Legal Business

Deal watch: Slaughters and Kirkland drill into giant $12bn offshore plc merger as Travers and Eversheds maximise L&G’s pensions buy-out

Deal watch: Slaughters and Kirkland drill into giant $12bn offshore plc merger as Travers and Eversheds maximise L&G’s pensions buy-out

Slaughter and May and Kirkland & Ellis have led on the $12bn combination of UK Plc offshore drilling companies Ensco and Rowan Companies as Travers Smith and Eversheds Sutherland wrap up Legal & General’s £2.4bn buyout of Nortel Networks UK Pension Plan.

The drilling merger – an all-stock deal and a court-sanctioned scheme of arrangements – will see the shareholders of Ensco and Rowan own 60.5% and 39.5% respectively of the combined business.

Kirkland & Ellis clinched a significant win in UK plc land in advising Rowan with a team including City partners David Higgins, David Holdsworth and Dipak Bhundia. The deal was led out of Houston by corporate partners Sean Wheeler and Doug Bacon and included Dallas partner Ryan Gorsche and New York-based executive compensation partner Scott Price and tax partners David Wheat, Lane Morgan and Mike Carew.

Latham & Watkins is advising Rowan on antitrust aspects, with a team including corporate partner Michael Egge in Washington, Brussels managing partner Lars Kjolbye, and London partner Jonathan Parker.

Meanwhile, Slaughters is acting for Ensco with a team led by corporate partners Hywel Davies and Christian Boney and including partners William Turtle (competition), Jonathan Fenn (pensions) and Mike Lane (tax).

Elsewhere, a Legal & General deal on Monday (8 October) saw the UK insurer complete a £2.4bn buyout of pensions relating to the now-defunct telecoms equipment provider Nortel.

The buy-out relates to around 15,500 pensioner members and around 7,200 deferred members of the pension scheme, which entered a Pension Protection Fund (PPF) assessment after Nortel went into administration in 2009, pending litigation and insolvency proceedings.

The Travers team advising the trustees was led by Dan Naylor and Susie Daykin and also included partner Peter Hughes. Advising Legal & General was an Eversheds team led by Hugo Laing.

Naylor told Legal Business that the deal represented the biggest ever PPF plus arrangement, in which the pension scheme members receive more options, via a member option exercise, and better benefits than the PPF compensation would have offered. A further transaction is likely to follow as more recoveries are made.

The deal is also the second biggest pension buyout ever, after the £2.5bn transaction with Legal & General relating to pensions of US-headquartered automotive supplier TRW in 2014.

Hughes and Naylor, the latter then an associate, were also part of the team advising the trustees of the TRW Pension Scheme, while Laing, then an associate at Clifford Chance, was part of the team advising Legal & General on that deal.

Another major deal this week saw Kirkland, Latham and Allen & Overy score key roles on the sale of shareholdings in fin-tech company FNZ to Canadian pension fund La Caisse de dépôt et placement du Québec (CDPQ) and private equity investor Generation Investment Management.

The deal sees Kirkland advise the sellers, FNZ and funds advised by HIG Capital and General Atlantic, led by London corporate partners Gavin Gordon, Carl Bradshaw and Tom McCarthy. A Latham team led by Michael Bond advised CDPQ and Jonathan Wood at Weil Gotschal & Manges advised Generation. Karan Dinamani at Allen & Overy advised the CEO of FNZ.

The acquisition is the first investment by CDPQ-Generation, the sustainable equity joint venture launched by CDPQ and Generation.  Kirkland has a nine-year relationship with FNZ, having advised on HIG Capital’s initial investment in 2009, General Atlantic’s investment in 2012 and FNZ’s recently announced deal to acquire European Bank for Financial Services (ebase) from comdirect bank.

Legal Business

Adviser reviews: Lucozade Ribena Suntory completes first post-merger panel

Adviser reviews: Lucozade Ribena Suntory completes first post-merger panel

Eversheds Sutherland has won the role of primary UK and Ireland adviser in Lucozade Ribena Suntory’s (LRS) inaugural legal panel review, with nine other firms also making the cut.

