Travers Smith and Freshfields lead on £1.5bn Pret a Manger sale

Travers reprises Bridgepoint role on Pret sale with Freshfields leading for JAB

Travers Smith and Freshfields Bruckhaus Deringer have won lead roles on the sale of Pret a Manger to German investment group JAB Holdings for a reported £1.5bn.

The sandwich chain is being sold by private equity house Bridgepoint, which bought it in 2008 for £364m. The City firm previously advised Bridgepoint on its acquisition of Pret, with former PE head Charles Barter, who subsequently joined Bridgepoint as GC, leading the team.

Travers is advising longstanding client Bridgepoint on the deal, fielding a team led by head of private equity Paul Dolman and private equity partner Ian Shawyer.

JAB, which also owns Krispy Kreme doughnuts and Dr Pepper, is being advised by Freshfields, where corporate partner Chris Mort is at the helm of a team that also includes Alex Potter and Patrick Ko. HSBC is providing financial advice for JAB.

Pret announced this morning that all of the chain’s 12,000 employees will receive a £1,000 cash windfall when the JAB deal is finalised later this year.

Pret started out as a single shop in north London in 1986 and now has 530 stores worldwide, including in the US and Asia.

Emmanuel PHOTO

Legal Test for a Valid Board of Directors’ Resolution under Nigerian Law

The Board of Directors (“the Board”) is a group of individuals, elected by the shareholders or the Directors themselves with a mandate to establish policies for corporate governance and management of the company. It is the decision making arm of the company which ensures that resolutions of the shareholders are executed. The Board carries out oversight of the company and executes its functions through its resolutions reached in meetings convened as provided by the law or the company’s articles of association (“the articles”).

The provisions of Nigerian Companies and Allied Matters Act (“the CAMA”) envisages that every company, whether private or public must have a Board of Directors (“Board”). This is why the CAMA provides that every company must have at least 2 (two) directors. In order for Board resolutions to be valid it must pass the legal test as provided under the CAMA. The legal test includes;

a. Notice of Meetings

Section 266 of the CAMA provides that every director shall be entitled to receive notice of director’s meeting, unless he is disqualified by any reason under the CAMA or at the material time the director was absent from Nigeria and has not provided an address in Nigeria for service of the notice on him.

Directors are entitled to a 14 days’ notice in writing of a meeting except the articles provides otherwise. Failure to give notice of a director’s meeting invalidates the meeting and the resolutions reached at the meeting.

In the case of Longe v FBN (2010) (Pt. 1189) 1 SC, the Nigerian Supreme Court held that further to Section 266 of the CAMA, the removal of a Managing Director of the Bank was unlawful because he was not given notice of the Board meeting in which he was removed.

b. Written Board Resolution

Section 263 (8) of the CAMA provides that a resolution in writing signed by all the directors entitled to notice shall be valid and effective as if it was passed at a meeting of directors duly convened and held.

This means a written resolution of the Board which is not signed by all the directors entitled to receive notice of Board meetings is invalid.

c. Lack of Quorum

Section 264 of the CAMA provides that except the articles states otherwise, the quorum necessary for the transaction of directors shall be 2 (two) where there are not more than 6 (six) directors, but where there are more than 6 (six) directors, the quorum shall be one third of the number of directors and where the numbers of directors is not a multiple of 3 (three), then the quorum shall be one-third to the nearest number.

A Board resolution reached in a meeting without the requisite quorum stipulated in the CAMA or the company’s articles is invalid.

d. Acting without Authority

The import of Section 66 (1) of the CAMA is that acts of a director are not deemed to be that of the company if he acted without the express or implied authority of the Board of directors. However, the Board of directors may ratify the acts done by the director without prior authorization.

A director is personally liable for actions done without Board’s authority or ratification.

e. Breach of Fiduciary

Section 282 of the CAMA provides that directors are trustees of the company’s moneys, properties and powers. They shall exercise their powers honestly in the interest of the company and all shareholders and not in their own sectional interests.

A director opens up itself to litigation and personal liability if he acts for his own interest against the interests of the company or its shareholders.

f. Improper Resolution

The CAMA provides instances where the Board would carry out its functions by an ordinary resolution or by special resolution. The Board’s business would be invalid if it passes an ordinary resolution for a business which requires special resolution and vice versa.

White & Case and Weil lead on $2.3bn Sony acquisition

White & Case and Weil Gotshal & Manges have taken lead roles on Sony’s $2.3bn acquisition of a majority stake in EMI Music Publishing, which owns songs by artists like Sam Smith, Queen and Kanye West.

