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Dentons has advised Bank Pekao SA on financing the acquisition of the 5-star Sheraton Warsaw Hotel by a Benson Elliot, Walton Street Capital, and Algonquin joint venture — part of an eight-piece European hotel portfolio purchased by the joint venture — from Host Hotels & Resorts.  DZP — in cooperation with Paul Hastings — advised Benson Elliot and Walton Street Capital on the EUR 420 million pan-European hotel portfolio acquisition. The cross-border transaction closed on October 28, 2015.

Algonquin reportedly acquired a 5% stake in the hotel portfolio — which reportedly spans 5 countries — with Benson Elliot and Walton Street equally dividing the remaining 95%. The eight hotels are: 

• The Westin Europa and Regina, Venice
• The Pullman, Paris Bercy
• The Westin Palace, Milan
• The Sheraton, Rome
• The Sheraton, Warsaw
• Le Meridien Grand Hotel, Nuremberg
• The Marriot Executive Apartments, Brussels
• Renaissance Hotel, Brussels

Trish Barrigan, Benson Elliot Senior Partner, said that: “This is a significant transaction for Benson Elliot, concluded with trusted partners like Algonquin, who we worked closely with on our Novotel Edinburgh Park investment.  The portfolio is of exceptionally high quality, with opportunities to grow income and value in a sector attracting increasing attention from investors.”          

Robert Bloom, the Senior Principal at Walton Street, said: “This Portfolio represents a high-quality collection of full-service branded assets that is being acquired at both an attractive yield and significant discount to replacement cost?, at what we believe is an opportunistic point in the investment cycle. We are excited about this transaction and look forward to working with our JV partners, Benson Elliot and Algonquin, to maximize value.”              

And Jean-Philippe Chomette, CEO at Algonquin, said: “We are very pleased to be associated in this acquisition with two major international investment partners, such as Benson Elliot and Walton Street. The inherent quality of each asset in this portfolio, their prime locations and the first class operators of these hotels will help us further optimise their value through material refurbishment programs and enhanced operational efficiencies.”

The Dentons team advising Bank Pekao — which financed only the part of the acquisition related to the Sheraton Warsaw Hotel — was supervised by Partner Mateusz Toczyski. Other lawyers on the team included Senior Associate Jakub Wieczorek, Associate Justyna Jamrozy, and Junior Associate Monika Kowara, as well as other Dentons lawyers in London and Prague.

Editorial Note: After this article was published, DZP confirmed that it had advised the Benson Elliot Capital Management and Walton Street Capital private equity funds and the Algonquin hotel group on obtaining financing from Bank Pekao SA to acquire the Sheraton hotel in Warsaw. The firm’s team included Partner Magdalena Skowronska and Associates Paulina Armada-Rudnik and Anna Czerwinska. 

Similarly, the WKB law firm announced that it was local Polish counsel to Benson Elliot on the acquisition, acting alongside Paul Hastings as global counsel. The WKB team consisted of International Partner Ben Davey, Partner Jakub Jedrzejak, and Associate Adrian Michalak. 

WKB also announced that the sellers, Host Hotels & Resorts, were advised globally by Freshfields Bruckhaus Deringer and by the Warsaw office of K&L Gates on Polish matters.

Image Source: marekusz / Shutterstock.com

BPV Jadi Nemeth has successfully represented ALD Automotive Hungary and K&H Autopark Kft (a subsidiary of the KBC Group) in securing merger clearance from the Hungarian Competition Authority for ALD’s acquisition of K&H’s fleet management and motor vehicle operative leasing portfolio.

The Competition Authority unconditionally approved the proposed transaction in what bpv Jadi Nemeth describes as “record time,” finding that the merger does not significantly lessen competition in the relevant market. The clearance decision will be published by the Competition Authority as a leading case in order to provide clarity for future customer portfolio acquisitions on the rules prohibiting early implementation (so called gun jumping), introduced only recently into Hungarian merger control. 

ALD Automotive — which is owned by the Societe Generale Group — is a global player in the full operational leasing and fleet management industry. Its reputation and expertise rank it amongst the top vehicle leasing operators in Europe and around the world. The company has been present in Hungary since 2004.

The bpv Jadi Nemeth team consisted of Partners Marton Horanyi and Andrea Jadi Nemeth, and Junior Associate Aniko Nagy. 

Norton Rose Fulbright has advised the banks providing a PLN 1.59 billion (approximately EUR 373 million) bank credit facility financing for Ciech S.A. to refinance its existing debt, consisting of high yield bonds (with a value of EUR 245 million) and revolving credit facilities and financing of working capital needs. Ciech was advised by Weil.

