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A $103 million cross-border investment translated into crunch time for O’Melveny & Myers lawyers when the deal ran up against a national holiday in China known as Labor Day Golden Week. The investment by longtime O’Melveny client International Game Technology in Hong Kong’s ChinaLot Synergy Holdings Limited was finished up on the eve of the seven-day holiday, according to Howard Chao, Silicon Valley partner and head of the firm’s Asia practice. “It was a very high-pressure cooker kind of deal,” Chao said. Though Hong Kong business closes for just one day during the holiday week, the mainland holiday makes it difficult to get any type of deal done, said Hong Kong partner Colin Law, who led the firm’s team in China. “China effectively shuts down during that period,” Law said. “You will not get to see any regulators [during] that time.” IGT, the Reno-based slot machine giant, is entering into a strategic alliance with CLS, which makes video lottery terminals. The company is investing partly in the form of equity and partly in the form of a convertible note, according to a company press release. Because the investment was made in Hong Kong, many of the applicable laws were local, which Chao said gave Law’s team a lot to do. Law agreed that the deal gave his team plenty to keep them busy. “The Hong Kong rules on related party dealings can translate into regulatory impediments that are not always warranted,” Law wrote in an e-mail. “That said, those rules can be critical in jurisdictions such as Hong Kong, where shareholdings in public companies tend to be highly concentrated compared to those in the U.S.” Law said the deal shows that the Hong Kong legal market hasn’t lost its luster as firms rush into mainland China. “The fear that Hong Kong will be sidelined as China becomes increasingly dominant is not entirely true, at least for legal services,” he said. “I am seeing the opposite, with more and more China direct-investment deals either routing through Hong Kong or otherwise coming with a Hong Kong dimension.” Also on the deal team were IP transactional partner Margaret Ikeya in Silicon Valley; transactional counsel Peter Chen and associate Winnie Suen in Hong Kong; international trade and antitrust counsel Nathan Bush and IP associate Elaine Zhang in Beijing; international arbitration counsel Nadia Darwazeh in Shanghai; and IP transactional counsel Albert Yuen in Los Angeles. Baker & McKenzie advised CLS on the deal with Hong Kong partner Lawrence Lee at the fore.

Zusha Elinson

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