Legal Business

Deal watch: City and US firms defy tough M&A market with deal duo as Gateley takes the cake on Patisserie Valerie collapse

Deal watch: City and US firms defy tough M&A market with deal duo as Gateley takes the cake on Patisserie Valerie collapse

Slaughter and May, Sullivan & Cromwell, CMS Cameron McKenna Nabarro Olswang and Ashurst have defied a challenging market to take key roles on a pair of UK mergers as listed Gateley leads on the collapse of Patisserie Valerie.

Last week saw the £3.3bn takeover of UK listed plastics manufacturer RPC Group by funds managed by Apollo Management IX, as well as Primary Health Properties’ £393m acquisition of MedicX Fund Limited in an otherwise sedate UK M&A market.

Slaughter and May took the company-side mandate to advise RPC on a recommended offer for all shares by Apollo. Each RPC shareholder will be entitled to 782 pence in cash for each RPC share, valuing the deal at roughly £3.3bn. The shares have been issued by Rome UK Bidco, a vehicle created by the buyer of RPC, which designs and engineers plastic products, including for the plastic packaging markets.

The deal was led by Slaughters head of corporate Andy Ryde with a team including corporate partner and future rising star candidate Paul Mudie.

A Sullivan & Cromwell team led by Ben Perry acted as lead adviser to Apollo on the UK takeover elements of the deal with Paull Weiss London-based M&A partner David Lakhdhir providing additional advice to that firm’s core client in the US.

The sale process has been relatively protracted, becoming public last September and being subject to numerous takeover panel extensions. Bain Capital was also pegged as a potential acquirer of the business but later pulled out of the process. The transaction also includes a significant debt financing piece.

Ryde told Legal Business: ‘RPC’s plastic packaging business has grown rapidly in recent years through acquisition and it was felt that a private equity owner would allow it to continue this acquisitive strategy.’

He added: ‘It is a sign of market confidence that a takeover of this size of a FTSE 250 company can be done in a challenging market. The deal first became public last September and required five takeover panel extensions to finalise the due diligence process. RPC is a decentralised business with seven divisions operating across 33 countries so the deal took time to cross the line – but it got there in the end.’

The deal is slated to close in the second quarter of 2019.

Meanwhile, Ashurst has landed a role advising MedicX Fund, the healthcare infrastructure fund owned by Octopus, on its takeover by Primary Health Properties Plc (PHP).

The deal is being done via a Guernsey law scheme of arrangement and sees the share capital of MedicX issued in exchange for new shares in PHP, a deal which is valued at roughly £393m.

MedicX, a specialist primary care infrastructure investor in healthcare properties in the UK and Ireland, was advised by a team led by Ashurst corporate partner Tom Mercer and including corporate partner Tara Waters.

CMS advised PHP on the deal, with a team spearheaded by partners Glyn Taylor and Jack Shepherd.

MedicX is a closed-end investment company with UK REIT status, listed on the London Stock Exchange. Its investment portfolio includes 166 properties with a value of around £806.7m.

FTSE 250 company PHP is also a listed UK REIT which leases properties to GPs, the NHS and other healthcare providers. It has a market capitalisation of £875m and investments of £1.5bn.

Elsewhere, woes continue to plague the UK high street as Patisserie Valerie succumbed to the dark cloud of ‘significant fraud’ overshadowing the fancy cake chain as it brought in KPMG to administer its collapse earlier this week.

Parent company Patisserie Holdings plc announced the move on Tuesday (22 January), saying that as a direct result of the significant fraud it had been unable to renew its bank facilities.

Last October, a £40m black hole was discovered in the company’s accounts overseen by former finance director Chris Marsh who was then arrested on suspicion of fraud, bailed and then resigned from the company.

Patisserie Valerie’s chairman Luke Johnson has taken out a loan in order to pay out January wages.

Listed law firm Gateley has been unforthcoming about its reported role advising KPMG on the administration. The firm has declined to comment on whether Birmingham-based partner James Madill is advising, as one restructuring source suggests.

