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Corporate events for Corporate Finance services

Defined benefit (DB) pension schemes can be one of the largest stakeholders of a company and their size and risks are rarely publicly disclosed. Understanding and managing the true position of the scheme can unlock value in a corporate deal.

Dealing with complexity and time pressure

The legislation on DB pensions is complex: the ‘right’ answer is never clear and is often situation-specific. The new Pension Schemes Act 2021 also brings the threat of civil and criminal sanctions to directors and advisors, with stronger powers for the UK Pensions Regulator to intervene.

This doesn’t apply only to big-ticket M&A activity, but also to dividends, refinancings and tax restructurings. This risk must be actively managed. Corporate finance and restructuring skillsets are required to consider the ongoing impact of a transaction on covenant.

Engaging with trustees and regulators takes time and brings deal completion risk – identifying scheme issues and proactively engaging early with stakeholders is a must.

Our services for corporate events

  • We can help you navigate the challenges associated with fast-paced, complex corporate transactions – including mergers and acquisitions, disposals and restructurings.
  • We can assess the impact of a corporate event on the covenant of a pension scheme.
  • We can provide strategic advice on how to view DB pension risk against a broader corporate finance background.
  • We can devise proposals to mitigate any detriment caused to the pension scheme.
  • We can support you in your negotiations with the pension trustees, and in engaging with The Pensions Regulator (for example, in order to apply for a Clearance statement).
  • We can examine whether The Pensions Regulator’s powers to impose a Contribution Notice or Financial Support Direction are applicable in your case.
  • We can prepare documentation for you to support a Statutory Defence to reduce the risk of future regulatory action.

Joined-up, independent advice from experienced professionals

  • Our specialist corporate advisory team has deep corporate finance experience, enabling us to view all the various issues associated with your pension scheme in the broader context of the corporate event.
  • We have experience in advising both investors (shareholders and bond-holders) as well as company directors.
  • We are skilled at working closely with other financial advisors (such as investment banks) and lawyers to ensure we deliver joined-up advice to best manage pensions risk.
  • We rarely suffer from conflicts of interests like some of our competitors: we deliver truly independent advice with your own interests at its core.

We appointed Cardano as our sponsor covenant adviser to engage in a cross-border and highly complex M&A process where multiple stakeholders held differing viewpoints. Their work, in conjunction with the trustee advisers, included pre- and post-transaction covenant analysis, entity priority modelling and an assessment of and advice around moral hazard issues. I found their work exemplary and would not hesitate to recommend them to anyone else in a similar situation.

Andrew Nelson, Chief Financial Officer, Amey