GKN rejects £7.4bn hostile takeover bid from Melrose

Engineering firm GKN has rejected a second unsolicited takeover offer from Melrose of £7.4bn.

The latest bid put forward by Melrose, a Birmingham-based investment house that specialises in improving other companies’ performances, values GKN at 430.1 pence a share, up from a previous offer announced last week of 405 pence, or £7bn.

GKN said that the new offer remains “effectively unchanged” from the initial offer made on 8 January but made public last week. That offer was rejected because GKN considered that it “fundamentally” undervalued the company.

“We have already stated that the terms of Melrose’s offer fundamentally undervalue the company and we are actively engaging with shareholders to explain how our transformation plan will provide value,” said chief executive Anne Stevens, who was appointed to the role last week having served as acting CEO since November.

Under the terms of the latest offer, GKN shareholders would get a cash payout of 81 pence per share and 57 per cent of the enlarged.

Melrose said the new proposal represents a premium of 29 per cent on GKN’s closing share price on 11 January, the day before its initial approach was made public.

“Since our approach was announced, the Melrose share price has risen as the market digests the attractive opportunity our proposal represents,” said Melrose chief executive Simon Peckham.

“However, the real value uplift will come from merging the interests of the two sets of shareholders and creating a business valued at approximately £11bn today, of which GKN holders will own the majority, including Nortek, our US business which is trading strongly,” he added.

Melrose said a takeover would “re-energise” GKN’s operations to deliver “significantly greater benefits to the shareholders of GKN than GKN could otherwise achieve on its own”.

GKN employs 58,000 people across 30 countries.


Personal Injury sector stands by for reforms update from parliament

Justice minister Lord Keen of Elie is today expected to set out the government’s agenda for personal injury reforms. Richard Keen QC, Ministry of Justice spokesperson in the House of Lords, will be among experts giving evidence to the justice committee of the House of Commons in a one-off session dedicated to potential changes in the sector.

MPs on the committee want to analyse the government’s case for increasing the small claims limit to £5,000 for RTA claims and to £2,000 for all other personal injury claims.

The reform, which requires secondary legislation but which is expected to come in alongside the Civil Liability Bill, has been in the pipeline since November 2015, when then-chancellor of the exchequer George Osborne proposed change, but progress has since stalled.

As well as Lord Keen, the committee will also hear from a representatives of trade union Usdaw, a claims handling company, the former president of the Forum of Insurance Lawyers, High Court judge Mrs Justice Simler, His Honour Judge Nigel Bird and David Parkin, deputy director for civil justice and law at the Ministry of Justice.

There has been criticism that no personal injury solicitors are being quizzed as part of the evidence-gathering exercise, although they were given the opportunity to submit written statements in advance of the session.

Donna Scully, former chair of the Motor Accident Solicitors Society and director of north west firm Carpenters Law, said: ‘On such a crucial issue, it is deeply disappointing that there is no single claimant solicitor or representative. It is vitally important that the committee robustly cross-examine Lord Keen on the evidence base and rationale for this proposal. The £5,000 figure appears entirely arbitrary.’

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Singapore lawyers back national IT plan

A world-first initiative to drag an entire jurisdiction into the digital age is under way in Singapore. The Future Law Innovation Programme (FLIP), organised by the agency responsible for developing the country’s legal profession, will encourage firms to adopt new technology, bring lawyers and entrepreneurs together and help ‘lawtech’ startups.

FLIP, launched last week by the Singapore Academy of Law, is part of the Legal Technology Vision, a five-year plan put together by representatives of the judiciary, the Ministry of Law, the attorney general’s chambers and private sector lawyers. The aim is to tackle the paradox that, in one of the world’s most digitally minded countries, much of the legal profession remains in the paper age.

Paul Neo, chief operating officer at the Singapore Academy of Law, said that a particular problem is the structure of the sector: ‘80% of legal practices have five fee earners or fewer,’ he said. Such practices have little time to adopt new ways of working.

Under FLIP, firms will receive up to 70% of the cost of new technology to re-engineer their working practices. The programme also includes a Legal Innovation Lab across the road from Singapore’s Supreme Court. A third component, south -east Asia’s first legal tech accelerator to groom promising legal tech start-ups, will be opened in April. The programme will be piloted for two years.

Neo said that 31 participants had signed up. These range from large firms such as Rajah & Tann Singapore LLP and Dentons Rodyk & Davidson to small practices as well as in-house counsel. ‘We are encouraged by the strong response from the legal community to the FLIP initiative,’ he said. ’Over three-quarters of the planned capacity for the pilot programme have been taken up in a short time and we have no doubt more will join as the programme gains momentum.’

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Litigation funder nears £1bn commitment to new investments

Growing global demand for litigation funding has been highlighted by a leading player reporting a massive increase in investment commitments. Burford Capital Limited said it made around £960m in new commitments in 2017. This was more than three times the £280m invested during 2016, which itself was up 83% on the previous year.

Burford says the latest figures show continued growth in demand for capital in its core litigation business, with just over half of its commitments attributed to portfolio finance.

Given the growth being experienced, the London stock exchange-listed company says it will hold meetings with fixed income investors to discuss a bond issue for raising extra funds.

Burford said in a stock exchange update that it was not yet in a position to provide guidance on its 2017 financial results, which are due to be released on 14 March.

Christopher Bogart, Burford’s chief executive, said: ‘The new commitments made during the year have the potential to generate significant future income in the years to come and reflect a robust legal finance market that Burford continues to lead.’

Investors responded positively, with the share price rising 5.4%.

Last year the company pledged an eight-figure sum to fund several cases brought by UK top-100 firm Shepherd & Wedderburn.

