Amarchand, JD, SullCrom bag record $2.5bn Apollo-Cooper takeover

Breaking

Thursday, 13 June 2013 By Legally India Corporate M&A

Amarchand Delhi, Jones Day Cleveland and Sullivan Cromwell London acted on Gurgaon’s Apollo Tyres $2.5bn takeover of Ohio-based Cooper.

Amarchand Mangaldas Delhi, Jones Day and Sullivan Cromwell acted on Gurgaon-headquartered Apollo Tyres, which bought Ohio, USA-based Cooper Tire & Rubber for $2.5bn, making it the largest takeover of an auto parts company since 2007.

Sullivan and Amarchand acted for Apollo, while Jones Day advised Cooper, according to a Cooper press release yesterday.

Amarchand Delhi managing partner Shardul Shroff led the team for Apollo, of which he is also an independent board of director member, according to the American Lawyer. The Sullivan team is led from London by M&A partners Scott Miller and Jay Clayton, finance partner Presley Warner and EU competition partner Juan Rodriguez.

Jones Day’s team was led by Clevaland M&A partners Lyle Ganske and Peter Izanec, and included a number of other partners from Cleveland and New York, according to a press release from the firm.

Cooper Tyre’s general counsel is Sullivan Cromwell alumnus Stephen Zamansky, according to the American Lawyer, which also added that US law firm Winston & Strawn had lobbied for Cooper Tire last year for $80,000 in fees, to improve the “business climate” for the firm.

BofA Merrill Lynch served as financial advisor, alongside Morgan Stanley and Deutsche Bank. Apollo’s share price plummeted 17 per cent upon the news. The deal, meant to offset weaker demand for automobiles in India and Europe, follows Apollo’s sale of its South African subsidiary to Sumitomo Rubber Industries for $60m.

The Indian company will issue debt to pay a 43 per cent premium in buying the US company, which is around twice its size. [Mint / Bloomberg]

Photo by psyberartist

Comments

Observer 13 Jun 2013, 06:50

+11 -1

"Amarchand Delhi managing partner Shardul Shroff led the team for Apollo, of which he is also an independent board of director member..."

Conflict??

Janu 13 Jun 2013, 10:15

+5 -0

Yeah very much ....Advocates Act clearly bars a lawyer to hold office as a director in a company or any other office of profit for that matter.

Mitthu 13 Jun 2013, 11:04

+3 -2

@ Observer - conflict will be if he acts against Apollo. Acting for Apollo is no conflict. His interests are aligned with Apollo.

@ Janu - the requirment is not to hold any office of profit. Being an independent director is not an office of profit as you dont receive any remuneration other than sitting fees. As a matter of fact, independent directorr positions are mostly held by lawyers.

Cheers

Confused Zeus Says . . . 13 Jun 2013, 08:17

+14 -0

Is it only me who is reading a bit extra in the photo showing a Dunlop and a Good Year tyre round a totally rusted rim?

Guest 13 Jun 2013, 09:51

+1 -1

[quote name="Confused Zeus Says . . ."]Is it only me who is reading a bit extra in the photo showing a Dunlop and a Good Year tyre round a totally rusted rim?[/quote]
Yusss.. Zeus. Who cares??

? 13 Jun 2013, 09:19

U.S. Senate records show that Winston & Strawn received $80,000 from Cooper Tire last year for lobbying work related to the company’s “efforts to improve the business climate for U.S. manufacturing and the tire industry, reflecting an interest in trade, taxation, labor, health care, transportation safety, and tort and regulatory reform issues.”

What does this have to do with the deal?

Lazy 13 Jun 2013, 10:59

+2 -0

Lazy Kian has simply taken large portions from the American Lawyer article. AmLaw wrote it in the American context but our friend did not exercise much judgment...

kianganz 13 Jun 2013, 11:07

+2 -2

With our recent controversy regarding 'lobbying partners' or otherwise in India, I think it was worth mentioning this to illustrate how transparent the system in the US is and how common it is for law firms to do this kind of work. Why does that line in the story (yes, it was sourced from AmLaw) concern you so much?

SM 13 Jun 2013, 12:59

So a little bit of pressure from Suhaan Mukerji and you will remove this reference also! ;)

T 13 Jun 2013, 13:11

+0 -0

Agree with 3.1. Kian, it bothers because it is misplaced in this story. Reader context adaptability is one of the basic principles taught in print journalism..

boyfriend 13 Jun 2013, 17:46

Conflict is not with Apollo in a war-like way obviously. Only that an independent director can't have a material pecuniary relation with a company. And so a firm owned by an independent director can't be making solid chunks of money from the company. It's a grey area- it is fair for a firm like his to state that given their total revenues, what they made in Apollo was not material (peanuts). Read 50 Shades of Grey for more.

