Category: Deals and Cases

DLA Piper’s Restructuring team has acted for Edinburgh businesswoman Ann Budge on her takeover of the Hearts of Midlothian football team.

The deal is expected to save the club from administration. The DLA Piper team advised Bidco, the special purpose vehicle set up for the acquisition.

Morisons (Scotland) acted for the administrators, Bryan Jackson and Trevor Birch of BDO. CMS acted for the Foundation of Hearts, the fan club which has been raising contributions from the supporters and is chaired by Ian Murray, MP.

The deal involved the acquisition of the 79% shareholding held by BUAB Ukio Banko Investicine Grupe (in Lithuanian bankruptcy proceedings), as well as the release of security held over Tynecastle Stadium held by BAB Ukio Bankas (also in Lithuanian bankruptcy proceedings).

DLA Piper also negotiated a funding and loan participation arrangement with the Foundation of Hearts, which, subject to satisfaction of various conditions, will enable the Foundation to become the majority shareholder of the football club in 5 years’ time. In the meantime, the Foundation is required to provide working capital to the football club to enable it to keep trading and discharge the loan put in place by Bidco to the football club.

The acquisition of the 79% shareholding by Bidco from UBIG means that Bidco is obliged to make a mandatory cash offer for the remaining Hearts shares not already owned by Bidco pursuant to Rule 9 of the Code.

The club’s appointed administrators from BDO will remain in office for the purpose of fulfilling the obligations of the board of the football club for the purposes of the Code. It is anticipated that the BDO administrators will remain in office until 19 June and then vacate office meaning that the football club will emerge successfully from administration, thus completing the rescue.

The board of the football club has been completely changed and arrangements are in place between the Bidco, Ann Budge, and the BDO administrators for the on-going management of the business pending the exit from office of the BDO administrators.

Ann Budge commented: “I have been involved in a number of corporate transactions over the years but never would I have believed any single transaction could be so complex. I cannot thank the teams of advisors enough for their perseverance, their commitment and their support in helping us get this deal over the line. “

Richard Obank stated: “We’re delighted to have played a role in rescuing Hearts. This has been a hugely complex transaction requiring the co-operation and commitment of all the legal and financial advisers. At times, it really looked like it was an impossible dream to pull off. There have been a number of novel issues to contend with around the takeover code and it is a credit to everyone involved that a deal has been done. We wish Ann Budge every success with the club and look forward very much to working with her over the coming months.”

The DLA Piper team was led by Partners Graeme Henry and Richard Obank, and also included John Gallon, Victoria Rhodes, Charlotte Sharples, Faith James, Gillian Buchanan, David Morton, Edwin Truesdale, and Emma Peverill.

Deloitte acted as CF adviser to Bidco. BDO acted as CF adviser to the administrators.

Weil has announced that New York Partners Daniel Dokos and Douglas Urquhart have led a team advising J.P. Morgan, Bank of America Merrill Lynch, and Morgan Stanley, as joint lead arrangers, in the financing for the combination of the coffee business of Mondelez International and D.E Master Blenders (announced by CEE Legal Matters on May 14).

Dokos heads Weil’s Global Finance practice, and Douglas Urquhart heads the firm’s US Banking & Finance practice. Other Weil lawyers working on the deal included Banking & Finance Partners Danek Freeman, Stephen Lucas, and Chris McLaughlin; Private Equity Partner Simon Lyell; Antitrust/Competition Partner Douglas Nave; Tax Partner Larry Gelbfish; Technology & IP Transactions Partner Jeffrey Osterman; Banking & Finance Counsel Roshelle Nagar; Executive Compensation Counsel Jeffrey Lieberman; Banking & Finance Associates Heather Viets, Kristopher Villarreal, Peter Puk, Young Lee, Justin D. Lee, Mei Dan, Patrick Brendon, Amy Kennedy, and Evgeny Zborovsky; Private Equity Associate Lewis Blakey; Tax Associate Andrew Pelzer; and Trainees Charles Osborne and Nathalie West.

Karanovic & Nikolic has advised Mid Europa Partners, a leading European private equity firm, on the sale of SBB/Telemach Group to Kohlberg Kravis Roberts & Co (KKR), a leading global investment firm.

The transaction was first announced on October 15, 2013, and regulatory approvals have only recently been completed. Though financial terms were not disclosed, Mid Europa described the transaction as representing the “largest private equity exit in the former Yugoslavia.”

The SBB/Telemach Group is the leading Pay-TV (cable, DTH) and broadband operator in South-East Europe, with a population of over 20 million in SBB/Telemach Group’s current operating perimeter. The SBB/Telemach Group operates in Serbia, Slovenia, Bosnia, Croatia, Montenegro, and Macedonia and has around 1.7 million cable and satellite TV, broadband, fixed, and mobile customers. Mid Europa Partners acquired SBB in 2007, in a transaction that Karanovic & Nikolic also advised on.

