UPDATE, 4/23/14, 2:30 p.m. EDT: Linklaters is also advising Novartis on its three-part transaction with GlaxoSmithKline. The names of Linklaters attorneys have been added to this article’s sixteenth paragraph.
A host of law firms are reaping deal work from a major hostile bid for Botox maker Allergan Inc. as well as a series of transactions involving Swiss pharmaceutical giant Novartis.
Canadian drug company Valeant Pharmaceuticals International announced on Tuesday a $45.7 billion hostile bid for Allergan, which makes the popular wrinkle treatment Botox. Private equity firm Pershing Square Capital Management, led by hedge fund billionaire Bill Ackman, is backing the deal by agreeing to vote its 9.7 percent stake in Irvine, Cal.–based Allergan in favor of Valeant’s unsolicited cash-and-stock offer.
Valeant is offering $48.30 and 0.83 Valeant shares in exchange for each Allergan share. Valeant said in its announcement that its bid would represent a “substantial premium” over Allergan’s unaffected share price of $116.63 on April 10, which was the day before Pershing Square amassed at least a 5 percent ownership stake in Allergan, allowing the investor to begin accumulating the remainder of its current stake. (Pershing Square has agreed to exchange its Allergan stake for Valeant shares and remain a long-term shareholder in the company.)
Valeant said Tuesday that the proposed deal would “create an unrivaled platform for growth and value creation in health care” for the shareholders of both companies. Allergan’s board of directors confirmed Tuesday that it had received Valeant’s unsolicited bid and that it planned to review the proposal. Allergan’s best-known product is Botox, a cosmetic injection commonly used to reduce and prevent wrinkles. The drug, which is also used to prevent migraines, generated 32 percent of Allergan’s sales last year, making $1.98 billion, according to Bloomberg.
As part of its massive takeover attempt, Valeant has amassed a large legal team that is led by attorneys at Sullivan & Cromwell, Skadden, Arps, Slate, Meagher & Flom and Osler, Hoskin & Harcourt. All three firms have a history of performing deal work for the Canadian company, which has been expanding its drug portfolio through several acquisitions in recent years. Both S&C and Skadden also advised Valeant on its $2.6 billion purchase of skin care company Medicis Pharmaceutical Corporation in 2012, while Skadden and Osler teamed up to guide the company’s $8.7 billion deal for contact lens maker Bausch & Lomb last year.
S&C’s team advising on the Allergan offer includes Los Angeles–based corporate partners Alison Ressler and Eric Krautheimer along with New York corporate partner Alan Sinsheimer. Tax partner Ronald Creamer Jr., finance partner S. Neal McKnight, compensation and benefits partner Matthew Friestedt, IP partner Nader Mousavi, antitrust partner Yvonne Quinn, corporate special counsel Lisa Murison, IP special counsel Spencer Simon and antitrust special counsel Eric Queen are also working on the deal. S&C associates on the team are Katherine Baudistel, Ari Blaut, Scott Campbell, Regina Readling and Aaron Werner.
New York–based M&A partner Stephen Arcano is part of the Skadden team also advising Valeant. Banking partner Robert Copen, antitrust partner Steven Sunshine, corporate finance partner Richard Aftanas and tax partner David Rievman round out the group of Skadden attorneys. Osler, which is serving as Canadian counsel to Valeant, is led by firm cochair Clay Horner along with M&A partner Douglas Bryce and antitrust partner Peter Glossop.
Kirkland & Ellis and Canadian firm Davies Ward Phillips & Vineberg are representing Pershing Square with respect to the takeover proposal. New York corporate partners Stephen Fraidin and Richard Brand are leading the Kirkland team working on the deal. Last year, the firm advised Pershing Square on the $490 million sale of its roughly 18 percent stake in retailer J.C. Penney as well as on the $2.2 billion purchase of a 9.8 percent stake in Air Products & Chemicals.
Corporate partner Patricia Olasker and M&A partner J. Alexander Moore, both based in Toronto, are leading the Davies Ward team.
Allergan’s board said it has enlisted the help of Latham & Watkins as its legal counsel on the takeover offer. Corporate partners Cary Hyden and Paul Tosetti—based in Orange County and Los Angeles, respectively—are leading the way for Latham. Hyden is Allergan’s longtime outside counsel, having advised the company on a number of small acquisitions as well as the 2002 spinoff of Advanced Medical Optics.
