Wachtell, Lipton, Rosen & Katz advised PVH Corp. (PVH:US), the owner of the Tommy Hilfiger brand, in its agreement to buy Warnaco Group (WRC:US) in a $2.9 billion transaction, creating a company with $8 billion in sales and bringing all Calvin Klein-branded apparel under one roof. Skadden Arps Slate Meagher & Flom LLP advised Warnaco. Kirkland & Ellis LLP represents the Peter J. Solomon Company, financial adviser to PVH Corp.
Wachtell’s team was led by corporate partners Andrew J. Nussbaum and Gregory E. Ostling. The team also included partners Michael J. Segal, executive compensation and benefits; Eric M. Rosof, restructuring and finance; Jodi J. Schwartz, tax; and Ilene Knable Gotts, antitrust.
Skadden partners Alan Myers and Peter Serating are leading the team on the deal for Warnaco.
New York-based corporate partners Stephen Fraidin and William B. Sorabella led the Kirkland team.
New York-based PVH will pay $51.75 in cash and 0.1822 of a PVH share for each Warnaco share, the companies said in a statement. The offer is worth $68.43 per Warnaco share, 34 percent higher than the last closing price of $50.88. Warnaco had licensed the Calvin Klein jeans brand from PVH, which bought Calvin Klein’s company from the designer in 2003.
PVH Chief Executive Officer Emanuel Chirico said last year that he would “aggressively” seek deals to turn PVH, which traces its roots to a shoe company founded in 1876, into the world’s largest apparel company, while boosting international sales and profit margins that trail competitors such as VF Corp. (VFC:US) and Ralph Lauren Corp. (RL:US) More than half of Warnaco’s 2011 sales came from outside the U.S.
PVH said the deal will add 35 cents a share to its earnings in fiscal 2013 if the deal closes as expected in early 2013, excluding integration and transaction costs. PVH expects the deal to contribute $100 million in additional annual revenue, or so-called synergies, offset by $175 million in acquisition costs, which will be spread over three years.
When the deal closes, Warnaco shareholders will own about 10 percent of the common stock of PVH. Warnaco’s board has unanimously approved the deal, and its CEO Helen McCluskey will probably join PVH’s board. Warnaco began as a maker of corsets more than a century ago and its shares are little changed over the past two years, lagging behind PVH’s 49 percent gain.
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Skadden, Latham Advise on Disney Purchase of Lucasfilm
Skadden Arps Slate Meagher & Flom LLP advised Walt Disney Co. (DIS:US) in its agreement to buy George Lucas’s Lucasfilm Ltd. for $4.05 billion, pressing Chief Executive Officer Robert Iger’s $15 billion bet on creative franchises by adding “Star Wars” and “Indiana Jones.” Latham & Watkins LLP advises Lucasfilm.
Skadden partners on the deal included Brian McCarthy and Howard Ellin, corporate/mergers and acquisitions; Stuart Levi and Anthony Dreyer, intellectual property and technology; Kenneth Betts, tax; Joseph Yaffe, executive compensation and benefits; John Nannes, antitrust; Frederic Depoortere - European Union/international competition; and Karen Corman, labor and employment.
Latham & Watkins’s corporate deal team was led by partners Christopher “Kit” Kaufman, Tad Freese and Jamie Leigh. Advice was also provided on intellectual property matters by partner Anthony Klein; on real estate matters by partner David Shapiro; on tax matters by partner David Raab; on employment law matters by partner Linda Inscoe; on environmental matters by partner Karl Karg; and on antitrust matters by partners Joshua Holian and Susanne Zuehlke in Brussels.
Sullivan & Cromwell LLP represents Goldman, Sachs & Co. in its capacity as financial adviser to Walt Disney in its acquisition of Lucasfilm Ltd. The S&C Los Angeles-based team is led by M&A partner Alison Ressler.
Lucas, 68, the sole owner, will get half in cash and the rest in stock, making him a major investor in the film, theme park and TV company, according to a statement from Burbank, California-based Disney. The first of a new trilogy of “Star Wars” films will be released in 2015, Disney said.
