PEARSON TURNS TO FRESHFIELDS ON SUMMER FT AND ECONOMIST SELL-OFF
Freshfields Bruckhaus Deringer advised Pearson twice over the summer. The publisher sold the Financial Times to Skadden, Arps, Slate, Meagher & Flom client Nikkei and split its 50% stake in The Economist Group between Macfarlanes client and co-shareholder Exor, while Linklaters acted for The Economist.
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Freshfields Bruckhaus Deringer has stolen a march on rival Slaughter and May after winning the role representing the UK government in its latest disposal of holdings in Lloyds Banking Group.
UK Financial Investments (UKFI), which oversees the HM Treasury’s stake in Lloyds, carried out the sale with a Freshfields team led by London corporate partners Mark Austin and Julian Makin advising.
The work is a significant win for Freshfields as UKFI previously instructed Slaughters’ corporate team, led by partner Nilufer von Bismarck, when the government first sold a 6% share in the bank three years ago. This came after the government initially held around a 45% stake in Lloyds after it was bailed out with £20bn of funds following the 2008 financial crisis. Von Bismarck also acted for the government when Lloyds and The Royal Bank of Scotland took part in its asset protection scheme in 2009 which saw Lloyds raise £21bn in capital.
The sale, which brought state ownership at the bank down to less than 13%, comes after the government launched a trading plan at the end of last year and takes the total recovered to almost £14bn.
In April this year, Lloyds group general counsel Andrew Whittaker stood down from his role after two years and was succeeded by deputy GC Kate Cheetham. More recently however, Linklaters’ managing partner Simon Davies confirmed he will retire from the Magic Circle firm at the end of 2015, a year ahead of the end of his current term, to join Lloyds Banking Group as its chief people, legal and strategy officer, and also take a place on the bank’s executive committee.
jaishree.kalia@legalease.co.uk
Freshfields Bruckhaus Deringer and Arthur Cox have taken the lead roles today (26 August) as Paddy Power and Betfair announced they had agreed a possible merger in a £5bn deal.
A Freshfields team led by Edward Braham and Oliver Lazenby for Betfair having previously worked with the gaming company’s initial public offering and on a takeover approach in 2013 by CVC which was fought off. Freshfields also fielded employment partner Jocelyn Mitchell with Simon Priddis covering antitrust and Tax advice coming from Peter Clements.
Paddy Power also turned to its longstanding adviser Arthur Cox on the deal. Corporate partner Maura McLaughlin led the team at the Irish firm while Allen & Overy’s Antonio Bavasso provided antitrust advice.
If carried through, the combined company will have revenues of around £1.1bn and will seek to keep both Betfair and Paddy Power brands running. Shareholders of Paddy Power will hold 52% of the new company and receive a special dividend totalling €80m while Betfair shareholders will split the remaining 48% stake.
The gaming sector has seen a series of high-profile deals over the summer including Ladbrokes £2.3bn merger with Gala Coral, which saw Slaughter and May and Ashurst win roles, and the bidding battle between 888 and GVC over Freshfields-client Bwin.Party Digital Entertainment.
michael.west@legalease.co.uk
Magic Circle duo Slaughter and May and Freshfields Bruckhaus Deringer have won roles as Switzerland’s Zurich Insurance Group bids to buyout its FTSE-100 listed rival RSA for £5.6bn.
Slaughter and May is advising RSA Insurance Group on the all-cash offer, led by corporate and commercial partners Andy Ryde and Robert Innes. The team also included competition partner Jordan Ellison, Jan Putnis covering financial regulation and pensions and employment specialist Jonathan Fenn.
Freshfields is acting for Switzerland’s largest insurer Zurich with corporate partners Sundeep Kapila and George Swan leading.
The RSA board received Zurich’s all-cash proposal with shareholders receiving 550p per RSA share and allowed to retain a 3.5p interim dividend announced by the insurer earlier this month.
As of this morning [25 August] the RSA board said would recommend the possible offer to RSA shareholders, as long as there is a ‘satisfactory resolution’ to other terms. The offer comes after Zurich announced it was assessing a potential offer for RSA last month [July] following press reports.
