Dealwatch: Consultants who have been concerned in various offers earlier than Christmas

In the noticeable absence of the traditional round of celebratory parties, the advisors have instead been busy making a number of offers across the board before the Christmas break.

As the pandemic rages on, coronavirus-fueled transactions are showing no signs of subsiding. A financing package worth EUR 1.8 billion for the tourism company TUI and the merger of the hotel companies Ennismore and Accor worth USD 1 billion characterize the current deal market.

Allen & Overy and Latham & Watkins won key roles in TUI funding as the travel sector continues to be among the worst victims of the restrictions caused by Covid-19.

With the EUR 1.8 billion package, TUI, which is listed on the London Stock Exchange and in Germany, will be able to strengthen its balance sheet and cope with other financial challenges resulting from travel restrictions that are expected to last until next summer despite the introduction of a vaccine.

The package has been agreed on with the Economic Support Fund (Wirtschaftsstabilisierungsfonds – WSF), a syndicate of underwriting banks, Kreditanstalt für Wiederaufbau (KfW) and Unifirm.

The TUI Group’s business includes tour operators, 1,600 travel agencies and online portals, five airlines with around 150 aircraft, more than 400 hotels and 17 cruise ships.

The financing package includes: a capital increase with subscription rights of around € 500 million; a silent partnership that the WSF can convert into TUI shares in the amount of € 420 million; a non-convertible silent participation of the WSF in the amount of € 280 million; a state guarantee of € 400 million; an additional credit facility from KfW in the amount of € 200 million; and extension of an existing credit facility by KfW until July 2022.

The A&O team advising TUI was headed by Stephen Mathews and Michael Bloch in London and Helge Schäfer, Hans Diekmann and Jonas Wittgens in Germany.

Latham advised the consortium of underwriting banks led by London capital market partner James Inness and Frankfurt capital market partner Oliver Seiler.

Elsewhere, Herbert Smith Freehills and Proskauer Rose won mandates as consolidation continued in the competitive hospitality industry and hotel groups Accor and Ennismore agreed to a $ 1 billion merger.

The all-share merger will bring Accor, the French owner of Ibis, Novotel and Mercure, together with Ennismore, the owner of the London hotel chain Hoxton. As part of the contract, a new global lifestyle hotel company will be established in London under the name Ennismore.

Herbert Smith advised Ennismore on the acquisition of the original Hoxton Hotel in 2012. The team advising on this final deal was led by Alan Montgomery. Proskauer corporate partner Steven Davis advised Accor.

Meanwhile, Bracewell and Linklaters won mandates when Italian oil major Eni tried to bolster its environmental credibility by getting Equinor and SSE to acquire a 20% stake in Dogger Bank’s 2.4GW offshore wind project (A and B) acquired.

The deal moves Eni towards its goal of installing 5 GW of renewable capacity by 2025 and marks its entry into the Northern European offshore wind market.

Construction costs for the Dogger Bank project are expected to reach £ 6 billion. The completion of Dogger Bank A is expected in 2023 and Dogger Bank B in 2024.

Linklaters worked for sellers Equinor and SSE, with a team led by Chris Staples and John Pickett. Bracewell partner Darren Spalding led a team that also included partners Oliver Irwin, Tom Swarbrick and Andrej Kormuth.

Spalding commented: ‘The deal completes a remarkable and outstanding year for our renewable energy practice, having advised on the first renewable energy projects in Armenia and Qatar. Tesla’s largest battery storage project in the UK; Equinors sells stake in Empire and Beacon offshore wind farm projects to BP; and now the winner of the Dogger Bank sales process. ‘

In addition to Latham, Linklaters has signed an agreement with Aviva Life & Pensions UK entering into a buy-in transaction for mass pensions worth £ 875 million with the Aviva Staff Pension Scheme. This is the second deal with the program after a £ 1.7 billion deal was announced in October last year.

The Latham team advising Aviva was led by London corporate partner Victoria Sander, while the Linklaters team advising the trustee was led by Rosalind Knowles.

Aviva will insure the defined benefit pension obligations of 2,868 members and remove the investment and longevity risk of these members from the system.

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