TOGETHER WITH…

In today’s email:

• Google’s doing great

• Livestream some cats

• JD Sports breaks America

• Happy A&O Shearman Day!

• Why law firms are going to Saudi

• TikTok’s US ban explained in 60 seconds

• Mentioned “legal tech” in your applications?

… and more!

EDITOR’S RAMBLE 🗣

We’re trying something new in this week’s newsletter.

Instead of having one in-depth “Featured Report”, we’ve got two.

They’re each slightly shorter than usual (to keep the newsletter under 5 minutes).

So, scroll down — have a read.

Then scroll back up and let me know your thoughts 👇️ 

Cheers!

- Idin

FEATURED REPORT 📰

📉 The stocks are disappearing

What's going on here?

Companies are delisting from the London Stock Exchange. This is worrying people about the City’s future as a financial hub.

Delisting means a company decides to stop being listed on a public stock market.

Why are companies delisting?

1. 💰 Better financing opportunities: Some companies believe they can raise more money as private companies than remaining listed on a public exchange — this is why the biotech companies Redx and C4X Discovery delisted from London’s AIM market. Private financing (for example, through private equity or venture capital funds) offers more flexibility and less public scrutiny.

2. 📈 High compliance costs: It can be expensive to maintain a public listing, especially for smaller companies. You’ve got a bunch of ongoing disclosure and reporting obligations (as well as other regulatory requirements). The fashion brand Superdry announced it’ll be delisting from the London Stock Exchange to cut costs.

3. 🤝 Takeovers or sales: Delistings can happen when a public company is acquired and the buyer wants to take it private. Last week, we wrote about the Hipgnosis deal — once that’s done, the buyer will take Hipgnosis private. (also, scroll down a bit to read about the JD Sports deal — they’re buying the US retailer Hibbetts before delisting it).

4. 🧐 Perceived undervaluation: Some companies feel their stocks are undervalued in UK public markets compared to alternative international markets. For example, Shell’s CEO believes the company is undervalued compared to similar companies in the US markets. Companies like this might be tempted to delist in London and re-list somewhere which might offer higher valuations.

Why should law firms care?

For corporate teams at law firms, listing and IPOs (initial public offerings) are a source of huge revenue.

As well as this, law firms will advise their public clients on:

1. compliance with the complicated listing rules,

2. interacting with regulators, and

3. corporate governance (things like their board structure, investor relations and annual meetings)

So, fewer public companies means less of this type of work going round 👆️ 

Yes, lawyers do make money from helping companies during the delisting process — and commercial lawyers still do a lot of work for private companies as well.

But the delistings threaten the City’s reputation as a financial hub (which is bad news for professional services providers, like commercial law firms).

So what needs to happen?

Well, all eyes are on the Financial Conduct Authority and the London Stock Exchange to change the rules to make UK capital markets more attractive.

They’ve announced some changes recently, but judging by the recent news, it seems like they need to do more.

TOGETHER WITH LEGAL TECH TRENDS* 🤝

If you've ever mentioned “legal tech” in your applications…

Ask yourself: Do I really know enough to talk about it in an interview?

Well, Legal Tech Trends will change that for you.

This fortnightly newsletter covers:

• 💡 the ideas shaping the future of law

• 📈 the latest developments in legal tech

• 🖥️ how tech changes the way lawyers actually work

Oh, and it’s free.

Interested in joining readers from leading global firms and legal departments?

* This is sponsored content

FEATURED REPORT 📰

👟 JD Sports goes shopping

What's going on here?

JD Sports, the UK’s biggest sporting retailer, is buying Hibbett Sporting Goods, an American sporting store chain, for $1.1bn (£899m).

It’s expected to complete in the second half of 2024. At that point Hibbett will stop being a publicly traded company.

Why’s JD Sports going for this deal?

A bunch of reasons, really. Some key ones are:

• 🇺🇸 Wider US presence: JD Sports already has some stores in the US, but this deal gives it a bunch more (especially in the southeast of the US where it doesn’t have many now).

• 💸 Financial sense: The new group would have combined revenues of about £4.7bn in North America — and JD Sports anticipates at least £20m in cost savings following the deal.

• 👟 Cultural fit: Both companies have a similar customer base who are interested in urban fashion athletic shoes.

Which law firms are involved?

JD Sports is being advised by Freshfields.

Hibbett’s legal counsel is Bass, Berry & Sims, an American national firm.

A BIT OF FUN 😄

🇺🇸 Is TikTok actually going to be banned in the US?

littlelawnews

View more on Instagram

IN OTHER NEWS 🗞

• 🌍 Two major US law firms are setting up shop in Saudi Arabia. Quinn Emanuel Urquhart & Sullivan and Morgan Lewis are opening offices in Riyadh, following recent regulatory changes that allow foreign lawyers more freedom to operate in the country. With Saudi Arabia looking to diversify away from oil, the region wants to become a more attractive spot for lawyers. These firms already have offices in Dubai and Abu Dhabi, so have some existing presence in the Middle East.

• 🎉 Today, A&O Shearman goes live! Today’s the launch of the new legal powerhouse formed by the merger of Allen & Overy and Shearman & Sterling. This mega firm now has $3.5bn (£2.8bn) in revenue and nearly 4,000 lawyers across 48 offices in 29 countries. With over 99% of votes from both firms supporting the merger, the legal world watches as this new global giant takes shape.

• 🏦 The Bank of England has warned UK banks on the risks of private equity. It has stressed that banks need a better grip on their risk exposures to this massive $8 trillion (yes, trillion) asset class. UK lenders now have four months to monitor how they deal with private equity businesses and report their findings back to the Bank of England.

• 🚀 Alphabet (Google’s parent company) impressed investors with a stellar earnings report, revealing over $80bn (£64bn) in revenue and a record $25.5bn (£20.4bn) in operating income. The real buzz, though, came from the announcement of its first-ever dividend and a massive $70bn (£56bn) share buyback, which pushed its shares up over 10%. Despite the rise of AI and people criticising Google Search for getting worse, the search engine still managed to pull in around $46bn (£36.8bn) from ads in just first 3 months of this year (check out this crazy chart below 👇️)

  

AROUND THE WEB 🌐

• 😺 Meow: Cat lovers — check out these livestreams of cat feeders in Japan’s streets.

• 🎵 Music: Guess the song name of your favourite artist (within 5 seconds).

• 🥛 Crypto: Milk Road is the most unhinged crypto newsletter on the internet. Sign up now — it’s free.*

Credit: r/internetisbeautiful

* This is sponsored content

STUFF THAT MIGHT HELP YOU 👌

• 📹️ Free application help: If you're applying to commercial law firms, check out my YouTube channel for actionable tips and an insight into the lifestyle of a commercial lawyer in London.