Legal Business

The clients’ verdict: Linklaters wins best firm in show from annual in-house survey

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In-house Linklaters
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In what signals a marked return to favour for the City’s elite players, Magic Circle firm Linklaters has led the field in Legal Business’ third annual in-house survey as best overall adviser in 2014, pushing Eversheds, which emerged as the clear overall favourite in 2013, into second place.

Our 2014 survey, which drew responses from 436 individuals at major companies operating in the UK, reveals the top ten firms comprise largely the same names as last year, with the Magic Circle plus Eversheds, DLA Piper, Pinsent Masons and Baker & McKenzie all appearing. The only significant change was alternative legal services provider Axiom taking the tenth spot, pushing Herbert Smith Freehills into 11th place, demonstrating how non-law firm providers are winning over some bluechip clients.

The Magic Circle had a further vote of confidence with 47% of respondents feeling positive about their quality and value, a jump from the 32% who voted last year. Linklaters, Slaughter and May, and Freshfields Bruckhaus Deringer took the highest number of votes for strategic, high-quality legal advice, while Eversheds retained first place as best value for money with DLA Piper second.

The expansion of in-house teams is also evident from the findings, as more than two thirds of respondents (71%) reported growth in the size of their in-house teams over the past five years, including 28% who have seen growth of 25% or more in headcount. More than 50% of respondents spent over £1m annually on legal fees.

Eighty six percent of survey respondents cited ‘quality of legal advice’ as the most important criteria for choosing a law firm, suggesting that, despite the aggressive expansion of non-law firm legal services providers in recent years, traditional law firms will continue to take precedence for heavyweight mandates.

However, non-law firm providers voted as having the strongest proposition for company clients included Axiom, which took the top spot, followed by Berwin Leighton Paisner’s lawyer contractor Lawyers On Demand, accountancy giant PwC, Integreon and KPMG.

There is a positive outlook for law firms with indications of rising demand, as 45% of respondents feel that demand for external legal services has increased, 32% reported it as remaining stable and 23% viewed it as in decline.

For the full in-house report, see ‘Getting with the programme’ here.

sarah.downey@legalease.co.uk

Legal Business

Linklaters wins best firm in show from annual in-house survey

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In-house Linklaters
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In what signals a marked return to favour for the City’s elite players, Magic Circle firm Linklaters has led the field in Legal Business‘ third annual in-house survey as best overall adviser in 2014, pushing Eversheds, which emerged as the clear overall favourite in 2013, into second place.

Our 2014 survey, which drew responses from 436 individuals at major companies operating in the UK, reveals the top ten firms comprise largely the same names as last year, with the Magic Circle plus Eversheds, DLA Piper, Pinsent Masons and Baker & McKenzie all appearing. The only significant change was alternative legal services provider Axiom taking the tenth spot, pushing Herbert Smith Freehills into 11th place, demonstrating how non-law firm providers are winning over some bluechip clients.

Legal Business

Dealwatch: Linklaters, Freshfields and Travers Smith fix RAC deal with Singapore sovereign wealth fund

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Corporate Freshfields Bruckhaus DeringerLinklaters
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Linklaters’ corporate heavyweight Charlie Jacobs and private equity partner Alex Woodward advised US private equity firm Carlyle on the sale of half of its majority stake in roadside recovery service RAC after abandoning plans to exit the company through a London IPO.

The sale to Singapore’s sovereign wealth fund GIC comes three years after Carlyle purchased a majority stake in RAC, the UK’s second largest roadside recovery provider with 8 million members, for £1bn. Market analysts believe RAC is now worth close to £2bn, which means Carlyle is likely to have recouped most, if not all of its initial investment while maintaining 50% of its holding.

GIC rehired Freshfields Bruckhaus Deringer, which advised the fund on its acquisition of a 28.5% stake in UK pension insurer Rothesay Life from Goldman Sachs in October 2013, to run its deal for RAC. The transaction was led by London corporate partners Richard Thexton and David Higgins, with support from corporate colleague Adrian Maguire and senior associate Holly Kinchin-Smith.

David Higgins, co-head of Freshfields’ global financial investors group, said: ‘Today’s deal with GIC demonstrates that, despite the current strength of the equity markets, financial investors can still compete with M&A options.’

Linklaters’ Jacobs and Woodward were assisted by a team that included London private partners Stuart Boyd and Nicole Kar, as well as corporate partner John Lane and associate James Wootton. The corporate team were set to run the IPO, with London-based Latham & Watkins corporate partners Richard Brown and James Inness advising the underwriters in the run up. Meanwhile, Travers Smith senior partner Chris Hale acted for RAC management on the deal which increased its stake in the company from 15% to 20%.

tom.moore@legalease.co.uk

Legal Business

Dealwatch: Linklaters acts on Microsoft’s $2.5bn deal for Minecraft as the firm sees deal flurry

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Linklaters’ Stockholm outpost closed two major deals last week being selected by Microsoft to handle its $2.5bn acquisition of Mojang, which was advised by Mannheimer Swartling, and TDC’s $2.2bn acquisition of Get AS.

