Legal Business

Deal Watch: Freshfields and HSF lead on Liberty Global’s £481m acquisition of stake in ITV

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Freshfields Bruckhaus Deringer’s London managing partner Julian Long has advised Liberty Global on the US media group’s £481m purchase of BSkyB’s 6.4% stake in UK broadcaster ITV, with Herbert Smith Freehills acting for BSkyB.

Freshfields lifer Long, who was elected as London managing partner in March after a three-year stint as the office’s head of corporate, worked alongside corporate partner David Sonter. Sonter was also instructed in May by Liberty Global on its £550m joint-purchase with Discovery of All3media, the maker of Midsomer Murders and The Only Way is Essex.

Herbert Smith Freehills’ global head of M&A, Stephen Wilkinson advised BSkyB on the deal, alongside M&A partner Malcolm Lombers and corporate partner Charles Howarth.

A longstanding client, Wilkinson also led on BSkyB’s £160m acquisition of Virgin Media Television from Virgin Media. Lombers, perhaps best known for his advisory role for Qatar Investment Authority and UBS on their £8bn consortium bid for RWE Thames Water last year, was previously instructed by BSkyB on News Corporation’s attempt to take full control of the broadcaster for £7.7bn in 2010. 

Mike Fries, Liberty Global’s CEO, said: ‘This is an opportunistic and attractive investment for us in our largest cable market. ITV is the leading commercial broadcaster in the U.K. and we’re excited to be shareholders.’

As required by the UK Takeover Code, Liberty Global confirmed that it does not intend to make an offer to acquire ITV.

Tom.moore@legalease.co.uk

Legal Business

CC edges ahead in growth as Linklaters and Freshfields unveil financial results

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Clifford Chance has emerged as the strongest-performing Magic Circle firm financially for 2013/14, as the UK elite all unveiled unaudited sterling figures to coincide with the launch of the Global 100 this month.

The 3,000-lawyer firm has revealed a 7% rise in revenues to £1.36bn, up from £1.27bn in 2013. Profit per equity partner (PEP) has increased significantly to push average partner drawings back to over £1m after a blip last year, up a trend-busting 16% to £1.14m from £983,000.

Senior partner Malcolm Sweeting told Legal Business that a revitalised domestic market was a key component of the firm’s success: ‘We had a very strong year in London, which is connected to the EMEA region. The idea that growth is dead in the original key territories is wrong. Performance this year for the firm would suggest that.’

This was a point echoed by Allen & Overy (A&O) global managing partner Wim Dejonghe, whose firm has performed the strongest of the Magic Circle firms over a five-year period. A&O has announced a 2% revenue increase for 2013/14 to £1.23bn, while PEP was up 7% to £1.12m. A factor in the increase in profitability has been the success of A&O’s Belfast office, opened in 2011, which Dejonghe said contributed seven-figure costs savings during the last financial year.

‘We expect further growth in London – there was a nice pick-up in revenues there over the last year,’ he added. ‘Banking and litigation are very strong; corporate is recovering. Capital markets was busy up until the end of 2013 and softer in the first quarter of 2014, but has now picked up again.’

Meanwhile, Linklaters turned in a much stronger performance in 2013/14, revealing solid 5% turnover growth to £1.26bn, while PEP increased by 6% to £1.39m. Managing partner Simon Davies also attributed the success to a revitalised European market, particularly in Germany and the UK.

Freshfields Bruckhaus Deringer, last year’s leading Magic Circle performer, experienced a slightly muted year in 2013/14. Its turnover increased by 1% to £1.23bn and PEP increased by 6% to £1.48m.

A renaissance in domestic markets, particularly for corporate work, is a prevailing theme of this year’s Global 100 report, published on pages 29-81. And while the UK Magic Circle performed impressively in their home currencies, in dollar terms – thanks to a weaker pound in 2013 and a dominant US market – these firms continue to be outpaced by US rivals. The Wall Street elite have seen an impressive return to form on the back of big-ticket M&A mandates, with Simpson Thacher & Bartlett the most impressive performer of all in 2013 with turnover increasing 15% to $1.13bn, alongside double-digit profit increases with profit per lawyer up 18% to $701,000 and PEP up 19% to $3.17m.