Sony has bought  Mubadala Investment Company’s 60% stake in EMI to take its total share of the company up to 90%.

White & Case advised Sony on the deal, with New York M&A partners Mort Pierce and Chang-Do Gong at the helm of a team that also included tax partner William Dantzler.

Weil meanwhile advised Mubadala, fielding a team led by Dallas M&A partner James Griffin and New York senior counsel William Gutowitz, which also included executive compensation & benefits partner Michael Nissan, banking and finance partner Daniel Dokos and capital markets partner Faiza Rahman.

Sony’s CEO said the deal was motivated by a desire to capitalise on the rise of paid subscription-based music streaming services.

Sony already owns hits from Michael Jackson, Ed Sheeran and The Beatles, but the EMI acquisition will expand Sony’s music catalogue to approximately 4.5 million songs.

EMI was split into two in 2011, with the recording unit sold to Universal Music, while the consortium including Sony and Mubadala bought the publishing business.

The deal generated roles for a host of firms, including legacy SJ Berwin, Clifford Chance, Baker McKenzie and Weil. Weil advised Mubadala, while other firms advising members of the consortium included Bakers, Allen & Overy and Cleary Gottlieb. Meanwhile CC advised Citigroup and EMI on both sales.

Linklaters secures Chinese law capability

Linklaters has become the first magic circle firm to secure Chinese law capability after receiving government approval for its joint operations in the Shanghai Free Trade Zone (FTZ).

The firm has secured a long-awaited official tie-up with best friend firm Zhao Sheng, a Shanghai-based boutique led by former Linklaters consultant Eric Liu, after approval was granted by the Shanghai Bureau of Justice.

In a statement, the magic circle firm said it would combine ”focused and high-quality PRC law capability with Linklaters’ longstanding international experience”.

Linklaters China head William Liu said: “Market shifts indicate that outbound work and high-end domestic transactions will become ever more important for our business. The joint operations will help us to protect our competitive advantage both in China and globally,”

The news marks the fifth time an international law firm has gained access to Chinese law via the four-year-old Shanghai FTZ scheme, which allows foreign and Chinese law firms to form joint offices and provide ‘one-stop shop’ legal services.

Linklaters follows Ashurst, Hogan Lovells, Holman Fenwick Willan and Baker McKenzie in launching similar operations.

The magic circle firm has been looking to gain Chinese law capability for several years, and entered into a best friend relationship with Zhao Sheng a year ago.

Linklaters had initially planned for a spin-off with a group of its lawyers launching a separate but affiliated Chinese firm. However, the regulations around joint operations require the Chinese firm to be in existence for three years or more, and so Linklaters then opted for Zhao Sheng and sent several of its own lawyers including Liu, senior lawyer Grace Yu and counsel Zhou Zhirong to be partners at the firm.

Linklaters managing partner Gideon Moore added: “Zhao Sheng shares Linklaters’ quality, culture and values – the aim to be best in class. We want to support our clients on both their inbound and outbound projects and the joint operations will provide the seamless Chinese and international advice required for this.”

William Liu was appointed as head of Linklaters’ China practice in January, succeeding Fang Jian, who left to join domestic firm Fangda Partners.

Major China roles for Linklaters in recent years have included advising on a $2bn (£1.5bn) debt issue last year that saw the Chinese Government sell dollar-denominated bonds for the first time since 2004. Liu led the firm’s team advising China’s Ministry of Finance.


Eversheds Sutherland PEP jumps 12% to break £800,000

Firm’s non-US business sees PEP rebound on year as revenue rises 13%

Eversheds Sutherland has posted double-digit increases in both revenue and profit per equity partner (PEP) for its non-US business during the 2017-18 financial year.

The firm has boosted its PEP by 12% from £726,000 to £812,000, reaching a record high. Last year, the firm’s net profit and profit per equity partner (PEP) both fell, by 4% and 2% respectively.

Jones Day London exits mount with Travers set to make rare lateral hire

Partner exits from the US firm’s City office rise to five this year

Jones Day real estate partner Alex Millar is set to leave the firm to join Travers Smith, Leaders-in-Law understands, in the latest exit from the US firm’s London arm.

DLA Piper confirms Dublin launch plan

DLA Piper is set to open an office in Dublin with the hire of corporate partner David Carthy from Irish firm William Fry.