Linklaters team on the Microsoft’s deal for Mojang, which makes Minecraft – the most popular online game on Microsoft console Xbox Live with over two billion hours played on Xbox 360 in the last two years – was led by Elisabet Lundgren, who heads Linklaters’ corporate TMT group in the Nordics.

Mojang, founded by 35-year old Swedish coding enthusiast Markus Persson, was advised by Mannheimer Swartling’s Stockholm-based corporate partner Adam Green, alongside with M&A partner Tom Wehtje.

Green told Legal Business: ‘Our M&A practice has won some wonderful mandates and had our strongest year since Lehman. Sweden has a very innovative tech space, right down to start-ups, and the legal market is still very dominated by the independent firms.’

The Magic Circle firm also acted for Quadrangle and Goldman Sachs on their sale of Get AS, a leading fibre-based entertainment and communications provider of video, broadband and voice over IP services in Norway, to TDC for an enterprise value of US$2.2bn.

Linklaters helped to execute more than $7bn worth of deals last week, largely spearheaded by its private equity group.

London-based private equity partner David Holdsworth, who last year led when TDR Capital acquired upmarket gym chain David Lloyd for nearly £800m, advised US computers systems provider Attachmate Group on a reverse takeover by the UK’s Micro Focus in a deal to form a company worth $2.35bn.

Micro Focus was advised by Travers Smith head of corporate Spencer Summerfield in what is one of that firm’s largest M&A advisory roles this calendar year.

Linklaters, which also acted for Attachmate Group’s four owners – Francisco Partners Funds, the Golden Gate Funds, the Thoma Bravo Funds and the Elliott Management Fund, isn’t renowned for its presence in the tech space but these two mandates come as part of a larger push that has been spearheaded by the firm’s private equity group.

Earlier this year Holdsworth led on Japanese e-commerce giant Rakuten’s $900m purchase of chat application Viber and he secured Attachmate a break fee of around $11m should this latest deal fall through, a clause that hasn’t been permitted in the UK since 2011. The holding vehicle for the four owners of Attachmate, Wizard, will hold a 40% stake in the new enlarged company.

tom.moore@legalease.co.uk

Legal Business

Linklaters names Stuart Bedford as London head of corporate

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Linklaters has appointed its third London head of corporate this year, with Stuart Bedford stepping up to lead its City offering following Sarah Wiggins’ switch to global head of client sectors just two months into the role.  

Bedford begins a four-year term with immediate effect, having recently moved back to London after leading the firm’s corporate practice in Asia. Having been at the firm for nine years, Bedford has built a practice around the natural resources and infrastructure sectors in Africa and Asia.

Before Wiggins’ brief tenure in the role, which she held alongside other management positions that included heading the corporate group’s natural resources division and spearheading the firm’s diversity drive, Shane Griffin served a four-year term.

Matthew Middleditch, Linklaters’ global head of corporate, said: ’With the M&A market gathering pace and with our London-based clients consistently at the forefront of major cross-border M&A activity right across the world, Stuart’s extensive cross-border expertise, across Africa and Asia in particular, means he brings tremendous global experience and insight to this role.’

Bedford added: ‘Linklaters enjoys an outstanding reputation for working on high profile, complex, cross-border deals. While our transactional track record speaks for itself, we are increasingly supporting the boards of our clients with matters of governance, risk management and strategic transformational change. It’s a significant challenge and an offering to clients that I am looking forward to helping our team sharpen further.’

A driving practice at the firm, Linklaters has promoted just one London corporate lawyer, Tracey Lochhead, to partner this year.

tom.moore@legalease.co.uk

Legal Business

Magic Circle duo advise on LSE’s £938m rights issue as part of £1.6bn Frank Russell acquisition

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Corporate Freshfields Bruckhaus DeringerLinklaters
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Magic Circle firms Freshfields Bruckhaus Deringer and Linklaters, alongside some of the leading US firms, have advised on the London Stock Exchange Group (LSEG) rights issue for £938m to help fund a £1.6bn acquisition.

The LSEG said in late June it would acquire global asset management firm Frank Russell Company from Northwestern Mutual for $2.7bn. The fully underwritten rights issue is intended to raise net proceeds of £938m as part of the cash consideration for the buyout.

The issue will be priced at £12.95 a share, with a total issuance of around 74.3m ordinary shares or approximately 27.3% of LSEG’s existing issued share capital.

