Legal Business

Significant mandates: Hogan Lovells among raft of firms on GE’s financial restructuring

Significant mandates: Hogan Lovells among raft of firms on GE’s financial restructuring

Hogan Lovells plus a host of US firms have won roles on GE’s major financial restructuring, including the $26.5bn sale of its real estate assets, as it tries to create a ‘simpler and more valuable company’ by selling most of GE Capital’s assets.

Under the agreement, GE will sell the bulk of the GE Capital Real Estate assets – in what has been dubbed one of the largest real estate deals on record – to funds managed by Blackstone with Wells Fargo also acquiring a portion of the performing loans at closing. The company also has letters of intent with other buyers for an additional $4bn of commercial real estate assets, totalling a $26.5bn disposal.

Hogan Lovells’ cross-border team, which comprised over 75 lawyers, advised GE on the real estate sale led by partners Warren Gorrell, Bruce Gil‎christ, Prentiss Feagles, Lauren Bellerjeau, Waajid Siddiqui and Lee Berner, based in New York and Washington DC. The GE legal team was led by former Hogan Lovells partner Mark Landis, currently executive legal counsel–M&A at the company.

On the other side was Dechert representing Wells Fargo with US based partner Richard Jones leading, alongside London-based Jeremy Trinder, Jason Butwick, Mark Stapleton plus US partners Kahlil Yearwood, Philippe Phaneuf, David Linder, Daniel Dunn and, out of France, Philippe Thomas.

Simpson Thacher & Bartlett represented Blackstone with partners Greg Ressa, Sas Mehrara and Krista Miniutti leading. Bank of America and Kimberlite Advisors provided financial advice on the real estate deal.

On the wider restructuring of the business GE took advice from Weil, Gotshal & Manges on corporate and restructuring matters with Sullivan & Cromwell advising on the regulatory aspects led by Sullivan’s senior chairman Rodgin Cohen. 

Davis Polk & Wardwell led on tax matters for the company with a team including corporate partners Richard Sandler and John Meade, tax partners Neil Barr, Michael Farber and Michael Mollerus, partners Randall Guynn and Luigi de Ghenghi handling regulatory matters and investment management partners Nora Jordan and Gregory Rowland. 

GE expects to return more than $90bn to investors through to 2018, the majority of which will come from the $50bn share repurchase program with the remainder generated from the current dividend and the spinoff of its remaining 85% stake in Synchrony. The company expects that by 2018 over 90% of its earnings will be generated by its high-return industrial businesses, up from 58% last year.

jaishree.kalia@legalease.co.uk

Legal Business

Game Over – Global London firms make winning moves as US players secure their breakthrough

Game Over – Global London firms make winning moves as US players secure their breakthrough

2014 found US firms in London gaining even more ground. Legal Business’ 13th annual Global London survey charts the key players and winning moves as leading firms make their breakthrough.

A line of taxis wait patiently along Old Broad Street as White & Case’s partners exit the office one after the other apologising for the delay. In January 2015, the firm ran up a £12,000 waiting charge from Addison Lee because partners failed to come out on time as they were overrun with work, mainly M&A deals. There’s no doubt it has been a dynamic start to the year for many global firms in London. And following a strong 2014, many firms expect this level of activity to continue.

Legal Business

Getting the High Court’s approval: Linklaters, Sullivan and Ropes advise on Towergate’s £1bn restructuring

Getting the High Court’s approval: Linklaters, Sullivan and Ropes advise on Towergate’s £1bn restructuring

Linklaters, Sullivan & Cromwell and Ropes & Gray have advised as Towergate secured approval from the High Court on its plan to restructure around £1bn worth of debt

The firms landed roles in advising the UK insurance broker Towergate on new terms for a debt restructuring which saw its unsecured creditors becoming majority shareholders with a debt-equity exchange plus an injection of new money.

