The Work

February 12, 2009 6:02 PM

Deal Roundup: Does Anyone Have Any Deals to Report?

Posted by Brian Baxter

It's been slim pickings in recent weeks here at The Am Law Daily when it comes to deal activity. We've heard similar stories from several of our associate buddies on the corporate side who now seem to have plenty of time to hone their Call of Duty skills.

It turns out there's some hard data to put all this inactivity into context. According to The New York Times's Dealbook, the volume of M&A deals for U.S. companies last week was the lowest on record for a single week since the one that ended May 1, 1993. The Times also reports that last week was one of only 10 since 1990 where deal volume was less than $1 billion. Yikes.

For the year, the bulk of the deal volume has been consumed by tie-ups between Pfizer and Wyeth and Live Nation and Ticketmaster. That's good news--if you work at Wachtell, Lipton, Rosen & Katz.

Our sibling publication The National Law Journal reports that as the federal government tries to thaw out the credit markets, corporate lawyers are trying to pass the time by crafting debt-restructuring deals and helping clients raise cash through stock offerings.

That sobering news aside, here's what we've managed to cobble together for this week's deal roundup:

Sirius XM Radio

Okay, so things are so bad that we're starting off our roundup with a potential deal that hasn't even happened yet. Hey, we're optimists. That means that in our eyes Sirius XM Radio--reported to be on the brink of bankruptcy--at least presents the opportunity for multiple areas of corporate work.

The beleaguered satellite radio company has already hired Simpson Thacher & Bartlett bankruptcy partner Mark Thompson--a likely choice given that the firm also advised Sirius on the $13 billion merger with XM in February 2007--to prepare a Chapter 11 filing. But Sirius sure appears to have plenty of suitors interested in taking it over.

The New York Times reported that Englewood, Colo.-based EchoStar has been steadily buying up Sirius's debt, possibly with thoughts of mounting a takeover bid. EchoStar, spun off from DISH Network in early 2008, had a previous offer for Sirius rebuffed in December.

A call to EchoStar's primary outside M&A counsel--Daniel Dufner, Jr., at White & Case in New York--was not returned by the time of this post.

The Deal reported that Sirius CEO Mel Karmazin had approached suburban Denver-based Liberty Media about a possible deal to avoid a bankruptcy filing or acquisition by Liberty rival EchoStar. (Liberty owns a 52 percent stake in DIRECTV, the largest broadcast satellite provider in the U.S. ahead of DISH.)

Liberty has relied in the past on New York-based Baker Botts corporate partners Frederick "Buzz" McGrath and Robert Murray, Jr., for M&A work. The two advised Liberty on its deal for a controlling interest in DIRECTV and acquisition of an $8 billion stake in QVC in July 2003.

As if all that wasn't enough, New England Patriots owner Robert Kraft, founder of The Kraft Group, stopped by Howard Stern's Sirius studios on Wednesday morning. Besides bizarrely being on a first-name basis with Gary "Ba Ba Booey" Dell'Abate and Artie Lange, Kraft revealed that he was in the building to meet with Karmazin.

Why is that important? Kraft is also a Viacom board member.


British semiconductor company CSR, which makes radio chips for wireless Bluetooth headsets, announced on Tuesday that it would acquire SiRF Technology Holdings in a whopping $136 million all-share deal.

SiRF, a San Jose-based semiconductor and software manufacturer, was advised by a team of lawyers from Simpson Thacher. M&A partner Peter Malloy, capital markets partner William Hinman, Jr., employee benefits partner Tristan Brown, antitrust partners Aimee Goldstein and Arman Oruc, tax partner Katharine Moir, IP partners Kerry Konrad and Jeffrey Ostrow, and environmental senior counsel Michael Isby advised SiRF from the firm.

CRS's acquisition of SiRF will give it access to the Silicon Valley company's GPS technology, which it hopes to integrate into Bluetooth.

Paul, Weiss, Rifkind, Wharton & Garrison M&A partner David Lakhdir in London advised Cambridge, England-based CSR on the transaction.