Freshfields’ advised LSEG on the acquisition and issue with corporate partner Andrew Hutchings leading alongside partners Mark Rawlinson, Mark Austin, Sarah Murphy, James Smethurst and Simon Priddis, while corporate partner Sean Rodgers and a team from Kirkland & Ellis provided US law advice to the company.

Linklaters advised the underwriting banks Barclays, RBC Capital Markets, Deutsche Bank, JP Morgan Cazenove, Banca IMI, Banco Santander, HSBC and Mitsubishi UFJ Securities.

Debevoise & Plimpton is advising Northwestern Mutual on the acquisition, led by partner Gregory Gooding and partners Kenneth Berman, Lawrence Cagney and Peter Schuur.

Skadden Arps Slate Meagher & Flom represented Russell Investments in the $2.7bn sale by Northwestern Mutual to the LSEG.

Jaishree.kalia@legalease.co.uk

Legal Business

Sidley Austin and Linklaters lead on Bank of Cyprus €1bn capital raise

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Finance LinklatersSidley Austin
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The London teams of both US firm Sidley Austin and Magic Circle firm Linklaters have scored heavyweight roles advising on a €1bn capital raise for the beleaguered Bank of Cyprus, in a landmark deal completed just one year after it was saved from collapse by an international rescue package.

Sidley acted as international legal counsel to the Bank as it raised the mammoth sum through a private placement, which includes international fund managers led by US billionaire Wilbur Ross and the European Bank for Reconstruction and Development.

Led by City-based global finance partner Matthew Cahill, who was supported by capital markets partner Stephen Roith, US securities partner Bart Capeci, and capital markets counsel Shireen Khoo, the team has advised Bank of Cyprus since it was placed into resolution in March 2013.

At Linklaters, corporate partner Nick Garland and capital markets partner Jason Manketo were also instructed as placement counsel, advising HSBC and Credit Suisse while Cypriot firm Chryssafinis & Polyviou acted as local counsel.

On the progression made by the bank just 12 months into its rescue deal, Sidley’s Roith said: ‘That Bank of Cyprus has successfully raised €1bn of new share capital just 12 months after exiting resolution is a great achievement and we understand that it is likely to be beneficial to the Cypriot economy as a whole. This was an interesting deal, as it had some of the characteristics of an institutional share offering and some of a private equity sale. We look forward to supporting Bank of Cyprus through the next stages of its capital raising.’

The deal is subject to approval by shareholders at an extraordinary general meeting in late August, with new shares expected to be sold at €0.24 each.

It constitutes an important step for the bank to regain market access since it came out of resolution in July last year. The private placement involved an ‘unusual and complex arrangement’ whereby a publicly-listed company offered unlisted shares privately to a group of potential investors.

Sarah.downey@legalease.co.uk

 

For more on the Cypriot legal market post-crisis, see Making bail – getting Cyprus back on its feet

Legal Business

Ashurst, Clifford Chance, Freshfields and Linklaters advise banks on competition inquiry

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Adviser reviews AshurstClifford ChanceFreshfields Bruckhaus DeringerLinklaters
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International firm Ashurst and Magic Circle trio Clifford Chance, Freshfields and Linklaters are advising the UK’s biggest banks over an inquiry into competition in the banking sector, following an investigation launched by the Competition and Markets Authority (CMA) in mid-July.

Ashurst’s global head of competition and EU law Nigel Parr is leading a team advising Lloyds Banking Group, while Freshfields is acting for HSBC, CC is acting for longstanding client Barclays, and Linklaters for the Royal Bank of Scotland (RBS).

Freshfields has previously taken on heavyweight mandates for HSBC including advising the banking giant on its record $1.9bn fine from US authorities in a settlement over money laundering. CC has previously won large-scale finance work from Barclays, having led on the bank’s £5.8bn rights issue alongside US firm Sullivan & Cromwell, and has also advised on its £59.5m settlement with the Financial Services Authority (FSA) over the fallout from the Libor scandal.

Linklaters also counts RBS as a regular client, and sits on the banking giant’s panel alongside Freshfields and CC. RBS did, however, appoint CC to conduct an independent inquiry into the treatment received by small business customers in financial distress, after allegations that the bank deliberately drove them to collapse for its own gain.

Britain’s new competition watchdog recommended the inquiry after an investigation into the supply of SME banking services found that high street banks had market shares of over 90%. Further competition concerns raised included limited switching between providers and high barriers to entry.

Sarah.downey@legalease.co.uk

Legal Business

Slaughters and Links lead on £3bn Carillion/Balfour talks; HSF and A&O advise on BSkyB’s £7.4bn European acquisitions

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Corporate Allen & OveryHerbert Smith FreehillsLinklatersSlaughter and May
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Construction group Carillion has instructed Slaughter and May’s corporate heavy hitter William Underhill and fellow corporate partner Kathy Hughes to advise on a proposed £3bn merger with UK rival Balfour Beatty, which has turned to Linklaters’ M&A veteran and longstanding adviser Iain Fenn.

