Legal Business

Updated: A&O freezes NQ and trainee pay as it ups associate salaries; Linklaters announces increases across board

legal-business-default

Allen & Overy (A&O) revealed today (8 May) that it will hold trainee and newly-qualified (NQ) lawyers’ pay at 2013 levels, while Linklaters has unveiled pay increases for all associates and trainees.

A&O has, however, raised its senior associate entry level salary by £5,000, up from £100,000 to £105,000, a level that has remained unchanged for some time.

A spokesperson for the firm said in a statement today: ‘We will be increasing the entry level salary for senior associates from 1 May 2014. Having raised salaries for other associates in November 2013, pay for all grades below senior associate will remain unchanged from 1 May 2014.’

The one-off increase for associates in November came after A&O fell behind its rivals on the associate pay table, having frozen its pay in May 2013.

The November increase saw NQ lawyers’ pay upped to £64,000 from £61,500, one-year post-qualified experience (1PQE) associate pay raised to £69,500, 2PQE increased from £74,500 to £78,500, and 3PQE up to £89,000 from £86,000.

A&O has also kept trainee pay at last year’s level, meaning its first year trainees will earn £39,000, while second year trainees will take home £44,000 – both less than the £39,500 and £45,000 respectively that Slaughter and May now offers.

Meanwhile, Linklaters has increased its pay bands for associates. As of 1 May 2014, first-seat trainees saw pay increase by £500 to £40,000, while NQ pay rises by £1,000 to £65,000.

And while pay for a one year PQE associate is up by £1,000 to £70,500, two and three years PQE have seen much more substantial increases, up by £3,750 and £4,500 to £82,000 and £93,500 respectively. These increases are significantly higher than this time last year, when pay rose by £2,250 for two years PQE and just £1,000 for three-year qualified associates.

In December, Linklaters announced the introduction of a performance-based element to salaries for its London-based associates with two years or more post-qualification experience as part of what it dubbed its ‘Our Deal’ strategy.

Last year, Freshfields led the pack on associate pay, awarding £65,000 to NQs, £72,500 to 1PQE, £80,000 to 2PQE and £90,000 to 3PQE, meaning that the firm will remain ahead on pay even if its freezes salaries at 2013 levels.

Clifford Chance, meanwhile, ahead of any announcements for 2014, currently pays £63,500 (NQ); £69,500 (1PQE); £78,200 (2PQE) and £87,800 (3PQE).

jaishree.kalia@legalease.co.uk

Legal Business

Linklaters appoints first female corporate City head

legal-business-default

Linklaters has named Sarah Wiggins as its first female corporate head in London, with the home-grown lawyer placing diversity on the agenda for her four-year term.

Wiggins, who was appointed by global practice head Jeremy Parr, takes up her new role today (1 May) and replaces former City head Shane Griffin.

Wiggins joined Linklaters in 1990 as a trainee and became a partner in 2000. She currently heads the firm’s energy, infrastructure and mining group, a role she will maintain alongside corporate head. She has worked across the firm’s corporate and commercial, corporate finance and M&A practice groups, with a particular focus on M&A, IPOs, privatisations, joint ventures and general corporate finance, and recently returned from a secondment at BP’s head office.

Some of her recent work includes representing PwC in relation to its acquisition of Booz & Co, and BP in relation to the sale of its stake of TNK-BP to Rosneft.

On top of standard objectives to increase corporate revenue and develop client services, Wiggins told Legal Business she aims to help the firm bring on more female partners, commenting: ‘It seems now is the right time; clients are increasingly asking more about diversity. I want to help ensure that more women are able to come through. This is not a main focus, as the firm is already working on this, but being a woman, I want to help develop this.’

Steps in this direction were in evidence in the Magic Circle firm’s latest partner promotion round in early April, when it made up 21 lawyers, of which nine were female, totalling around 43%.

jaishree.kalia@legalease.co.uk

Legal Business

Linklaters and Simpson Thacher lead on Sanpower’s landmark acquisition of House of Fraser

legal-business-default

Linklaters and Simpson Thacher & Bartlett have taken lead roles on the landmark acquisition by Chinese conglomerate Sanpower Group of a majority stake in iconic UK retailer House of Fraser.