The review was a first for general counsel (GC) Mary Guest since joining the drinks giant from Magic Circle firm Linklaters in June 2017, and it is also the first since LRS was formed after Lucozade and Ribena were acquired by Suntory for £1.35bn in 2013. Eversheds will be top of the list for general matters, with the remaining nine firms offering more specialist advice.

Clifford Chance (CC) is in place to offer M&A counsel, while Addleshaw Goddard will offer support with competition matters. Norton Rose Fulbright is on hand to deal with data protection and Stephenson Harwood will oversee IP and litigation.  McCann FitzGerald and Philip Lee have won spots offering Irish advice and completing the roster was DWF, TLT and Walker Morris.

Guest began the review process in April, starting with an initial shortlist of 23 firms which was whittled down to ten during the tender process. The new panel came into effect on 1 September 2018 and it will run for a two-year period.

Eversheds Sutherland partner Julia Woodward-Carlton, who leads on the LRS relationship, told Legal Business: ‘It was a long and challenging tender process with questions around cultural fit and values. Being awarded the primary adviser role was a particularly good outcome as it showcased our deep sector expertise and ability to maintain a trusted advisor relationship.’

Previously owned by GlaxoSmithKline (GSK), Allen & Overy were on hand to advise as Lucozade was sold to Japanese consumer goods company Suntory in 2013.

Corporate partners Edward Barnett and Andrew Ballheimer took the lead for A&O as the represented GSK. CC, led by corporate finance partner Joel Ziff, advised Suntory on the deal.

In other recent panel reviews, education company Pearson selected 14  firms to inhabit newly-created ‘preferred’ and ‘general’ rosters in July.  Among the chosen firms were Freshfields Bruckhaus Deringer, Herbert Smith Freehills, DWF, Bird & Bird, Pinsent Masons and DLA Piper.

Legal Business

Deal watch: City high-flyers land jumbo £4.4bn BA pension deal as Blackstone’s buying spree continues

Deal watch: City high-flyers land jumbo £4.4bn BA pension deal as Blackstone’s buying spree continues

City heavyweights Allen & Overy (A&O), Clifford Chance (CC) and Eversheds Sutherland have landed key roles on Legal & General’s £4.4bn buy-in of the British Airways pension scheme as advisers cash in on a brace of Blackstone deals.

UK insurer Legal & General is taking on £4.4bn of historic pension liabilities relating to the Airways Pension Scheme (APS) in a bulk annuity designed to reduce risk in the scheme.

A&O and Eversheds are advising the trustees, with A&O’s team led by insurance partner Philip Jarvis and counsel Kate McInerney. For their part, Anthea Whitton and Francois Barker are heading the Eversheds team.

The CC team advising Legal & General is being led by corporate partner Katherine Coates and pensions partner Sarah McAleer.

The deal also covers existing longevity reinsurance contracts of roughly £1.7bn entered into by APS via a captive insurer with Canada Life Reinsurance and PartnerRe, which were incorporated into the buy-in arrangement. Closing of the deal will mean that APS is now 90% hedged against all longevity risk.

‘This deal is very significant in the market and part of a trend of which there are push and pull factors,’ one City partner told Legal Business. ‘On the push side, there are trustees out there looking to de-risk and on the pull, market conditions are making deals like this economically viable transactions.’

APS was established in 1948 and it was closed to new members from 31 March 1984. The scheme had 24,196 members, of whom 1.4% were active members, 3.6% deferred members and 95% pensioners.  At the end of March 2018, APS had assets totalling £7.6bn.

Elsewhere, the blistering private equity market saw A&O win the mandate to advise private equity giant Blackstone on its €1bn acquisition of a majority stake in Baltic bank Luminor. The deal involves funds managed by Blackstone and other institutional investors acquiring a 60% stake in the bank, with Nordic banks Nordea and DNB each retaining a 20% stake.

