The takeover battle for Dell Inc. may not have yet reached the level of Wall Street legend, but the proposed $24.4 billion leveraged buyout for the company has drawn in enough high-powered lawyers to make a small screen drama.
The latest large firms to join the fray are Alston & Bird, which is serving as litigation counsel to Dell in shareholder litigation in Delaware, and Kirkland & Ellis, which has been retained by private equity firm The Blackstone Group to advise on a competing bid for the world’s third-largest personal computer maker.
The drama began in earnest last month when private equity firm Silver Lake Partners and Dell founder Michael Dell teamed up to take the Round Rock, Texas-based company private in the largest LBO since the global economic crisis began five years ago. Hogan Lovells is advising Dell itself, while Debevoise & Plimpton is counseling the company’s board of directors, save for CEO Michael Dell, who is being represented by Wachtell, Lipton, Rosen & Katz.
Sullivan & Cromwell is advising Microsoft, which is providing a $2 billion loan to back the bid by Michael Dell and Silver Lake, with the Menlo Park, Calif.–based private equity firm being advised on its offer by Simpson Thacher & Bartlett. Former Simpson corporate associate Rex Khan serves as senior counsel for Silver Lake, while ex-Ropes & Gray attorney Andrew Schader is the private equity firm’s managing director and general counsel.
Simpson’s long-standing transactional ties to Silver Lake prevented it from advising New York-based Blackstone, another longtime private equity client, when it began negotiating with a special committee of Dell’s board last week on its own potential deal for the company.
An SEC filing by Dell shows that Kirkland M&A partners David Fox and Daniel Wolf are advising the private equity firm. Both Wolf and Fox joined Kirkland in a high-profile lateral move from Skadden, Arps, Slate, Meagher & Flom in 2009. (While still at Skadden, Wolf and Fox sat across the table from Blackstone on its $4.3 billion acquisition of Travelport from now-defunct Cendant Corp. in 2006.)
Also seeking a sizable piece of Dell is a group fronted by Carl Icahn, the noted corporate raider who owns a $1 billion stake in the company through his investment arm Icahn Enterprises. Icahn has said publicly he’s open to partnering with Blackstone to take control of Dell, thereby forcing out Michael Dell, who founded the company as a teenager back in the mid-1980s.
Reached Tuesday by The Am Law Daily, a Daily Report affiliate, Keith Schaitkin, who took over as general counsel of Icahn Enterprises last year from predecessor Marc Weitzen, declined to comment on whether Icahn has brought in outside counsel. But Icahn himself has generally relied upon his in-house team to handle his various investment initiatives, such as the activist investor’s pursuit late last year of on-demand streaming media and movie rental company Netflix.
Weitzen and Schaitkin both previously practiced together at New York’s Gordon Altman Weitzen Shalov & Wein, a 50-lawyer firm that counted Icahn as one of its most prominent clients before closing its doors in 2000 after a series of lateral departures to other Am Law 100 firms.
Two other lawyers who are now members of Icahn Enterprises include president Daniel Ninivaggi, a former Winston & Strawn partner who joined the holding company for its namesake’s various assets in 2010, and director Jack Wasserman, a former senior partner at New York’s Wasserman, Schneider, Babb & Reed.
Should either Icahn—whom Forbes notes is now sporting a scholarly white beard—or Blackstone succeed with their bids, large Dell institutional shareholders would be able to retain their holdings in the company. Two of those shareholders, Memphis-based Southeastern Asset Management and Baltimore-based T. Rowe Price, have been vocal in voicing their objections to the offer put forth by Michael Dell and Silver Lake.
Shearman & Sterling senior partner Creighton Condon and Greenberg Traurig senior M&A chairman Dennis Block are advising Southeastern Asset Management on its objections to the Dell LBO. Andrew McCarroll serves as general counsel for Southeastern, while Michael Wittke is its chief compliance officer.
It’s unclear whether T. Rowe Price has retained outside counsel of its own. T. Rowe Price managing counsel and chief compliance officer John Gilner and vice president and chief legal counsel David Oestreicher did not immediately respond to requests for comment on the matter. (McGuireWoods partner Anne Whittemore—the widow of late firm patriarch Robert Patterson Jr.—is an independent member of T. Rowe Price’s board of directors.)
T. Rowe Price and Southeastern collectively own more than a 10 percent stake in Dell and believe that the offer made by Silver Lake and Michael Dell significantly undervalues the company. Dell itself has been sued in Delaware by other shareholders seeking to block a sale on the grounds that it shortchanges investors.
Alston & Bird litigation partners John Latham, Susan Hurd, Gidon Caine and Jon Shepherd are leading a team from the firm serving as litigation counsel to Dell in Delaware. The firm has handled other matters for Dell in the past, including an antitrust case the company filed three years ago against makers of liquid crystal display screens, as well as litigation involving the sales of PCs to businesses and work for certain Dell affiliates.
Litigation partner S. Mark Hurd at Delaware’s Morris, Nichols, Arsht & Tunnell is representing the special committee of Dell’s board of directors in Delaware, while litigation partner Gregory Williams from fellow First State firm Richards, Layton & Finger is advising the independent directors who are not on the special committee. (The special committee’s financial adviser JPMorgan Chase has retained Davis Polk & Wardwell and Cadwalader, Wickersham & Taft as counsel following the latter firm’s recent hire of JPMorgan North American M&A cohead James Woolery, a former partner at Cravath, Swaine & Moore.)
Dell general counsel Lawrence Tu, vice president for corporate, securities and finance counsel and assistant secretary Janet Wright, and vice president for global litigation and IP Laura Coleman are leading an in-house legal team advising the company that also includes executive director for global complex litigation Mary Pape, executive director and corporate finance and M&A counsel Mark Mouritsen, executive director and financial services counsel Daniel Murphy, senior counsel for securities Robert Lindsey, and legal director for compensation and benefits Robert Potts.
The company itself, which, in addition to firms like Debevoise, has turned to Vinson & Elkins and the now defunct Dewey & LeBoeuf to advise on various acquisitions over the past several years, has slashed the amount it has spent on federal lobbying since 2010. K&L Gates and Dow Lohnes, which have previously handled lobbying work for Dell, have not done so since 2010.
Records on file with the U.S. Senate show that Dell spent $2.71 million on lobbying in 2012, about $2.39 million of which was for the company’s in-house lobbyists, a team led by senior manager of global public policy Matt Krupnick, head of North American government affairs Christopher Turner, and federal government affairs manager Chris Alsup.
Williams & Jensen, a law and lobbying shop focused on tax and business in Washington, D.C., has seen its annual billings on behalf of Dell fall from $330,000 in 2008 to $240,000 last year. Williams & Jensen principals Denis Dwyer, J. Steven Hart, Robert Martinez, George Baker, David Franasiak and Christopher Hatcher have taken the lead lobbying for Dell on tax issues.
Dwyer did not respond to a request for comment on how the takeover machinations surrounding Dell have affected his lobbying work for the company.
Bloomberg News reported earlier this year that Dell was one of several major multinational companies that were using the Netherlands as an offshore tax haven, and a successful LBO for the computer maker could save it $775 million in taxes, according to business news site Quartz.