Ac­tavis’s deal to buy Al­ler­gan puts back spark in deal-mak­ing ac­tiv­ity

The Star Early Edition - - BUSINESS REPORT INTERNATIONAL -

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

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