Bloomberg News

Slaughter and May, S&C, Bingham, Mattos: Business of Law

November 12, 2012

Slaughter and May is advising Diageo Plc (DGE), the maker of Johnnie Walker Scotch, in its purchase of a 53.4 percent stake in India’s United Spirits Ltd. (UNSP) for 111.7 billion rupees ($2.04 billion) to gain leadership in the world’s largest whiskey-consuming nation. Indian legal advice is being provided by Platinum Partners for Diageo.

Amarchand & Mangaldas & Suresh A. Shroff & Co. acted as lead legal adviser to United Spirits. Legal adviser on matters of English Law was Herbert Smith Freehills LLP. Legal adviser for legal due diligence process for United Spirits was Kanga & Co.

The Slaughter and May team is led by corporate partners Simon Nicholls, Robin Ogle and Padraig Cronin. The team also includes financing partners Stephen Powell and Ed Fife; tax partner Sara Luder; IP partner Susie Middlemiss; pensions and employment partner Charles Cameron; and real estate partner David Waterfield.

The Platinum Partners team is led by Nihar Mody, Yash Mohanram and Piusha Bose, Slaughter and May said in a statement.

The team from Herbert Smith Freehills is led by London- based corporate partners Alan Montgomery and Roddy Martin, and India practice chairman Chris Parsons.

The U.K. distiller will acquire a 27.4 percent stake at 1,440 rupees a share and will make a tender offer for 26 percent of United Spirits, the companies said Nov. 9. They first disclosed that they were in discussions in September.

United Spirits Chairman Vijay Mallya and others are selling a 19.3 percent stake in the maker of McDowell’s No. 1 whiskey as his Kingfisher Airlines Ltd. (KAIR) struggles with a cash shortage. The Indian distiller has a leading 43 percent share of the country’s whiskey market, which Euromonitor International estimates will grow by about 50 percent to $31.1 billion in the five years through 2016.

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Priceline Buys Kayak for $1.8 Billion to Defend Web-Travel Lead

Sullivan & Cromwell LLP represents Priceline.com Inc. (PCLN:US), the most valuable online-travel agency, which is buying Kayak Software Corp. (KYAK:US) for $1.8 billion in cash and stock, adding profitable search tools to its services that help consumers book flights and hotels online. Bingham McCutchen LLP represented Kayak.

S&C’s team included mergers and acquisition partners Keith Pagnani and Brian Hamilton. Partners Juan Rodriguez, on European antitrust; Matthew Friestedt, on executive compensation and benefits and Ronald Creamer Jr., on tax also worked on the deal.

The Bingham team was led by Boston-based corporate partners Michael Conza and Laurie Cerveny. The team received support from Boston-based antitrust and trade regulation partner Thane Scott, Boston-based tax and employee benefits partner Russ Isaia, Los Angeles-based securities and financial institutions litigation partner Stephen Alexander, London-based antitrust and trade regulation partner Davina Garrod and New York-based tax and employee benefits partner Anthony Carbone.

Shareholders of Kayak, which held an initial public offering in July, will receive $40 a share, the companies said in a statement. That represents a 29 percent premium over the Nov. 8 closing price of $31.04 in New York, and includes about $500 million in cash as well as $1.3 billion in equity and assumed stock options.

The deal is the biggest to date for Priceline, which has been using acquisitions to add customers as it works to increase sales and fend off competition. Kayak lets travelers compare prices and make reservations for hotels, flights, cars and vacations. Online travel sales may reach $151.9 billion by 2016 from $107.4 billion in 2011, according to EMarketer Inc.

Law firm Levi & Korsinsky is investigating Kayak’s board of possible breaches of fiduciary duty “by failing to adequately shop the company before entering into this transaction,” according to a statement after the company’s announcement.

Newman Ferrara LLP, another law firm, said it is investigating whether the board took “all necessary steps to ensure that Kayak’s shareholders receive the maximum value readily available for their shares of Kayak common stock.”