The Global 100 as a whole managed 4% growth in total revenues to $88.63bn, a figure somewhat flattered by a number of transformative mergers coming online, such as Norton Rose Fulbright, the tripartite combination that created Dentons a year ago and the full integration of Ashurst with its Australian business in 2013.

Total profit was $33.95bn, an increase of 5%.

mark.mcateer@legalease.co.uk

Legal Business

Freshfields and Linklaters lead on SSP Group’s float

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Freshfields Bruckhaus Deringer and Linklaters are advising on the float of SSP Group, the owner of Millie’s Cookies and Uppercrust, on the London Stock Exchange.

Corporate partner Mark Austin, who earlier this year advised high street retailer Poundland on its £750m float, is representing SSP alongside the Magic Circle firm’s co-head of international capital markets Sarah Murphy.

Corporate partners at Linklaters, David Avery-Gee and Patrick Sheil, are advising the joint sponsors and bookrunners Goldman Sachs International and Morgan Stanley.

London-headquartered SSP, which operates almost 2,000 food outlets across 30 countries – largely at airports and railway stations, is looking to raise £500 million from the float. Despite volatility in the London IPO market, with low cost airline Wizz Air and clothes retailer Fat Face having both pulled out of listings in the last two months, SPP’s recently installed chief executive Kate Swann, who ran stationery chain WH Smith for 10 years until 2013, is looking to fund expansion at transport hub redevelopments across Europe.

Swann said in a statement: ‘SSP is a leader in the fast growing international travel food and beverage market and is focused on the more rapidly growing sectors of air and rail.

‘An IPO is the appropriate next step for a business of SSP’s calibre, size and international scale and we believe that we are well-placed for life as a listed company.’

SPP’s partner brands include Starbucks, Burger King and M&S Simply Food.

tom.moore@legalease.co.uk

Legal Business

UK big six energy giant SSE announces seven-strong inaugural legal panel

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Big six energy giant SSE has set up an inaugural seven-strong law firm panel following an ‘extensive selection process’.

Freshfields Bruckhaus Deringer, Addleshaw Goddard, CMS, Osborne Clarke, Gillespie Macandrew, Thorntons and Kennedys have been appointed to advise across various legal disciplines, including but not limited to construction, property, finance, litigation and corporate.Osborne Clarke’s real estate partner Shane Toal will act as a client relationship manager for the firm.

Kennedys will cover the sub-division of personal injury litigation and Gillespie Macandrew and Thorntons will focus exclusively on Scottish property work.

In a statement, SSE’s head of legal, Liz Tanner, said: ‘Previously SSE had no formal panel but worked with a number of external agencies to provide legal support.

‘The new panel will provide renewed focus and help us in delivering legal services to business areas right across SSE more efficiently.’

The panel in the Irish and Northern Irish jurisdictions are still to be finalised.

Kathryn.mccann@legalease.co.uk

Legal Business

Zoopla! Freshfields and Slaughter and May line up for £1bn float of the UK’s second biggest property website

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Corporate Freshfields Bruckhaus DeringerSlaughter and May
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The anticipated £1bn initial public offering (IPO) of the UK’s second largest online property website has seen Magic Circle firms Freshfields Bruckhaus Deringer and Slaughter and May retained to advise as Zoopla prepares to list on the main market later this month.

Advising Zoopla is a Freshfields team led by corporate partners Mark Austin and Adrian Maguire, supported by relationship partner Martin Taylor.

Slaughter and May’s Jeff Twentyman is advising Zoopla’s majority shareholder Daily Mail and General Trust (DMGT), while fellow corporate partner Richard Smith is adviser to minority shareholders LSL Property Services, Countrywide and Connells.

Both Freshfields and Slaughters have been involved in some of the most high profile IPO mandates in the past few months, including most recently Freshfields’ role as adviser to the underwriters JP Morgan, Citigroup, UBS and Investec on Lloyds’ 25% TSB float for £1.5bn, led by London-based corporate partner Julian Makin.