Ciech is one of the largest firms in the chemical sector in Europe.

Norton Rose Fulbright advised Bank Handlowy w Warszawie S.A., Bank Millennium S.A., Bank Zachodni WBK S.A., Credit Agricole Bank Polska S.A., HSBC Bank Polska S.A., Industrial and Commercial Bank of China (Europe) S.A., (Spolka Akcyjna) Oddzial w Polsce, and Powszechna Kasa Oszczednosci Bank Polski S.A., as mandated lead arrangers, Bank Handlowy w Warszawie S.A. as facility agent, and Powszechna Kasa Oszczednosci Bank Polski S.A. as security agent.

Warsaw-based Partner Grzegorz Dyczkowski led the Norton Rose Fulbright team on the transaction, assisted by London-based Partner James Dunnett, Warsaw-based Senior Associates Tomasz Rogalski and Associates Maksymilian Jarzabek and Konrad Leszko, and London-based Senior Associate Alexandra Schaafsma.

The Weil team consisted of Partners Pawel Rymarz and Artur Zawadowski, and Associates Marcin Iwaniszyn, Jerzy Bombczynski, Maciej Czekanski, Jerzy Rostworowski, and Barbara Skardzinska.

The Supreme Court upheld a decision of the Cartel Court against SPAR, a leading company in the Austrian food retail sector, concerning collusion on resale prices (Resale Price Maintenance; RPM) with suppliers of dairy products. At the same time, the court increased the fine imposed by the Cartel Court tenfold, i.e. from EUR 3 million to EUR 30 million.

1 Case Background

The Cartel Court had fined SPAR, one of the major players in the Austrian food retail sector, EUR 3 million for vertical and horizontal collusion on resale prices with various suppliers between July 2002 and March 2012. The proceedings were limited to dairy products, while proceedings for other product categories are still pending in first instance. As established by the Cartel Court, SPAR had developed a general strategy that, whenever a supplier requested an increase of the purchase price, the retail margin must remain constant, not only with regard to SPAR sales but in the entire industry. Thus, increases of the purchase price were to be passed on to the end consumers. To this end, the relevant suppliers were required to inform SPAR’s competitors about the agreed resale price by means of a ‘price recommendation’, and they were induced to implement this price level. The Cartel Court held that such practices are in breach of Article 101 AEUV as well as Section 1 of the Austrian Competition Act, because they limit not only suppliers but also other competitors at the retail level in their price-setting autonomy.

2 The Court’s judgment

The Supreme Court upheld the Cartel Court’s judgment on appeal and increased the fine imposed tenfold to EUR 30 million. The court justified the need to increase the fine pointing to the insufficient deterrent effect of the fine imposed by the Cartel Court in the light of the high turnover achieved by SPAR group and the (presumed) potential benefits resulting from the infringement. All in all, the Supreme Court considered a fine amounting to 0.35 percent of the global turnover of SPAR to be proportionate.

As regards setting of fines in general, the Supreme Court held that 10% of the group turnover achieved during the last business year constitutes not only a cap but the basis for the calculation of the fine. In this respect, the court followed the recent judgment of the German Federal Supreme Court in the case Grauzement and explicitly deviated from the Fining Guidelines of the European Commission.

With respect to the argued ‘novelty’ of the infringement, the Supreme Court highlighted that the practices in question do not constitute a new type of competition law infringement but qualify as a vertical price fixing agreement reinforced at the retail level. The ‘obligation’ imposed upon the suppliers to promote a particular price level with competing retailers was considered to add to the gravity of the infringement, similar to a hub-and-spoke cartelization. According to the Supreme Court, there is no need for a direct agreement between retailers to take the additional adverse effect of such behaviour on competition into account.

3 Conclusion and practical implications

Having the actual facts of the case in mind, as established by the Cartel Court, it is not surprising that the Supreme Court confirmed the existence of an infringement. The much discussed question whether ‘pure’ resale price maintenance, without additional horizontal elements, inevitably qualifies as a ‘restraint by object’ was unfortunately not answered in the judgment.

From an overall perspective, the decision sets a milestone due to the statement that the 10 percent upper limit for fines sets the range for their calculation. This means that the fine calculation is primarily based on the overall turnover of the undertaking involved and not on the turnover that has been affected by the infringement. As a result, the size of the undertaking – meaning the entire group to which the respective defendant belongs – becomes more relevant than its actual participation in and the scope of the infringement. In practical terms this approach may effectively discriminate large groups of companies with business activities in several business areas vis-à-vis more specialized undertakings if the infringement relates to just one product area. Consequently, large groups may in the future expect substantially higher (and maybe even disproportionate) fines.