Business restructuring partner James Douglas at Ropes & Gray advised the unsecured creditors which included Highbridge Principal Strategies, KKR Credit Advisors and Sankatay Advisors. The trio will become the new majority shareholders with 80.6% of the group after providing £300m in cash.

Meanwhile US firm Sullivan & Cromwell acted for the senior secured creditors which will take up the remaining stake of the company, as well as receive a £250m pay-out from the cash put in by the unsecured lenders. The US firm’s team was led by finance partner Chris Howard. Linklaters banking partner Bruce Bell advised Towergate

The court approval was won for its plan to restructure at a hearing on 27 March and comes after Towergate was warned in the last quarter of 2014 that it may face a liquidity shortfall in the first quarter of 2015.

jaishree.kalia@legalease.co.uk

Legal Business

Bayer’s $14.2bn acquisition from Merck spins out roles for Sullivan, Fried Frank, Morgan Lewis and Cleary

Bayer’s $14.2bn acquisition from Merck spins out roles for Sullivan, Fried Frank, Morgan Lewis and Cleary

The $14.2bn acquisition of Merck’s consumer care business by German pharmaceutical giant Bayer has spun out roles for a clutch of leading US law firms, as Sullivan & Cromwell advises longstanding client Bayer opposite Fried, Frank, Harris, Shriver & JacobsonMorgan, Lewis & Bockius; and Cleary Gottlieb Steen & Hamilton for Merck.

At Fried Frank corporate partners David Shine and Abigail Bomba took the lead for US healthcare corporation Merck. The dealmakers worked alongside antitrust and competition partner Peter Guryan, executive compensation and employee benefits partners Amy Blackman and Donald Carleen, IP and technology partner Daniel Glazer and tax partners Michael Alter and Robert Cassanos.

Morgan Lewis’s team for Merck included a trio of business and finance partners: Alan Leeds; Randall Sunberg and David Glazer. The team also included the practice group leader of the firm’s antirust practice Scott Stempel, fellow antitrust partner Harry Robins and Frankfurt-based business and finance partner Nils Rahlf.

Cleary Gottlieb advised Merck on the non-US antitrust aspects of its sale. The Brussels-based Cleary Gottlieb team is led by partner Romano Subiotto QC, assisted by associates Katia Colitti, Andrew Leyden and Vladimir Novak.

Sullivan advised long standing client Bayer on its multi-billion dollar acquisition, with a team led by New York-based Matthew Hurd, who co-heads the firm’s healthcare and life sciences group. Sullivan has advised the German pharma giant on a string of US acquisitions, including last year’s now completed $1.1bn cash tender offer for Californian contraceptive company Conceptus.

In an increasingly buoyant transactional market, the pharma industry has been particularly active, as seen most recently with Pzifer’s record £63bn bid for the UK’s AstraZeneca.

Merck itself was in an acquisitive mode last year when it made a £1.57bn cash offer to buy AZ Electronic Material, when Allen & Overy (A&O) advised Merck with a team led by corporate partners Richard Browne and Michael Ulmer alongside Luxembourg corporate head Mark Feider. Clifford Chance advised AZ.

A&O also advised Novartis on its sale late last year of its blood transfusion diagnostics unit to Barcelona-based Grifols for an estimated $1.68bn.

David.stevenson@legalease.co.uk

Legal Business

Barclays £5.8bn rights issue sees Clifford Chance, Sullivan & Cromwell and Freshfields in the lead

Barclays £5.8bn rights issue sees Clifford Chance, Sullivan & Cromwell and Freshfields in the lead

Barclays has begun the biggest capital raising by a UK bank since 2009 under which Clifford Chance (CC), Sullivan & Cromwell and Freshfields Bruckhaus Deringer will lead on its initial £5.8bn rights issue, as the global financial institution moves to plug a £12.8bn funding gap.

A team from 3017-lawyer Magic Circle firm CC led by London corporate partner Patrick Sarch and capital markets partner Simon Thomas is advising on English law for Barclays, while a Sullivan & Cromwell team in London is advising the bank on US law, led by client relationship partners George White and John O’Connor.