A&O’s private equity partner Karan Dinamani led on the deal – the Magic Circle firm’s inaugural deal for Blackstone on the buyout side – which builds on a long-standing relationship acting for Blackstone’s lenders on real estate transactions.

Commenting on the frothy PE market, Dinamani told Legal Business: ‘A lot of private equity players are looking to acquire right now and the London market is roaring. The fact that a private equity player is acquiring a majority in an European Central Bank regulated bank makes the deal interesting and complex.’

With €15bn of assets, Luminor was created in 2017 through a combination of Nordea and DNB’s operations in the Baltics.

Meanwhile, a £1.5bn deal that saw Blackstone Property Partners and Telereal Trillium acquire Network Rail’s commercial business estate sealed roles for Kirkland & Ellis, CC, Eversheds and Gowling WLG.

CC and Eversheds acted as legal advisors to Network Rail, with CC’s team comprising partners Franc Peña, Angela Kearns and Adrian Levy and Nick Bartlett leading for Eversheds.

Kirkland and Gowling advised buyers Telereal and Blackstone, with the Kirkland team led by corporate partner Michael Steele and including corporate partner Carlos Gil Rivas. Mike Twinning led the Gowling team.

The portfolio includes 5,200 properties, the majority of which are converted railway arches.

The sites are being sold on a leasehold basis, with Network Rail retaining access rights for the future operation of the railway. The proceeds are being put towards the UK railway upgrade plan.

Legal Business

Deal watch: Eversheds Sutherland races to advise Formula 1 team on administration as Cooley acts on $126.8m tech IPO

Deal watch: Eversheds Sutherland races to advise Formula 1 team on administration as Cooley acts on $126.8m tech IPO

Eversheds Sutherland has landed a major role on the administration of Formula 1 team Force India as Cooley advises a UK IT company on its $126.8m IPO and Herbert Smith Freehills (HSF) acts on a $388m Philippines agribusiness deal.

Finance partner Jamie Leader led Eversheds as it represented Brockstone Limited, the services company linked to Force India driver Sergio Pérez, on a High Court administration application intended to safeguard the jobs of 400 employees.

With the application approved, Eversheds will now advise administrators Geoff Rowley and Jason Baker of FRP Advisory on the management of Force India.

Force India’s financial crisis comes as its team principal, Indian businessman Vijay Mallya, fights a worldwide freezing order and is also attempting to ward off an effort by India to extradite him from Britain to answer fraud charges.

According to Leader, it was a challenging mandate for the Eversheds team due to the timescale; the administration application was made on 20 July with the hearing taking place a week later on 27 July.

The hearing was also subject to a last-ditch intervention from soft drink company Rich Energy, which had a £30m cash injection rejected by the court.

Leader told Legal Business: ‘Most of the major stakeholders felt that the team be put under the control of independent professionals to solve its financial problems. The company was under the control of directors who were not in a position to support it. It’s really important that we were able to save 400 jobs.’

Elsewhere, Cooley has represented UK IT company Endava on its IPO on the New York Stock Exchange. The listing saw Endava issue 6.3 million shares at $20 each, giving the flotation an overall value of $126.8m.

A transatlantic team including Boston partner Nicole Brookshire, Reston, Virginia-based partner Richard Segal and London partner Ed Lukins picked up the instruction.

Lukins told Legal Business: It is a first in terms of a UK plc going straight for a US listing with a dual-share class structure, similar to that employed by Snap and Google. Enhanced voting rights are not a feature of European markets, but afford management greater flexibility to execute Endava’s stated strategy.’

Davis Polk & Wardwell also landed a role on the listing, advising bookrunners Morgan Stanley, Citigroup, Credit Suisse and Deutsche Bank.

Finally, HSF has exercised its foreign law alliance with Singapore firm Prolegis to advise on a $338m deal financing.

The firm acted for a bank syndicate as it financed Philippines company AEV International’s buyout of Gold Coin Management Holdings, one of Asia’s predominant agribusiness companies. The syndicate consisted of DBS Bank, Mizuho Bank, MUFG Bank and Standard Chartered.