In our opinion, this appears somewhat unjustified, considering that the objective of the 10 percent upper limit (which is modelled on Article 23 of EU-Regulation 1/2003) is to ensure that the fine does not exceed the financial capacity of the undertaking concerned, rather than deterrence. In that respect, the Supreme Courts approach is in conflict with the intention of the Austrian legislator to adapt the Austrian Cartel Act to European competition rules. Currently, the Ministries of Justice and Economics prepare amendments to the Austrian Cartel Act, both with a view to implement the EU Damages Directive as well as to strengthen the Federal Competition Authority, not least in abuse cases. It remains to be seen whether the legislator uses this occasion to remedy possibly unwanted consequences of the SPAR decision.

By Franz Urlesberger, Partner, Schoenherr

CMS has advised on the initial public offering of the Wittchen luxury accessory and leather goods retailer and the introduction of its shares to trading on the Warsaw Stock Exchange.

The value of the IPO totalled more than PLN 55 million (approximately EUR 12.9 million), of which PLN 27.2 million (approximately EUR 6.4 million) was obtained through the issue of new shares for the realization of strategic objectives. 

Wittchen’s shares were listed on the Warsaw Stock Exchange on November 9, 2015. The final IPO price for the company’s securities was set at PLN 17. The offer – addressed to individual and institutional investors – includes 3.25 million shares, of which 1.6 million come from a new issue, and 1.65 million from existing shareholders. 250,000 newly issued securities are provided for individual investors. According to Wittchen, the funds raised under the IPO will be used to further develop the sales network (including Internet sales to new foreign markets), the development of a logistics center, and as working capital.

“Recent months have shown that, despite a number of market challenges, good companies can still successfully view the stock market as a way to raise capital for planned investments,”  said Rafal Wozniak, Of Counsel in the CMS Capital Markets Team. “Although we have recently witnessed several suspended or cancelled offers, in the case of today’s debut, we can speak of significant interest from investors. There is much strength in a well-known brand with 25 years of history on the Polish market, which translates into investor confidence.”

According to Michal Pawlowski, Managing Partner of the CMS Capital Markets Team, “Investors’ interest was already evident during the book-building process and allowed the issue price to be established at the expected level. The Wittchen IPO is another example of a successful transaction on which we have recently advised. It’s a well-managed company with high growth potential, which is appreciated by investors.”

The Wittchen IPO was prepared by a CMS team composed of Pawlowski, Wozniak, Of Counsel, and lawyers Magdalena Trzepizur, Rafal Kluziak, and Dawid Koruba.

Image Source: wittchen.com

Brandl & Talos has advised Sportradar — a provider of sports data technologies and services — and primary Sportradar shareholder Carsten Koerl on the acquisition of financing from, among others, Revolution Growth (co-founded by Ted Leonsis, the owner of the NHL’s Washington Capitals and NBA’s Washington Wizards), former NBA star Michael Jordan, and Mark Cuban (the owner of the NBA’s Dallas Mavericks).

Sportradar shareholder EQT VI was advised by Freshfields Bruckhaus Deringer. Revolution Growth was advised by Latham & Watkins and Switzerland’s Homburger law firm. Sportradar also entered into a strategic partnership with Revolution Growth, and has established a new advisory council, which will included Leonsis, Jordan, and Cuban.

Sportradar entered the US market in 2013, and — according to Brandl & Talos — “established itself as the fastest-growing sports data provider in North America and, inter alia, has entered into exclusive partnerships with NFL, NASCAR and NHL. The company will use the newly formed US advisory council and the capital acquired within the financing round to further strengthen its position in the US sports market.

The Brandl & Talos team, led by Partners Thomas Talos and Roman Rericha, advised Sportradar and its main shareholder Carsten Koerl as transactional counsel with regard to the relevant financing round. Other team members included Associates Sabine Schmidt and Katharina Mihalovic, and Bernhard Sturma.

“We are very happy to have supported Sportradar in this transaction as we did when EQT VI came on board,” said Rericha. “The transaction once again underlines our expertise in connection with the implementation of complex international M&A transactions. We are convinced that Sportradar will succeed in further expanding its market position thanks to this strategic cooperation.”

Musat & Associates has obtained the initiation of insolvency procedures of Asesoft International — one of the leading IT companies in Romania with a revenue over RON 100 million — in order to recover a debt owed to the firm’s client, Transas Marine International.

