Amcor deal a sign of things to come: lawyers
Deals | 19 August 2009 | The New Lawyer
Law firms Freehills and Allens Arthur Robinson sealed positions on packing company Amcor Limited's A$3.1 billion equity raising, announce yesterday.
Allens is acting for Amcor on the deal, which is targeted at seeing the company acquire Alcan Packaging form the Rio Tinto Group, valued at US$2.03 (A$2.45) billion.
The deal comprised a fully underwritten A$1.61 billion accelerated, non-renounceable entitlement offer at $4.30 per share, which involved Freehills' advising the underwriters. It also included a US$1.2 (A$1.44) billion debt facility syndicated by 10 Australian and overseas banks.
Allens brought together partners to form a team spanning several practice areas, including co-head of equity capital markets and partner Robert Pick, and corporate, M&A partner Cameron Price. and banking and finance team leader and partner Phillip Cornwell. Senior associate James Darcy also joined the Allens team.
Price said the deal was a complex one, involving multiple teams and multiple jurisdictions. "A complete funding package was critical to Amcor's ability to execute this acquisition," said Pick.
"Allens was able to provide coordinated advice to Amcor on both components of their funding package, in equity and debt markets that are only just starting to re-open for acquisition finance," he said.
Cornwell, head of Allens' banking and finance practice, said the deal suggests there is a turnaround developing in the economy.
"Helping Amcor's finance team put together a US$1.2 billion acquisition facility in the current market was a challenging but ultimately very satisfying exercise for [Darcy], myself and the team. The terms achieved are not only indicative of market confidence in Amcor and its executives, but also confirm that there is a strong recovery under way in the financial markets."
Freehills, meanwhile, advised Commonwealth Securities Limited, Deutsche Bank AG, Sydney Branch, J.P. Morgan Australia Limited, Merrill Lynch International (Australia) Limited and UBS AG, Australia Branch, on the packaging company's A$1.61 billion accelerated, non-renounceable entitlement offer.
The Freehills team included partner Tony Sparks, senior associate Daniel Scotti and lawyers Tim Cruickshank and Steven Drummond.
Sparks agreed about the deal being a sign that things may be improving in the financial markets.
"The ability of Amcor to raise equity capital to fund such a significant acquisition is evidence of the health of the Australian equity capital markets," he said.
The announcement comes after Amcor narrowly avoided a courtroom showdown this month over whether it colluded to fix cardboard box prices. The company reached a confidential settlement with customer and confectioner, Cadbury.
Cadbury had launched a $235.8 million claim against the packaging company, saying it had engaged in anti-competative behaviour with Visy, its box-making peer.
Cadbury had launched the Federal Court action in 2006, but the action was adjourned on 5 August shortly before it was due to go to trial.