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November 6, 2009 6:00 AM

Dealmaker of the Week: Robert Denham of Munger, Tolles & Olson

Posted by Matt Straquadine

When Warren Buffett speaks, people listen. And when the Oracle of Omaha proclaims that "America's best years lie ahead," then backs his statement with a huge pile of his company's cash, the business world starts buzzing.

The buzzing over his latest deal hasn't died down yet. On November 3, Buffett's Berkshire Hathaway announced it was acquiring the 77 percent of railroad operator Burlington Northern Santa Fe it didn't already own for $34 billion in cash and stock.

Denham “This is a classic Berkshire Hathaway investment,” says Robert Denham, a partner at Munger, Tolles & Olson and Berkshire's longtime outside deal counsel. “The company has a long track record of transport and energy deals, if you'll pardon the pun.”

Indeed, some of Berkshire’s largest holdings are in ConocoPhillips and in Union Pacific Corp. But neither of those purchases compare to this week's acquisition. As Bloomberg reported, the Burlington Northern buy is the biggest deal the company has ever done. Berkshire Hathaway is even assuming $10 billion of the railroad’s debt, bringing the total value of the transaction to $44 billion.

“It represents a very big bet on the U.S. economy,” says Denham, now a two-time Dealmaker of the Week (he was singled out in September 2008 for representing Buffett on his $5 billion investment in Goldman Sachs).

Regardless of the size, for Denham and his team at Munger, Tolles & Olson, the buy meant work as usual. The firm has served as counsel to Buffett and his company since the mid-1970s. And Denham has handled more matters than he can probably count as lead corporate partner on several of the company's acquisitions.

Time was the one challenge, if any, on the matter. "[W]e got the deal done under enormous time pressure, though that’s not unprecedented," Denham says. Specifically, Munger got the call about the work on October 27, according to Denham and Munger corporate partner Mary Ann Todd. On November 3, just seven days later, the deal was announced.

Denham and his team worked marathon hours negotiating with Burlington's lawyers at Cravath, Swaine & Moore. It all went smoothly, the Munger lawyers say. "There was no acrimony,” says Todd who credits her partner--a "consummate dealmaker"--with keeping everyone on schedule and focused. "Bob's experience working with Warren over many years is just a huge asset when there's very little time," she says.

Denham joined Munger Tolles right out of law school and spent 20 years with the firm (including five as managing partner) before leaving for a job at Salomon Brothers. He was eventually promoted to CEO of the company. In 1998, he returned to Munger Tolles.

After a long week putting the deal together, Denham says he plans on a break this weekend. He and his wife, both University of Texas grads, will take in the Longhorn's game against University of Central Florida.

Hook 'em horns, indeed.

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If you remember your Salomon Bros history Mr. Buffet installed Mr. Denham at Sally after losing confidence in John Gutfreund following the treasury bond bidding scandel which also required John Meriwether to resign.

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