Herbies dents Dentons' finance ambitions
It is back to the drawing board for Dentons following Herbert Smith's two-partner raid on its banking fortress
February 01, 2006 at 07:03 PM
3 minute read
Denton Wilde Sapte is in the unfortunate position of having been on the receiving end of one of the largest team moves in recent years. But it could be argued that the departure of the firm's technology, media and telecoms (TMT) team to DLA Piper Rudnick Gray Cary was less damaging than the decision just before Christmas of leveraged finance partners Chris Fanner and Ian Yeo to up sticks for Herbert Smith.
After all, Dentons' strategy is to focus on its core strengths – and finance is about as core as you can get for the firm.
There is no getting away from the fact that the duo's departure is a major blow to the firm, which has been slowly rebuilding its acquisition finance team since a string of departures from Wilde Sapte in the run-up to its merger with Denton Hall in 2000.
Interestingly, neither Fanner nor Yeo were homegrown. Fanner joined from Norton Rose in 1997 and was made head of department in 2002, while Yeo joined from Clifford Chance in 2003.
Fanner, the bigger name of the two, has an impressive client portfolio, including a long-term relation-ship with the Royal Bank of Scotland (RBS). RBS has handed Fanner a regular stream of deals, including two recent financings for equity house MidOcean Partners – the £113m public to private financing of LA Fitness health clubs in July last year and the £55m acquisition of the Bezier Group in September.
Fanner has also been behind some of the firm's big-ticket transactions, including advising new client Goldman Sachs on the £1.2bn acquisition of Paladin Resources by Talisman Energy in October last year.
However, much of Fanner's big-ticket work has arisen out of magic circle conflicts. Take his role advising ABN Amro on its £1.75bn financing for Morrison's bid for Safeway in 2004. ABN Amro had originally turned to Allen & Overy to do the work.
No doubt Herbert Smith – for whom the hires represent a statement of intent about its finance ambitions – will be looking to exploit Fanner's links with the likes of ABN Amro, Calyon, CIBC and HBOS.
Dentons has responded to the pair's departure in the only way it can – by attempting to downplay the move's significance. It argues that the acquisition finance practice should not be regarded as a standalone team, but part of its 40-partner banking practice. It cites as evidence of this the fact that its largest leveraged finance instructions in each of the last three years were generated from outside the immediate team.
So confident is it of its position that it says it has no immediate plans to recruit laterally into the team. However, there is no getting away from the fact that the team's new head, Catherine Astruc, was only promoted into the partnership last year.
Given the strength of the firm's finance brand, critics will ask why it has not been able to build a more deep-rooted practice and whether Dentons can continue to rely on its brand in a practice area that is dominated by a few big personalities.
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