The Shanghai Stock Exchange-listed subsidiary of Sanpower, Nanjing Cenbest, has acquired an 89% stake in the 165-year old British department store in a £480m deal which is expected to close in four months. 

Simpson Thacher is acting for Nanjing Cenbest – a chain of luxury Chinese department stores which is also being advised by Bank of America Merrill Lynch – led by London M&A partner Derek Baird and Hong Kong corporate partner Shaolin Luo. Baird joined Simpson Thacher in 2012 from Allen & Overy, having formerly been a partner at legacy Lovells until 2006. The hire was a significant boost to Simpson Thacher’s English law capability, following on from the 2009 hire of Clifford Chance corporate rainmaker Adam Signy.

Advising House of Fraser is a Linklaters team led by partner Simon Branigan alongside managing associate Kanyaka Ramamurthi. Linklaters has previously acted for the retailer on deals including a 2011 £250m bond issue, which was part of an effort by the company to refinance debt taken on when it was taken private in 2006, led by London-based high yield partner Mark Hageman.

On this latest deal Lloyds Banking Group, which is among the stakeholders selling its share in the department store, is being advised on debt and equity interests by a King & Wood Mallesons SJ Berwin team led by corporate finance partner Andrew Wingfield.

Clyde & Co, meanwhile, advised Sanpower Group on what is China’s largest foreign retail investment to date with a team of 20 lawyers across Clyde & Co’s offices in Beijing, Hong Kong, London, Guildford, Dubai and Paris worked on the deal, led by partner and chief representative of the firm’s Beijing office, Lynia Lau.

Lau said: ‘As Chinese retail sales are expected to grow at an annual average of 14% and British retail sales continue to recover, this deal opens new opportunities for market expansion for either party.’

Sanpower is a Nanjing-based conglomerate run by chairman Yuan Yafei, who founded the business in 1993, which owns or controls more than 100 companies across multiple industries including finance, retail, media and healthcare with a workforce of about 60,000 employees.

Yafei said: ‘This acquisition is a landmark transaction for a Chinese listed company. House of Fraser is a strong and iconic heritage brand in the UK and abroad, with exceptional fashion credentials. The management team has done an incredible job moving this business from a traditional department store to a recognised premium branded fashion retailer with a first-class multichannel offering. We have always been looking to invest in strong brands like House of Fraser, and take them to the next level of growth.

‘To date, this is the largest cross-border direct acquisition by a Chinese non-state-owned A-share listed company, and the largest overseas acquisition in the retail sector by a Chinese business.’

francesca.fanshawe@legalease.co.uk

Legal Business

Partner promotions: Linklaters beats Magic Circle rivals with 21 lawyers made up to partner

legal-business-default

With the latest promotions round among the City elite so far showing a marked drop in the number of associates made up to partner, Linklaters has elected 21 new partners across its global network, with seven made up in London.The promotions will take effect from May 1 2014.

Although the number of promotions is slightly down on last year, when the firm promoted 24, it is well ahead of its Magic Circle peers. Freshfields Bruckhaus Deringer and Allen & Overy promoted just 15 and 16 partners respectively last month. The new partners are spread across 11 jurisdictions and eight practice areas. The promotions also reflect the perceptible increase in equity capital markets work globally during the last financial year, with capital markets partners make up a large proportion of the new intake. Seven of the new partners work in this practice area: Matthew Monahan and Adam Fogarty will both be capital markets partners in London, alongside Jorge Alegre in Madrid, Jonathan Fried in Dubai, Motoyasu Fujita in Tokyo, Michael Ng in Hong Kong, Pornpan Chayasuntorn in Bangok and Matthew Poulter in New York.