Legally Speaking 14 Jun 2013, 05:15

+4 -3

@Mitthu - I hope u are not a lawyer.

The definition of 'Independent Director' as per Listing Agreement is:

For the purpose of the sub-clause (ii), the expression ‘independent director’ shall mean a non-executive director of the company who:
a. apart from receiving director’s remuneration, does not have any material pecuniary relationships or transactions with the company, ...........
b. is not related to promoters or ..............
c. has not been an executive of the company ............

d. is not a partner or an executive or was not partner or an executive during the preceding three years, of any of the following:
i) the statutory audit firm or the internal audit firm that is associated with the company, and
ii) [u][b]the legal firm(s) and consulting firm(s) that have a material association with the company.[/b][/u]

Mitthu 14 Jun 2013, 07:11

+2 -1

Legally Speaking,

Only difference is that I am a better lawyer than you.

Read the text that you have so nicely underlined. The answer lies there. If you are not able to spot it - well, I am always around.

Cheers

P.S. - Take a look at JJ Irani Committee Report for guidance on "materiality" threshold. Rest later

Legally Speaking 17 Jun 2013, 11:23

+0 -1

@ Mitthu

It is apparent how good a lawyer you are. With your kind of interpretation, God help your clients.

Anyways thanks for only seeing the text that I had highlighted. Please review the following as well:

d. [u][b]is not a partner [/b][/u]or an executive or was not partner or an executive during the preceding three years, of any of the following:
i) ]the statutory audit firm or the internal audit firm that is associated with the company, and
ii) [u][b]the legal firm(s) and consulting firm(s) that have a material association with the company[/b][/u].

While the term materiality may not be explicitly defined under the Listing Agreement, I feel that the fee that Amarchand would have charged Apollo would certainly fall in that category.

@Kian - My earlier comment on the matter was not uploaded.

Mitthu 17 Jun 2013, 15:27

Why trouble God? I am there to help my clients.

In fact, I am here to help you as well.

Let us dwell deeper. You say - "I feel that the fee that Amarchand would have charged Apollo would certainly fall in that category".

So, according to you the fee charged by Amarchand is material for Amarachand or Apollo?

Better still, even if lets say Amarchand charged 2 crores for this deal - is it material for Amarchand or Apollo or YOU? What do you think is the turnover of Amarchand or aggregate legal fees that Apollo paid last year.

Think about it before jumping to respond - something I felt in your earlier response.

As I said, I am here to help. Keep the conversation rolling. I am sure a lot of lawyers (like you) are going to be benefitted.

Did you check out JJ Irani report on Corporate Governance about materiality guidance? My guess is no, given the naivette of your response.

Regards,
Mitthu

Lone Ranger 14 Jun 2013, 17:14

While debating conflict of interest and amarchand Delhi's potentially huge fee am curious to know if shardul acted alone on this deal. Didn't he have junior partners and a pack of associates. Why no deal disclosure of the partner who possibly did the grunt work and associates who burnt the midnight oil.

wha??? 15 Jun 2013, 05:56

+3 -0

the real question is whether amarchand did this deal at all! Kian - do not put this up. this is a message for you. dig deeper, there is a big scoop here.

who??? 16 Jun 2013, 13:39

Probably the biggest LI story ever!!!! I agree....

Kian Fan 17 Jun 2013, 08:27

+1 -0

[quote name="who???"]Probably the biggest LI story ever!!!! I agree....[/quote]
Kian. Please follow up.

anything?? 25 Jun 2013, 16:37

anything??

blinkie 15 Jun 2013, 10:47

Shardul means lion. Lion's share for the lion. Fee, glory, all. And remember lions eat first then the pack- and the kill is made by the lioness.

sree 22 Jun 2013, 15:33

This is a case of wrong reporting. My firm did all the work for another part of this deal and we are not reported. Plz do more all-round research before publishing deal reports. In fact we sent deal report as soon as this deal was closed.

Best Regards,

Last Laugh 30 Dec 2013, 15:16

Another AMSS deal which does not go through (diageo- USL another example)

This is what happens when quantity is preferred over quality work and major chunk of the work is handed over to inexperienced juniors!

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