On Wednesday (23 January), KPMG announced the closure of loss-making stores, including 27 Patisserie Valerie stores and 19 Druckers stores. A further 25 Patisserie Valerie concessions in Debenhams (the UK department store which has itself been on restructuring counsel’s watch list for several months), Next and motorway service areas have also closed, along with the company’s bakery in Spitalfields. The closures have resulted in 920 redundancies.

nathalie.tidman@legalease.co.uk

Legal Business

Revolving Doors: Sullivan & Cromwell ends City recruitment hiatus as White & Case lead firms strengthening in Asia

Revolving Doors: Sullivan & Cromwell ends City recruitment hiatus as White & Case lead firms strengthening in Asia

There are signs the summer hiring lull is coming to an end after Sullivan & Cromwell and Bryan Cave Leighton Paisner (BCLP) made significant London plays, while White & Case led an array of firms looking East.

Sullivan & Cromwell broke a five-year duck in the City by hiring Jeremy Kutner from Shearman & Sterling. Kutner, who was made partner in 2012, had headed up Shearman’s technology, media and telecoms (TMT) industry group, advising a plethora of major media companies including Liberty Global, Virgin Media and Vivendi.

Sullivan’s last City lateral before Kutner was restructuring partner Chris Howard, who joined from Linklaters in 2013. The firm claims it is looking to strengthen its City corporate practice further.

A spokesperson for Shearman commented: ‘We can confirm that Jeremy Kutner will be leaving the firm. We wish him all the best for the future.’

BCLP, meanwhile, made an addition with Elizabeth Hicks, who will spearhead the firm’s family asset protection team in London. Hicks joins from Irwin Mitchell, where as partner she acted as head of family law. She previously worked at Kingsley Napley, where she was made partner in 2001.

The move comes as BCLP looks to improve its wider private client capability. Global co-head of the firm’s private client practice, Damian Bloom, commented: ‘Elizabeth’s arrival furthers the family asset protection group’s ambition of seamlessly servicing high net worth clients on complex high value family and asset protection matters. There are growing opportunities in this space across the private wealth sector, and a global commercial law firm with international family disputes capability is an attractive proposition for prospective clients.’

Finishing off the domestic recruitment round, RPC announced the hire of professional indemnity partner Rhian Howell from Beale & Co to the firm’s Bristol office. Howell had previously acted as head of the Bristol office for Beale.

Meanwhile, American heavyweight White & Case kicked off an international recruitment round dominated by appointments in Asia, announcing the hire of Bingna Guo as partner in the firm’s Beijing office. Guo joins from O’Melveny & Myers, where she had spent her entire career and was made partner in 2012.

Guo has experience in international investigations and providing compliance advice on domestic and cross-border matters for multinational companies.

White & Case’s China head Alex Zhang said: ‘China continues to be a key Asia-Pacific jurisdiction in which White & Case is targeting further growth. Bingna, an experienced and highly capable partner with strong client relationships and an excellent market reputation, is an exciting addition to our team who adds further breadth and depth to the firm’s practice in China.’

Elsewhere in Asia, DWF continued its run of hires with the appointment of Jonathan Goacher to its Singapore office. Goacher joins from Kennedys, where he led the firm’s regional corporate insurance practice, and was previously a consultant at DLA Piper’s Bangkok office for more than a decade. Goacher is also a New York-qualified lawyer.

Oommen Mathew, managing partner of DWF Singapore, said: ‘Jonathan will be a very strong addition to our Singapore practice as we look to build our corporate and transactional offering to further capitalise on the opportunities in the market.’

Finishing off the international round, Quinn Emanuel Urquhart & Sullivan joined the Asia hiring spree in securing the services of former Finnegan, Henderson, Farabow, Garret & Dunner partner York Faulkner. Faulkner’s practice focuses on intellectual property litigation, adding to Quinn’s Tokyo litigation offering, as well as bringing experience from acting as a federal prosecutor in the U.S Department of Justice.

Managing partner, John Quinn, welcomed the hire: ‘We have been looking to add the right person to the Tokyo office for a while now. We are very excited to have York join us.’

thomas.alan@legalease.co.uk

Legal Business

Global Elite advise Siemens on €40bn German IPO of medical division

Global Elite advise Siemens on €40bn German IPO of medical division

Latham & Watkins, Linklaters and Sullivan & Cromwell are all advising as German conglomerate Siemens plans to list its €40bn medical technology unit in what will be one of the largest IPOs in the country since Deutsche Telekom floated for €13bn in 1996.

The listing is slated for the first half of 2018 on the Prime Standard segment of the Frankfurt Stock Exchange and will see Siemens create Siemens Healthineers, a spin-off of the company’s medical technology business. After the listing, Siemens will become the new company’s most significant shareholder.