Deputy general counsel Michael Shaw is leading the Barclays team.

At 2332-lawyer Magic Circle rival Freshfields, US capital markets partner Sarah Murphy heads the team providing English and US legal advice to the sponsor, joint bookrunners and underwriters including Credit Suisse, BofA Merrill Lynch, Deutsche Bank, ABN Amro, J.P Morgan Securities, BNP Paribas and ING Bank.

The prospectus was published on Tuesday (16 September) and forms part of the capital raising first announced in July, after the Prudential Regulation Authority (PRA) revealed the results of its review on the capital adequacy of major UK banks and building societies and a leverage ratio target of 3%. Barclays was found to have a PRA leverage ratio of 2.2%, leaving it with a shortfall of £12.8bn.

Shaw told Legal Business: ‘The most eye-catching piece of the leverage plan is, of course, the rights issue – the biggest equity raising in the UK since the crisis. Normally when a company carries out a rights issue or a similar capital raising, it would expect to announce and publish the prospectus simultaneously. The preparation of a prospectus takes a number of weeks of intense effort to ensure, once published, it contains the information needed by shareholders and investors for their investment decision.

‘However, Barclays needed to announce the leverage plan as soon as it was agreed with the PRA on 30 July, and there wasn’t time before then to prepare a prospectus. Unusually, the underwriting had to be done based just on the announcement and using a small group of initial underwriters. Once the rights issue was public, it was possible to expand the underwriting syndicate and then prepare the necessary prospectus. It really has been a great team effort to achieve everything in the time available.’

According to the prospectus, the bank will contest a £50m fine from the Financial Conduct Authority (FCA), which said the bank had ‘acted recklessly’ in breaching rules over disclosing the value of a deal with Qatari Holdings during a cash call in 2008. The FCA issued Barclays a warning notice on Friday 13 September.

francesca.fanshawe@legalease.co.uk

Legal Business

Revolving Doors: King & Spalding, Olswang and Sullivan & Cromwell in key partner hires

Revolving Doors: King & Spalding, Olswang and Sullivan & Cromwell in key partner hires

The past week saw a clutch of firms including Kennedys, Olswang, King & Spalding and Sullivan & Cromwell make key partner hires as US firms’ assault on the City continues apace.

King & Spalding launched its London trade practice on 20 May 2013 with the hire of Bird & Bird head of international trade and customs for Brussels and London, Iain MacVay, as the firm continues to expand its global trade offering.

MacVay, who has more than two decades experience advising on international trade matters, was one of the first to represent industries in World Trade Organisation (WTO) dispute settlement proceedings. His practice focuses on European and international regulatory law, particularly in representing the alcoholic beverages, pharmaceutical and petrochemical industries.

MacVay becomes the fifth partner to join King & Spalding’s London office since the start of 2012, bringing the total number to 14 and the number of fee-earners to 36.

The hire is in line with the firm’s ambition to double its City base to around 60-75 fee earners by the end of 2014. The firm plans to add partners to its energy, life sciences and dispute resolution practices.

London managing partner Garry Pegg said the firm needs to be bigger in London as competition from the other side of the pond increases: ‘There are around 80 US firms in London so we need to claim our stake and be bigger here. We are looking for individuals that have sector experience that crosses over, such corporate lawyers with energy experience.’

Last year, the firm recruited international disputes partners Sarah Walker and Jane Player – also from Bird & Bird, corporate rainmaker William Charnley from Mayer Brown and real estate head Nigel Heilpern from Fried Frank Harris Shriver & Jacobson.

‘The London office has almost doubled the number of fee-earners during the last 18 months and the addition of an international trade practice in London is the latest step in our strategic expansion,’ said Pegg.

‘We look forward to the London office’s ongoing growth with the addition of more leading lawyers as we continue to broaden our London capabilities.’

