Baker & McKenzie, CMS and Taylor Wessing line up for Gherkin sale
Baker & McKenzie, CMS Cameron McKenna and Taylor Wessing have all advised on the £700m sale of the landmark Gherkin building to the Safra Group controlled by Brazilian billionaire Joseph Safra.
Baker & McKenzie global co-heard of financial restructuring and insolvency Ian Jack led the team advising receivers Deloitte on the corporate elements of the deal while CMS Cameron McKenna partner James Miller and senior associate Sarah Allonby handled the real estate work.
Private investor the Safra Group turned to a Taylor Wessing team including real estate partner Paul Lawrence, corporate partner Ronald Graham and tax partner Rob Young following a frantic bidding war for the tower.
Bakers was instructed by Deloitte earlier this year when the Gherkin went into receivership. The team including Ian Jack, head of real estate Stephen Turner and investment fund head James Burdett advised both Deloitte and the banking syndicate which funded the original acquisition of the iconic building (29 July 2014).
The building houses Swiss Re and Kirkland & Ellisand remains a well-rented trophy asset but has suffered from financial issues due to currency fluctuations. The building has been dogged by continued defaults on its debts despite being almost fully rented, due to the weakening value of the pound against the Swiss franc. Deloitte was finally called in several months ago by the five-bank senior lender syndicate and Savills and Deloitte Real Estate were enlisted to sell the building in July.
The Gherkin went up for sale on 29 July with a price tag of around £640m and Safra confirmed the acquisition of the tower from its receivers this morning. The group has reputedly paid over £700m according to press reports following a bidding war among investors.
In April Neville Kahn, joint receiver and restructuring services partner at Deloitte commented: “The senior lenders were reluctant to appoint a receiver but felt they had no choice due to the ongoing defaults, which have remained uncured for over five years, and concerns that the borrowers’ lack of equity in the transaction had caused their incentives to become misaligned with the lenders’.”
The deal marks the latest major acquisition for the Safra Group, which acquired Chiquita for $1.3bn last month after bidding with Brazilian orange juice group Cutrale.
Background to the deal
CMS is the longest-standing adviser on the roster, having acted on IVG Immobilien and private equity group Evans Randall’s £600m acquisition of the tower seven years ago, with partner Edward Benzecry leading the team representing IVG in 2007.
The then Camerons team included corporate partners Barney Hearnden and Bill Carr, banking partner Simon Johnston and construction partner Victoria Peckett.
The building remained in the hands of Evans Randall and IVG until April this year, when a series of loan defaults and failure to arrange a debt restructure meant it was placed into receivership.
Stefanie Harper, November 2014
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