The move, which has been in the works for at least 18 months, will see the firm launch a new base in the Irish capital that will initially focus on the financial services, technology and life sciences sectors.

Global co-CEO Simon Levine said: “We have been evaluating Dublin for some time and through consultation with our clients (a number of whom currently operate in Ireland or are looking to) and our partners, have decided now is the right time for DLA Piper to enter the Irish market.”

Carthy, who heads up William Fry’s foreign direct investment and life sciences and healthcare groups, has acted on major corporate deals including advising King Digital Entertainment on its $5.9bn acquisition by Activision Blizzard in 2016.

The office does not yet have a specific launch date, with Carthy set to work out his notice at William Fry.

A string of law firms have sought to create a presence in Ireland ahead of the UK’s exit from the European Union next year.

Simmons & Simmons opened for business in Dublin earlier this month after recruiting asset management and investment funds partners Niamh Ryan and Elaine Keane from Irish firm A&L Goodbody, while Pinsent Masons and US firm Covington & Burling have also launched in the city.

Levine added: “Dublin is an important legal market and a key global hub for the financial services and technology sectors, in addition to being well located to support our global tax practice, and will continue to be so, particularly in the context of Brexit, as we expect more institutions to have or develop a presence in the country.”

The news comes after DLA Piper recently lost more than 20 partners to McDermott Will & Emery, as well as the co-chair of the firm’s US private equity practice, Steven Napolitano, who is set to join Kirkland & Ellis alongside Chicago co-managing partner Brendan Head.

US lateral hires: Asda shows a payoff for Gibson Dunn’s competition push

A cursory exploration of the hiring strategies of American firms in 2017 leads straight to Kirkland or Latham. Yet The Lawyer’s Top 50 US firms in London report shows the brouhaha around David Higgins eclipses other, equally targeted talent acquisitions. And arguably one of the most significant hires in the last few years has been not in private equity or leveraged finance, but in competition: namely, Ali Nikpay.

Catrin Griffiths

Nikpay joined Gibson Dunn in 2013, having built his career at DG Comp and then the OFT. This week he was named as the lead competition partner for Asda, working aside Slaughter and May partners Sally Wokes, Victoria MacDuff and Nigel Boardman on the megadeal with Sainsbury’s. Linklaters was on the other side, with partners Nicole Kar and Simon Pritchard leading on competition.

As co-counsel mandates go, it’s a plum job. And a US firm displacing the mighty competition department at Slaughter and May, no less, has not gone unremarked by City competition partners. “They’ll be bloody livid,” speculates one, with just the tiniest shade of glee.  Despite the fact that Slaughters’ Bertrand Louveaux had advised Asda on the Competition Commission’s market investigation into the supply of groceries in the UK and on the OFT’s investigation into dairy products – including representing Asda before the Competition Appeals Tribunal – Gibson’s Nikpay nevertheless managed to get the call.

US firms’ cheerleaders in certain sections of the press will no doubt heap yet more doom upon magic circle firms, but Nikpay’s success in getting through Asda’s door is down to a combination of specific circumstances. First – and this is where the network effect is a structural advantage – Gibson has a significant client relationship with Walmart. Washington DC partner Adam Vincenzo was lead antitrust counsel on Walmart’s $3bn acquisition of internet retailer (cleared by the Federal Trade Commission in 2016) and on its 2017 acquisition of online retailer Bonobos. Nevertheless, what is more important is the specifics. As a deal precipitated by the threat of online retail, and in particular the faint rumble of Jeff Bezos’s tanks on the lawn, the competition elements of the Sainbury’s-Asda deal have attracted considerable notice from commentators.

Nikpay’s success on a superficially different but nevertheless related retail sector is significant here; namely, the 2016 merger between Gala Coral and Ladbrokes, a transaction that had been on and off the table for years. That deal, between the then-second and third largest bookmakers in the UK, was hugely dependent on regulatory approval, with Nikpay’s arguments that the deal should be analysed on a local not a national angle, and also through the lens of online competition, winning the day. Plaudits abounded. Several partners note Nikpay’s can-do attitude: “Ali is Mr Positive,” says one.

Nikpay’s background at the regulator – and his training as an economist – was a crucial selling point for Asda, and has been Gibson Dunn’s entry point into a number of UK corporates. “Antitrust undeniably raises political issues as well as technical issues,” says a City competition partner. “Ali has relationships and insights that the Slaughters team, brilliant though they are, don’t quite have in equal measure.”

