September 15, 2008 10:56 AM
Wachtell, Shearman, Cravath on B.of A.'s Merrill Buyout
Posted by Zach Lowe
Bank of America, fresh off its $2.5 billion buy of Countrywide Financial Corp., agreed over this historic Wall Street weekend to shell out $50 billion to, in essence, save Merrill Lynch from bankruptcy.
Shearman & Stearling advised Merrill on the deal that will end nearly a century of independence for one of the world's most storied banks. John Madden, the lead Shearman partner on the matter, calls the rush to save Merrill before the markets opened Monday "one of the most extraordinary weekends of my career."
He spent the weekend shuttling between his office in midtown Manhattan, Merrill's headquarters downtown, and the West Fifty-Second Street offices of Wachtell, Lipton, Rosen & Katz, which represented the now-colossal B. of A.
"This was so fast-paced," Madden says, "that it all had to be done on-site, not over the phone."
Shearman M&A partners John Marzulli and Scott Petepiece joined Madden on the deal.
Wachtell corporate partner Edward Herlihy, coming off advising the Treasury Department in its bailout of Freddie Mac and Fannie Mae just last weekend, led the 23-lawyer team repping B. of A. Herlihy was not immediately available for comment. The team included corporate partners Steven Rosenblum, Craig Wasserman, Richard Kim, Lawrence Makow, and Nicholas Demmo.
Madden says the $50 billion deal, which will be accomplished via a stock swap, is "extremely attractive" for Merrill share-holders; it represents a 70 percent premium on Merrill's Friday closing price, according to Bloomberg.
What happens to Merrill's 60,000-plus employees from here is unclear, Bloomberg says, which also reported that B. of A. is known for cutting after acquisitions and has already announced plans to cut costs going forward.
Cravath, Swaine & Moore advised Merrill's independent board on whether to accept the offer--one some have characterized as unexpected, since B. of A. CEO Kenneth Lewis in a conference call last year said that he had no interest in buying up any investment banks, according to various press reports.
Robert Joffe is leading the Cravath team; he declined to comment on the deal, saying only that the firm has represented Merrill's board since October, when embattled CEO E. Stanley O'Neal stepped down amid billions in losses and write-downs. Merrill has lost about $52 billion since the credit crunch kicked in a year ago, Bloomberg says. The Cravath team also includes Susan Webster and Sarkis Jebejian.
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