The deal furthers Iger’s pursuit of marquee content in an era marked by technology changes, such as $8-a-month video streaming and free game downloads, that disrupted Hollywood’s traditional revenue sources. Iger, who paid a combined $11.2 billion for Pixar and Marvel, said memorable characters will be valuable no matter what medium they appear in.
“Technology has proved more friend than foe to great storytelling,” Iger said in an interview. “It allows us to distribute in ways we never thought would have been imaginable.”
Disney paid $7 billion for animation studio Pixar in 2006 and bought Marvel Entertainment in 2009 for $4.2 billion, adding the creators of “Toy Story,” and “The Avengers” to the company’s library.
The Lucas acquisition brings the “Star Wars” pictures, which have generated $4.54 billion in worldwide ticket sales -- second only to Warner Bros.’ “Harry Potter,” according to Box Office Mojo. The “Indiana Jones” films have collected $1.95 billion.
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King & Spalding Adds Deals Lawyer Judy O’Brien in California
Silicon Valley dealmaker Judy O’Brien joined King & Spalding LLP as a corporate partner in its Redwood Shores office today.
O’Brien spent 20 years at Wilson Sonsini Goodrich & Rosati PC before leaving in 2001 to co-found the venture capital fund Incubic. She was also general counsel for Obopay, a mobile- payment company, the firm said. Most recently, O’Brien has consulted on business and financing strategies for early-stage enterprises through her consulting firm, Laurel Advisors, the firm said in a statement.
“We’re thrilled that she chose King & Spalding from the many firms competing for her talents,” said Timothy T. Scott, King & Spalding’s managing partner in Silicon Valley. “We intend to grow our presence in the Bay Area aggressively.”
King & Spalding has 800 lawyers in 17 offices in the U.S., Europe, Middle East and Asia.
Manhattan Federal Courthouse Closed for Entire Week by Storm
The U.S. District Court in lower Manhattan, the primary venue for major financial litigation with jurisdiction over the New York Stock Exchange and bank headquarters, will be closed for the week as a result of the super-storm that pummeled the New York metropolitan area.
Ecuador to Sue Chevron in Argentina to Enforce $19 Billion Award
Ecuadoreans will sue Chevron Corp. (CVX:US) in Argentina seeking to seize company assets in the country to enforce a $19 billion damage award in a lawsuit over pollution in the Amazon rain forest, a lawyer representing the group said.
Pablo Fajardo, the Ecuadorean lawyer who represents the group, said yesterday at a press conference in Buenos Aires that a lawsuit will be filed today at the Commercial Court of Justice in Buenos Aires. The group also plans to file in Colombia, Enrique Bruchou, an Argentine attorney with Bruchou, Fernandez, Madero & Lombardi, said at the same press conference.
The Ecuadoreans blame Texaco Inc., which Chevron acquired in 2001, for destroying the environment in the Lago Agrio region, damaging life conditions of 30,000 inhabitants. Chevron, based in San Ramon, California, on Oct. 9 lost a U.S. Supreme Court bid to block the judgment by an Ecuadorean court. The highest U.S. court let stand a federal appeals court ruling against Chevron that the Ecuadoreans can’t be barred from seeking to collect the award anywhere in the world.
“The Ecuador judgment is a product of bribery, fraud, and it is illegitimate,” Chevron said yesterday in an e-mailed response. “The company does not believe that the Ecuador judgment is enforceable in any court that observes the rule of law.”
A similar lawsuit was filed by the Ecuadoreans in the Ontario Superior Court of Justice in Toronto on May 30.
Chevron is the fourth-largest producer of oil in Argentina, with concessions in the Neuquen Basin in the western part of the country. Chevron’s assets in Argentina include an information technology support services center. Chevron signed a memorandum of understanding on Sept. 14 with YPF SA, Argentina’s biggest energy company, to analyze a partnership to jointly develop projects at the shale formation of Vaca Muerta.
Chevron Canada Ltd. will have a hearing on the lawsuit Nov. 28 in the Ontario Superior Court, Alan Lenczner, an attorney for the Ecuadoreans based in Toronto, said in a telephone interview yesterday.