In April, capital markets partners were attesting to an end to the jitters that have until now dogged the IPO market, with retailers including Poundland, Pets at Home and AO World in recent weeks making their debut on the London Stock Exchange.

Pets at Home listed in mid-March at a value of £1.2bn, gifting Simpson Thacher & Bartlett, Clifford Chance and Travers Smith with lead mandates.

However, recent pricings have showed signs of market fatigue, with floats such as Saga listing at the bottom of their range.

In mid-May Patisserie Valerie listed on the AIM market at the bottom of its £170-200p range, raising proceeds of £33m and leading to commentary in the financial press that there has been a softening of the IPO market.

However, corporate partner Jonathan King, who led on the float, told Legal Business: ‘The range was at the top end anyway so this is still a good price.’

Sarah.downey@legalease.co.uk

Legal Business

EY hires Freshfields’ Richard Norbruis to head global transaction group

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EY has made its third senior private practice hire in three months months with the announcement that Freshfields Bruckhaus Deringer partner Richard Norbruis is to lead the accountancy giant’s global transaction law practice.

The Amsterdam-based corporate and M&A lawyer has been a partner at Freshfields for nearly 15 years, after joining from the New York office of NautaDutilh where he was managing partner. Since May 2011, he has acted as Freshfields’ global people partner with responsibility for recruitment, retention, diversity, partner development and leadership.

The hire constitutes the third high profile lateral EY has made in recent months, most recently following the appointment of Berwin Leighton Paisner’s (BLP’s) former head of finance Matthew Kellett to spearhead EY’s financial services legal work. Kellett, who resigned from the top 20 firm last October, is due to start at EY in September.

In March it recruited Addleshaw Goddard’s corporate managing partner Philip Goodstone in one of the first steps towards boosting its UK legal capability via lateral hiring.

The appointment of longstanding Addleshaws partner Goodstone, whose previous clients include Admiral Taverns, Accrue Capital, The Cooperative Group, and Standard Life Investments, marked a step change by the Big Four accountant, which since last year has been considering its options for expansion under the Legal Services Act 2007, including acquiring an alternative business structure (ABS) licence.

Last year also saw EY hire the former managing partner of Freehills’ Singapore office, John Dick; a precursor to its expansion plans in the region, as in March EY formally announced plans to expand its legal services business throughout Asia over the coming year.

EY has previously said it is looking to expand its offering across Singapore, Vietnam, Hong Kong, Korea and Indonesia, subject to regulatory requirements.

Sarah.downey@legalease.co.uk

Legal Business

Freshfields increases associate pay across the board

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Freshfields Bruckhaus Deringer today (29 May) unveiled a significant pay hike for its newly qualified (NQ) and junior ranks, with trainees also in line to take home £1,500 more, following a pay freeze in 2013.

The Magic Circle firm upped pay packets for first and second year trainees to £40,500 and £45,500 respectively.

NQ and one year post qualification experience (PQE) lawyers – known as career milestone (CM) foundation – will see their pay bracket rise from 2012’s level of £65,000 – £72,000 to £67,500 – £77,500.

Associates of between two and four years’ PQE (CM1) will now receive between £87,500 – £100,000, compared to £80,000 – £92,500 in the last two years, while associates with over four years’ PQE (CM2) will take home between £107,500 – £115,000, up from £100,000 – £107,500.

Associates that have six years’ PQE (CM3) will be paid between £120,000 – £135,000, an increase from last year’s starting point of £115,000, although no upper limit was specified.

Freshfields’ increases this year puts the firm ahead of Linklaters, which has been leading the pack, paying its NQ lawyers £65,000; one-year PQE associates £70,500; two-years PQE £82,000; and three-years PQE £93,500.

A&O, in comparison, lags behind its peer group after choosing to stick to last year’s pay levels. NQ lawyers will receive £64,000, while one-year PQE will take home £69,500, and second and third years will receive £78,500 and £89,000 respectively.

Despite the firm freezing its pay bands last year, Freshfields still led the pack with its high 2012 rates in comparison to its Magic Circle peers. Clifford Chance is the last to announce its trainee/associate pay bands with an announcement expected in the next few weeks.

