|
 
M&A Alert 6.12.07
|
Litigation over go-shop / no-shop covenants
- Some
recent M&A deals have resulted in litigation
over terms of go-shop / no-shop covenants and payment of break-up fees
-
Guidant
-
ABN AMRO
-
Topps
-
Aeroflex
Some recent private equity deals have been
structured as
two-step mergers Latest amended S-1 reveals more details about
Blackstone
|
M&A Alert 5.07.07
|
Bank of America sues ABN AMRO
- Claims that contractual M&A representations were
false in deal ABN made to sell LaSalle Bank for $21B
- Asserts that no shop covenant doesn't apply to
ABN AMRO's receipt of an unsolicited competing proposal to acquire all of ABN
AMRO for $89B
- See ABN AMRO Acquisition
Board rejects revised offer for Clear Channel
- Revised offer proposed use of stub equity
- Shareholders to vote on May 7; Outcome is
uncertain
- See
Clear Channel Buyout
Harman International buyout
offers stub equity to current shareholders
|
Corporate Alert 4.11.07
|
Morgan Stanley and BoNY shareholders turn down "say
on pay" proposals
- 37% of Morgan Stanley shareholders vote FOR
- 47% of Bank of New York shareholders vote FOR
- Over 60 more proposals coming to vote in coming
weeks
- See Say on Pay Proposals
IRS issues final regulations on IRC §409A -
Nonqualified deferred compensation SEC targets 10b5-1 trading plans
for investigation
|
Corporate Alert 3.28.07
|
Intel and other notable proxy filers
- Dow Component Companies such as Intel, 3M,
AT&T, Boeing and Altria as well as other select companies have recently filed
their proxies for the 2007 season
- See Precedent Proxy Filers, S-K 402
and Perquisite Disclosures
for direct access to these and other precedent disclosures
- In particular, the Intel filing provides notable
disclosures for those who draft executive compensation disclosures: three years
of compensation history in the Summary Compensation Table, explanation of
methodologies used for calculation of compensation expense, no perks
disclosure, and other notable items
SEC Chairman criticizes the CD&As that are being
filed Supreme Court hears three commercial cases
this week
-
Including one on the meaning of scienter under the PSLRA.
-
See our Supreme Court
Cases topic page
|
Corporate Alert 3.15.07
|
Proxy access proposal gets 39% support at H-P
- Shareholder proposal sought to
amend H-P's by-laws to allow
direct shareholder access to future H-P proxy statements
in order to nominate directors
- An important test case following 2nd
Circuit decision in
AFSCME v AIG and SEC's failure to amend its
rules
- See
Precedent Proxy Filers 2007
Activists are poised to take control of Take Two Interactive
without a proxy contest
- Large institutional investor and three hedge
funds recently formed a 13D group to combine their 46% voting power
- They intend to oust current management
by voting directly at the upcoming regular annual meeting without soliciting
proxies
- Take Two makes the popular
Grand Theft Auto video game series
and has a $1.5B market cap
- See Take Two Interactive
"Say on Pay" shareholder proposals
|
Corporate Alert 3.15.07
|
Proxy access proposal gets 39% support at H-P
- Shareholder proposal sought to
amend H-P's by-laws to allow
direct shareholder access to future H-P proxy statements
in order to nominate directors
- An important test case following 2nd
Circuit decision in
AFSCME v AIG and SEC's failure to amend its
rules
- See
Precedent Proxy Filers 2007
Activists are poised to take control of Take Two Interactive
without a proxy contest
- Large institutional investor and three hedge
funds recently formed a 13D group to combine their 46% voting power
- They intend to oust current management
by voting directly at the upcoming regular annual meeting without soliciting
proxies
- Take Two makes the popular
Grand Theft Auto video game series
and has a $1.5B market cap
- See Take Two Interactive
"Say on Pay" shareholder proposals
|
M&A Alert 3.02.07
|
M&A Deals of the Week: TXU and Station Casinos
|
Corporate Alert 2.23.07
|
"Say-on-pay" proposals will be a hot item this year
|
Corporate Alert 2.15.07
|
What will
perks look like under the new rules?
