Ex-UBS bankers land Centerview top adviser role on BAT's $47B Reynolds American buyout bid
The U.K. group's $47 billion bid for the outstanding shares in the maker of Camel reunites a raft of advisers to Big Tobacco.
By Laura Board & David Marcus
Two M&A bankers who recently defected to Centerview Partners will be reunited with former colleagues at UBS on the same side of the negotiating table as British American Tobacco plc (BTI) attempts to convince independent directors of Reynolds American Inc. (RAI) of the merits of its $47 billion stock-and-cash offer for the outstanding 57.8% stake.
Nick Reid, who joined Centerview from the Swiss institution in 2014 to expand his new firm's U.K. client base, and Hadleigh Beals, who followed in 2015, join Centerview co-founder Blair W. Effron on the job. The mandate reunites the defectors with former UBS colleagues including John Woolland and James Robertson. Meanwhile, Centerview's Effron represented Lorillard Inc. on its $27.4 billion takeover by Reynolds American, which closed in June 2015. That deal handed a supporting role to BAT and also to the U.K.'s Imperial Tobacco plc, now Imperial Brands plc. (BAT invested $4.7 billion in Reynolds American to maintain its stake at just over 42% after the Lorillard fusion, while Imperial bought assets).
While at UBS, both Reid and Beals advised BAT, with Reid working on its acquisition of Indonesia's Bentoel Group, and both bankers representing the London company in the merger of Reynolds American and Lorillard.
Reid was co-head of UBS' European investment banking business before his move to Centerview. Prior to UBS, Reid was at Goldman, Sachs & Co. in London, where he led the U.K. investment banking business.
BAT's other financial advisers on the Reynolds American buyout include Deutsche Bank AG's Nigel Meek, James Ibbotson, Matt Hall, Jimmy Bastock and James Stynes. Meek and Ibbotson advised BAT on its $2.7 billion buyout last year of the outstanding 24.7% stake in Brazilian affiliate Souza Cruz SA, during which intervention from Aberdeen Asset Management plc forced BAT to lift the offer. The Deutsche bankers also represented BAT in the Lorillard/Reynolds American transaction. UBS' Robertson and colleagues also worked on both those two deals.
Legal matters are being handled for BAT by a Cravath, Swaine & Moore LLP team led by Philip A. Gelston, David J. Perkins, Ting S. Chen and Alyssa K. Caples and by a Herbert Smith Freehills team including James Palmer, Gillian Fairfield, Alex Kay and Isaac Zailer.
Cravath, Swaine lawyers including Gelston and Chen advised British Tobacco on Lorillard/Reynolds American. In that deal the two lawyers also advised on Reynolds American's related sale of the Kool, Salem, Winston, Maverick and Blu eCigs brands and other assets to the-then Imperial Tobacco.
Gelston's involvement with Reynolds American goes back even further. He advised BAT in 2004 when it combined its Brown & Williamson Tobacco Corp. with RJ Reynolds Tobacco Holdings Inc. in a $6.6 billion deal to create Reynolds American.
In the latest Big Tobacco transaction the Cravath lawyers find themselves once again opposite Jones Day, which is advising Reynolds American and which advised RJR on the 2004 merger with Brown & Williamson.
The Jones Day legal advisers are led by Randi Lesnick and Lizanne Thomas; Reynolds American's bankers were not immediately available. Jones Day's long history with Reynolds American also includes advising it on the Lorillard merger and on its September 2015 deal to sell the Natural American Spirit brand to Japan Tobacco for $5 billion, on which Lesnick advised.
Jones Day also advised Reynolds American in 2011 when it sold subsidiary Lane Ltd. to Scandinavian Tobacco Group A/S for $205 million and in 2006 when it bought Conwood Sales Co. LP for $3.5 billion in cash.
Reynolds American has recently taken advice from Lazard bankers including Antonio Weiss, Maxence de Gennaro and Marc Weidner, who worked on the Lorillard transaction in conjunction with JPMorgan Chase & Co.
Lazard and JPMorgan declined to confirm that they are involved in the current deal. BAT is led by CEO Nicandro Durante, who took the helm in 2011 after joining as chief operating officer in 2008. Reynolds American's president and CEO is Susan M. Cameron, who led Brown & Williamson before the 2004 union with RJR.