‘Many congratulations to our new cohort of talented partners. Their promotions are the result of their strong commitment to our clients, their technical expertise and our focus on building strength in the practice areas where our clients need support,’ said Robert Elliot, senior partner at the firm.

david.stevenson@legalease.co.uk

The full list of partner promotions:

Jorge Alegre, capital markets, Madrid

Markus Appel, corporate, Berlin

Pornpan Chayasuntorn, banking/capital markets, Bangkok

Peter Cohen-Millstein, corporate, New York

Tessa Davis, banking/projects, Singapore

Michael Ehret, Tax, Frankfurt

Nuno Ferreira Lousa, litigation, Lisbon

Adam Fogarty, capital markets, London

Jonathan Fried, capital markets/projects, Dubai

Motoyasu Fujita, capital markets, Tokyo

Xiaohui Ji, banking, Beijing

Nick Le Masurier, banking, London

Tracey Lochhead, corporate, London

Annamaria Mangiaracina, competition/antitrust, Brussels

Matthew Monahan, capital markets, London

Jillian Naylor, employment, London

Michael Ng, capital markets, Hong Kong

Matthew Poulter, banking /capital markets, New York

Kirsty Thomson, banking, London

Alison Wilson, litigation, London

Fay Zhou, competition/antitrust, Beijing

Legal Business

Alstom thermal power sale gifts Freshfields and Linklaters with $1bn deal

legal-business-default

Magic Circle firms Freshfields Bruckhaus Deringer and Linklaters have won lead roles advising on the sale of Alstom’s thermal power division to German private equity firm Triton in a deal worth around $1bn.

Linklaters is advising Triton, led out of Germany by the head of private equity in the jurisdiction, Rainer Traugott, alongside Paris-based Vincent Ponsonnaille and Florian Harder in Munich. The large multi-disciplinary team includes partners from the firm’s corporate, tax, banking, TMT, competition and employment practice areas.

Freshfields’ corporate, tax and finance team is representing Alstom, led by corporate partners Alan Mason and Olivier Rogivue, working closely alongside Alstom’s Doris Speer and Alessandra Zingone-Audouin.

The deal comes as French turbine and train maker Alstom plans to divest its non-core assets to pay off some debt and re-focus on fast-growing markets, Reuters reported. The transaction was approved by Alstom’s board on March 31 and is expected to close by September 2014.

Meanwhile, Triton is largely focussed on investing in medium-sized businesses in Northern Europe, and is currently invested in 25 companies, with combined sales of around €13bn and over 52,000 employees.

While Freshfields is advising Alstom this time round, the firm previously represented Triton Partners in June 2013 on its acquisition of leading European recycling specialist Befesa from the Spanish listed energy and environment technology company Abengoa worth €1,075bn, led by corporate partners Anselm Raddatz and Christoph Nawroth in Düsseldorf.

Jaishree.kalia@legalease.co.uk

Legal Business

With an external legal spend in excess of $1bn since 2010, BP launches panel review

legal-business-default

Energy giant BP, which has paid around $1bn in external legal fees in relation to the Gulf of Mexico oil spill in 2010, has announced a review of its UK law firm adviser line-up.

Law firms have been asked to tender for a place on the FTSE 100 company’s new roster, pending the expiry in May of a three-year panel put in place in 2011. The review will be completed towards the middle of 2014.

The current panel includes Magic Circle firms Linklaters and Freshfields Bruckhaus Deringer, as well as Norton Rose Fulbright, Olswang, Herbert Smith Freehills, CMS Cameron McKenna and Scottish firm McGrigors.

The review is being led by high-profile group general counsel Rupert Bondy (pictured), who also oversaw the 2011 review.

Linklaters is a longstanding adviser to BP, with corporate partner Stephen Griffin having advised on BP’s $27bn sale of a 50% share in TNK-BP to Rosneft, the major Russian integrated oil and gas company, as well as the dual-track IPO and $9bn private sale process of its chemicals business Innovene.

At Freshfields, meanwhile, ex-corporate head Mark Rawlinson prepared BP’s defence against a potential bid in the wake of the oil disaster.

The panel review follows the announcement in February that a further $150m of external legal costs can be expected in relation to the spill.