-
We provide in-depth coverage of the required disclosures as well as precedent
disclosures from recent filings
-
We anticipate seeing more no perks and reduced perks disclosures in response
to new disclosure rules and other developments
-
See Perquisite Disclosures
SEC tweaks recent FAQs for exec comp disclosures
IRS announces compliance program for backdated
options
|
Corporate Alert 2.09.07
|
SEC proposes rules for Rating Agencies
-
Congress recently amended the Exchange Act to direct the SEC to formally
regulate rating agencies such as S&P and Moody's
-
The SEC has just proposed rules
-
See SEC Release 34-55231
|
Corporate Alert 2.01.07
|
Derivative securities can reduce stock option
expense
-
SEC clears use of ESOARs to
establish fair market value of employee stock options
-
An alternative to using financial models such as Black- Scholes
-
Which may not sufficiently account for the differences between employee stock
options and freely-traded options
-
ESOARs have been developed, and
are being marketed by, Zions Bancorporation
-
See Equity Compensation Accounting
|
Corporate Alert 1.26.07
|
SEC issues exec comp disclosure FAQs
-
Long-awaited guidance on new disclosure requirements for executive and director
compensation
-
Lawyer Links Advantage correlates these new FAQs with the specific
S-K rule and recent precedent EDGAR filings
-
For direct access, go to our
S-K 402 Topic Page
|
Corporate Alert 1.24.07
|
Hewlett-Packard gets no relief; Includes by-law
proposal in its proxy statement
-
The SEC didn't give Hewlett-Packard no-action relief to omit a shareholder
proposal
-
The SEC also won't be adopting rules to address the Second Circuit's September
2006 decision in AFSCME v AIG
-
H-P could have tried to omit the proposal by claiming that it wasn't required to
follow this Second Circuit decision, but went ahead and included in its
definitive proxy statement
-
The proposal seeks to amend H-P's by-laws to allow direct shareholder access to
future H-P proxy statements in order to nominate directors
- See
Early Proxy Compliers 2007
|
Corporate Alert 1.17.07
|
Precedent 2007 proxy filing collection
-
We track early compliers in the 2007 proxy season
-
Including companies with September to November fiscal year ends
-
To provide useful precedent examples for 12.31 fiscal year end companies
-
See
Early Proxy Compliers 2007
|
Corporate Alert 1.10.07
|
Executive compensation disclosure update
-
We have "early complier precedent": hyperlinked examples of CD&A and disclosure
tables that comply with the new exec comp disclosure rules
-
We have detailed treatment of all the relevant S-K items, updated for recent SEC
rule changes
-
See
Executive Compensation Disclosures
|
Corporate Alert 12.15.06
|
DOJ backs off aggressive corporate prosecutorial
practices
-
New McNulty Memo revises the Thompson Memo
-
Limits DOJ from coercing companies to waive their
attorney-client privilege
-
Limits DOJ from coercing companies from advancing
legal fees to their employees
-
Follows withering judicial and Congressional
criticism
-
See
Corporate Criminal Liability
SEC acts on several matters at its December 13
meeting
-
Proposed
SOX Act 404 interpretive guidance
-
Adopted
e-proxy rule amendments
-
Re-proposed
rules for FPI deregistration
-
Proposed
rules for hedge funds
-
Proposed
bank broker rules
-
See SEC Rule-Making
-
Lawyer Links will provide detailed, continued coverage as SEC rule releases
become available
SEC failed to act on a promised Rule 14a-8(i)(8)
fix
- SEC had said it will consider rule changes to address
Second Circuit decision overturning
SEC rule interpretation
- Activist shareholders are now expected to propose a
slew of Rule 14a-8 proposals to amend company by-laws
- To allow shareholder access to the company's
proxy statement when specified conditions are met
- See
AFSCME v AIG
|
M&A Alert 11.03.06
|
SEC final release adopts changes to Best Price Rule
Recent notable deal announcements
|
M&A Alert 10.19.06
|
SEC adopts changes to its Best Price Rule
-
To address a split in judicial interpretation
Recent notable deal announcements
|
M&A Alert 10.12.06
|
Big week for new M&A deals
Other M&A developments
|
M&A Alert 9.29.06
|
Saga of Guidant - Johnson & Johnson
continues
-
One of the largest deals of 2005 - 2006 ($27B)
-
Boston Scientific trumped J&J's deal to acquire Guidant
-
After J&J forced Guidant to cut their agreed deal price, following recalls of
Guidant pacemakers
-
Boston Scientific needed Abbott Labs' help to win bidding
-
Since closing, continued problems at Guidant have contributed to sharp declines
in Boston Scientific's stock
-
J&J is now suing over breach of its no
