Rescue deal: King & Wood Mallesons reveals takeover talks with ‘small number’ of potential suitors
As the international firm’s bank takes out additional security over its assets
King & Wood Mallesons (KWM) has confirmed that it is holding “detailed discussions” with a “small number” of potential merger suitors.
According to a recent statement released by the international giant, the firm has said it is:
[P]leased to confirm that it has received a number of indicative purchase offers. The management team and its financial advisers have reviewed these and are now entering into detailed discussions with a small number of parties.
Describing the merger talks as a “significant step forward”, the spokesperson continued:
As you would expect, the firm will not be commenting further given the confidential nature of these important discussions. A further announcement will be made once discussions have been completed.
The legal press is rife with speculation as to the identity of these secret suitors.
Top of the list appears to be global behemoth Dentons. The largest law firm in the world by lawyer headcount, Dentons is reportedly interested in snapping up KWM’s entire European arm. Other rumoured names — seemingly keen to get a slice of the action — include global outfit DLA Piper and US duo Greenberg Traurig and Winston & Strawn.
News of this potential merger lifeline comes just days after it emerged that Barclays, KWM’s lender, had taken out additional security against the firm’s assets. According to The Lawyer (£), “a source close to Barclays” announced that a second “all encompassing” debenture had been taken out in response to the firm’s uncertain future.
Late last month KWM revealed that a planned £14 million partner-funded lifeline to cover the firm’s debts had not been given the go-ahead. Initially put on hold due to several high profile partner resignations, KWM eventually confirmed that the “planned recapitalisation programme” had failed. According to a statement released at the time, KWM will now be considering “a range of strategic options”, including the possibility of a merger.
UPDATE: Monday 12 December — 16:30pm
According to a report released this afternoon, KWM has informed its lawyers and staff that it cannot guarantee salaries will be paid beyond January 2017. This information appears to be based on the proviso that a merger will not go ahead. KWM declined to comment.