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Dealwatch: Advisers wrapped up in flurry of offers in last push earlier than Christmas

In the conspicuous absence of the traditional round of festive parties, advisers have instead busied themselves with getting a host of deals across the line ahead of the Christmas break.

As the pandemic continues to rage on, Coronavirus-driven transactions show no sign of abating, with a €1.8bn financing package for tourism company TUI and the $1bn merger of hospitality companies Ennismore and Accor characterising the current deal market. 

Allen & Overy  and Latham & Watkins won key roles on the TUI financing as the travel sector continues to be among the worst casualties of restrictions wrought by Covid-19.

The €1.8bn package will allow TUI, which is listed on the London Stock Exchange and in Germany, to strengthen its balance sheet and ride out further financial challenges posed by travel restrictions slated to last until next summer, notwithstanding the roll-out 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 business includes tour operators, 1,600 travel agencies and online portals, five airlines with around 150 aircraft, more than 400 hotels and 17 cruise liners.

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

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

Latham advised the syndicate of underwriting banks, led by London capital markets partner James Inness and Frankfurt capital markets partner Oliver Seiler.

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

The all-share merger will combine Accor, the French owner of Ibis, Novotel and Mercure with Ennismore, the owner of London hotel chain Hoxton. The deal will see a new global lifestyle hotels company created and headquartered in London, under the name Ennismore.

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

Meanwhile, Bracewell and Linklaters secured mandates as Italian oil major Eni looked to bolster its green credentials by acquiring a 20% stake in the Dogger Bank (A and B) 2.4GW offshore wind project from Equinor and SSE.

The deal advances Eni towards its target of 5GW installed renewable energy capacity by 2025 and marks its entry into the north European offshore wind market.

Construction costs of the Dogger Bank project are expected to reach £6bn, with completion of Dogger Bank A expected in 2023 and Dogger Bank B in 2024.

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

Spalding commented: ‘The deal caps a remarkable and standout year for our renewables practice, having advised on the first renewables projects in Armenia and Qatar; Tesla’s largest battery storage project in the UK; Equinor’s sale of a stake in the Empire and Beacon offshore wind farm projects to BP; and now the winning bidder on the Dogger Bank sale process.’

Linklaters, alongside Latham, also turned up on a deal that saw Aviva Life & Pensions UK complete a £875m bulk annuity buy-in transaction with the Aviva Staff Pension Scheme. This is the second deal with the scheme, having announced a £1.7bn transaction 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 liabilities of 2,868 members, removing the investment and longevity risk of these members from the scheme.

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