shop covenant
-
Even though J&J got a $705mm break-up fee
-
Includes tortious interference claims against Abbott Labs
-
See Guidant Acquisition
for detailed coverage
Recent notable deal announcements
|
M&A Alert 9.22.06
|
M&A Deal of the Week - Freescale Semiconductor
-
Former Motorola business in $19B consortium buyout
-
Largest tech buyout ever
-
No financing condition
-
50 day go shop period
-
See Freescale Semiconductor
deal page
|
Corporate Alert 9.08.06
|
2nd Circuit rules that proxy access bylaw
proposals can't be excluded under Rule 14a-8(i)(8)
-
Court declined to defer to SEC's interpretation of the rule
-
SEC has already scheduled rule-making to revise rule to vitiate the Court's
opinion
-
For complete coverage go to
AFSCME v AIG
|
M&A Alert 8.09.06
|
Aramark announces buyout, despite hedge fund
Other new deals announced
|
M&A Alert 8.08.06
|
Hedge funds derail management-led buyouts
Other noteworthy deal developments
|
Corporate Alert 8.02.06
|
Nasdaq becomes a national securities exchange
-
Switches its legal status under the Exchange Act
-
Nasdaq-listed companies are automatically re-registered under Exchange Act §12(b)
-
For complete coverage go to
Nasdaq Transition
|
Corporate Alert 8.01.06
|
2006 Delaware corporate law changes become
effective
-
Includes changes to facilitate majority voting
-
For complete coverage go to
DGCL Amendments
|
Corporate Alert 7.27.06
|
SEC adopts sweeping changes to executive
compensation disclosures
|
M&A 7.26.06
|
Two notable deals announced |
White Collar Alert 7.05.06
|
US violated constitutional rights in KPMG tax case
-
SDNY decision finds US attorneys violated 5th
and 6th amendments rights of
KPMG personnel
-
By pressuring KPMG not to advance their legal expenses
-
Court criticizes application of DOJ's Thomson Memo
-
Criticizes actions of individual assistant US attorneys
-
See
US v Stein
|
M&A 6.28.06
|
Busy week for M&A announcements
Court challenges to SEC rule-making continue
|
Corporate 6.21.06
|
Detailed review of stock option backdating
-
Growing scandal has implicated over 40 companies
-
SEC and Department of Justice continue to add to list
-
Many companies have dismissed executives
-
Others have had to restate financials or have been sued by their shareholders
-
For complete coverage go to Stock Option Backdating
|
Corporate 6.09.06
|
Delaware Supreme Court rules in Disney
-
Affirms Chancery Court opinion that decisions of Disney management to hire and
fire Michael Ovitz were protected business judgments
-
For complete coverage of this nearly decade-long litigation (including copies of
opinions) go to Disney Fiduciary Duty Litigation
A perfect storm? NYSE Rule 452 meets majority
voting
-
NYSE is moving to eliminate discretionary voting by brokers in routine director
elections
-
When combined with a majority voting requirement, annual meetings may not be so
routine in 2007
-
See NYSE Rule 452 - Developments
-
Also see Majority Voting
|
Corporate 6.02.06
|
Some buyers in Vonage IPO may have rescission
rights
Other news
-
NYSE to merge with Euronext
in a merger of equals
-
MasterCard
jumps 18% the day after its $2.4B IPO
-
Fannie Mae
pays $400mm fine over misstated financials
|
M&A 5.26.06
M&A 5.19.06
|
Recent noteworthy Delaware M&A cases
For each case, these Topic Pages provide
- Opinions, in both hyperlinked and PDF versions
- Summary of outcome
- Third party commentary, including select law firm
mailings
- Related deal documents
|
M&A 5.02.06 - Corporate
SEC_CODE_REF_0090001192884
|
Update on shareholder proposals re Majority
Voting
- Early
results show trend in shareholder voting
- As proposals carry when company hasn't adopted
voluntary guidelines
- But fail when company has adopted guidelines
- Go to Majority Voting
for complete coverage
Highlighted M&A deals of the week
- Engelhard
pursues leveraged recapitalization
To fight unsolicited offer from BASF
- Aztar
juggles four competing offers
Has already found two to be superior
proposals
- Lexar Media - Micron
ready to go to shareholders
Faces opposition from activist shareholders including Icahn
- McLatchy
to sell four Knight Ridder papers for $1B
On track with its divestiture plan
- More at
M&A News
|
M&A 4.27.06
|
New developments re: stapled financing
- Delaware judge now says his opinion has been
misconstrued
- Some deals were using stapled financing despite
critical remarks he made in his Toys R Us decision
- Go to Stapled Financing
for complete coverage
|
M&A 4.14.06
|
NASD reissues its new rule on Fairness Opinions |
M&A 4.04.06
|
Yesterday was a big day for M&A announcements
- Alcatel
to merge with Lucent Technologies
Is it really a merger of equals?