Sarah.downey@legalease.co.uk

Legal Business

Oil and gas: Slaughters, Linklaters and Hengeler act on €5.1bn sale of RWE Dea

legal-business-default

With large deals in the oil and gas sector still often struggling to get away, RWE’s €5.1bn sale of its upstream oil and gas business RWE Dea to Russian billionaires Mikhail Fridman and German Khan has gifted Slaughter and May, Hengeler Mueller and Linklaters with major corporate mandates, as the deal is already touted to be one of the most significant of the year.

The acquisition from RWE – one of Europe’s big five energy companies – was made by the LetterOne Group, an investment vehicle set up by Fridman and Khan in 2013.

Slaughters and Hengeler put a team together to advise RWE, led by Slaughters oil and gas partner Hywel Davies and corporate partners Matthias Hentzen and Thomas Meurer at Hengeler.

Linklaters advised LetterOne Group, with a team from Dusseldorf led by corporate partners Ralph Wollburg and Tim Johannsen-Roth.

Davies told Legal Business: ‘We’ve seen quite a lot of people looking at decent size deals, the problem is pulling them off. There’s an appetite for large deals, but in the oil and gas sector deal activity in 2013 was significantly down. On the commodities side it’s tended to be portfolio management and shuffling [of assets].’

According to EY, while the oil and gas sector remained one of the most active and resilient global sectors for M&A, the total value of reported oil and gas transactions in 2013 was $337bn, down by 21% on a record high of $423bn posted in 2012. The number of deals – both reported and unreported – was down from 1,800 in 2012 to just under 1,400.

However, there was an increase in ‘megadeals’ in 2013: four with a reported value of over $10bn, compared with three in 2012.

RWE is a longstanding client of both Slaughter and May and Linklaters. In 2006, Slaughters advised RWE on its sale of Thames Water Holdings to Kemble Water for £4.8bn, while Linklaters advised renewable division RWE Innogy on its £400m refinancing of its windfarm portfolio, Zephyr Investments in 2004. Hengeler Mueller also has a history with the energy giant, advising RWE Deutschland on the restructuring of its grid business last year.

david.stevenson@legalease.co.uk

Legal Business

IPO Fever: Just Eat float gifts Herbert Smith Freehills and Linklaters with £700m listing

legal-business-default

With Pets at Home and Poundland having only days ago made their London Stock Exchange debut, Just Eat yesterday (17 March) announced its intention to float, gifting Herbert Smith Freehills (HSF) and Linklaters with a high profile corporate mandate valued at between £700m to £900m.

HSF corporate partner Chris Haynes and US-qualified global head of capital markets Steve Thierbach are leading a team for 2001 Danish start-up Just Eat, which also includes associates Jessica He and Bridget Castle.

The deal comes after both Haynes and Thierbach recently advised on the £1.6bn float of Bolton success story, white goods company AO, alongside corporate partner Mike Flockart.

That listing exceeded its predicted market capitalisation of around £1bn upon listing.

Magic Circle firm Linklaters is acting for chief underwriters Goldman Sachs and JP Morgan Securities, with corporate partner Iain Wagstaff and associate Niamh Liddy to advising on English law, while City-based Mike Bienenfeld and associate Megan Schellinger are providing US law advice.

In 2013, Just Eat recorded a strong financial performance within the UK, the company’s largest business, recording a 67.4% increase in revenue to £68.8m from £41.1m in 2012.

Its move to list on London’s main market is indicative of a wider uptick in UK IPO activity in recent months, with Poundland having closed with a valuation of £925m last Wednesday (13 March).

Last year also saw IPOs raise $18.7bn globally constituting a substantial increase on 2012, which raised $4.7bn according to Dealogic.

Sarah.downey@legalease.co.uk

Legal Business

Clifford Chance leads on VW’s $9.2bn offer for remaining shares in Scania

legal-business-default

Magic Circle giant Clifford Chance (CC) has scored a key advisory role on Volkswagen’s (VW’s) $9.2bn offer for a remaining stake in Swedish truck company Scania.