Siemens’ medical technology division is the largest contributor of revenue to the business, achieving sales of €13.8bn in the 2016/17 business year.

The Latham team advising longstanding client Siemens is led by Frankfurt capital markets partner Oliver Seiler alongside Munich corporate partner Rainer Traugott. Hamburg corporate partner Dirk Kocher, Düsseldorf corporate partner Nikolaos Paschos, Hamburg regulatory partner Christoph Engeler and Munich tax partner Thomas Fox make up the Magic Circle firm’s German team. In London, capital markets partner David Boles also advised for Latham.

Linklaters is representing Siemens Healthineers on the IPO, spearheaded by Düsseldorf corporate partner Ralph Wollburg with support from Frankfurt capital markets partner Marco Carbonare. US firm Sullivan & Cromwell is acting for a consortium of banks including Goldman Sachs, Deutsche Bank and JPMorgan. The firm’s team comprises Frankfurt capital market partners Carsten Berrar and  Krystian Cznerniecki.

For Latham it is a second major instruction by Siemens in a year, as the firm advised the company on its $4.5bn acquisition of US software provider Mentor Graphics in November 2016 .

The transaction saw Latham field a 15-partner team, led by New York corporate partners Adel Aslani-Far and Eli Hunt, alongside New York partner Jim Gorton and London employment and pensions partner Catherine Drinnan. Traugott, who is acting on the IPO, also advised.

tom.baker@legalease.co.uk

Legal Business

Morrison & Foerster and SullCrom gear up on Landis+Gyr’s electric smart meter $2.4bn initial public offering

Morrison & Foerster and SullCrom gear up on Landis+Gyr’s electric smart meter $2.4bn initial public offering

Morrison & Foerster and Sullivan & Cromwell have both advised on major Swiss electricity smart meter producer Landis+Gyr’s $2.4bn (£1.84bn) initial public offering (IPO), Europe’s second largest this year.

The IPO represents Landis+Gyr’s break from Japanese conglomerate Toshiba after it purchased the company six years ago. The IPO is the largest on the Swiss Exchange in the past ten years. Landis+Gyr employs more than 5,700 staff with activity across 30 countries.

Toshiba, which controls 60% of Landis+Gyr, has been plagued by a series of recent setbacks which this year culminated in the Japanese company releasing unaudited third-quarter accounts for the three months to December 31. Innovation Network Corporation of Japan (INCJ) also sold its 40% stake in the company.

The transaction closed on July 25 when Toshiba and INCJ sold all of their Landis+Gyr shares in the offerings.

Morrison & Foerster advised Toshiba and INCJ with a team led by London-based partners Scott Ashton in capital markets and Andrew Boyd in corporate. Tokyo-based corporate partner Stanley Yukevich also headed up the firm’s team. Niederer Kraft & Frey acted as Swiss counsel on the transaction with a team led by capital markets partner Philippe Weber.

Sullivan & Cromwell and Swiss law firm Bär & Karrer advised the underwriters which included UBS and Morgan Stanley acted as joint global coordinators, Credit Suisse and JP Morgan as further joint bookrunners.

Mizuho International and Bank Vontobel acted as co-bookrunners. SullCrom brought on a team led by Frankfurt-based partner Krystian Czerniecki. Bär & Karrer’s team included capital markets partner Thomas Reutter and tax partner Susanne Schreiber.

M&A activity in the smart meter maker market has increased recently, with producers becoming more important with the digitalisation of the energy industry.

Madeleine.farman@legalease.co.uk

Legal Business

S&C and Wachtell lead on Amazon’s $13.7bn Whole Foods buyout

S&C and Wachtell lead on Amazon’s $13.7bn Whole Foods buyout

Amazon moves into food sector with swoop on 460 shops

Sullivan & Cromwell and Wachtell, Lipton, Rosen & Katz led a host of elite US law firms advising Amazon on its $13.7bn purchase of Whole Foods Market, marking the online retailer’s first expansion into the bricks-and-mortar food industry.

Legal Business

Sullivan & Cromwell advises Diageo as it snaps up $1bn Casamigos tequila firm

Sullivan & Cromwell advises Diageo as it snaps up $1bn Casamigos tequila firm

Sullivan & Cromwell has advised as UK-headquartered alcoholic beverages company Diageo as it buys up tequila company Casamigos for $1bn.