Parties claim NPV of cost savings will be $12B -
which nearly equals Lucent's market cap
- GM
sells majority stake in GMAC to Cerberus-led group
One objective is to free GMAC from increasing GM credit risk
in order to lower GMAC's cost of borrowing;
But rating agencies still consider GMAC a junk credit.
Still, $14B in cash provides GM with much-needed liquidity
- Vincor
reverses itself; Accepts Constellation Brands offer
Persistence pays off after initial hostile bid failed
- Ameristar Casinos makes an unsolicited offer for Aztar
Target now has three competing all-cash offers;
Is 10.5% premium enough to be a superior proposal?
- SCI to buy
Alderwoods
Cemetery-funeral home operator acquires rival
- Verizon
sells foreign businesses to Carlos Slim vehicle
Divests Caribbean and Latin American operations for $3.7B;
In 2005 Slim sold his 13.4% MCI stake to Verizon in a side deal that helped
Verizon beat
competing Qwest offer
- More at M&A News
Special feature - PLI Doing Deals 2006 |
M&A 3.30.06
|
M&A Deals of the Week
- Maytag - Whirlpool
gets antitrust clearance
DOJ cites influence of foreign manufacturers
to approve the deal despite high combined market share
- Lexar - Micron
uses patent cross-license deal lock-up
Carl Icahn and others may oppose this deal
- Lafarge North America
rejects parent buy-out offer
As stock trades above majority shareholder's offer
Other developments
|
M&A 3.14.06
|
US politics continues to affect cross-border deals
- More cross-border deals are becoming subject to
the delays and uncertainties of Exon-Florio
review
- US political pressure led Dubai-owned company to
restructure its $6 billion acquisition of a British port management company
- Chinese company's bid for a US oil company
(Unocal) was abandoned in face of US resistance
- Meanwhile, US legislators are criticizing
Exon-Florio review for not being strict
enough
- For more information, including precedent
contractual provisions, please go to Exon-Florio
Review
Four large deals were announced yesterday |
M&A 3.06.06 - Public Company
|
2006 Annual Reporting Update
- What you need to review 2006 10-Ks and proxy
statements
- Hyperlinked SEC rules and interpretations
- Tied to collection of precedent filings
- Updated daily through 2006 reporting season
- Covers hot button issues such as perks
disclosure
- Covers company responses to SEC review
- See 2006 Annual Reporting
|
M&A 3.03.06
|
Trends in financing conditions for sponsored
buyouts
- Some recent large deals haven't had a financing
condition
- Private equity sponsors have instead agreed to a
reverse break-up fee
- Sponsors assume contractual
liability
in the event the deal doesn't close because of their failure to obtain financing
- E.g., buyouts of Burlington
Coat Factory, Hertz,
Neiman Marcus, SunGard Data Systems
-
See Private Equity Financing Conditions
- For more on sponsored buyouts, see Private Equity
Deals
|
M&A 2.22.06
|
Trends in Voting Agreements after Omnicare
- The different approaches taken in
Pixar-Disney compared with the
LBO of Burlington Coat Factory show the continued variance in use of
M&A voting agreements
- Following Delaware Supreme Court's controversial
Omnicare decision
- For more information on this Topic, including
cases, precedent examples of voting agreements and related proxy statement
disclosure,
See Voting Agreements
|
M&A 1.26.06
|
Boston Scientific wins bidding for Guidant
- By offering $80 per GDT share ($27.2B total)
- Topped re-raised J&J deal of $71 per share by 13%
- Important market precedent for determining
what's a superior proposal
- For a complete market survey on what's a superior proposal
See Competing Offers - Superior Proposal
- Complete SEC filings and analysis
Guidant:
Johnson & Johnson - Boston Scientific
Inamed: Medicis - Allergan
ShopKo:
Buyout firms (Sun Capital - Goldner Hawn)
Maytag:
Ripplewood - Haier - Whirlpool
Unocal:
Chevron - CNOOC (China)
MCI: Verizon - Qwest
|
M&A 1.18.06
|
Boston Scientific tops bidding for Guidant, again
- BSX offers $80 per GDT share ($27B total)
- Raises its bid a third time
- GDT's board finds BSX offer a superior proposal
- Tops current re-raised J&J deal of $71 per share by 13%
- Latest BSX offer also tops original J&J offer of
$76 per share
- Which was cut to $63 following GDT pacemaker recall
- Which J&J asserted was a material adverse change
- J&J calls latest BSX offer "highly diluted and
leveraged"
- Will J&J counter bid a third time?