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Qatar Holding Said to Invest $100 Million in Chernin Group

Peter Chernin, former chief operating officer of News Corp. (NWSA:US), received an investment in his company from Qatar Holding LLC to expand and diversify media and entertainment operations in the U.S. and Asia.

Gibson, Dunn & Crutcher LLP represented the Chernin Group while White & Case LLP advised Qatar Holding.

Gibson Dunn’s team includes Century City corporate partner Ari Lanin and New York tax partner Jeffrey Trinklein.

The White & Case partners on the deal were William Wynne, Ward Atterbury and Michiel Visser, mergers and acquisitions; John Lillis, tax; and Stefan Mentzer, intellectual property.

The investment is about $100 million, according to a person with knowledge of the agreement. Financial terms of the deal weren’t disclosed, Los Angeles-based Chernin Group said Nov. 9 in an e-mailed statement.

Chernin’s company has raised about $300 million from investors, said the person, who requested anonymity because the terms are private. The infusion from Qatar Holding, the Gulf state’s sovereign wealth fund, comes after Chernin sold a stake to Providence Equity Partners for about $200 million in April. Both companies are interested in partnering on bigger investments, Chernin, 61, said in an interview.

Chernin said he will continue to focus his company’s investments on TV shows and films, media outlets in India and other Asian countries as well as digital media.

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Firm News

Mattos Filho Takes Top M&A Legal-Adviser Rank: Corporate Brazil

The top-ranked law firm for mergers and acquisitions in Brazil this year is Mattos Filho, Veiga Filho, Marrey Jr. & Quiroga Advogados after it helped complete more buyout-fund transactions than any other legal adviser.

Mattos Filho handled deals totaling $14.3 billion this year through Nov. 8, giving it 27 percent of the market and propelling it past 2011’s leader, Barbosa Mussnich & Aragao, according to data compiled by Bloomberg. The Sao Paulo-based firm advised on eight of the 64 transactions involving buyout funds so far this year.

“Increasing competition for deals between private-equity funds has kept us working a lot,” Joao Ricardo de Azevedo Ribeiro, a senior partner at Mattos Filho, said in an interview. He credited the firm’s New York office for winning assignments on international buyouts.

Estok Comercio & Representacoes Ltda., owner of the Tok&Stok chain of furniture stores, hired Mattos Filho to advise on its sale of a 60 percent stake to Carlyle Group LP (CG:US) for 700 million reais ($343 million). The law firm also advised London- based private-equity company Actis LLP on its pending 180 million-real purchase of Cruzeiro do Sul Educacional, a Sao Paulo-based for-profit university.

Private-equity funds participated in 64 M&A transactions in Brazil, or 12 percent of the 552 deals so far this year. That’s up from 57 deals, or 9.6 percent, of the 596 transactions announced in the same period of 2011, according to data compiled by Bloomberg.

Mattos Filho and Pinheiro Neto tied for first place based on the number of deals, with 37 transactions each. Mattos Filho was No. 1 based on that basis for the previous three years.

“For a lawyer, the number of transactions done is more important than the value because we don’t earn a fee from the value of deals, but a fixed value by hour of work,” said Carlos Lima, the Pinheiro Neto partner who handled the $4.9 billion acquisition of Amil Participacoes SA (AMIL3) by UnitedHealth Group Inc. (UNH:US), the No. 1 U.S. health insurer, announced on Oct. 8.

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Moves

Litigation Partner Kiser Joins Loeb & Loeb in Chicago

Loeb & Loeb LLP announced that litigator Livia M. Kiser has joined the firm’s consumer protection defense department as a partner in the Chicago office. She was previously a partner at Barack Ferrazzano Kirschbaum & Nagelberg LLP in Chicago.

Kiser has defended clients in the automotive, financial, retail, food and other industries against allegations of consumer fraud, false labeling, false advertising, breach of warranty, and other claims arising under state and federal law.

Loeb & Loeb has more than 300 attorneys in seven U.S. and Asian offices.

Burr & Forman Hires Banking and Real Estate Partner

Burr & Forman LLP hired Brendi E. Kaplan and an associate from Wyatt Tarrant & Combs LLP. She joins the firm’s banking and real estate practice group in Nashville, Tennessee.