It won’t be a one-off. What is more than ever at stake is understanding the regulator’s outlook in a landscape where digital has changed the game, and in a world where after March 2019 the CMA will have a considerably extended remit, including ruling on state aid.

Any hires from the regulator are all about getting insight into thinking; just look at the scramble for recruits from the enforcement agencies, the most recent being ex-DPP Alison Saunders to Linklaters. “The way the CMA and Commission look at markets doesn’t stand still,’ says one competition partner. ‘Some firms tend to go back to old cases to apply an existing methodology, but the CMA is constantly evolving its ideas.” The traffic between private practice and competition regulator is not high, but it has produced some quality catches, largely for magic circle firms: Nelson Jung at Clifford Chance, Simon Priddis at Freshfields and Linklaters’ Simon Pritchard, who is currently on for Sainsbury’s on the Asda deal. Nikpay aside, the only US firm hire of recent times was Jonathan Parker, who joined Latham as a partner after a stint as director of mergers at the CMA – prior to that he was a senior associate at A&O.

Private practitioners predict less traffic between private practice and the regulator in the near term, citing the internal restructure at the CMA that means that responsibilities are spread out between a larger number of team leaders, a move that is seen as partly defensive. “The CMA didn’t like one or two indiviudals having a huge amount of influence or being better known,” says one partner.

Still, now is the perfect time to join the regulator and make your name. The CMA has vacancies for a senior director in mergers and senior legal director in mergers, markets and sector regulation. The new technology team at the CMA, which will include the new post of chief data and technology insights officer, underlines the extent to which digital and online market disruption will dominate competition policy over the next few years. “It’ll be the most interesting time for them,” says one partner. “The big question is, are they going to have the cojones to take on someone like Google, going forward?”

But back to Sainsbury’s. Once Slaughters partners have recovered from their internal lament at missing the deal of the year, they will have some work to do to make sure no further ground is lost to the US. Once is unlucky, but twice would be a trend.

As GDPR looms, law firms do double duty on compliance

With just three weeks until the 25 May deadline, global firms are still grappling with the challenges presented by the new General Data Protection Regulation

For privacy and data security lawyers at global law firms, there’s never been a busier time.

BBC Broadcasting House

Pinsent Masons advises BBC over ‘Paradise Papers’ leaks

Pinsent Masons is advising the BBC as the broadcaster and the Guardian newspaper reach a settlement with offshore law firm Appleby over the ‘Paradise Papers’ data hack.

The litigation, which was settled Friday afternoon (4 May), comes after Appleby took legal action against both news outlets, citing breach of confidence following the data hack in May 2016.

In an agreed statement, the parties announced they had “resolved their differences”.

The statement continues: “Without compromising their journalistic integrity or ability to continue to do public interest journalism, the Guardian and the BBC have assisted Appleby by explaining which of the company’s documents may have been used to underpin their journalism. This will allow Appleby to initiate meaningful discussions with its clients, colleagues and regulators.”

The offshore firm had alleged that information leaked to German newspaper Sueddeutsche Zeitung (SZ) and subsequently passed on to the Guardian and BBC was “obtained unlawfully” in circumstances “likely to have amounted to the commission of a criminal offence or cyber-hack”.

Appleby said the leak coverered 6.8 million documents dating back to the 1950s, including loan agreements, financial statements, records of approaches from potential clients and records of legal advice, among other information.

The particulars of claim alleged that the Guardian and BBC should have known the information they had access to was confidential and subject to legal privilege, and that the publication of the documents did not meet the public interest test as “there was no ground to suspect that the confidential information disclosed illegal conduct” either by Appleby or its clients.

The offshore firm was seeking the delivery, destruction or deletion of the information, as well as financial damages covering the costs of dealing with “regulatory entities, clients, employees and agents”.

In their defence, both the BBC and the Guardian argued that there was a strong public interest in the publication of the information from the leak, while the BBC’s defence states that there were grounds for suspecting that the data contained evidence of unlawful activity by Appleby or its clients.

Both the BBC and the Guardian stated that they were unaware of the source that passed the leaked documents to SZ, and argued that they acquired the information lawfully.

A BBC spokesperson said: “We will continue to defend our journalism robustly.”

Pinsents technology, media and telecoms disputes partner David Barker acted for the BBC, with Catrin Evans QC of Matrix Chambers and Jonathan Scherbel-Ball of One Brick Court instructed as counsel.