DWF rides to rescue of Cobbetts
National firm DWF has announced its intention to acquire troubled firm Cobbetts.
In a statement this afternoon, DWF said the process of transferring people across to the firm will start in the next seven days if the deal is approved. There was no confirmation on how many of the 492 Cobbetts staff would be retained.
The announcement comes just a day after Manchester-based Cobbetts confirmed it was looking to sell the business due to difficult trading conditions in the professional services sector.
The two firms dropped merger talks more than a year ago after failing to agree terms.
DWF said Cobbetts had built an infrastructure ‘reflecting the buoyant economy of the mid-2000s’ and had put in plans to reduce costs.
However, poorer than expected trading in November and December caused the firm to review its financial position and seek an immediate sale of the business and assets.
Andrew Leaitherland (pictured), managing partner and chief executive of DWF, said: ‘DWF’s plans to grow, in a strategic, targeted way have been clearly set out and this move supports that goal.
‘I am confident that the merging of the two firms will bring genuine benefits to both and, importantly, the joint client base.
‘There are many synergies between the two firms in terms of the sectors in which we operate and this collaboration will further strengthen our existing business. I am very much looking forward to welcoming the new team to DWF.’
The firm added that the move would ensure ‘business as usual’ for Cobbetts’ clients.
The acquisition continues DWF’s rapid growth of the past year, having announced a merger with London firm Fishburns earlier this month and Scottish firm Biggart Baillie last year.
The firm has 1,800 people based in Birmingham, Coventry, Edinburgh, Glasgow, Leeds, Liverpool, London, Manchester, Newcastle, Preston and Teesside.
Comments
Anyone remember Lloyds and
Anyone remember Lloyds and HBOS?
Thanks DWF
Thanks DWF! It's so blatantly obvious that they scuppered the deal last year when they realised they would be better off waiting for it to go bust!
DWF
Certainly an interesting developement. It would not surprise me if DWF was waiting for an opportunity but surprising if they were aware of the extent of the troubles, given how suddenly events unfolded. I still am surprised that it came to this on the back of a couple of poor months.
Anyway you often see situations with companies listed on the stock market and predators moving in. The most common stunt is the pre pack. I have even held shares in companies that have undergone expansion programmes just before announcing a pre pack and the assets being snapped up for a song and shareholders being dispossessed. It is essentially theft but is apparently legal. Colliers UK was a classic example of carpet bagging, greed and collusion between the management and the 'buyer'.
Obviously this is a different set up but will be interesting to see how it works out in comparision and who benefits.
theres a storm coming and
theres a storm coming and things are going to get a lot worse !
Thanks DWF
Well done DWF. Why take on a business that has unrealistic expectations or refuses to cut it's cloth? DWF would have been taking on nothing but trouble proceeding with a deal that they could not agree on a year ago. If they did recognise that it would be sensible to wait and see then credit where it's due. At least a number of people will stay in their jobs.
Pre pack?
Pretty obviously a deal done here then? Too slick.............
My initial thoughts, too -
My initial thoughts, too - especially given the reference to a dodgy property deal (if they were going to merge with DWF, easier to do it this way and ditch the creditors in the process with the decision of RBS v Halliwells making it easier still) . Made me laugh how the naive SRA were seemingly spun along.
Two sides of the coin
There are two ways of looking at this. One is that the members of Cobbetts came to the view that they couldn't continue in business for whatever financial reason - guessed at by most commentators. The aquisition made by DWF will save many jobs, so it's to be applauded. The second view is to suggest a conspiracy theory dating back to last year's talks. But this is just one coin, the side chosen dependent on the person's general outlook on life. Mine is that as long as the court looks to the interest of creditors, which it will do, I don''t mind if there was a plan to wait and see on DWF's part. I wish all parties well.
Creditors
I think the key point here is, has anyone been or will be disadvantaged because of the way this has been carried out? The consensus on here and elsewhere and as I suspected (although I know very little about solvency and pre packs) is that this was a tidy deal hatched some time ago.
As I said before, I have been a shareholder who has been stitched up by directors and other major shareholders whose interest was their own fat pay and getting something for nothing. A bunch of carpetbaggers.
If the creditors and others are being stitched up then that is of concern. These creditors may well be banks which are regularly criticised here and if they lose out it sends out a message that elements of the legal profession are like many others in society who do not repay their debts. Such behaviour undermines good faith and honesty and might be one reason why banks do not lend. I may well be wrong of course and everybody might end up O.K. But I think it is a valid point nevertheless.
Cobbetts took a new lease in
Cobbetts took a new lease in Manchester in 2007 when the market was good and had to sub-let 2 floors. No doubt they got a rent-free period of between 3 and 5 years. The first rent review was due in 2012. If they had 5 years, then the huge jump in rent may have pushed them over the edge. If so, this is the second firm in Manchester to have gone under due to property deals. There are a number of other firms who took leases at the height of the market and will be watching with anxiety as they see their rents kick in or increase dramatically. There are a lot of good people at Cobbettts. I hope it works out for all of them.