Perry Corp investigated by SEC over vote buying
- Hedge fund bought shares to counter Carl Icahn
- In takeover battle over Mylan Labs-King Pharma
- But simultaneously sold the shares short
- A tactic to capture voting rights in the shares
- SEC sends Wells notice to Perry Corp
- See Vote Buying
Debt
buyers are increasingly requiring event protection
- Requiring change of control and
ratings downgrade covenants
- Even from investment grade issuers
- To address risk that an issuer will become more
highly leveraged after a private equity sponsored buyout or activist shareholder
inspired recapitalization
- See Debt Covenants
SEC developments
-
SEC proposes changes to executive comp disclosures
- Including changes to M&A payout disclosures
- See
SEC Executive Comp Proposal
-
SEC offers to expedite reviews for XBRL volunteers
- See
XBRL
Recent
notable deals |
M&A 1.11.06
|
SEC denies exclusion of majority voting
proposal
- Pension fund sent Rule 14a-8 shareholder proposal
to Hewlett-Packard
- Sought adoption by H-P of majority voting
- By amending H-P's corporate governance documents
- H-P had already adopted majority voting as a
policy
- But policy didn't include elements recommended by
shareholder advocates
- Elements that were included in pension fund proposal
-
SEC denied H-P no-action relief
-
Expected to set precedent for inclusion of similar shareholder proposals in 2006
proxy statements
-
See Majority Voting
In re Tele-Communications
- Delaware Chancery opinion raises several issues
- Lawsuit was over AT&T's 1999 acquisition of TCI
- Because one class of TCI stock got a 10% premium,
Court applied entire fairness standard
to an arms-length merger
- Because TCI directors mostly got the 10% premium
- Because of flaws in its process,
Special Committee failed to meet this standard
- Court found that financial advisor getting a
large
contingent fee put its independence into question
- May affect fairness opinion practices
- See In re Tele-Communications
NYSE proposes to amend its "20% Rule"
- Requires shareholders to approve issuances of
stock
- Including issuances of 20% or more of shares outstanding
- NYSE current interpretation excludes treasury shares
- So that repurchased shares could be reissued
without counting against 20% limit
- NYSE proposal would change this
- Became an issue in Sovereign Bancorp proxy fight
-
Hedge fund is challenging NYSE's current interpretation
before the SEC
- See SRO: Shareholder Approval
SEC developments
Recent
notable deals |
M&A 1.04.06
|
2005
has largest M&A volume since 2000
Private
equity was a big driver of 2005 M&A volume
Activist
shareholders
- Bally Fitness
threatens to trigger its poison pill
- As acrimonious proxy fight escalates
- Implies that hedge funds may have been acting
in concert
- Kerkorian reduces GM stake to 7.8%
Competing
Offers
-
Guidant
mails J&J proxy
- Sets 1.31.06 shareholder meeting
- GDT has yet to take position on
competing
offer
from
Boston Scientific
-
GDT closed at $65.51 (1.03.06)
◊ Current J&J offer is $63.08
◊ BSX offer is $72
-
Inamed accepts Allergan's superior proposal
- Competing offer tops original Medicis deal by 12%
- Medicis gets its $90mm break-up fee
-
ShopKo Stores
buyout closes
- Interloping private equity firm wins
- Tops counter bid from another private equity firm
Recent
Notable Deals
- BASF makes $4.9B unsolicited offer for Engelhard
- German company pursues US chemical company
- Hilton Hotels to buy
Hilton Group plc
for $5.7B
- Will create world's largest lodging company
- Reunites two companies that were split in 1964
- Apax Partners to take