HSF partner and head of Asia finance Adrian Cheng led for the firm, alongside a team of associates.

Legal Business

Eversheds wins key Rolls-Royce mandate as Norwegian group lands marine business

Eversheds wins key Rolls-Royce mandate as Norwegian group lands marine business

Nigel Cooke leads the team advising the UK giant on its £500m sale

Engineering giant Rolls-Royce turned to long-term adviser Eversheds Sutherland for the £500m sale of its unprofitable commercial marine division to Nordic technology company Kongsberg Gruppen.

Legal Business

Sole-adviser relationships: Commitment issues

Sole-adviser relationships: Commitment issues

Commitment. Marriage. Honeymoon. Divorce. Conversations about single-supplier legal advisory mandates are rife with relationship-strewn analogies.

While no two arrangements are the same, most begin with a commitment from a company and its in-house legal team to reduce external legal spend and get a better handle on its multitude of legal connections.

Legal Business

Revolving Doors: City laterals pick up with hires at Dentons and Eversheds as international moves maintain momentum

Revolving Doors: City laterals pick up with hires at Dentons and Eversheds as international moves maintain momentum

City recruitment picked up after a lull last week as Dentons strengthened its bench in London at the hand of Eversheds Sutherland, which saw moves both ways.

Dentons announced the hire of Howard Barrie, who re-joins the firm after several years at Eversheds Sutherland. Barrie had previously spent 19 years with Dentons in his first stint at the firm, and returns to its finance practice.

Barrie focuses on projects and project finance, as well as structured trade finance and commodity finance. Paul Holland, head of Dentons’ UK and banking finance practice, commented: ‘Paul brings an immense amount of international experience – in particular with regards to Africa – to the table, and we are confident he will help us to further enhance and grow our project finance work across the African continent and elsewhere’

Coming the other way, Eversheds made an addition to its City real estate practice in the form of Morgan Lewis & Bockius partner Paul Beausang. He was previously London head of tax at K&L Gates, and specialises in real estate tax structuring and transactional execution.

David Watkins, global co-head of real estate at Eversheds, commented on the hire: ‘The depth and market knowledge of UK real estate structuring offered by our real estate practice is a great match for Paul’s strength and expertise.’

Also in London, Hogan Lovells announced the hire of Jennifer O’Connell as finance partner to its London international debt capital markets practice. Jennifer returns to the firm from an in-house role at CACIB, the corporate and investment banking arm of the Crédit Agricole Group.

International recruitment continued apace last week, with CMS hiring Michał Mężykowski in Poland from Dentons. Mężykowski will join the firm’s banking and finance practice, bringing experience advising financial institutions with a particular focus on the real estate market. Mężykowski had been a partner at Dentons for eight years.

Across the Atlantic, Kennedys bolstered its New York office with the hire of Mark Dessi from US firm Skarzynski Black. Dessi had previously been at Sharzynski Black since 2014, and has experience representing insurers in negotiating and litigating first and third party insurance claims.

Dessi commented: ‘This move appealed to me for many reasons, including joining Kennedys’ impressive financial lines practice. Given the nature of my practice, the breadth and depth of the firm’s global network was especially important.’

Further afield, Stephenson Harwood announced the hire of Kevin Lee to its global private wealth practice. Lee will join the firm’s Hong Kong office from Zhong Lun Law Firm, where he had been since 2015.

Stephenson Harwood partner Ian Devereux commented on the hire: ‘Having a lawyer of Kevin’s quality – seen by many as the premier Canadian tax and private wealth advisor in Hong Kong – enables us to broaden the support we can provide to our clients.’

In South America, Mayer Brown announced the hire of Raúl Fernández-Briseño, who joins the firm as partner in Mexico City. Fernández joins from American firm White & Case, and has experience in transactional matters and financing, particularly in the aviation and private equity industries.

