Thursday, 11 April 2019

Deal watch: Linklaters lands roles on Debenhams administration and Carlyle oil deal

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Deal watch: Linklaters lands roles on Debenhams administration and Carlyle oil deal

Linklaters has secured a role in the pre-pack administration of Debenhams, in which the struggling department store has been taken over by its lenders.

Meanwhile, Hogan Lovells and Shoosmiths have acted on M Restaurants’ merger with Gaucho, which was brought out of administration in a rescue deal last September, as multiple firms landed roles in The Carlyle Group’s agreement to buy a minority stake in a Madrid-based oil and gas company in a multibillion-dollar deal.

Debenhams said on 9 April that administrators had been appointed to the company. A pre-pack deal will see its 165 stores continue to trade for now – although with 50 already earmarked for closure – after being sold to a new company owned by Debenhams’ lenders. A last-ditch £200m offer from Mike Ashley’s Sports Direct was rejected.

Linklaters is advising the administrators, FTI Consulting, led by restructuring and insolvency partner James Douglas. Freshfields Bruckhaus Deringer restructuring partner Ken Baird has been advising Debenhams during the restructuring, with Allen & Overy (A&O) partners Ian Field and Trevor Borthwick leading a team acting for the lenders. Kirkland & Ellis partners Kon Asimacopoulos, Sean Lacey and Partha Kar are advising the bondholders, while a Baker McKenzie team led by partners Geoff O’Dea and Bevis Metcalfe is advising the security trustees.

Debenhams’ administration is the latest in a raft on the high street, including House of Fraser, LK Bennett and Patisserie Valerie. Elsewhere, Hogan Lovells and Shoosmiths have led on a merger between another company not long rescued from administration, Gaucho Group, with M Restaurants for an undisclosed sum. The deal involved the sale of shares for more than 60 M Restaurants shareholders.

Hogan Lovells acted for Lomo Bidco, which acquired Gaucho in October 2018 and saw the Argentinian restaurant group exit administration, in a team led by corporate and M&A partner Richard Diffenthal and finance partner Debbie Gregory. The firm previously acted for the shareholders of Gaucho when it acquired the restaurant chain in the administration.

Shoosmiths, meanwhile, advised longstanding client M Restaurants in a team led by corporate head Stephen Porter and partner David Harrison. The firm has acted for the restaurant group and its founder, Martin Williams, since he first left Gaucho in 2014 to form M. Williams takes over as chief executive of the new parent company, which will share a head office but otherwise operate separately.

Harrison told Legal Business the client had reached a point in its development where there was a compelling opportunity to merge with Gaucho. ‘It’s no secret that it’s not the easiest of times in the restaurant market,’ he said. ‘There is potentially room for more consolidators; it will be interesting to see what happens off the back of this transaction.’

Finally, a number of firms have acted on private equity firm Carlyle’s acquisition of a minority stake in Spanish oil and gas company Compañía Española de Petróleos (Cepsa) from Abu Dhabi wealth fund Mubadala Investment. The financial details of the deal were not disclosed, but is reportedly worth at least $3.6bn.

A Linklaters team led by corporate partners Owen Clay and Alejandro Ortiz advised Carlyle, alongside projects partner Mark Russell and corporate partner Stuart Bedford. Clay commented: ‘We have seen an increase in M&A activity by private equity firms in the energy sector as the oil price recovers coupled with attractive asset valuations. This deal is a great example of that and we could see similar transactions over the coming year.’

Ropes & Gray advised Carlyle on compliance, in a team led by partners Amanda Raad and Ryan Rohlfsen, while Latham & Watkins advised on antitrust and foreign investment control aspects, led by partners Luca Crocco and Marc Williamson.

The transaction is subject to regulatory approvals and is expected to close by the end of this year.

Hamish.mcnicol@legalbusiness.co.uk