Tommy Hilfiger
private
- Apax puts up a $50mm guaranty
- Clothing companies continue to be a hot M&A
sector
- WellPoint closes acquisition of
WellChoice
- Health benefits company buys New York health
insurer
- Target is parent of Empire Blue Cross Blue Shield
- GE to buy
Arden Realty
for $3.2B
- Trizec Properties to buy Southern California
properties
in a side deal
- REITs continue to be a hot M&A sector
- Seagate to buy
Maxtor
for $1.9B
- Hard drive maker buy storage solutions company
- Expected to draw antitrust scrutiny
- IBM to buy
Micromuse
for $865mm
- Play on convergence of data, voice and video
-
Hertz
buyout closes
- Acquired by private equity consortium for $15B
- Second largest US buyout ever
|
M&A 12.22.05
|
 Hot
Sector - Energy M&A Deals
- COP acquires leading natural gas company
- 50%-50% stock-cash merger
- Acquires privately-held company for $1.6B
Other
Notable Deals
- $13.2B deal creates largest US private company
- Cash tender offer closed five weeks after
announcement
- $11B deal will create 2nd largest US utility
- World's largest biotech buys human antibody
company
- General Dynamics to buy
Anteon for $2.2B
- Continues trend of defense contractors buying
high-end technology companies
-
Alltel to divide its wireless and wireline businesses
- Wireline business to be spun-off and merged with VALOR
- Uses tax-free Morris Trust structure
- Buyout of Nextel affiliate required by corporate
charter
- Triggered by Sprint - Nextel merger of
equals
- Valuation set by dueling investment banker appraisals
Private equity update
- Thomas Lee to leave Thomas H. Lee Partners
- Consortium to buy Dunkin Donuts
- Consortium to buy Swedish cable TV operator
SEC Rule-Making
- Should lead to more two-step deals (tender offer
/ back-end merger)
- Many deals have instead been structured as
one-step mergers to avoid litigation exposure created by decisions like Epstein v
MCA
|
M&A
12.06.05
|
Notable M&A Deals
Boston Scientific
makes $25B competing offer for Guidant
Verizon
may divest its yellow pages business
- Expected to be worth $17B
Carl
Icahn makes unsolicited offer for Fairmont Hotels
Private
equity update:
Securities Offering Reform now effective SEC
issues a second set of FAQs
Several
companies have filed
automatic shelf registration statements
Upcoming SEC Rule-Making Amending
tender offer best price rules
- To address decisions like Epstein v MCA
that discourage use of two-step tender offers
More
changes for accelerated filers
|
M&A
11.29.05
|
Proxy Fights
Icahn
hires Lazard to assist in Time Warner proxy fight
- Steps up pressure for company to restructure
itself
Red
Zone wins Six Flags consent solicitation
- ISS backing makes the difference
With
some tinkering,
Sovereign Bancorp
avoids shareholder vote
- NYSE won't invoke its Rule 312
- Santander to invest $2.4B in Sovereign
- Sovereign to use proceeds to buy
Independence Community Bank
- Relational Investors likely to continue to seek
board seats
Notable Deals Constellation
makes unsolicited offer
for Vincor
- "Best and final"
- Target snubs buyer's offer to pay more in a
friendly diligenced deal
- US bidder proceeds with tender offer for
Canada's largest wine maker
New fairness opinion
settles dispute over NYSE-Archipelago merger
- New York court criticized Goldman Sachs'
conflicts of interest
Other SEC
proposes to allow internet posting
of
proxy solicitation materials
- Proposal approved Tuesday November 29
Supreme
Court will review eBay v MercExchange
patent dispute
- Will address when an injunction should issue
against an infringer
|
M&A
11.22.05
|