Robert Knorr, a Senior Partner of Mid Europa, commented that “We acquired SBB, the leading Serbian pay TV provider in 2007 and through extensive investment in organic growth and 18 add-on acquisitions, transformed a national champion into a pan-regional leader serving 1.8 million RGUs across six countries. This transaction validates our long held conviction that this region offers excellent growth opportunities, and our ability to create value by building regional champions.”

KKR’s Co-Founder and Co-CEO Henry Kravis was equally enthusiastic, saying: “This is our first direct investment in Southern Eastern Europe. It adds to our investments in more than 40 European companies across 12 countries and it is a sign of our confidence in the prospects of SBB/Telemach Group.”

Karanovic & Nikolic’s legal team was headed by Partner Rastko Petakovic.

Skadden has announced that it is representing the JAB Holding Company Group – the controlling shareholder of D.E Master Blenders 1753 – as it combines its coffee business with that of Mondelez International.

In 2013, Mondelez International’s wholly owned coffee business generated approximately EUR 2.9 billion in revenue, and D.E Master Blenders 1753 generated approximately EUR 2.5 billion in revenue. The two companies own some of the world’s leading coffee brands, such as Jacobs, Carte Noire, Gevalia, Kenco, Tassimo and Millicano from Mondelez International and Douwe Egberts, L’OR, Pilao and Senseo from D.E Master Blenders 1753.

The new company, to be called Jacobs Douwe Egberts (JDE), will be based in the Netherlands, with an executive leadership team consisting of executives from both companies. The transaction, along with several related and secondary transactions, is expected to be completed in 2015, subject to regulatory approvals and the completion of employee information and consultation requirements.

Upon completion of all proposed transactions, Mondelez International will receive cash of approximately USD 5 billion and a 49 percent equity interest in Jacobs Douwe Egberts, along with certain minority rights. AHBV – a company owned by an investor group led by JAB Holding Company – will hold a majority share in the proposed combined company and will have a majority of the seats on the Board, which will be chaired by current D.E Master Blenders 1753 Chairman Bart Becht. 

“We’re delighted with this transaction and the substantial value we expect to create for our shareholders,” said Irene Rosenfeld, Chairman and CEO of Mondelez International.  “By retaining a significant stake in the combined company, we’ll continue to benefit from the future growth of the coffee category and share in the synergies and tremendous upside of this leading, one-of-a-kind coffee company.”

Just a day after Debevoise & Plimpton announced that it advised funds managed by Clayton Dubilier & Rice on the acquisition of the Mauser Group from Dubai Investment Capital, Clifford Chance has announced that it was involved as well.

The large Clifford Chance team advising CD&R was led by Partner Oliver Felsenstein, who was assisted by Partners Felix Muhlhauser, Bernd Meyer-Witting, Nicole Engesser Means, David Elshorst, Claudia Milbrandt, and Marc Besen, Counsel Leif Schrader Wolfgang Schonig and Marie-Theres Ramer, Senior Associates Jan Wittrodt, Priscilla Ries, Amrei Fuder, and Achim Gronemeyer, and Associates Laurent Muller and Radmila Petrovic.

Debevoise & Plimpton is advising Clayton, Dubilier & Rice on the financing aspects of an agreement under which CD&R-managed funds will acquire Mauser Group from Dubai International Capital (DIC), the private equity arm of Dubai Holding.

Latham & Watkins provided DIC with legal counsel. Mauser is one of the world’s leading industrial packaging companies, with approximately 4,400 employees and consolidated revenues of over USD 1.6 billion. Mauser now operates out of 83 facilities across 18 countries, up from 53 facilities in 12 countries in 2007, and profit margins are reported to have steadily increased in that time as well. The transaction, which is expected to close in the third quarter of 2014, is valued at approximately EUR 1.2 billion. 

Since its inception in 1978, the CD&R private equity firm has managed the investment of USD 19 billion in 59 U.S. and European businesses with an aggregate transaction value of approximately USD 90 billion. 

The sale and purchase agreement is conditional upon receipt of all appropriate anti-trust approvals.

David Smoot, Chief Executive Officer of Dubai International Capital, commented: “Mauser has been a very successful investment for DIC, providing a return of approximately double our equity invested. We partnered with a strong management to improve the Group from both a strategic and financial perspective, and now is the right time for it to continue its development under new ownership. Mauser is well positioned to drive further growth and profitability given its attractive global platform.”

The Debevoise team advising CD&R is led by Partner Jeffrey Ross and includes Partners David Brittenham, Alan Davies, and Matthew Saronson, International Counsel Cecile Beurrier and Philipp Von Holst, and Associates Thomas Dobleman, Ramya Tiller, Ryan Rafferty, Klaudius Marius Heda, Thomas Smith, and Patrick Fasoro. Bank of America Merrill Lynch acted as exclusive financial advisor to DIC.  