The Malibu-headquartered Casamigos was founded by actor George Clooney alongside business partners Rande Gerber and Mike Meldman in 2013. The trio will receive $700m with a further potential $300m based on the performance of the company over the next 10 years.

Sullivan & Cromwell advised Diageo on the deal with a team including London-based competition partner Juan Rodriguez (pictured) and New York based partners Melissa Sawyer, Ronald Creamer, Matthew Friestedt and Steven Holley.

In 2011, Diageo turned to Sullivan & Cromwell as it paid $16.4m to settle following a probe by US regulator the Securities and Exchange Commission (SEC). The regulator was investigating claims that the company had paid $2.7m in bribes in exchange for sales and tax benefits. 

Casamigos is advised by US law firm Wilson Elser Moskowitz Adelman Dicker.

Madeleine.farman@legalease.co.uk

Legal Business

‘Remarkable deal’ for tech: King & Spalding, SullCrom line up Delivery Hero’s €1bn IPO

‘Remarkable deal’ for tech: King & Spalding, SullCrom line up Delivery Hero’s €1bn IPO

King & Spalding and Sullivan & Cromwell are leading one online food-delivery service Delivery Hero’s planned initial public offering (IPO) €1bn target, with Freshfields Bruckhaus Deringer advising the underwriters. 

The IPO would value Delivery Hero at €4.4bn. The Berlin-headquartered company said it will sell up to 39m shares with pricing set at €22 to €25.50.

Freshfields’ team, acting for the underwriters on the deal, is led by financial institutions global co-head Christoph Gleske.

King & Spalding is advising Delivery Hero on the US law side while Sullivan & Cromwell is acting on German delivery service laws. King & Spalding is advising Delivery Hero on the US law side while Sullivan & Cromwell is acting on German delivery service laws. King & Spalding’s team includes London based-capital markets partner Markus Bauman (pictured) and tax partner John Taylor. 

Sullivan & Cromwell’s Frankfurt based partners Carsten Berrar and Krystian Czerniecki are advising.

The company’s online and mobile platforms reach customers across 40 countries in Europe, the Middle East & North Africa, Latin America and the Asia-Pacific region. Its brands include Pizza.de, Foodora and Foodpanda. The company was set up in 2011.

Bauman told Legal Business: ‘It is a remarkable deal for the tech ecosystem in Europe generally, Berlin specifically. There are any number of push and pull factors that may see these companies go to market or stay private a little bit longer’, he said

‘The wealth of private money that is available to them is one thing that keeps them off the market but many of these companies will find their way over the next few years’ Bauman added.

King & Spalding has been advising Delivery Hero since 2015, when Berlin-based e-commerce group invested $586m in Delivery Hero.

Madeleine.farman@legalease.co.uk

Legal Business

S&C and Wachtell lead on Amazon’s $13.7bn Whole Foods buyout

S&C and Wachtell lead on Amazon’s $13.7bn Whole Foods buyout

Sullivan & Cromwell and Wachtell Lipton Rosen & Katz lead a host of elite US law firms advising Amazon on its $13.7bn purchase of Whole Foods Market, as the online retailer expands into the bricks and mortar food market.

Sullivan & Cromwell partners Krishna Veeraghavan and Eric Krautheimer are leading on behalf of Amazon while Wachtell Lipton Rosen & Katz partners Daniel Neff, Trevor Norwitz and Sabastian Niles are acting for Whole Foods.

Weil Gotshal & Manges banking partners Morgan Bale and Heather Viets, capital markets partner Faiza Rahman, M&A partner Raymond Gietz and tax partner William Horton all represented Bank of America Merrill Lynch and Goldman Sachs. The banking giants provided debt financing for Amazon to pay for the merger.

Latham & Watkins acts for financial adviser Evercore Partners on the deal, with a team consisting of corporate partners Adel Aslani-Far and Mark Gerstein.  US-headquartered company Whole Foods hired Evercore Partners earlier this year to advise the company on a strategic review of its business operations. 

The merger is the first high-profile role that Sullivan & Cromwell has undertaken this year since advising Deutsche Bank on its £500m fine by the Financial Conduct Authority (FCA) in January.

Sullivan & Cromwell white collar partner Samuel Seymour advised Deutsche Bank on its US settlement with the FCA.