If further evidence of US firms march on the City were needed, Sullivan & Cromwell took a significant step into UK work with the hire of Linklaters banking and restructuring partner Chris Howard. As reported by Legal Business on 23 May, the high-profile hire will be seen as a significant boost to Sullivan’s English practice in restructuring, distressed M&A and finance. Howard will advise international corporations, banks and financial sponsors on corporate restructurings and financings throughout Europe, the Middle East and the US.

Meanwhile, 383-lawyer top 50 UK firm Olswang strengthened its pensions offering with the arrival of Ron Burgess, who joined from Lawrence Graham having previously worked at Allen & Overy, Freshfields Bruckhaus Deringer and on secondment at the Pensions Regulator.

Burgess advises corporates, trustees and insolvency practitioners on pension related matters including scheme funding, liability management and complex benefit design schemes.

Head of corporate Fabrizio Carpanini said: ‘Not only is Ron an excellent pensions lawyer, he also stands out for his experience at the pensions regulator, which means he understands how to navigate the intricacies of the system and find the best solutions for our clients.’

Elsewhere, Kennedys boosted its Manchester office with a double partner hire on 20 May, bringing the office head count to 48. Partner Claire Bushen joined from DAC Beachcroft along with the head of the sport and entertainment department at Freeth Cartwright, Simon Taylor.

Bushen is a professional indemnity expert with experience defending claims against professionals including accountants, insurance brokers, estate agents and solicitors.

Taylor, who was brought in to bolster the firm’s specialist sport, entertainment and insurance capability, brings with him solicitor Andrew Martin and trainee Nick Spearing.

‘We now have one of the largest professional indemnity teams in the UK and act for more than 50 insurers. To facilitate this growth it is crucial that we continue to grow our own people and make strong lateral hires,’ said senior partner Nick Thomas.

On the continent, a trio of Hogan Lovells Italian partners have left to join Ernst & Young. Gianroberto de Giovanni, Massimiliano Marinozzi and Paolo Ricci will join as partners of the Italian legal offering of the global audit firm in its Rome and Milan offices. Ricci will take over the leadership team in Italy, while de Giovanni and Marinozzi will head the corporate and dispute teams respectively.

francesca.fanshawe@legalease.co.uk

jaishree.kalia@legalease.co.uk

 

To be included in our weekly roundup of high profile partner moves please send your announcements to caroline.hill@legalease.co.uk

Legal Business

Global London rises – Sullivan & Cromwell signs up Linklaters partner for finance push

After years of conservative City growth, further signs emerge this week of Wall Street’s finest pushing into mainstream UK work with Sullivan & Cromwell recruiting Linklaters banking and restructuring partner Chris Howard.

The high-profile hire will be seen as a significant boost to Sullivan’s English practice in restructuring, distressed M&A and finance. Howard will advise international corporations, banks and financial sponsors on corporate restructurings and financings throughout Europe, the Middle East and the US.

The well-regarded Howard joins the US law firm after hopping between the Magic Circle for over a decade; previously, he joined Freshfields Bruckhaus Deringer as a partner in 2004 from Linklaters, where he was a senior associate. He then rejoined Linklaters in 2010 as a partner in the London banking team.

He recently acted for Carlyle on the financing of the £1bn acquisition of RAC as well as advising on the leveraged buy-out of DFS and representing Carphone Warehouse on its £1bn de-merger facilities. Other clients include Lloyds Banking Group, Royal Bank of Scotland, BNP Paribas and HSBC.

Sullivan has been edging further into City work, having in recent years hired high profile corporate finance partners Tim Emmerson and Presley Warner, respectively from Milbank Tweed Hadley & McCloy and Freshfields. The firm’s closest New York rival Davis Polk & Wardwell last year signalled its move into UK law with the hire of Freshfields corporate partner Simon Witty.

Despite US firms’ rising international ambitions, Magic Circle rivals will be relieved that elite Wall Street firms move slowly. In 2007 Sullivan had 70 lawyers in its City arm. By 2012, that figure had fallen to 64.

jaishree.kalia@legalease.co.uk