Freshfields’ London managing partner Julian Long said: ‘We make sure we offer the most talented individuals a combination of great work, great training – and market leading levels of compensation. We have maintained our leading reward position for a number of years. We are now making a further significant investment in our people to recognise and reward outstanding performance…and we our investing further in bonuses. This move is part of our strategy to attract and retain the most talented individuals in the market and secures our position as a leading investor in exceptional people.’

The firm introduced the CM pay bands in 2012 to replace the previous system of pay based purely on PQE, claiming it was a more accurate way of reflecting both the lawyer and business roles that associates perform. Progress between each milestone is tracked using seven key elements, including technical skills, people and team skills and project management.

The milestone pay bands are being used by the firm’s London and Asia offices, with the firm’s other network offices currently at different stages in implementing the career milestones. ‘Most offices introduced them as part of last year’s appraisal process either to support personal development planning or when assessing performance,’ the firm said in a statement. The firm also confirmed it will be investing further in the bonuses it offers.

All pay increases went into effect May 1, 2014.

jaishree.kalia@legalease.co.uk

Legal Business

Updated: Linklaters and Freshfields lead on Lloyds’ 25% TSB float for £1.5bn

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Linklaters’ Matthew Bland is advising Lloyds Bank on its floatation of a 25% of its TSB business on the London Stock Exchange next month, on which Freshfields Bruckhaus Deringer’s Julian Makin will act for the underwriters.

Bland, a corporate partner in London, has represented Lloyds Bank for nearly a decade. His position as adviser on the £1.5bn initial public offering (IPO) follows lead roles on Lloyds TSB’s takeover of HBOS in 2008 and related £5.5bn recapitalisation, as well as a £22.6bn combined rights issue in 2009.

Freshfields’ Makin, a London-based corporate partner and co-head of the firm’s mining and metals group, is advising the underwriters: JP Morgan, Citigroup, UBS and Investec.

Herbert Smith Freehills’ corporate partners James Palmer and Nick Moore and outsourcing partner Nick Pantlin have been advising TSB, working closely with general counsel Susan Crichton, on the IPO and all aspects of its separation of Lloyds Bank, including on the material business and IT services arrangements required for TSB to operate as a standalone bank post-IPO.

Lloyds became one of the Big Four banks – alongside RBS, Barclays and HSBC – after consolidation of the banking sector in the 1990s but has been forced to sell off the 631 branches that now makes up TSB after receiving government aid during the financial crisis. Lloyds had been in advanced negotiations for the Co-operative Bank to acquire the branches but the talks collapsed when the Co-op discovered a £1.5bn funding gap.

TSB, which is already the UK’s seventh largest retail bank with 4.5 million customers, will be spun off through a series of floats by the end of 2015, appeasing the European Commission in its quest for greater competition in the sector.

tom.moore@legalease.co.uk

Legal Business

Deal Watch: Freshfields advises Blackstone on €1.8bn NAMA loan; CC and A&O close €2.8bn offshore wind financing

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Corporate Allen & OveryClifford ChanceFreshfields Bruckhaus Deringer
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Freshfields Bruckhaus Deringer has led on the latest major European mandate for Blackstone, advising the New York Stock Exchange-listed private equity group on its acquisition of a €1.8bn portfolio of cross-border loans and swaps from the National Asset Management Agency (NAMA) in Ireland.

Referred to as Project Tower, the portfolio acquired is supported by assets primarily in the UK, Ireland, Germany and Spain and, commenting on the transaction, lead partner Michael Steele said: ‘It was a pleasure to work alongside Blackstone on this highly significant and complex transaction – one of the largest loan portfolio sales to have taken place in Europe. We look forward to continuing to support Blackstone throughout its investment in Project Tower.’

Blackstone, traditionally perceived as being wedded to Simpson Thacher & Bartlett, opened an office in London in 2000 and has in recent years given a significant number of mandates to Freshfields.