Bird & Bird is advising Lexmark International Technology on its recommended cash offer to the shareholders of the Swedish ReadSoft company.

Lexmark’s total offer value for all shares in ReadSoft amounts to approximately SEK 1.2 billion (approximately EUR 133 million).

Lexmark is a wholly-owned subsidiary of Lexmark International. In 2013, Lexmark had sales over USD 3.6 billion, did business in over 170 countries and employed approximately 12,000 people world-wide.

ReadSoft offers applications for automated business processes such as accounts receivable, sales order processing, and multichannel mailroom automation. ReadSoft’s solution for invoice processing automation integrates seamlessly e.g. with ERP systems from SAP and Oracle. Today ReadSoft is an international group with subsidiaries in 17 countries. The ReadSoft B-share is traded on NASDAQ OMX Stockholm.

The Bird & Bird team advising Lexmark is led by Partner Hans Svensson and Senior Associate Caroline Grotenfelt in Stockholm, with assistance from Partners Jorgen Ekstrom, Gabriel Lidman, Mahmut Baran, Fabian Niemann, Anne Federle, Stefan Munch, and Polish Partner Maciej Gawronski, and Associates Johanna Elvaner Juhlin, Anna Gustaffson, Johan Bohm, Magnus Berterud, Nina Strandnas, Daniel Thorbjornsson, Ida Smed Sorensen, Tim Bostrom, and Johanna Stampe. 

Allen & Overy has announced today that it is advising Eni on the sale to MOL first reported by CEE Legal Matters on May 8.

As reported in that earlier story, Eni is selling the company’s stake in the Czech Republic’s sole refinery, Ceska rafinerska, to the Hungarian oil and gas group, as well as on the sale of Eni’s wholly owned downstream oil affiliates (eni Ceska Republika, eni Slovensko, and eni Romania) operating over 200 Agip branded petrol stations in the Czech Republic, Slovakia, and Romania.

The sale of Eni’s 32.44% stake in Ceska rafinerska is subject to the right of first refusal of Unipetrol (controlled by PKN Orlen), the other shareholder in Ceska rafinerska.

Prague-based Managing Partner for Central Europe Jane Townsend led the Allen & Overy team, assisted by Senior Associate Magda Pokorna. Specialist employment advice has been provided by Associate Ondrej Kramolis. Senior Associate Vojtech Palinkas advised on the Slovak aspects of the transactions, while RTPR Allen & Overy Managing Partner Costin Taracila (with support from Senior Associate Anca Rusu) advised on the Romanian aspects of the disposals.

The Allen & Overy team worked closely throughout the transaction with the Eni legal team led by Alessandro Benedetti, manager of International Refining & Marketing Business Legal Assistance. Domenico Durante, Eni’s Senior Vice President for Antitrust and Regulatory Legal Assistance, advised on the competition law aspects of the transactions.

The transactions remain subject to merger clearance in a number of jurisdictions.  

Linklaters announced that it has advised the Funke Media Group on the sale of select magazine titles to the Klambt Media Group — a sale required by the German Federal Cartel Office to ensure approval of combination between Funke and Axel Springer, initially reported by CEE Legal Matters on May 7, 2014.

The portfolio of TV guides sold off includes, among others, Funke Media Group’s own TV guides, as well as the Bildwoche, Funk Uhr and TV NEU TV guides, which it had previously acquired from Axel Springer. It remains now only with respect to the establishment of joint ventures for the advertising marketing and distribution of print and online offers agreed by Funke and Springer that the antitrust merger clearance still remains to be granted.

The Linklaters team was led by Nikolaos Paschos and Christoph van Lier, with assistance by Achim Kirchfeld, Eva Reudelhuber, Sebastian Benz, Daniel Pauly, Tim Mundhenke, Judit Kormoczi, Przemyslaw Lipin, Nadine Annette Geppert, Hubertus Witte, Eva Kotthaus, Fabian Rosner, Julian Bohmer, Marco Huchzermeier, and Alexander Ofiarkiewicz.

Linklaters has announced that it advised PZU on the insurance company’s acquisitions of four insurance companies in Poland and the Baltics, reported by CEE Legal Matters on April 18, 2014.

PZU, which Linklaters describes as “CEE’s largest insurance company”, acquired Link4 in Poland, Lietuvos Draudimas in Lithuania, AAS Balta in Latvia, and Codan Forsikring in Estonia, all from the the British RSA insurance group. As a result of the acquisition, PZU will become the largest insurer in the Baltic region. Closing of the transaction is subject to regulatory approvals.

A team of lawyers from Linklaters in Warsaw and London advised PZU on all legal, regulatory, and tax aspects of the transaction and co-ordinated the input of local counsel Sorainen.

The team was led by Partner Daniel Cousens and Managing Associate Marcin Schulz in Warsaw.