Actavis’s deal to buy Allergan puts back spark in deal-making activity
AFTER a day like Monday, it is no surprise that revenues are up at law firms with significant merger and acquisition practices.
Actavis announced that it would buy Allergan for $66 billion (R732bn), while Halliburton announced its $34.6bn purchase of Baker Hughes.
Two deals of that magnitude have not been announced on the same day in 16 years, according to data compiled by Bloomberg News.
That was when energy giant Exxon agreed to buy Mobil and two European drugmakers struck the merger that created Aventis.
The two takeovers added to what has already been the busiest year for global deal-making since the record in 2007.
On the Actavis-Allergan deal, Cleary Gottlieb Steen & Hamilton represented Actavis, while Latham & Watkins and Wachtell Lipton Rosen & Katz represented Allergan.
Baker Botts and Wachtell represented Halliburton, while Davis Polk & Wardwell and Wilmer Cutler Pickering Hale & Dorr represented Baker Hughes.
It was especially busy for two Wachtell partners – Daniel Neff and David Katz – who worked on both.
In what was certainly an understatement, Katz described the stretch as “busy”.
What helped, he said, was the ability to divide up work with Dan Neff. The two often work together on hostile takeovers.
Also helping: the Allergan deal terms were straightforward, despite “twists and turns” since Valeant and William Ackman’s Pershing Square launched a tender offer for the company in April, Katz said.
“Both drafts were really ‘middle of the road’,” Katz said on Monday.
“While you often see buyerfriendly or seller-friendly” agreements, both were “reasonably negotiated documents which allowed people to move more quickly.”
Katz’s view was echoed by Latham partner Cary Hyden, who said his firm, along with Wachtell and Cleary Gottlieb, placed “a priority on putting grand-standing to the side to negotiate a deal for our clients”.
Wachtell acted as co-counsel to Allergan.
Wachtell’s team, in addition to Neff and Katz, included partners Gregory Ostling, corporate, and Joseph Larson, antitrust.
Although Valeant has said it would not try to top the Actavis offer, Katz said there was still a chance Ackman would seek to hold a shareholder meeting that was scheduled for next month.
Litigators are seeking an injunction to prevent that meeting.
Additionally, Allergan is pressing ahead with a lawsuit – now seeking an expedited appeal in the US Court of Appeals for the Ninth Circuit – in its case claiming that Valeant and Pershing Square violated federal proxy rules and committed insider trading in launching its tender offer.
The trial court judge on November 4 allowed Pershing Square to vote its shares but said the bid “raised serious questions” about insider trading.
Valeant and Ackman have denied any wrongdoing. – Bloomberg