The recent sale of Whitbread’s beer company business to Interbrew for £400m seems to have hammered the final nail in Clifford Chance’s coffin as preferred corporate adviser to the pub giant, which instructed Slaughter and May on the deal instead.
The breakdown in the relationship began last July after Clifford Chance was associated with Whitbread’s decision to publicise details about an informal interview with the Office of Fair Trading (OFT), saying the regulator would clear its proposed offer for Allied Domecq’s pubs business. A riled OFT retorted with its own statement saying that Whitbread’s bid had yet to be cleared by the OFT. Clifford Chance’s corporate partner Neil Harvey led the legal team, which included competition expert James Wheaton. Whitbread absolved Clifford Chance of any blame, but the company has not instructed the firm on any major corporate deals since. Some City lawyers believe Clifford Chance has become a scapegoat for Whitbread’s ultimate failure to secure Allied Domecq.
Last December, Whitbread instructed Allen & Overy (A&O) ahead of Clifford Chance on its £587m acquisition of Swallow Group. The deal was A&O’s first Whitbread instruction, although Legal Week understands that the work would have gone to Slaughter and May, but for the fact that it was already advising Swallow.
However, Slaughter and May has clearly emerged as Whitbread’s new main corporate adviser.
Confidence in new economy still high
The latest Private Equity Confidence Survey, published by Deloitte & Touche, has found that volatile market conditions have failed to dampen venture capital hunger for new economy investments. And private equity lawyers confirm that their workflow remains steady.
The survey reveals that 60% of the venture capitalists interviewed expect the proportion of their investments in new economy companies to increase in terms of value and volume in the next six months. One reason is that, due to stock market volatility, the IPO is becoming a less attractive way of funding.
The survey also reveals that the Government’s proposed change to double tax relief rules is causing venture capitalists to think twice before setting up their holding companies in the UK.
Two-thirds of those interviewed expect such changes to impact adversely on the UK’s attractiveness as a base for their operations.
Firms with pan-European operations, such as Clifford Chance, look well placed to pick up any new work derived from this movement.
On the other hand, the highly-rated private equity team at Ashurst Morris Crisp might be left wondering what could have been after the firm’s failed merger with US giant Latham & Watkins, which would have provided resources to fund its European expansion.
