Consumer electronics giant Apple, which was unburdened by debt until this week, is relying on Hogan Lovells as the company undertakes its first bond sale in more than two decades to help finance a $100 billion capital return program to shareholders.
Apple priced an estimated $17 billion in bonds Tuesday as part of an offering to investors that Reuters reports is the largest nonbank bond deal in history. The Cupertino, California–based information technology and electronics company is seeking to return $100 billion in cash to shareholders by the end of 2015.
Since its market capitalization of $623 billion—more than the combined worth of the stock markets of several European nations—made it the most valuable company of all time last summer, Apple has fallen on what it might consider a rough patch of sorts.
The company’s stock price has slipped some 35 percent since September 2012 and fell below the $400-per-share mark last week for the first time since December 2011. The decline raised concerns that the October 2011 death of company cofounder Steve Jobs had damaged Apple’s aura and led critics to claim that the company had let the technology revolution slip through its fingers.
Earlier this year, shareholders led by hedge fund manager David Einhorn of Greenlight Capital pushed Apple to stop hoarding cash and increase the dividends it pays to shareholders. In February, Einhorn and his lawyers from Akin Gump Strauss Hauer & Feld persuaded a U.S. district court judge in Manhattan to side with their argument that Apple should stop collecting shareholder votes in an effort to change provisions of the company’s corporate charter. (O’Melveny & Myers advised Apple in the dispute.)
Though Apple has $145 billion in cash on hand, only about $45 billion of that sum is in the United States, and repatriating the excess cash to fund the capital return program would have severe tax implications for the company, according to The Wall Street Journal. As a result, Apple turned to the debt markets.
Apple filed an S-3 with the SEC on Monday showing that Stuart Stein, global cohead of the corporate group at Hogan Lovells, and corporate and securities partners Eve Howard and Gregory Parisi, are advising the company in its epic bond endeavor. Legal fees and expenses related to the listing are not yet available and Stein did not respond to a request for comment. (A preliminary prospectus filed with the SEC also contains details of the bond sale and reveals that a team from Simpson Thacher & Bartlett—led by corporate partners Kevin Kennedy and Daniel Webb, along with associates E. Ryan Coombs, Brian Osimiri, and Kelli Schultz—are representing underwriters on the offering led by Deutsche Bank and Goldman Sachs.)
Hogan Lovells has handled various matters for Apple in the past, including representing the company in connection with several privacy-related class actions until the firm was replaced by Morrison & Foerster two years ago, according to a report at the time by sibling publication The Recorder.
MoFo itself has been extremely busy for Apple in recent months, representing the company in its global patent battle with South Korean electronics giant Samsung. The Recorder reported this week that Apple’s attorneys from MoFo and Wilmer Cutler Pickering Hale and Dorr are preparing to face off against Samsung and its Quinn Emanuel Urquhart & Sullivan lawyers later this year in a new damages trial after Apple’s $1.05 billion jury award was cut in half last month by a federal judge in San Francisco.
Overseeing the IP war for Apple is general counsel D. Bruce Sewell, who joined the company from Intel in 2009. Before heading Intel’s legal department, Sewell was a partner at Brown & Bain, a Phoenix-based firm that merged with Perkins Coie in 2004.
Sewell, who replaced the retiring Daniel Cooperman (now of counsel at Bingham McCutchen) as Apple’s in-house legal chief, has been richly rewarded for his efforts. An SEC filing by the Apple late last year shows that he received $69 million in compensation in 2012, according to news reports.
Apple’s current chief IP counsel Bruce "B.J." Watrous Jr. joined the company in 2011 to replace predecessor Richard “Chip” Lutton Jr., who became the new general counsel of Palo Alto–based Nest Labs a year ago this month. Lutton is the husband of Katherine Lutton, an IP litigation partner with Fish & Richardson in Silicon Valley.