Steele has over the past year to eighteen months advised Blackstone on its 2014 refinancing (as lender) of the Invista Group; its investment in the Cosgrave Group, its investment in French real estate investment trust Gecina and its 2013 acquisition of European shopping centre owner Multi Corporation.

Elsewhere, Magic Circle duo Clifford Chance (CC) and Allen & Overy (A&O) towards the end of last week closed what is said to be Europe’s largest offshore wind financing, ‘Project Gemini’, valued at €2.8bn.

The wind farm, owned by Canadian Northland Power (60%), Siemens (20%), Van Ord (10%) and HVC (10%), will consist of 150 wind turbines providing a capacity of 600 megawatts, creating one of the biggest offshore wind farm’s globally.

The longrunning project has seen CC act as legal advisor with regard to the structuring of the project, including project documentation for Van Oord and Siemens. In addition, the 3,017-lawyer firm acted as advisor on the subordinated financing of €200 million by the Danish pension fund PKA and Northland Power and acted as the borrower’s advisor. As project counsel the team also set up the corporate and shareholder structure and governance for the project sponsors.

The Magic Circle firm fielded a multi-disciplinary team led by asset finance counsel Hein Tonnaer in Amsterdam.

A&O represented the lenders consortium including ABN AMRO Bank; the Bank of Tokyo-Mitsubishi UFJ; BNP Paribas, Bank of Montreal; London Branch; Caixabank; CIBC World Markets; Deutsche Bank; Export Development Canada; Natixis; Banco Santander; Bank Nederlandse Gemeenten; Sumitomo Mitsui Banking Corporation and the European Investment Bank (EIB). A&O’s team was led by energy practice head Werner Runge in the Netherlands and counsel Frédérique Jacobse.

Over 22 parties were involved in the project, including 12 commercial creditors, four public financial institutions, one pension fund and an equity consortium.

The project reached financial close on 15 May 2014 and the wind farm is expected to reach commercial operations in the summer of 2017.

CC’s Tonnaer said: ‘We are very pleased to have been involved as a legal adviser for the project from the beginning. It is the largest ever project within the Dutch offshore wind energy sector and provides an excellent framework for future renewable energy projects. Despite there being so many different types of parties involved we were able to conduct harmonious negotiations and achieved the full consensus needed to make this project a success. For the last couple of years we have been able to work on this project as a fully integrated team consisting of a wide range of disciplines within our firm, from project management to financial expertise and corporate law.’

A&O’s Runge added: ‘The volume and complexity of this project underlines the challenges and opportunities in the offshore wind sector.

‘We are excited that our projects team was involved in this largest-ever European offshore wind financing, another “first” in the Dutch market.’

Jaishree.kalia@legalease.co.uk

Legal Business

Freshfields unveils new City competition head as Marchant takes over as London corporate chief

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Freshfields Bruckhaus Deringer has appointed Simon Marchant as its new City corporate head in the wake of Julian Long’s election to London managing partner, as the Magic Circle firm also announces that Simon Priddis will take over as competition head.

Marchant, who previously headed the firm’s Asia business and co-headed its London-based M&A business, has experience of advising corporate clients, investment banks and institutional and other shareholders.

He fills the gap left after Long’s appointment in March to London managing partner, as incumbent City chief Mark Rawlinson returns to client work.

Priddis, meanwhile, will take over as London head of antitrust, competition and trade (ACT), succeeding former head Rod Carlton, who has served two terms and will return to full time fee-earning. Both appointments come into effect today (May 1st) and will run for 3 years.

Priddis’ was the firm’s former co-head of the global healthcare group, and covers antitrust and competition matters, including obtaining merger control clearances for transactions, counselling clients on competition law compliance, advising on cartel and market investigations, and related litigation. Prior to joining Freshfields, he was a senior official at the UK competition regulator.

Freshfields global managing partner David Aitman said: ‘These appointments see the leadership of our London corporate and competition practices handed over to two massively skilled and very well regarded partners.

‘Freshfields’ corporate and ACT practices are globally recognised as market leaders – I have no doubt that we will see these positions consolidated under Simon and Simon’s guidance of the London teams.’

Jaishree.kalia@legalease.co.uk