Commentary: Barclay brothers are just the ticket for Weil in the City
Weil Gotshal looks to add more big-ticket deals to a steady stream of mid-market work
September 27, 2006 at 08:03 PM
3 minute read
Last week's news that Weil Gotshal & Manges' London arm has carried out its first public deals for the Barclay Brothers came at a good time for the office.
True, with a value of just £100m the acquisition of the De Vere Cavendish Hotel did not stand out in its own right, but the client is a useful addition to the US firm's expanding roster of upper mid-market UK corporate clients.
The firm is also handling deals in the larger category. It was only late last year that it advised on the £1.27bn buy-out of Cadbury Schweppes' European drinks business by Blackstone Group and Lion Capital, a notable mandate for any US firm in London.
But Mergermarket statistics show that the largest deal the office has advised on since the Cadbury transaction is less than half its size. This confirms the quality mid-market credentials of Weil Gotshal's current City M&A team. Lion Capital – formerly Hicks Muse's European arm – and its offshoot Premier Foods, also continue to account for a major chunk of the practice.
Weil Gotshal has its critics in London, but what the New York firm's recruitment in recent years has achieved is a genuine broadening of a practice that was once heavily reliant on the twin pillars of Hicks and the talents of London chief Mike Francies.
Other buy-out clients to now use the firm in London include Montagu Private Equity, Apax, Change Capital and Candover. True, Weil Gotshal will want to bring in more regular work from these clients, but it has made a start.
Another sponsor that has already generated considerable work is Advent, a recent addition courtesy of new recruit Marco Compagnoni and now cited alongside Lion and Premier Foods as a major London client.
Enter the Barclay brothers, another of Compagnoni's clients, who look likely contenders for a top-three client status sometime soon. The brothers generated a regular stream of mandates for Compagnoni while at Lovells, including high-profile acquisitions of The Telegraph Group and Littlewoods, worth £729.5m and £750m respectively. These are the kind of deal sizes Weil Gotshal will be hoping to secure if it is to take the practice up a level or risk being overly identified with the mid-market.
Not that the firm should be overly concerned regarding its mid-market positioning. In an age in which the term can cover deals in excess of £500m and firms like Macfarlanes and Travers Smith are doing much of the running, there are worse places to be for the ambitious US firm.
Note the relative success of Weil Gotshal compared with the City operation of US rival Shearman & Sterling during the past year. Shearman might land the odd multi-billion pound mandate, but most rivals currently cite Weil Gotshal as doing the better of the two. This is a school of thought gaining ground at US firms in London, as can be seen with the recent positioning of firms as diverse as Latham & Watkins, Kirkland & Ellis and Hunton & Williams.
It seems that combining a thriving mid-market practice with ambitions to take in a handful of big-ticket transactions is serving US firms better than just waiting by the phone for JP Morgan or BP to call.
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