Holding Company Buys Control of Investment Bank for $2.8 Billion

Leucadia National Corporation, a holding company, will buy New York investment bank Jefferies Group Inc. for $2.8 billion in stock, the firms announced on Nov. 12.

Leucadia already owns a 28.6 percent stake in Jefferies. The target company’s shareholders will receive .81 of a Leucadia share for each Jefferies share. Following the transaction, former Jefferies shareholders will have a 35.3 percent stake in Leucadia.

Under the terms of the agreement, Jefferies CEO and chairman Richard Handler will become CEO of Leucadia, while the conglomerate’s current chairman and CEO, Ian Cumming, will retire but remain a director. Leucadia’s president, Joseph Steinberg, will become chairman of Leucadia’s board of directors.

Jefferies will be Leucadia’s largest business following the deal’s closure, which is expected to occur in the first quarter of 2013.

Weil, Gotshal & Manges represents Leucadia in the transaction, while Leucadia’s board of directors tapped Proskauer Rose. Morgan, Lewis & Bockius is advising Jefferies, while Wachtell, Lipton, Rosen & Katz represents the Jefferies board’s transaction committee.

Weil’s team is led by New York mergers and acquisitions partners Andrea Bernstein and Matthew Gilroy. Tax partners Mark Hoenig and Chayim Neubort, both in New York, are also working on the deal, along with M&A associates James Lurie, Allison Donovan and Michael Ray in New York and tax associate Mark Dundon in Dallas.

The Proskauer team in New York advising Leucadia’s board of directors is led by restructuring chair Martin Bienenstock and M&A partners Lorenzo Borgogni and Arnold Jacobs. Other lawyers on the deal include employee benefits partner Andrea Rattner; tax partners Stuart Rosow and Martin Hamilton; litigation associate Michael Richter; and corporate associates Mina Farbood, Yoon Suk Choo and Daniel Forman.

Covington & Burling partner Jack Bodner in New York is representing UBS in its role as financial adviser to Leucadia’s board.

The Morgan Lewis team representing Jefferies is led by business and finance partners R. Alec Dawson, Sharyl Orr and Robert Robison, all in New York. Other New York lawyers advising on the deal are business and finance partners Stephen Farrell and Richard Petretti and associates Sarah Grimm, Anna Tomczyk, Eleanor Tai, Eric Tajcher and Shawmir Naeem; antitrust partner Harry Robins; employee benefits partner Gary Rothstein; tax partners Kenneth Kail and Richard Zarin; and investment management partner Robert Mendelson. Securities partner David Sirignano is assisting from Washington.

Jefferies general counsel Michael Sharp is serving as in-house counsel.

Wachtell’s team is led by corporate partners Edward Herlihy and David Shapiro, along with executive compensation and benefits partner Jeannemarie O’Brien and tax partners Jodi Schwartz and Joshua Holmes, all in New York.

A team from Cleary Gottlieb Steen & Hamilton is advising Citigroup Global Markets in its role as financial advisor to the Jefferies transaction committee. Corporate partner Victor Lewkow and associate James Langston, both in New York, are working on the deal.

$2.9 Billion Buys Rights to Calvin Klein Brands

Fashion company PVH Corporation will buy Warnaco Group, a New York apparel firm, for $2.9 billion in a cash-and-stock deal that will bring various divisions of Calvin Klein under one corporate roof.

PVH bought the Calvin Klein brand in 2002, though Warnaco retained control over licensing rights for the brand’s jeans and underwear. The most recent deal brings Warnaco into a stable of fashion brands that includes Van Heusen and Tommy Hilfiger. The deal is expected to save PVH $100 million annually within three years, PVH said.

Warnaco shareholders will receive $51.75 in cash and .1822 PVH shares for each share they hold in Warnaco. The acquisition will leave Warnaco shareholders with a combined 10 percent stake in the expanded company.

The merger has been approved by both companies’ boards of directors but is still subject to approvals by regulators and Warnaco shareholders. PVH said it expects the deal to close early next year.

A Wachtell, Lipton, Rosen & Katz team advised PVH, while Warnaco turned to Skadden, Arps, Slate, Meagher & Flom.

Wachtell’s team is led by corporate partners Andrew Nussbaum and Gregory Ostling in New York. Other lawyers on the deal are executive compensation and benefits partner Michael Segal and associate D. Miishe Addy; corporate associates Justin Rosenberg and Daniella Genet; restructuring and finance partner Eric Rosof and associate Gregory Pessin; tax partner Jodi Schwartz and associate Michael Sabbah; and antitrust partner Ilene Knable Gotts and associate Franco Castelli, all in New York.

PVH general counsel Mark Fischer advised in-house.

Kirkland & Ellis corporate partners Stephen Fraidin and William Sorabella represent the Peter J. Solomon Company in its role as PVH’s financial adviser.

Skadden’s Alan Myers and Peter Serating, both M&A partners in New York, served as outside counsel to Warnaco in the deal.

Warnaco’s general counsel is Jay Dubiner.

Weil, Gotshal & Manges represented J.P. Morgan in its role as financial advisor to Warnaco. Corporate chair Michael Aiello advised J.P. Morgan along with associates Frank Martire and Paul Carbonelli.