May 6, 2011 2:43 PM
Paul Weiss, Debevoise Handling $3.3 Billion Sale of Warner Music
Posted by Brian Baxter
Warner Music Group (WMG), spun off by Time Warner in a $2.6 billion deal in late 2003, announced on Friday that it had agreed to be sold to an investment vehicle of Russian billionaire Leonard Blavatnik's Access Industries in a cash deal valued at $3.3 billion, including the assumption of debt.
Robert Schumer, chair of the corporate department at Paul, Weiss, Rifkind, Wharton & Garrison, is advising New York-based WMG on the deal, along with finance partner Valerie Radwaner, corporate partners Tarun Stewart and Stephen Lamb, employee benefits chair Robert Fleder, IP head Charles Googe, Jr., and tax partner David Sicular. WMG has been a longtime Paul Weiss client, having turned to the firm for counsel on its $123 million sale of shares in Front Line Management to Ticketmaster in 2008 and $67.5 million acquisition of independent recording company Ryko in 2006.
WMG's general counsel is Paul Robinson. Former WMG general counsel David Johnson, who spent nine years as the legal chief for Sony Music Entertainment, serves as chairman of WMG unit Warner/Chappell Music, one of the world's largest music publishing companies. WMG is one of the world's largest recording companies and ranks third in U.S. market share behind Universal Music Group and Sony. Simpson Thacher & Bartlett is serving as regulatory counsel to WMG on its sale.
Debevoise & Plimpton is advising Access on the deal. Jeffrey Rosen, cochair of Debevoise's M&A practice, is leading a team from the firm that includes corporate partner and leveraged finance chair David Brittenham, finance partner Pierre Maugue, employee benefits partner Elizabeth Pagel Serebransky, M&A partner William Regner, and tax partner David Schnabel. SEC filings show that Debevoise has previously done work for multinational chemical company LyondellBasell Industries, created by Blavatnik through a merger in 2007. The company emerged from bankruptcy last year. The general counsel for New York-based Access is Alejandro Moreno.
The Los Angeles Times reports that Blavatnik beat out more than a dozen other suitors for WMG that included supermarket magnate Ronald Burkle, Live Nation Entertainment, and private equity firm KKR, and Tom Gores's Platinum Equity, which recently bought the NBA's Detroit Pistons. Blavatnik previously spent four years on WMG's board, stepping down in January 2008. The LAT reports Blavatnik could be in line to acquire another music company, London-based EMI Music Publishing, which is back on the market after an ownership battle in federal court last year. A merger with WMG would make it the world's largest music company.
Also announced this week was the purchase of social movie service Flixster and movie review site Rotten Tomatoes by former WMG sibling Warner Brothers Entertainment (WBE). The Time Warner subsidiary reportedly spent $80 million to acquire Flixster, which is the parent company of Rotten Tomatoes, and another $20 million in bonuses to hold on to top executives.
San Francisco-based Flixster, which was founded in 2005, turned to Fenwick & West for outside counsel on its sale to WBE, according to sibling publication The Recorder. M&A partner R. Gregory Rouseel, IP and technology partner Ted Wang, and associates Edgar Tirado and Ryan Slunaker are leading a team from the firm working on the deal. Fenwick advised Flixster on its acquisition of Rotten Tomatoes from News Corporation in January 2010.
O'Melveny & Myers M&A partner Andor Terner, employee benefits partner Jeff Walbridge, labor and employment partner Adam Karr, and tax partner Robert Blashek III are leading a team from the firm advising WBE on the transaction, according to The Recorder. Also working on the deal was WBE deputy general counsel Mark Easton, who joined the company last month from O'Melveny.
Easton reports to WBE general counsel John Rogovin, who replaced the entertainment giant's longtime legal chief John Schulman in September 2008, according to sibling publication Corporate Counsel. Schulman, now a partner at Mitchell Silberberg & Knupp in Los Angeles, heads the entertainment law program at USC's Gould School of Law.Make a comment