Mead Johnson Nutrition IPO

An IPO is an initial public offering. Just thought you might need a refresher since the $720 million offering by Evansville, Ind.-based Mead Johnson Nutrition is the largest U.S. IPO since April of last year.

New York-based Bristol-Myers Squibb is spinning off shares of Mead, which specializes in making formula for infants. The initial returns have been promising. MarketWatch reported that Mead sold 30 million shares--5 million more shares than expected.

Cravath, Swaine & Moore corporate partners Ronald Cami (our Dealmaker of the Week) and Susan Webster, tax partners Stephen Gordon and Lauren Angelilli, and associates Matthias Baudisch, Michael Kim, Justin Tichauer, David Azarkh, and Luke Facer represented Mead.

Richard Truesdale, Jr., cohead of the capital markets group at Davis Polk & Wardwell, is serving as counsel to lead underwriters Morgan StanleyCitigroup, and Banc of America Securities.

AAR in the Land of Oz

We couldn't help but notice a flurry of deal activity Down Under this week by Australian giant Allens Arthur Robinson. The 1,000-lawyer firm has kept busy with capital markets work, starting with a $1.9 billion capital raising for Perth-based Wesfarmers, the country's largest retailer.

That was followed by a $330 million capital raising for Qantas, the nation's largest airline. AAR corporate/M&A partners Ewen Crouch and Tom Story in Sydney advised on both transactions.

But the firm wasn't finished. AAR also finished off capital raisings for Melbourne-based Newcrest Mining and Melbourne-based casino operator Tabcorp Holdings for $495 million and $200 million, respectively. Robert Pick, cohead of the firm's equity capital markets group, advised on both engagements along with M&A partner Robert Simkiss.

Add to that AAR handling a $70 million capital raising for London-based Henderson Group and advising Dexus, one of Australia's largest diversified property groups, on the sale of a one-third interest in a premier office tower development in Sydney, and its been a busy year so far for the firm.

But other Aussie firms are staying busy as well. Clayton Utz and Gilbert + Tobin--home to one of our honorary Dealmakers of the Week--have been tapped to advise the cash-strapped government of New South Wales on its proposed divestiture of several state-owned assets.

Gilbert + Tobin will advise on the proposed sale of the NSW Lotteries and Superannuation Administration Corporation--a pension plan known in Australia as the Pillar Administration.

Clayton Utz will provide advice on the sale of WSN Environment Solutions, a government-owned waste disposal company.

Independence Federal Savings Bank / ColomboBank

Rockville, Md.-based ColomboBank, founded in the Little Italy section of Baltimore 95 year ago, announced plans to merge with Independence Federal Savings Bank on Wednesday. Washington, D.C.-based ISFB was founded in 1968 to serve African Americans in the D.C. area.

The deal would create a $300 million thrift owned by D.C. businessman Morton Bender, who owns more than 90 percent of Colombo and 20 percent of ISFB. The Office of Thrift Supervision had resisted Bender's efforts in past years to merge the two. The proposed deal will still need OTS approval.

We spoke briefly with Bender who told us that he "can't remember" the names of the lawyers he used on the transaction. When told that the name of the firm itself would more than suffice--we're not averse to doing our own legwork here at The Am Law Daily--Bender told us that he couldn't remember that information either.

We said that seemed a bit implausible, but Bender held firm. After a bit more back-and-forth, the conversation was abruptly concluded. Who knows, maybe Bender was upset about the repeal of a bank merger tax break in the new stimulus package.

In a last ditch attempt to see if any lawyers had a role on this deal or if the two banks just collided into one another in some Beltway back alley, we called David Wilmot of Washington, D.C.'s Harmon, Wilmot & Brown.

Wilmot's name has been mentioned as one of three new proposed directors for Independence. Not surprisingly, Wilmot didn't call us back. Nor did an Independence representative. Looks like this economy is leaving everyone cranky.

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