In the second round of major pharmaceutical M&A news, Freshfields Bruckhaus Deringer, Hogan Lovells and Linklaters are helping Novartis undergo a massive restructuring that will see the company boost its oncology portfolio while shedding some of its underperforming assets through a series of transactions, including a joint venture with fellow pharmaceutical giant GlaxoSmithKline (GSK). Novartis has agreed to pay up to $16 billion for an oncology business from GSK, which will then buy most of Novartis’ vaccines portfolio for as much as $7.1 billion, while the two companies will also combine their consumer health care businesses. Novartis is also selling its animal health business to Eli Lilly and Company for roughly $5.4 billion.
Novartis is paying $14.5 billion to GSK for the oncology division, along with up to $1.5 billion in future payments that are dependent on the unit’s products hitting certain development milestones. London-based GSK will then pay $5.25 billion up front for Novartis’ vaccines portfolio, excluding its flu vaccines, along with up to $1.8 billion in future payment and potential royalties. Meanwhile, Novartis will own a 36.5 percent stake in the two companies’ consumer health care joint venture, with GSK holding the remaining shares. The deals are expected to close during the first half of next year, pending antitrust approval.
Novartis has also agreed to deal to shed its animal health business, which generated roughly $1.1 billion in revenue last year. Eli Lilly will acquire that unit in an all-cash deal and combine it with its own animal health business, Elanco. That deal is expected to be completed by the end of the first quarter of 2015, pending regulatory approval.
Novartis has turned to Magic Circle firm Freshfields for advice on all of Tuesday’s announced transactions. Corporate partner Julian Long, who heads Freshfields’ London office, is leading the firm’s team on the deals with GSK, along with London antitrust head Rod Carlton, Brussels competition partner Thomas Janssens and Washington, D.C., antitrust partner Paul Yde. On the Eli Lilly deal, Freshfields is fielding a team that includes New York corporate partners Doug Bacon and Julian Pritchard as well as Paul Yde and tax partner Claude Stansbury in Washington, D.C.
Hogan Lovells is also advising Novartis on each of the deals announced Tuesday. New York–based corporate partner Adam Golden is leading the firm’s team, which also includes corporate partner Adam Bellack and IP partner Cullen Taylor, as well as IP counsel Anishiya Abrol. Hogan Lovells associates on the deal are Adam Aft, Allison Donovan, Carrie Etherton, Venroy July, Thomas Kennedy, Catlan McCurdy and Adriana Tibbitts.
Linklaters is cocounsel to Novartis with respect to the pact with GSK. The Magic Circle firm is led by London-based corporate partner James Inglis, who is working with corporate partner Aisling Zarraga, IP partner Nigel Jones, technology partner Marly Didizian, tax partner Dominic Winter and antitrust partners Christopher Bellamy and Jeffrey Schmidt. Corporate counsel Peter Cohen-Millstein and managing associate Jarlath McGurran are also advising on the matter.
Slaughter and May is advising GSK on its complicated, three-part agreement with Novartis. The firm has advised GSK on a number of past transactions, including last fall’s $696 million sale of a roughly 6.5 percent stake in Aspen Pharmacare Holdings. London-based corporate partner Simon Nicholls is heading the firm’s team on Tuesday’s deal. Corporate partners Gavin Brown, Richard Smith and David Johnson are also advising along with competition partner Bertrand Louveaux, IP partner Susie Middlemiss, employment partner Sandeep Maudgil, real estate partner David Waterfield and financing partner Guy O’Keefe.
Cleary Gottlieb Steen & Hamilton is serving as antitrust counsel to GSK with a team led in the U.S. by Washington, D.C.–based partner George Cary and counsel Kathleen Bradish. Cologne-based partners Romina Polley and Patrick Bock are leading the European team along with counsel Silke Heinz. Swiss firm Niederer Kraft & Frey is also advising GSK.
Eli Lilly is being represented by a Weil, Gotshal & Manges team that includes New York–based corporate partners Raymond Gietz and Matthew Gilroy. IP partners Charan Sandhu and Elizabeth Weiswasser are also advising, along with tax partner Helyn Goldstein, benefits partner Amy Rubin and real estate partner Samuel Zylberberg. Weil associates on the deal are Adrienne Baker, Daniel Birnhak, Claire Comfort, Mark Dundon, Melissa Meyrowitz, Joshua Nemser, Megan Pendleton and Rachel Vigneaux.