AT&T / DirecTV
At least a dozen firms are advising on telecommunications giant AT&T Inc.’s proposed $48.5 billion acquisition of DirecTV LLC, the nation’s largest satellite television operator. Announced May 18, the deal came three months after Comcast Corporation announced that it had agreed to acquire Time Warner Cable Inc. for $45.2 billion.
For the DirecTV deal, AT&T has mostly reassembled the same legal team it deployed on the $39 billion acquisition of T-Mobile US Inc. that it was forced to abandon in December 2011 in the face of opposition by the U.S. Department of Justice. Sullivan & Cromwell M&A chair Joseph Frumkin and corporate partner Eric Krautheimer are leading the team. Other Sullivan & Cromwell lawyers working on the matter include tax partner Andrew Mason and special counsel David Passey, executive compensation and employee benefits partner Matthew Friestedt and special counsel Henrik Patel, IP special counsel Spencer Simon and associates William Blackman, Scott Crofton, Allison MacDonald, Stephen Miller, Jordan Oreck, Michael Portner Gartke and Adam Rachlis.
AT&T tapped Sullivan & Cromwell last year to advise on the company’s $780 million purchase of a retail wireless unit owned by Atlantic Tele-Network; its $1.19 billion acquisition of Leap Wireless; its $1.9 billion spectrum buy from Verizon Wireless; its $4.85 billion sale of 9,700 cell towers to Crown Castle International; and its $2 billion purchase of wireline assets from Frontier Communications. The firm also handled the $950 million sale of AT&T’s majority stake in its Yellow Pages directory division and $600 million acquisition of NextWave Wireless in 2012.
Arnold & Porter, Crowell & Moring, Sidley Austin and Washington, D.C., litigation boutique Kellogg, Huber, Hansen, Todd, Evans & Figel are providing antitrust and regulatory counsel to AT&T on its DirecTV bid. All four firms, along with Sullivan & Cromwell, advised AT&T on the failed T-Mobile acquisition. Arnold & Porter partners Richard Rosen, Maureen Jeffreys and Wilson Mudge in Washington, D.C., are serving as Federal Communications Commission regulatory counsel to AT&T, along with London-based partners Susan Hinchliffe and Michael Ryan. Crowell is acting as antitrust counsel for the Justice Department’s review of the deal. Antitrust chair Wm. Randolph Smith and partners Jeane Thomas and Ryan Tisch are working on the matter.
AT&T also brought Gibson, Dunn & Crutcher onto the deal. Its lawyers working on the deal include antitrust and trade regulation cochair M. Sean Royall in Dallas and antitrust partner Adam Di Vincenzo in Washington, D.C. A spokeswoman for Sidley Austin did not respond to a request for comment about the names of the lead lawyers from the firm working on the bid.
D. Wayne Watts is AT&T’s general counsel and former Akin Gump Strauss Hauer & Feld partner James Cicconi is the company’s senior executive vice president for external and legislative affairs. Reuben Anderson, a senior partner with Phelps Dunbar in Jackson, Miss., is a lead independent director at AT&T.
El Segundo, Calif.-based DirecTV designated Weil, Gotshal & Manges as its lead outside counsel. Frederick Green, cochair of Weil’s transactional practice, and Michael Lubowitz, cochair of its private equity and M&A group, are leading the firm’s team on the matter. Green advised on the $6.6 billion spinoff from Hughes Communications in 2003 that gave birth to DirecTV.
Other Weil lawyers working on the deal include technology and IP transactions partner Jeffrey Osterman, employee benefits partner Paul Wessel, tax partners Marc Silberberg and Chayim Neubort, capital markets partner Matthew Bloch, environmental partner Annemargaret Connelly, banking and finance partner Andrew Yoon and employment law counsel Lawrence Baer. Weil associates on the team include William Dong, Natasha Gopaul, Thomas Goslin, Sachin Kohli, Suzanne Lee, Lauren Luptak, Amanda Rosenblum, Joseph Santo, Adam Templeton and Cassie Waduge.
Jones Day is acting as antitrust counsel to DirecTV. Washington, D.C.-based partner Joe Sims is leading a team that also includes partners Kathryn Fenton, J. Bruce McDonald, Fiona Schaeffer and Craig Waldman.