The deal comes as today (25 July) also saw BSkyB conclude a £7.4bn deal to buy European sister companies Sky Deutschland and Sky Italia from 21st Century Fox, with Herbert Smith Freehills (HSF) leading for BSkyB and Allen & Overy (A&O) for Rupert Murdoch’s multinational media corporation.

If the Carillion Balfour talks are successful the merger, which is likely to be scrutinised by the UK’s Competition Commission, will create the largest construction and engineering company in the UK.

Carillion is also a longstanding client of Underhill (pictured), adviser to Royal Mail on its high profile IPO, who has handled a large slice of Carillion’s corporate work over the past decade, including its £291m acquisition of civil engineering firm Mowlem in 2005.

Slaughter and May have formed a close client relationship with Carillion, which in 2013 turned over £4.1 billion, including offering the services of Carillion’s low-cost legal arm to key client Vodafone.

Fenn, meanwhile, last year advised Balfour Beatty on its £190m sale of its UK facilities management arm to French energy group GDF Suez Energy in an attempt to reduce debt and focus on major infrastructure projects. He is well known for his work for Vodafone and advised the company on its £6.6bn acquisition of German cable group Kabel Deutschland last year.

Confirming the talks today (25 July) Balfour Beatty and Carillion said in a joint statement that they are working on a strategy and business plan for a combined entity, which will be ‘underpinned by the evaluation of achievable synergies, future financing arrangements and a number of other essential supporting workstreams’.

The construction duo now have until 21 August to complete the deal under the UK Takeover Code.

Elsewhere, BSkyB has turned to relationship partner Stephen Wilkinson to advise on the acquisition of Rupert Murdoch’s pay TV companies in Germany and Italy, creating one of Europe’s largest pay TV providers. Wilkinson, who also advised BSkyB in the £481m sale of its stake in ITV to Liberty Global earlier this week, was flanked by M&A partner Malcolm Lombers, equity capital markets partner Chris Haynes, Brussels-based competition partner Kyriakos Fountoukakos and IP partner Joel Smith.

HSF teamed up with Hengeler Muller’s Klaus-Dieter Stephan to complete the £2.9bn purchase of Sky Deutschland, acquiring a 57.4% stake from US media group Fox, with an offer put in for the outstanding shares to the remaining minority shareholders. On the £2.45bn acquisition of Fox’s 100% stake in Sky Italia, HSF worked alongside Bruno Bartocci of Italian firm Legance on local law.

BSkyB’s in-house team was spearheaded by deputy general counsel Andrew Middleton and principle legal adviser Sianne Walsh.

Wilkinson told Legal Business: ‘The deal was a complex, marrying the German public offer system with a private acquisition and stitching the transactions together as an integrated deal.’

For 21st Century Fox the A&O team was led by London corporate partners Andrew Ballheimer and Simon Toms, with a team made up of London corporate partners and German corporate partners Oliver Seiler and Hans Diekmann and the firm’s co-head of competition Antonio Bavasso. Milan-based corporate partner Paolo Ghiglione worked alongside Italian firm Duccio Regoli of Mazzoni e Associati to complete the Italian end of the deal.

Tom.moore@legalease.co.uk

Legal Business

Trainee retention rate at Linklaters up to 93%

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Trainee retention Linklaters
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Linklaters has kept on 93% of qualifying trainees in its latest cohort, up on the 86% spring 2014 retention rate.

The Magic Circle firm made offers to 54 of 57 qualifying trainees, with 53 lawyers accepting a position, up on the 50 trainees in a 56 lawyer cohort that were kept on earlier this year. 

Linklaters upped its salary bands for junior-level solicitors earlier this year, increasing first year pay 1.26% to take it to £40,000 and second year pay to £45,000. The firm also boosted newly-qualified (NQ) lawyer salaries by 1.6% to £65,000 earlier this year. Slaughter and May was the first Magic Circle firm to post its reviewed pay for junior solicitors this year, upping trainee, NQ and first to third year PQE by 3.2% as rival Allen & Overy froze pay for junior lawyers. 

Top tier firms have been preparing to up their associate levels after restrained intake following the financial crisis. Linklaters’ retention rate dipped to 73% in March 2010 but the firm has stepped up its hiring, with a retention rate in March and September last year standing at 86% and 87%, respectively, while this latest round represents the Magic Circle firm’s highest retention rate since September 2011.

Of the Spring 2014 qualifying trainees, Freshfields achieved an 80% retention rate, keeping on 35 of 44 trainees, while Clifford Chance retained the highest number of trainees, offering roles to 45 of 48 lawyers, or 94%.

Tom.moore@legalease.com