Hogan Lovells advises Shaftesbury on its £300m equity capital raising

International law firm Hogan Lovells have advised Shaftesbury on its equity capital raising which intends to raise gross proceeds of approximately £297 million by way of a fully underwritten firm placing and placing and open offer. Up to a further approximately £10 million in gross proceeds may also be raised by way of an offer for subscription which is not underwritten.

Shaftesbury is a real estate investment trust with a portfolio that extends to 16 acres in the heart of London’s west end, where the COVID-19 pandemic and the measures to contain it have had, and continue to have, a material adverse effect on normal patterns of activity and business. In light of the COVID-19 pandemic, Shaftesbury are carrying out the capital raising to help ensure its group maintains a strong financial base, is positioned to return to long-term growth as pandemic issues recede and, should conditions improve, is able to invest further in its exceptional portfolio.

The Hogan Lovells team was led by Corporate & Finance partners Nicola Evans and Raj S. Panasar with support from partners Jonathan Baird, Gill McGreevy (Real Estate) and Elliot Weston (Tax).

Commenting on the transaction, partner Nicola Evans said: “We are delighted to have partnered with Shaftesbury on this significant transaction which ensures Shaftesbury is in a stronger position to deal with the continuing impact of COVID-19. Agility in helping companies with the optimal type of capital raise for the circumstances is key at the moment, as the business environment can change daily.”

Kirkland advises Gordon Brothers on €100M ABL facility

Kirkland & Ellis has advised Gordon Brothers on an Asset Based Lending (ABL) facility in the amount of €100 million to a leading German hypermarket store chain. B. Riley Financial is participating in the loan as a minority partner.

The advice provided by a team of Kirkland lawyers from Munich and London included the comprehensive structuring of the transaction from a financial, contract and insolvency law perspective as well as its documentation and implementation.

Gordon Brothers is a global consultancy and investment company which provides customised liquidity solutions in the retail, commercial and industrial, and finance sectors.

The Kirkland team was led by Munich-based restructuring partner Sacha Lürken, debt finance partner Dr Alexander M.H. Längsfeld and restructuring partner Dr Bernd Meyer-Löwy; and also included London-based debt finance partners Evgeny Zborovsky and Karen Ford and associates Oliver Trotman and Adebayo Lanlokun.

£14.7 billion raised in secondary offerings since the start of the year

Overall secondary offerings have reached £14.7 billion across 135 transactions in the UK for the year to date, according to new analysis from Deloitte. A secondary offering refers to the sale of shares in a listed company occurring after a company’s IPO, with the transaction taking place through either London’s Main Market or AIM.

Prior to the lockdown in the UK, the amount of money raised in January and February 2020 was almost twice that of the same period in 2019 (£3.4 billion vs £1.9 billion), signalling increased business optimism. Despite a drop in March, April and May both saw elevated levels of equity fundraising in London.

Chris Nicholls, Head of Equity and PLC Advisory at Deloitte, said: “The UK market has very much been open for existing listed companies seeking additional equity capital, including those from the retail and hospitality sectors. Typically this has been to strengthen balance sheets and improve liquidity in the wake of the pandemic. I would expect fundraising activity to continue into the rest of the year, albeit with only a modest trickle of IPOs.”

Since 23 March this year, the FTSE 100 and S&P 500 have risen 29.8% and 42.8% respectively, boosted by the gradual reopening of world economies and bold government and central bank stimulus measures. However, volatility levels remain elevated compared to long-term averages with the global VIX Index currently in the region of 24, substantially higher than the 2019 average of approximately 15.

Chris Nicholls concludes: “Whilst volatility has substantially reduced from March levels, any VIX reading above 20 traditionally represents a difficult environment in which to launch IPOs. However, global equity markets are recovering strongly from the unprecedented shock to the economy caused by COVID-19.”