It is one of a number of litigation funders expanding in recent years and finding a more receptive audience among the previously-sceptical legal profession.

While markets in the US, UK and Australia are now well established, funders have also opened offices in South America and South East Asia in recent years. Burford opened a new Singapore office last year and appointed a former Allen & Overy lawyer to head operations there. This following the passage of new laws in the region that facilitated the litigation finance sector.

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Deloitte makes long-awaited assault on legal market

Big four accountancy firm Deloitte today confirmed it will join its fellow heavyweights with a move into legal services. The firm has previously rejected the option of expanding into the UK legal sector but has now announced plans to branch out.

As an alternative business structure, Deloitte will provide managed services such as automated document review and contract management, and will provide consulting services to help in-house legal departments to exploit new technology.

Deloitte will also extend its existing legal services in employment law, tax litigation and immigration.

Matt Ellis, managing partner for tax and legal at Deloitte, said the aim is not to replicate a traditional legal practice but instead to initiate a different approach.

‘We’re planning to use our technology and advisory skills to transform legal services and help address many of the challenges lawyers, whether in practice or in-house, are facing in today’s increasingly complex legal environment,’ said Ellis. ‘By automating repetitive processes and completing routine tasks in a fraction of the time, lawyers will be able to spend more time on specialist areas.’

New services will be on offer early this year and Deloitte will apply for an alternative business structure licence. The company says it is ‘investing in new staff’ but has not given a figure for how many lawyers will be recruited.

Deloitte Global will start a complementary legal management consulting business in 10 countries, comprising a team of more than 100 professionals.

The company’s 2016 survey of in-house legal departments found that 62% of legal counsel, general counsel and business leaders wanted to significantly review and transform the way in which their legal function operated.

Deloitte joins fellow big four competitors in trying to tap into the legal services market and potentially replace traditional law firms. PwC legal services has 17 partners, 31 directors and a 350-strong team in total, based in London, Belfast, Birmingham, Leeds and Manchester, with plans confirmed last year for further growth. KPMG and EY have also expanded into the legal market through alternative business structures.

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Trump lawyer sues BuzzFeed for publishing document

Donald Trump’s personal lawyer is suing news website BuzzFeed almost exactly a year after it published an explosive dossier containing serious and salacious allegations about collusion with Russia.

Michael Cohen posted on Twitter on Tuesday night: “Enough is enough of the #fake #RussianDossier. Just filed a defamation action against @BuzzFeedNews for publishing the lie filled document on @POTUS @realDonaldTrump and me!”

Cohen told Bloomberg News he had also filed a second defamation suit against political intelligence firm Fusion GPS, which compiled the dossier, in federal court.

Cohen is one of Trump’s closest business advisers and most loyal confidantes and it seems improbable that he was acting without the president’s blessing. His move came hours after Dianne Feinstein, the top Democrat on the Senate judiciary committee, unilaterally released a transcript of testimony from Fusion GPS founder Glenn Simpson.

BuzzFeed vowed to fight the action in court.

The publication of the 35-page dossier in January 2017 triggered a political storm and debate over media ethics. The raw research by former British intelligence officer Christopher Steele suggested the Russian government had both compromised and colluded with Trump during the 2016 presidential election, and included lurid allegations.

Steele also recorded claims that Cohen had held secret meetings with Russian officials in Prague in August 2016, where he allegedly discussed how to pay Kremlin-associated hackers for targeting Hillary Clinton.

Cohen told Bloomberg that he was mentioned in the dossier 15 times. “It will be proven that I had no involvement in this Russian collusion conspiracy,” he said. “My name was included only because of my proximity to the president.”

In an interview with ABC News, he added: “I want to be very clear. I have never been to Prague or the Czech Republic, and I have never engaged with, been paid by, paid for, or communicated with anyone representing the Russian Federation or anyone else to hack anyone or any organisation or disseminate false news reports or interfere in any way with this election.”

The dossier came into the possession of several media organisations but BuzzFeed posted the unredacted documents just 10 days before Trump’s inauguration, with a warning that the contents contained errors and were “unverified and potentially unverifiable”. The decision was attacked by both Trump and some traditional media outlets, claiming it was irresponsible to publish unverified allegations.

Cohen’s complaint against Buzzfeed names editor-in-chief Ben Smith, reporter Ken Bensinger and editors Miriam Elder and Mark Schoofs.

BuzzFeed said it was ready to defend the case in court. Spokesman Matt Mittenthal said: “The dossier is, and continues to be, the subject of active investigations by Congress and intelligence agencies. It was presented to two successive presidents, and has been described in detail by news outlets around the world. Its interest to the public is obvious. We look forward to defending the free press and our First Amendment rights in court.”

In an article in the New York Times on Tuesday, headlined I’m Proud We Published the Trump-Russia Dossier, Smith wrote: “A year of government inquiries and blockbuster journalism has made clear that the dossier is unquestionably real news. That’s a fact that has been tacitly acknowledged even by those who opposed our decision to publish.”

Cohen said the suit against Fusion GPS and Simpson was filed in federal court in the southern district of New York. It reportedly claims that the firm “recklessly placed [the dossier] beyond their control and allowed it to fall into the hands of media devoted to breaking news on the hottest subject of the day: the Trump candidacy”.

Fusion’s lawyer, Joshua Levy, told Bloomberg he had not seen the suit and had “not received a letter from counsel on anything”.

Cohen has emerged as a person of interest to congressional investigators examining Russian meddling in the 2016 election. He testified to the House intelligence committee behind closed doors on 24 October and publicly to the Senate intelligence committee on 25 October.