As British law firm DWF prepares for its privatization, at least 40 lawyers will receive a pay-out of more than a million pounds per lawyer.
The London-listed DWF said on Monday that it was in talks to sell itself to Inflexion Private Equity for a price of approximately £342m.
Many current and former DWF Partners who own shares of the law firm would benefit from the takeover.
According to an analysis of public filings, more than 30 people have stakes that are large enough to earn them payouts exceeding £1 million each.
The chief executive, Sir Nigel Knowles, is set to receive £2.7m as a result of the sale. He could also earn up to £2.25m in shares that are subject to performance criteria and allocated under a deferred bonuses plan scheme.
Former chief executive Andrew Leaitherland, who is now the chief operating officer of the company, will receive shares worth £2.7m.
The deal will delist DWF four years after the firm became the UK’s largest listed law firms in 2019.
DWF raised £95m through an IPO, giving the international law firm a value of £366m. Since then, shares in the company have dropped by 40pc.
Stocks rose by 19.8p, to 87.8p, on the news of takeover talks.
The proposal being considered values DWF shares at 100p each, with a 3p special dividend per share if the deal closes.
In an update sent to investors, DWF stated: “Discussions are ongoing between DWF, Inflexion and it is not possible to guarantee that an offer will come through, even if all pre-conditions have been met or waived.”
Inflexion must make an official offer by August 7. In 2018, the London-based firm led a buyout of Chambers and Partners, a lawyer ranking company.
The sale could be a result of years of restructuring by Sir Nigel who will replace Mr Leaitherland in 2020 as CEO. The company has made changes including closing offices in Singapore and Australia, as well as downsizing its operations in Germany and Dubai.
Sir Nigel was the former managing partner of DLA Piper and received a salary of £530,000 and a bonus worth £221,680 last year. He also received over £40,000 as pensions and benefits.
As interest in making law firms publicly traded has cooled, discussions about going private have begun. Mishcon de Reya of London abandoned plans last year to list on the London Stock Exchange due to volatile economic and stock market conditions.