RSA announced it had been awarded an alternative business structure licence by the Solicitors Regulation Authority in March this year, in a joint venture with Parabis Law.
jaishree.kalia@legalease.co.uk
The first of the Magic Circle’s big four to announce its trainee retention rate, Freshfields Bruckhaus Deringer is set to see 40 newly-qualified lawyers walk through its door this autumn, from a trainee intake of 48.
Freshfields offered positions to 43 or 90% of total trainees, of which three rejected a place at the firm where a newly-qualified lawyer can earn between £67,500 and £77,500. The firm’s retention rate has remained between 80-85% in the last few rounds, having retained 85% in its spring intake earlier this year after 41 out of 48 trainees accepted offers.
This came after 82% or 38 qualifying trainees out of 45 confirmed places at Freshfields in August 2014, while in spring that same year, the firm kept on 80% of junior lawyers, totalling 35 out of 44.
Freshfields retention rate is lower than the only other Magic Circle firm to report so far, Slaughter and May, which last month [July] revealed it kept on 33 trainees, or 89%, out of a cohort of 37. The figure was unusually low for Slaughters which regularly posts rates of over 90%.
In comparison, Herbert Smith Freehills earlier this month announced that it will be keep 34 of its 37 trainees, posting a 92% retention rate – higher than both Freshfields and Slaughters – and marginally down from its spring 2015 intake. Out of a total 37 qualifying trainees, 34 were made offers of which all accepted.
Freshfields once again did not disclose in which offices and practice areas the trainees would be qualifying.
jaishree.kalia@legalease.co.uk
Freshfields Bruckhaus Deringer has reprised its role for Pearson as, just weeks after selling the Financial Times, the publishing group agreed to sell its stake in The Economist group for £469m to Macfarlanes‘ client Exor and back to the group itself.
Freshfields corporate partners Oliver Lazenby and Simon Marchant led the team advising Pearson on the sale of its 50% interest in the group, which comprises the weekly magazine plus other titles and the Economist Intelligence Unit, to existing shareholder Exor which is taking 27.8% with 22.2% repurchased by the group.
The same team most recently acted for Pearson on its disposal of the Financial Times group to Japan’s Nikkei for £844m, announced in July, while Skadden, Arps, Slate, Meagher & Flom advised Nikkei and Herbert Smith Freehills acted for Pearson on UK real estate matters.
The Magic Circle firm has built a strong relationship with the FTSE-100 company, with duo Marchant and Lazenby having also advised the publisher on the combination between Penguin and Random House, as well as its disposal of Mergermarket Group.
Macfarlanes partner John Dodsworth advised the Italian-based investment firm on the Economist buy alongside Italian law firm Pedersoli e Associati’s partner Carlo Re. Pedersoli also advised Exor on all regulatory aspects of the transaction with partner Davide Cacchioli and junior partner Lisa Noja advising.
Meanwhile, Linklaters acted for the The Economist Newspaper itself on the deal as the overarching group repurchased £182m worth of shares in an effort to safeguard editorial independence. The Silk street team was led by corporate partners Richard Godden and James Inglis.
The transaction, which is subject to regulatory and shareholder approvals, is expected to complete by the end of the year.
sarah.downey@legalease.co.uk
Freshfields Bruckhaus Deringer and Kirkland & Ellis continue to swap talent in the City, this time with Kirkland hiring the Magic Circle’s finance partner Michael Steele.
The hire comes one month after high-yield heavyweight Ward McKimm quit the US firm to join Freshfields and become co-head of its European leveraged finance group.
Steele was Freshfields’ relationship partner for The Blackstone Group and Goldman Sachs, and spent 12 months in the leveraged finance team at Goldman Sachs in 2010. His client base covers financial sponsors, funds and financial institutions, advising them on complex and cross-border financing transactions, including leveraged finance, special situations investing, loan portfolio acquisitions and restructurings.
Deal highlights include advising Blackstone on its acquisition of the €1.8bn Project Tower loan portfolio from NAMA; representing Cinven on its acquisition of Heidelberger Leben; and acting for CVC and BC Partners on their bid for BSN Medical.
He joined the Magic Circle firm in February 2008 as a senior associate and was promoted to the partnership in April 2012.