CC, a longstanding adviser to the German automobile manufacturer, is leading on the German and US legal aspects of the offer, led by Frankfurt-based M&A partner Wolfgang Richter and banking partner George Hacket. Leading Nordic firm Roschier is also advising VW on Swedish law matters.

Linklaters corporate partners Hans-Joachim Holzapfel and Stephan Oppenhoff are also reportedly working on behalf of the Wolfsburg-headquartered automaker, according to German legal publication Juve, although that statement is not corroborated by a recent press release from Volkswagen.

Linklaters previously advised Europe’s largest car maker on its $19bn takeover of German truck and bus manufacturer, MAN, in 2011.

The American Lawyer reports that Sullivan & Cromwell is representing Goldman Sachs in its role as Volkswagen’s financial adviser with a team that includes corporate partners Carsten Berrar and George Sampas as well as European counsel Markus Lauer.

At present, VW directly and indirectly holds 62.6% of the capital and 89.2% of the voting rights in Scania after a 2008 share acquisition, also led by CC.

Regarding this latest offer, VW stated: ‘Commercial vehicles is a highly attractive and important strategic business area for Volkswagen. The next logical and consistent step in the strategy of the Volkswagen Group is to strengthen the operational integration between Scania, MAN and Volkswagen to create a world-class commercial vehicles group. This will enable the members of the Volkswagen Group to fully share know-how and entirely realise synergies to deliver strong economies of scale.’

The acceptance period for the offer is expected to begin on or around 17 March and expire on or around 25 April 2014. VW has publicly stated it will not complete the offer unless it becomes the owner of more than 90% of all shares in Scania.

The announcement of the offer came as CC’s Frankfurt-based head of automotives Johannes Perlitt, a key relationship partner for VW having represented the company on its €4.7bn combination with Porsche, joined Jones Day’s corporate practice.

sarah.downey@legalease.co.uk

Legal Business

Panel review: Addleshaws and Linklaters new appointments as Nationwide completes adviser reshuffle

legal-business-default

Addleshaw Goddard and Linklaters will sit alongside incumbent advisers Allen & Overy and Eversheds on Nationwide‘s new legal panel as the building society today (31 January) concluded its first review since putting together its first-ever roster in 2009.

Burges Salmon, Nabarro and Olswang have all lost their place on the group-wide legal panel for the building society, which started its review process last summer, led by group general counsel Liz Kelly, after plans to start the review in early 2013 were delayed.

In a statement, the building society said: ‘Nationwide…has consolidated the work undertaken by its core panel so that the panel is able to provide full support across the range of legal and compliance services required by the Society going forward. Crucially, these firms will forge close relationships with Nationwide, becoming an extension of the in-house function and partnering business success.

‘The review follows a strategy of ensuring the panel suitably reflects the nature of the work being undertaken by the business now and in the future.’

GC Kelly, who is due to leave Nationwide at the end of the financial year to spend more time with her family, said: ‘Following a rigorous tender process, we have really challenged firms to showcase their ability to deal with a wide range of issues.

‘We have selected those firms which demonstrated that they were not only able to respond to the work and challenges we face as an organisation, but additionally offered the best value to our members and were a natural fit to Nationwide’s culture and business.

‘We would like to thank our outgoing panel members for their valued experience, particularly during such an exciting, and challenging time, for Nationwide.’

Kelly was appointed as general counsel in 2009 and has since pulled together what was a fractured legal department, creating a risk-based blueprint for areas where it needed to grow and building it up to around 50 lawyers, including seven litigators.

Her innovations include rolling resource planning, under which the legal team provides a formal two-year partnering plan to show how it will support the business based on discussions with key stakeholders.

The forward-thinking lawyer also introduced terms of reference for each project, which sets out at the outset the agreed project objectives.

The building society was one of five financial institutions identified in June by the Prudential Regulation Authority as having a capital shortfall. Kelly said: ‘What we are looking for in our panel review is how firms can support us on the regulatory side.’

Kelly says she will also play a role in the ongoing process of appointing her successor.

Francesca.fanshawe@legalease.co.uk