Fernández had spent nearly 20 years at White & Case and will serve as the head of M&A at Mayer Brown in Mexico City. Commenting on his move, Fernández said: ‘Mayer Brown has a sterling reputation among different industries, which view the firm as a fantastic resource for solving complex problems and steering clients through sophisticated transactions’

Legal Business

‘A clear validation of our strategy’: Eversheds bounces back with double-digit revenue and profit growth

‘A clear validation of our strategy’: Eversheds bounces back with double-digit revenue and profit growth

In its first full financial year since its transatlantic merger, Eversheds Sutherland (International) has recorded a robust increase in both revenue and profit per equity partner (PEP).

In revenue terms – which apply to the legacy Eversheds portion of the business – the firm saw a 13% increase from £438.6m to £494.6m. PEP, meanwhile, grew by a similar margin of 12% from £726,000 to £812,000 – the highest-ever PEP figure achieved by the firm.

Chief executive Lee Ranson (pictured) conceded that the positive results owed significantly to the knock-on effect of the firm’s recent international expansion, which includes the  February 2017 tie-up with US outfit Sutherland Asbill & Brennan,  but also asserted there had been ‘organic growth’.

Due to the merger or not, the results will be welcome after last year’s lacklustre performance, where the firm’s net profit and PEP dipped by 4% and 2% respectively as the firm shouldered the costs of the union.

On that point, Ranson commented: ‘It is particularly pleasing to see a strong uptick in profitability after a number of years of flat or negative growth – a clear validation of the success of our strategy. A year ago I said that confidence in the business is high, and it remains so as we build momentum and look forward to another year of growth.’

In February, on the one year anniversary of the US combination, Eversheds Sutherland unveiled combined global revenues as just under $1bn – a 5% increase on the year before.

The international results cap off a particularly expansive financial year for the firm, opening offices and forging alliances in Singapore, Dusseldorf, Moscow, St Petersburg, Amsterdam and Rotterdam.

While revenues are rising, Eversheds revealed a flat partnership promotion round last month. The firm made up 20 partners globally, the same figure as last year.

The results also come as the firm expands its tax practice in London, this week hiring Paul Beausang from Morgan Lewis. Beausang, who will fill the role of head of real estate tax, previously served in a similar position at K&L Gates.

Legal Business

UK Litigation Outlook sponsored briefing: Three is a crowd! The rise of third-party funding in international arbitration

UK Litigation Outlook sponsored briefing: Three is a crowd! The rise of third-party funding in international arbitration

Eversheds Sutherland assesses the key issues of using third-party funding in international arbitration

The use of third-party funding (TPF) has been a hotly debated topic in the international dispute resolution community for some time, with all signs pointing to its continued growth. The funding market appears to be on a constant expansion trajectory, with the number and geographic diversity of funders increasing, and new funders continuing to enter the market.

Legal Business

Eversheds Sutherland settles £100m Northern Rock negligence case

Eversheds Sutherland settles £100m Northern Rock negligence case

A £100m claim brought against Eversheds Sutherland by Northern Rock Asset Management (NRAM) has been settled.

NRAM’s claim, which came to light in late 2016, alleged professional negligence in relation to advice the legacy Eversheds firm provided following a review of two annual statements for a ‘together loan’ – a combination of a secured mortgage and an unsecured loan at a single interest rate with one combined monthly payment.

The £100m claim was understood to have first been made in 2014, although progress in the early years had been slow. Eversheds and NRAM have now agreed a resolution, however, before the matter reached court.

An Eversheds spokesperson said: ‘The resolution was agreed at a mediation on 6 February 2018 and the terms are confidential.’ An NRAM spokesperson confirmed the resolution.

NRAM had claimed the annual statements Eversheds advised on in 2010 ‘did not comply with the requirements of the Consumer Credit Act’ and the advice failed to be provided within a ‘reasonable time’. It also alleged the advice meant the loans were not enforceable and NRAM became liable to repay or refund all charges and interest it had charged to borrowers.

Eversheds denied the claim and in 2016 said it was being ‘vigorously defended’.