This year’s honorable mentions go to seven dealmakers who handled a range of innovative transactions: a first-of-its-kind restructuring of a pension plan, a world-famous soccer club’s IPO, a Japanese investor’s big-bucks foray into the U.S. cellular market, and an arduous Chinese banking acquisition. 

 

Peter Izanec, Jones Day, Cleveland
Evan Miller, Jones Day, Washington, D.C.
Nicholas Potter, Debevoise & Plimpton, New York

General Motors Company tapped Izanec, an M&A partner, and Miller, cochair of Jones Day’s employee benefits and executive compensation group, in March 2012 to help it implement a novel plan to trim its crushing pension burden: In exchange for around $25 billion in GM assets, Prudential Financial Inc. would take on GM’s liability for 110,000 GM pensioners.

Previously, annuity deals like this had only been done on a very small scale, so "we basically had to start with a blank page" in developing the deal templates, Miller says. The asset transfer itself also posed challenges: Prudential agreed to take as payment some hard-to-value assets, such as real estate and interests GM had in private equity funds. The transfers of those interests were subject to ownership transfer restrictions, so Prudential’s counsel, a team led by Debevoise financial institutions practice cochair Nicholas Potter, had to manage side negotiations with dozens of private equity general partners.

In addition, both legal teams grappled with how to protect their clients’ interests as both asset values and pension liabilities fluctuated in the five months between the signing of the agreement and its closing. GM had concurrently offered retirees a lump-sum buyout option, meaning that the number of retirees who would ultimately be covered by the transaction was hard to predict.

As the GM deal moved toward its November 1 close, the three lawyers juggled a similar "de-risking" transaction between Verizon Corporation and Prudential valued at $7.5 billion; that deal closed on December 10. "There’s no question that there’s logic in the insurance industry and in the industrial world getting together for these type of deals," says Potter. "Now there’s a regulatory road map to get them done."

 

Marc Jaffe, Latham & Watkins, New York

Only a handful of sports franchises have attempted IPOs. Teams are hard to value, and the market is generally skeptical about any individual franchise’s market potential. But the 135-year-old soccer club Manchester United F.C.is not just any franchise: it claims 650 million fans worldwide. Jaffe, a corporate partner who had experience handling the last big sports IPO, of the World Wrestling Federation (now World Wrestling Entertainment), in 1999, was tapped by Manchester United and its owner, the Glazer family, to lead the legal effort toward the club’s IPO launch.

Particularly tricky, Jaffe says, was keeping Manchester United’s management largely mum during the registration period, as required by U.S. securities laws—even amid daily negative, or inaccurate, news reports about the offering.

Leading a 25-member Latham team, Jaffe worked to meet the family’s desire to maintain control over Manchester United via a dual class of shares. Critically, Jaffe was able to take advantage of newly enacted rules under the United States’s year-old Jumpstart Our Business Startups Act, legislation intended to make it easier for foreign companies to go public in the United States. (Manchester United was among the first foreign private issuers to do so.) Jaffe got Manchester United qualified as an "emerging company" under the new rules, allowing it to submit its registration and answer regulatory queries initially out of the public eye—a key consideration, given the passion of the club’s fan base. "What makes sports team IPOs unique is that they have another set of stakeholders: the fans," says Jaffe. "They have a huge emotional stake in the team."

 

Kenneth Siegel, Morrison & Foerster, Tokyo
Robert Townsend, Morrison & Foerster, San Francisco

Siegel, Morrison & Foerster‘s Tokyo managing partner and longtime counsel to SoftBank Corp., and Townsend, cochair of global M&A, were tapped by CEO Masayoshi Son last summer to help SoftBank in a splashy bid to enter the U.S. cellular market. SoftBank signed a deal in October agreeing to pay $20.1 billion for a 70 percent stake in the third-ranked U.S. wireless company, Overland Park, Kansas–based Sprint Nextel Corporation. If approved, the acquisition will be Japan’s largest outbound deal ever.

Among several challenges: SoftBank offered to inject $3.1 billion in up-front capital to help Sprint build up its 4G network capacity ahead of the close. To do this without triggering regulatory restrictions on foreign ownership of U.S. companies, Morrison & Foerster, together with Sprint’s advisers, Skadden, Arps, Slate, Meagher & Flom, structured the initial investment as a debt security that converts to equity if the acquisition is approved. They also helped devise a deal structure that offers Sprint shareholders either cash or stock in the surviving "New Sprint," while ensuring that Softbank retains 70 percent of the new company.

Concurrently, Siegel led round-the-clock efforts in Tokyo to finalize $17.1 billion in Japanese lender acquisition financing. After pausing to catch their breath, in December the team was also advising SoftBank in connection with Sprint’s proposed acquisition—using SoftBank’s cash injection—of Clearwire Corporation; at press time, Dish Network Corporation was attempting to top Sprint’s bid, with no clear victor in view.

 

Francis Zou, White & Case, New York

It took the Industrial and Commercial Bank of China Limited (ICBC) more than two years to get to the finish line in its groundbreaking $140 million acquisition of the U.S. unit of The Bank of East Asia, Limited (BEA). For its success, ICBC owes much to the behind-the-scenes efforts of Zou, a White & Case bank regulatory and M&A partner who, in a previous career, served as a high-level Chinese government interpreter.

A failure to obtain regulatory approval for an acquisition would have been politically damaging for a Chinese bank, so correctly reading the U.S. regulatory tea leaves was critical. In March 2010 Zou and a colleague, bank regulatory partner Ernest Patrikis, approached the board of governors of the Federal Reserve System, the main U.S. gatekeeper on bank deals, to ask about its position on a hypothetical acquisition of a U.S. bank by a Chinese entity. The response was negative, but in 2011, after a visit to China by then–Treasury Secretary Timothy Geithner, the board’s position appeared to soften.

Wasting no time, ICBC, with Zou’s help, then signed a deal with BEA; it was up to Zou to shepherd ICBC through a 13-month comprehensive review before both the Fed board and the U.S. Office of the Comptroller of the Currency. The final step was preparing ICBC for an official visit by regulators to ICBC’s offices in Beijing.

In May, the board approved the deal, the first time a Chinese bank met U.S. standards for real-time, high-level global supervision in its home country. The deal closed July 6—"an important milestone for ICBC," says Zou, "and for China."