For Latham & Watkins, Amazon’s swoop on the upmarket food grocery market is the first major deal since advising offshore drilling contractor Ensco on its $839m acquisition of Atwood Oceanics. The top US-headquarted firm advised Ensco with a team lead by Houston-based energy partners Sean Wheeler and Debbie Yee. Ensco also turned to Slaughter and May corporate partner Hywel Davies for advice.

Amazon was unavailable for comment.

tom.baker@legalease.co.uk

Legal Business

White & Case and SullCrom advise as Deutsche Bank fined over £500m for money laundering claims

White & Case and SullCrom advise as Deutsche Bank fined over £500m for money laundering claims

White & Case and Sullivan & Cromwell have advised Deutsche Bank as Germany’s largest lender has been fined £500m by the Financial Conduct Authority (FCA) and the New York’s Department of Financial Services over money laundering claims.

UK financial watchdog fined Deutsche Bank £163m for failing to maintain an adequate anti-money laundering (AML) control framework between 2012 and 2015. It is the largest financial penalty for AML controls failings ever imposed by the FCA.

The fine was issued after an FCA investigation into allegations the bank was used by unidentified customers to transfer $10bn out of Russia ‘in a manner that is highly suggestive of financial crime’. Deutsche Bank turned to White & Case dispute resolution partner John Reynolds for legal advice in London.

Deutsche Bank received a 30% discount after it agreed to settle during the early stages of the FCA investigation bringing it down from £229m. The discount did not apply to the £9.1m in commission the bank generated from the suspicious trading that it had to pay the FCA.

Director of enforcement and market oversight at the FCA Mark Steward said: ‘Deutsche Bank was obliged to establish and maintain an effective AML control framework. By failing to do so, Deutsche Bank put itself at risk of being used to facilitate financial crime and exposed the UK to the risk of financial crime. The size of the fine reflects the seriousness of Deutsche Bank’s failings.’

In a separate settlement announced overnight, the New York’s Department of Financial Services confirmed Deutsche Bank will also pay $425m (£340m) to the state’s main financial regulator. The US regulator said in a statement it had worked closely with the FCA on the enquiry which was related to the same transactions.

Sullivan & Cromwell white collar partner Samuel Seymour advised Deutsche Bank on its US settlement.

madeleine.farman@legalease.co.uk

Legal Business

Linklaters joins SullCrom and Cravath on $65bn Linde and Praxair megadeal

Linklaters joins SullCrom and Cravath on $65bn Linde and Praxair megadeal

Sullivan & Cromwell, Cravath, Swaine & Moore, Linklaters and Hengeler Mueller have won roles on another potential mega merger, between US and German oil and gas giants Praxair and Linde.

The two companies confirmed the deal yesterday (20 December), creating a company with revenues of around $30bn and a combined market value of more than $65bn. The combined company will be a ‘merger of equals’ with shareholders from each party holding around 50% of the new company, which will be branded as Linde on the New York and Frankfurt stock exchanges.

Cravath US-based head of European M&A Richard Hall led on the deal for Linde, alongside partner Aaron Gruber who acted on M&A matters and Len Teti who advised on tax.

Linklaters is advising on regulatory and antitrust issues with New York-based partner Thomas McGrath and Brussels head Bernd Meyring while Hengeler Mueller corporate partner Maximilian Schiessl is also advising the Munich-headquartered company.

Sullivan & Cromwell is advising Praxair on the deal. The team was led by New York corporate partners Keith Pagnani, Krishna Veeraraghavan and Frankfurt-based partner Carsten Berrar.

The deal has been under consideration for some time, with the two companies confirming talks over the summer before they were called off in September.

Other megadeals this year have included AT&T’s $85.4bn bid to takeover Time Warner, with Sullivan & Cromwell and Arnold & Porter advising AT&T, while Cravath acted for Time Warner.

Sullivan & Cromwell also scored a spot acting on the largest deal confirmed in the first half of 2016, when the New York firm advised Bayer in $62bn takeover attempt of Monsanto. Allen & Overy is also acting for Bayer on the financing of the transaction under Frankfurt-based finance partner Neil Weiand in another key US/German deal.

Wachtell, Lipton, Rosen & Katz advised Monsanto through the potential acquisition. The Bayer/Monsanto deal ultimately closed in September after Bayer returned with an improved $66bn takeover bid.

matthew.field@legalease.co.uk