Simpson Thacher & Bartlett is serving as counsel to the compensation committee of DirecTV’s board. The firm’s team includes executive compensation and employee benefits practice head Brian Robbins, senior counsel Jamin Koslowe and associate Patricia Adams. (Former Alston & Bird and Goodwin Procter litigation partner Ralph Boyd Jr. is an independent member of DirecTV’s board.)
Larry Hunter, a former senior partner at Honigman Miller Schwartz and Cohn, has served as DirecTV’s general counsel since 2002. Hunter is leading an in-house team that also includes deputy general counsel and company secretary Michael Hartman, deputy general counsel William Ryan, senior vice president and associate general counsel Keith Landenberger and Warren Jackson, senior vice president of legal and U.S. general counsel Robin Rogers, assistant general counsel Jill Sullivan, executive vice president of government and regulatory affairs Susan Eid, senior vice president of government affairs Andrew Reinsdorf and vice president of government relations Stacy Fuller.
Debevoise & Plimpton is advising Lazard Ltd. in its role as financial adviser to AT&T, through corporate chair Jeffrey Rosen and M&A partner Jonathan Levitsky. Cleary Gottlieb Steen & Hamilton M&A partner Ethan Klingsberg and asso­ciate Thomas Larkin are representing The Goldman Sachs Group Inc., which is serving as a financial adviser to DirecTV along with Bank of America Merrill Lynch, which is being advised by Shearman & Sterling M&A partners Peter Lyons and Robert Katz and associates Gregory Gewirtz and Jessica Nielsen.
DirecTV and AT&T hope to close their union within the next year, pending the approval of DirecTV shareholders and the FCC, Justice Department and other regulators in several U.S. states and Latin American nations. —Brian Baxter
Chinese e-commerce giant Alibaba Group Holding Ltd. filed its highly anticipated U.S. initial public offering May 6, disclosing that it has tapped Simpson Thacher & Bartlett for legal counsel. Sullivan & Cromwell is advising the underwriters.
The filing notes that Alibaba plans to raise $1 billion, but the figure is expected to balloon to exceed $15 billion. Alibaba operates an online shopping center, Tmall, and a digital payment operator, Alipay, among other brands. Last year, it posted revenues of nearly $8 billion and net income of $3.4 billion.
Simspon Thacher’s William Hinman Jr. is heading the deal team advising Alibaba out of Palo Alto, with Leiming Chen and Daniel Fertig in Hong Kong. Sullivan & Cromwell’s Jay Clayton and Sarah Payne in Palo Alto and William Chua in Hong Kong are among those counseling the underwriters, which include Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Citigroup.
The high-profile status of the offering may shed light on a legal structure required in China but little known globally. Chinese law mandates that licenses to operate websites in the country be held by so-called variable-interest entities. VIEs are wholly owned by Chinese citizens—not the main corporation—and contracts give effective, but not direct, control, the filing notes. Tokyo-based SoftBank Corp. is Alibaba’s largest shareholder, with 34.4 percent. Yahoo owns 22.6 percent.
—Chelsea Allison, The Recorder
Valeant / Allergan
Canadian drug company Valeant Pharmaceuticals International announced on April 22 a $45.7 billion unsolicited bid—later upped to $53 billion—for Allergan Inc., which makes the popular wrinkle treatment Botox. Private equity firm Pershing Square Capital Management, led by hedge fund billionaire William Ackman, is backing the deal by agreeing to vote its 9.7 percent stake in Irvine, Calif.-based Allergan in favor of Valeant’s cash-and-stock offer.
Valeant’s revised bid, announced on May 30, offers $72 and 0.83 Valeant shares in exchange for each Allergan share. Valeant says its bid represents 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 the proposed deal would “create an unrivaled platform for growth and value creation in health care” for the shareholders of both companies. 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 takeover attempt, Valeant has amassed a 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 Sullivan & Cromwell 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.
Sullivan & Cromwell’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. Sullivan & Cromwell 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 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. The team from Osler, which is serving as Canadian counsel to Valeant, is led by firm cochair Clay Horner, 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. Capital markets partner Patricia Olasker and M&A partner J. Alexander Moore, both based in Toronto, are leading the Davies Ward team.
Allergan’s board enlisted 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 advising 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.
—Tom Huddleston Jr.