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May 3, 2010 2:43 PM

Kirkland's Skadden Hires Pay Dividends

Posted by Zach Lowe

There was plenty of talk in the legal world last May when David Fox and Daniel Wolf left their spots as M&A partners at Skadden, Arps, Slate, Meagher & Flom for Kirkland & Ellis--a borderline unthinkable move if you go strictly by traditional M&A rankings. But Fox and Wolf saw K&E's higher profits per partner (that's profits per equity partner for Kirkland) and the opportunity to build a strong M&A practice, and they made the jump. 

The duo have helped to bring in new business, including Teva Pharmaceuticals, a traditional Willkie Farr & Gallagher client which turned to Kirkland in March for a $5 billion deal. But they also seem to have convinced some regular clients to jump with them from Skadden to Kirkland, including Avis Budget Group, which has retained Kirkland in its push to outbid Hertz Global Holdings for Dollar Thrifty Automotive Group, according to a company statement and this piece in Bloomberg. In a letter to top Thrifty officials made public today, Avis higher-ups questioned why Thrifty agreed last week to sell itself to Hertz in a proposed $1.27 billion deal after refusing several times to discuss a merger with Avis. A source familiar with the matter tells us Wolf and Fox were in on those discussions for Avis during their time at Skadden. Avis has turned to them again to fight the Hertz-Thrifty tie-up. 

Wolf tells us the weekend was so busy that he was checking his BlackBerry even while pitching during his son's Little League baseball game on Sunday. (He was checking between pitches, of course; checking during the pitching motion would be both physically difficult and, we think, disrespectful to the 8-year-old hitters.) The work over the weekend mainly involved general strategy and crafting of the letter and accompanying public statement released today, sources close to the deal say.

The Hertz offer values Thrifty at about $41 per Thrifty share, an offer two key Thrifty shareholders have already declared too low, Bloomberg says. Thrifty shares have shot up to $50 since the Hertz offer became public, Bloomberg reports. 

Under the terms of the Hertz-Thrifty offer, Thrifty would have to pay Hertz a $44.6 million breakup fee--plus $5 million in related costs--if it backs out of the deal, Bloomberg reports, citing regulatory documents.

We reached out to Patricia Moran and Kenneth Wolff, two corporate partners at Skadden who have represented Avis, to ask them about the firm's current relationship with Avis now that Fox and Wolf are at Kirkland. We haven't heard back from either one, but we'll let you know when we do.

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