Kirkland’s chairman Jeffrey Hammes said: ‘Michael is recognized as one of the top finance lawyers in the market and has developed a strong reputation for handling complex transactions, particularly on the sponsor side. His joining the firm reflects our continued commitment to building our leading European finance platform.’
In early June, Kirkland saw the exit of a trio of funds partners, led by Mark Mifsud, to Fried, Frank, Harris, Shriver & Jacobson.
jaishree.kalia@legalease.co.uk
Skadden, Arps, Slate, Meagher & Flom and Freshfields Bruckhaus Deringer have both won lead roles advising on Pearson’s £844m sale of the Financial Times.
The publishing group announced today it had agreed to sell the Financial Times Group to Japan’s largest media company, Nikkei, for £844m in cash.
Skadden won its first mandate from Nikkei to work on the deal with a cross-border team of lawyers led by Mitsuhiro Kamiya in Tokyo and M&A partner Scott Hopkins in London. Travers Smith provided support on aspects of English law with a team including pensions partner Philip Stear, Mahesh Varia covering employee incentives and IP specialist Dan Reavil.
Freshfields acted for Pearson with corporate partner Oliver Lazenby leading alongside Simon Marchant. The duo previously advised the publisher on the combination between its Penguin and Random House, as well as its disposal of Mergermarket Group. Herbert Smith Freehills acted for Pearson on UK real estate matters, with a team led by Alice Dockar.
The deal involves the FT newspaper, FT.com, How to Spend, The Banker and Investors Chronicle, but not the FT Group’s London headquarters at One Southwark Bridge and Pearson’s 50% stake in The Economist Group.
The the 127-year old newspaper currently has a circulation of 737,000 with 70% of that coming from digital sources. John Fallon, Pearson’s chief executive, said: ‘Pearson has been a proud proprietor of the FT for nearly 60 years. But we’ve reached an inflection point in media, driven by the explosive growth of mobile and social. In this new environment, the best way to ensure the FT’s journalistic and commercial success is for it to be part of a global, digital news company.’
jaishree.kalia@legalease.co.uk
Magic Circle duo Allen & Overy (A&O) and Freshfields Bruckhaus Deringer acted as the bidding battle for online gambling company Bwin.Party Digital Entertainment came to an end today (17 July) with 888 beating GVC to acquire the FTSE 250-listed rival for £898m.
The two bidders extensively competed to acquire the gaming company in recent months as the gambling industry continues to consolidate because of increased taxation. 888, which is smaller than the target being valued at £570m, won out over its AIM-listed competitor despite GVC’s higher bid of 110 pence per share, or £907m, and its backing from Canadian gaming company Amaya Gaming.
A&O acted for 888 led by corporate partners Ed Barnett and Annabelle Croker while financing advice was provided by partners Denise Gibson and Jake Keaveny with partner James Roe on capital markets matters. The City office of Skadden, Arps, Slate, Meagher & Flom picked up work from one of the founding shareholders of 888 with a team led by M&A partner Michal Berkner.
Meanwhile, Freshfields took on the work from Bwin with corporate partners Christopher Mort and Piers Prichard Jones working on the deal. Freshfields also advised on the 2010 merger that created the present company but acted for Party Gaming with Clifford Chance advising Bwin on that deal.
The winning offer gives Bwin shareholders 39.45 pence in cash and 0.404 new 888 shares per share and values the online gambling company at a 16.4% premium on the closing price in May when Bwin first entered talks with its potential suitors.
The two companies’ board said that by combining both businesses, they ‘anticipate that the enlarged group will benefit from significantly enhanced scale, an enhanced product offering and significant cost and revenue synergies’. The boards added that the combination will save at least $70m per annum (before tax) by the end of the 2018 financial year.
jaishree.kalia@legalease.co.uk
FRESHFIELDS BREAKS CITY LOCKSTEP TO BRING IN KIRKLAND’S McKIMM
Freshfields Bruckhaus Deringer’s hire of Kirkland & Ellis high-yield heavyweight Ward McKimm made waves in the City in June. Joining as co-head of European leveraged finance, McKimm’s salary is understood to be well above the firm’s City top of equity.
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