ADDING VALUE: Herbert Smith Freehills partners Rob Merrick (left), Simon Reed, and senior associate Paul Branston. Freehills worked on 32 corporate finance transactions valued at $7.53bn. Photo: Bohdan Warchomij

Freehills prevails in a shrinking market

THE past 12 months was a lean time for lawyers working in the corporate finance field, with a slump in both takeover deals and capital raisings.

Nearly all law firms in Western Australia reported a fall in both the number and value of transactions they worked on.

In this challenging environment it was the state’s largest law firm - Herbert Smith Freehills - that fared best.

It worked on 32 corporate finance transactions last year, valued at $7.53 billion.

That put it just ahead of King & Wood Mallesons, which worked on 18 transactions worth $7.03 billion.

Other law firms to rank high in the annual WA Business News survey included Clayton Utz (22 deals worth $3.66 billion) and Allen & Overy (13 deals worth $3.16 billion).

The WA Business News survey found that the total value of WA-related corporate finance transactions fell by 40 per cent, to $33 billion.

This mirrored other national surveys, which also reported a large decline.

The slide in deal value was particularly stark for a few big law firms, most notably Allen & Overy, which topped the 2011 survey.

In that year it worked on deals worth $21 billion, a result greatly boosted by its connections with prolific acquirer-turned-take-over target, Equinox Minerals.

A notable feature of Freehills’ performance was that it ranked at or near the top in both mergers and acquisitions (M&A) and equity capital markets (ECM).

M&A deals

In the M&A segment, Freehills worked on 17 announced transactions worth $6.38 billion.

The most significant was its work for Marubeni and POSCO, which were part of a group of four investors that paid $3.2 billion for a 30 per cent stake in Hancock Prospecting’s Roy Hill iron ore project.

It was matched in the M&A segment by Mallesons, which worked on 17 deals worth $6.97 billion.

This included providing support to Chevron’s in-house legal team, on an asset swap under which Chevron exited the Browse gas project in return for increased equity in gas fields in the Carnarvon Basin.

The value of this transaction has not been disclosed, but WA Business News has estimated it was worth about $2.7 billion, based on the announced value of two other Browse deals involving Woodside and BHP Billiton.

Freehills partner and WA Business News 40under40 award winner Simon Reed said the level of activity was at or near the lows recorded during the GFC.

“The general trend is a reduction in M&A activity but more importantly a reduction in competitive M&A,” he said.

“It’s getting much harder to executive M&A deals.”

Mr Reed said investors, bankers and company directors had all become more risk averse.

While this created a challenging market, he anticipated this could benefit Freehills relative to its competitors.

“Boards certainly focus on having well-credentialed advisers,” Mr Reed said.


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1st-Herbert Smith Freehills144
2nd-Jackson McDonald114
3rd-King & Wood Mallesons87
4th-Clayton Utz86
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