Within a litigation first filed in August 2014, Musat & Asociatii has represented Transas Marine International, a Swedish company specialized in the distribution and set-up of high-tech equipment, software applications, and integrated solutions and services dedicated to the maritime industry. 

The Musat & Associates team was led by Partner Mihai Popa and included three other lawyers from the firm. 

This article was referred by our friends at LegalMarketing.ro. You can find the original full article here (Romanian).

The Esin Attorney Partnership (EAP) — the Turkish member firm of Baker & McKenzie International — has advised Vaillant Saunier Duval Iberica in its squeeze-out of the remaining shareholders of Turk Demir Dokum Fabrikalari.

According to EAP, this constitutes one of Turkey’s first squeeze-outs following the Turkish Capital Market Board’s (CMB) new regulations, which entered into force on July 1, 2014 — and which saw the squeeze-out and sell-procedures revised four months later in November 2014. The Vaillant deal was ongoing throughout that process.

“We have been in touch with the CMB since the beginning of this initiative which dates back to 2012 and had opined on the CMB’s draft squeeze-out regulation several times to make it a fair arrangement from the perspective of both the majority shareholder and the minorities,” said Partner Muhsin Keskin. “This has been a particularly challenging process. Our client was the first to officially launch its squeeze-out process. After the changes by the CMB only four months after the application, we had to start from scratch. We predict that squeeze out will soon become an ordinary part of M&A transactions concerning public companies in Turkey, just as mandatory tender offers have.”

The firm advised Vaillant in relation to the sell-out process of the minority shareholders in Turk Demir Dokum Fabrikalari, and subsequently, the squeeze-out of the remaining shareholders. The deal was launched on July 2, 2014, one day after the new rules entered into force and restarted in November 2014 after the regulatory changes. The deal was completed in September 2015.

The Esin Attorney Partnership team was led by Partner Muhsin Keskin, supported by Associates Caner Elmas, Berk Cin, and Deniz Erden.

Poland’s Gessel law firm has represented the owners of Apteki Gemini in the acquisition of an unspecified percentage of shares by Warburg Pincus, a leading global private equity firm. Gessel did not reply to inquiries about the size and value of the transaction.

The Gemini Group consists of 31 pharmacy stores operating mainly in the northern part of Poland, and it is the biggest Polish online pharmacy business. The new partnership will support Gemini in its plan to expand its operations across the country.

The Gessel team was led by Partner Marcin Macieszczak and Managing Associate Maciej Kozuchowski.

Editorial Note: After this article was published Weil, Gotshal & Manges informed us that it had advised Warburg Pincus on the acquisition.

CMS has advised Allianz Real Estate Germany and various investors within the Allianz Group on their acquisition of the “Haus an der Wien” property in Vienna from two companies belonging to the SIGNA Group. The SIGNA Group was advised by Austria’s Benn-Ibler law firm.

The purchase price was around EUR 94 million. The transaction was structured as a share deal, representing Allianz’s first investment in a property company in the Austrian capital.   

The “Haus an der Wien” was constructed in the 1960s at a historical location in the center of Vienna and was initially home to a municipal savings bank. The building was fully refurbished to new-build standards in 2012 and awarded LEED Platinum status along with an EU Green Building certificate. It provides around 14,300 square meters of rental space. Major tenants include Der Standard — the newspaper publishing company — and media service provider GroupM, Austrian tourism association Oesterreich Werbung, and BNP Paribas.  

Allianz Real Estate Germany is responsible for real estate investment and asset management by the Allianz companies in Germany, Austria, Eastern Europe, and Scandinavia, and manages a real estate portfolio with a market value of around five billion euros. It is a subsidiary of Allianz Real Estate, which forms the strategic umbrella for Allianz’s worldwide real estate investments. 

The Viennese CMS team, led by Partner Johannes Hysek, was responsible for due diligence and parts of the transaction involving Austrian law. Hysek was supported by Partners Sibylle Novak and Clemens Grossmayer and Associates Martin Schweinberger and Marlene Wimmer.

The CMS Hasche Sigle team in Germany was led by Partners Volker Zerr and Counsel Simon Marschke, and included Partners Maximilian Grub and Christian Friedrich Haellmigk, Senior Associate Sabina Krispenz, and Counsel Frank Puttgen.

The team was directed by Allianz Real Estate Germany Head of legal Markus Trotter-Melitz.

Editorial Note: After this story was published Benn-Ibler Partner Stefan Eder contacted us to report that he had led his firm’s team in the matter, supported by Attorney Oliver Thurin.

Image Source: lexan / Shutterstock.com