working as Covington and Latham lead on $2.6bn pharma acquisition

The lucrative pharmaceutical sector continues to provide a corporate boon to Global 100 firms, with Covington & Burling and Latham & Watkins winning key roles on Salix Pharmaceutical’s $2.6bn acquisition of specialty pharmaceutical company Santarus, announced yesterday (7 November).

With the firm’s longstanding reputation as a leading adviser on both corporate and regulatory matters to life sciences clients a key factor behind its 44% increase in revenues over the last five years to $731m, the Covington team advising Salix is being led by corporate partners Edward Britton and Catherine Dargan out of Washington.Meanwhile, the acquisition finance team is led by finance and capital markets partners Mike Lefever and Kerry Burke. Completing the Covington partner line-up are life sciences partner Amy Toro; co-chair of the firm’s securities practice David Martin; employee benefits partner Mike Francese; food and drug regulatory co-chair Peter Safir and regulatory specialist Scott Cunningham.

Latham – itself no slouch in financial terms, increasing turnover 11% over five years to $2.2bn in 2012 – is advising Santarus, led by corporate partner and San Diego office head Scott Wolfe. The team includes employee benefits and compensation partner Jim Barrall, intellectual property partner John Wehrli, Laurence Stein in tax, finance specialist Christopher Plaut and Washington based life sciences regulatory partner Ben Haas.

Salix is financing the transaction with a combination of approximately $800m cash and $1.95bn in financing from investment bank Jefferies, with the bank committing an additional $150m in a revolving credit facility. The deal is expected to close in the first quarter of 2014.

Salix said the acquisition is driven by the company’s desire to cement its position as the number one pharmaceutical provider in the gastrointestinal market as the deal includes Santarus’s portfolio of drugs aimed at battling gastrointestinal disorders such as acid reflux.

According to data recently compiled by Bloomberg, there have been 44 acquisitions of speciality drug companies for more than $500m in the last three years. As such, the sector has kept leading M&A practices well fed recently, with Linklaters and Hengeler Mueller advising on California drugs wholesale group McKesson Corporation’s $8.3bn acquisition of German counterpart Celesio from holding company Franz Haniel & Cie last month.

david.stevenson@legalease.co.uk