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MDS Inc.’s $615 million purchase of Molecular Devices Corp., a Sunnyvale supplier of measurement systems that aid in drug discovery, was a deal that used an interesting � and more efficient �, lawyers said. In this deal, Cooley Godward Kronish’s California lawyers worked with Molecular Devices while Boston-based Ropes & Gray represented MDS, a Canadian drug developer. The deal’s structure included a two-step acquisition, using a tender offer as the first step, according to Cooley partner Suzanne Sawochka Hooper. “We expect to see this structure used more frequently in 2007 than in the last few years,” she said. That’s because of the SEC amendments to the “best price” tender offer rule that became effective in late 2006. A tender offer refers to a public offer to all stockholders of a publicly traded company to tender their shares for sale at a specified price for a specified time. The structure provides a shorter period between signing an agreement and closing the transaction than in a typical merger structure, but it wasn’t a popular option until recently when the new amendments took effect, Hooper added. Before then, the tender offer structure was complicated by a concern that employees who are also stockholders would be considered paid during the tender offer, and thus violate the “best price” rule. The amendments clarified that the best-price rule applies only to the consideration offered for stock tendered in a tender offer and not to employment arrangements entered into with employees. Cooley has represented Molecular Devices since before its 1995 IPO. The firm has also represented the company in several M&A transactions. On the MDS side, the effort spanned several offices, said Ropes partner William Shields. “We were happy to be able to use input from experts in four of our offices to complete the transaction, including lawyers in San Francisco, Palo Alto, New York and Boston as well,” Shields said. The deal is expected to close during the second quarter. Along with Shields, a Boston partner, the Ropes & Gray team included Boston partner Joel Freedman, San Francisco associate Amy Olson, Boston partner Edward Black and New York partner Barbara Ruskin. The Cooley team consisted of Palo Alto partners Hooper and James Kitch and Palo Alto associates Wei Chen, Chadwick Mills and Tali Sealman Tene.

Kellie Schmitt

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