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December 4, 2009 6:00 AM

Dealmaker of the Week: David Caplan of Davis Polk & Wardwell

Posted by Julie Triedman

David CaplanThursday's announcement of Comcast's deal to buy control of NBC Universal from General Electric makes it one of the largest media deals in years. And both GE and Comcast appear to be getting what they wanted.

"Everyone seems to have come out a winner," says Dewey & LeBoeuf M&A partner Morton Pierce, who was not involved in the deal. "Comcast wanted to be in the content business, and GE was ready to get out."

GE gets a cash infusion and a clear path towards selling the company's entire stake in Comcast while retaining a 49 percent stake in the business in the short term. Meanwhile, Comcast gets control of one of the largest media content companies around, for a price that doesn't appear to jeopardize its credit rating or underlying financial health.

The cable giant will only be laying out $6.5 billion in cash for control without having to buy the entire company, leading many in the media to agree that the deal was a very good one for Comcast.

David Caplan, 48, is the Davis Polk & Wardwell lawyer who helped ink the complex transaction for longtime firm client Comcast. Caplan and GE's lawyer, Howard Chatzinoff of Weil, Gotshal & Manges, reached after the last of a series of all-nighters on the eighth floor conference center of Davis Polk, say the deal was unique in many ways. Rumors of the merger drew extensive media attention and microscopic reporting in the financial press. At one point, Caplan recalls, he was trying to remember a date related to GE's redemption rights on a document he was drafting. "I picked up the newspaper and it had the fact I needed," he says, laughing. "You do marvel sometimes at the information being published," says Chatzinoff. "Though it wasn't always correct information."

The big push over the past several weeks was hammering out a GE exit strategy from NBC Universal that met with Comcast's approval. Comcast wanted to limit the exposure of the joint venture and the parent company. GE wanted a clear timeline. Both got what they needed. Comcast's and NBC Universal's maximum cash outlay for the remaining GE redeemed shares is capped at $5.85 billion over the seven-year redemption period. GE gets to redeem half its stake in the joint venture in three-and-a-half years, and the rest after seven years.

Chatzinoff has known Caplan since they were on opposite sides of a deal 15 years ago. Last year he was opposing counsel when Caplan represented Campbell's Soup in its sale of Godiva chocolate to Yildiz, a Turkish company. He calls Caplan a "smart" negotiator and trusted adviser. "You can just tell when a client relies on their counsel's judgment," he says. "He was that counsel."

The next obstacle to overcome will be the regulatory hurdles. The Obama administration has said consolidation of the media industry poses concerns about competition. The deal is expected to draw intense scrutiny by Obama administration regulators and Capitol Hill.

Ultimately, whether the tie-up is a winner or a loser will depend on what the regulators do. They may impose conditions that could "threaten the structural attractiveness of the core businesses of both Comcast and NBCU," Craig Moffett, an analyst with Sanford C. Bernstein & Co. in New York, said in an interview with Bloomberg.

The details of the closing conditions, and whether Comcast will be forced to go through with the deal if regulators demand the sale of its or NBC's assets, remain undisclosed.

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