Abu Hamza’s Lawyer: I’m Interested in Talking About Plea Deal
Jeremy Schneider, a lawyer appointed by a Manhattan federal judge to represent alleged al-Qaeda member Abu Hamza, told Bloomberg Law’s Spencer Mazyck that he’s interested in speaking to prosecutors about a plea deal. He declined to say whether his client would accept a deal. Hamza is the former imam of London’s Finsbury Park mosque, where shoe bomber Richard Reid and “20th hijacker” Zacarias Moussaoui once worshiped. Hamza is charged with trying to set up a terrorist training camp in Oregon, among other charges.
Several al-Qaeda members tried in U.S. courts have refused to deal with court-appointed counsel, but so far, Hamza and his lawyer are communicating “very well,” Schneider told Mazyck.
Title Insurer Group Selects Lawyer Pellegrini as President
Frank Pellegrini, the lawyer who founded Prairie Title Services Inc. in Illinois, was named president of the title insurance industry’s trade group.
Pellegrini will serve for the 2012-2013 year, the American Land Title Association said yesterday in a statement.
The group represents more than 4,000 companies according to the statement. Title insurers use their records and public documents to verify a seller is a property’s true owner and that it is free from liens. The companies collect a premium at the closing of the purchase and pay costs that may arise if someone disputes the new owner’s right to the property.
Pellegrini has been involved in the industry since the 1970s and joined Chicago Title Insurance Co. in 1978 before starting a law firm. He and his wife formed the Prairie agency in Oak Park, Illinois.
Adoboli Says Witnesses Won’t Help Him Because of UBS Machine
Kweku Adoboli, the former UBS (UBSN) AG trader on trial over a $2.3 billion loss, said he hasn’t been able to find any current or former UBS employees to testify on his behalf because they fear the bank.
“People have been in touch and said we’d like to help you but we can’t,” Adoboli told a court on his fourth day of testimony. “Across the industry, there is no one who’s been willing to stand up to the machine.”
Adoboli, 32, pointed to the area in the London courtroom next to prosecutors that has been reserved for UBS officials. Nine lawyers and two public relations officials were present yesterday on behalf of the bank. Some have passed notes to the prosecutors during the trial, he said.
“You see the machine that is amassed against me,” Adoboli said, pointing at them. “All of these people, along with the police, along with the Crown Prosecution Service.”
The former trader is charged with falsifying records on exchange-traded-fund transactions and other documents as early as October 2008 and keeping a slush fund of profits from unbooked trades that he used to cover the desk’s costs. Adoboli has pleaded not guilty to two counts of fraud and four counts of false accounting.
Prosecutor Sasha Wass told Adoboli yesterday that he is just like Jerome Kerviel, the former Societe Generale trader convicted of causing a 4.9 billion-euro ($6.35 billion) trading loss in 2008. Kerviel and Adoboli worked on the same type of desk doing proprietary trading, traded the same products and were both booking fake hedges to hide their risk, she said.
“I experienced the same thing” as Kerviel, Adoboli said. “Not because I’m a rogue trader, not because I’m a fraudster, not because I’m a criminal, but because I went in pursuit of the goals set by the organization and the only way we could reach those goals was by ignoring” warnings from management such as the e-mails the bank sent after Kerviel’s loss was discovered.
Adoboli said he followed the case closely and his “deep belief” is that Societe Generale pushed Kerviel too hard and it ended in “catastrophe.” He said it’s “impossible” the French bank wasn’t aware of Kerviel’s trades.
He testified yesterday his intentions were never dishonest and that senior management at UBS’s investment bank were telling traders to “push the boundaries” to generate more profits.
Wass said Adoboli treated UBS as his own personal bank, ignored the rules, and gambled recklessly with the bank’s money. She said it was “absolutely nonsense” the Swiss lender would instruct traders to exceed risk limits.
“You played God with the bank,” Wass said. “Your motivation, Mr. Adoboli, was all about you, your reputation, your ego, your desire to be a star trader.’
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