Kaplan represents business clients in commercial transactions, real estate, finance, acquisitions, dispositions and general corporate matters. She also represents clients in public finance, serving as bond counsel, underwriters’ counsel, trustee’s counsel, and counsel to governmental entities, the firm said.

The new hires give Burr & Forman 29 Tennessee-licensed attorneys. The firm has almost 300 attorneys at nine U.S. offices.

Buchanan Ingersoll Adds IP, Pharma and Biotech Lawyer

Buchanan Ingersoll & Rooney PC hired intellectual property lawyer Christine M. Hansen, as a shareholder in the Wilmington office. Hansen was a partner at Connolly Bove Lodge & Hutz LLP where she focused on patent procurement and licensing for the past 13 years, the firm said.

Hansen has more than 20 years of experience in chemical, biotechnology and pharmaceutical matters, with in-depth knowledge of global patent prosecution issues and U.S. patenting procedures, according to the firm. She represents clients in patent counseling and opinions, due diligence, licensing and transactions, interferences, prosecution and reissue and reexaminations in biotechnology and chemical matters, the firm said.

With Hansen hire, firm-wide headcount in the intellectual property section stands at 54. Buchanan has 450 lawyers and government relations professionals in 14 U.S. offices.

Litigation

Visa, MasterCard $7.25 Billion Fee Deal Wins Early Approval

Visa Inc. (V:US) and MasterCard Inc. (MA:US)’s proposed $7.25 billion settlement of a merchant fee price-fixing case received preliminary approval by a federal judge in Brooklyn, New York.

U.S. District Judge John Gleeson made his ruling Nov. 9 after considering arguments by retailers opposed to the deal. The judge’s decision allows plaintiffs to begin signing up the more than 7 million retailers that might be eligible to participate.

Estimated to be the largest-ever private antitrust settlement, the deal would end a seven-year-long case alleging that the card companies conspired with major banks to fix interchange, or swipe, fees charged to merchants when customers pay with plastic.

In an Oct. 24 order, the judge said the deal would likely meet requirements for the initial sign-off, a threshold he said is “meaningfully lower” than that of a later final approval. Still, lawyers for the opponents were hopeful they could change his mind, given that there are provisions in the deal allowing some elements they claim are unfair to go into effect at the preliminary stage.

In court papers, retailers and trade associations opposing the settlement amount -- including $6.05 billion in cash payments and a temporary interchange fee abatement -- say it falls far short of the damages plaintiffs might have recovered at trial.

Plaintiffs could have won as much as $300 billion if the case had been fully litigated and the court awarded triple damages as permitted under antitrust law, a lawyer for one group of objectors said in an Oct. 18 filing, referring to an August analysis by Georgetown University law professor Adam Levitin.

“The proposed settlement is far south of this number, not even 10 percent of the potential recoverable damages should this case be tried,” said the lawyer, Jerrold Parker, who is representing about three dozen small businesses, including restaurants and auto dealerships.

During the hearing Nov. 9 in a standing-room-only courtroom, Patrick Coughlin, a lawyer for plaintiffs in favor of the settlement, said that some large merchants oppose the deal because they are planning to start a competing payment network, the Merchant Customer Exchange. The exchange, or MCX, was formed by merchants including Target Corp. (TGT:US) and Wal-Mart Stores Inc. (WMT:US), which also oppose the settlement.

Stephen Neuwirth, an attorney for Home Depot Inc. (HD:US), said that the company is concerned about the legal releases and potential lack of ability to decline participation.

“It’s so obvious Visa and MasterCard were prepared to make a large payment because of the scope of the releases being given,” he said. “It’s all one quid pro quo and merchants like the Home Depot are being denied the chance to opt out of that quid pro quo and say this is a bad deal.”

The case is In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, 05-md-01720, U.S. District Court, Eastern District of New York (Brooklyn).

For more, click here.

To contact the reporter on this story: Elizabeth Amon in Brooklyn, New York, at eamon2@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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