Dentons is no longer talking to King & Wood Mallesons’ (KWM) European management about a potential deal to take over its distressed European and Middle East (EUME) business, with no single-firm takeovers left on the table.
Dentons was revealed as being interested in KWM EUME a fortnight ago.
A source close to Dentons said the international firm informed KWM last week that it was no longer considering acquiring a large portion of its distressed EUME business.
Other firms that have been interested in taking on all or parts of KWM Europe include Winston & Strawn, KWM’s own Asian arm, DLA Piper and Greenberg Traurig. However, all potential discussions about a single firm takeover have now ended. This means the struggling European partnership is likely to be sold in pieces to a number of interested firms.
All KWM London lawyers and staff were given an update by management earlier today about the future of the practice.
Last Friday (9 November), KWM EUME announced that it had received “a number” of purchase offers and that these are now under review.
It is understood the business is aiming to secure deals by the end of this week.
In the statement today, the firm said “We can confirm that the discussions launched on 9 December with a small number of interested parties continue. We are not able to comment further until those discussions have been concluded.”
Last week, sources at the firm said the EUME business is heading for a pre-pack administration, with negotiations already at an advanced stage.
Legal Week also revealed that KWM has updated its partnership deed to ensure that any tax losses are split fairly between current and former partners in the event of collapse.
The partnership is understood to have voted in the change earlier this month.
Issues for KWM’s Europe branch came to a head in late October, following the resignation of four high profile London partners including former managing partner Rob Day and UK funds head Michael Halford, who are joining Proskauer Rose and Goodwin Procter respectively.
The exits forced the firm to put its recapitalisation plans on hold to reassess its financial situation, prompting a revised proposal with an additional bailout from Asia, subject to European commitment. It is understood that the firm informed staff and associates at meetings last month that they would guarantee salaries until January.
KWM has declined to comment on specific firms involved in the process.
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