Overview
In today’s global business environment, in which regulation is increasingly complex and shareholder activism is on the rise, companies and buyout firms need an experienced advocate to protect their vital business interests. A leader in both global M&A and litigation, Ropes & Gray provides clients with unrivaled counsel on strategic transactions, as well as the possible litigation challenges that can follow major deals.
Over the past few years, Ropes & Gray has represented companies in M&A transactions with an aggregate value of more than $100 billion, many of which involved cross-border and multijurisdictional issues, and have led to some of the largest and most important deal litigation.
In recent years the plaintiff’s bar has challenged nearly all—90 percent or more—of transactions valued at more than $500 million. Our premier litigators have a track record of successfully advising and resolving many of these challenges. We recently were successful in representing Goldman Sachs, in its role as financial adviser to a Worldwide Pharmaceutical Company, in the $69 billion acquisition of a Worldwide Pharmaceutical Company by Activas plc, and Cubist Pharmaceuticals Inc. in its $9.5 billion sale to Merck & Co. Inc.
We have prevailed in some of the biggest litigation battles in recent deal markets, representing:
- The Gillette Company in its $57 billion acquisition by Procter & Gamble. We successfully defeated a Massachusetts Secretary of State subpoena, allowing the transaction to proceed.
- Covidien plc and its directors in federal and state court shareholder challenges to its $42.9 billion acquisition by Medtronic, Inc.
- Genzyme and its directors and officers in multiple state and federal putative class actions challenging Sanofi-Aventis’s $18.5 billion hostile tender offer for all of the outstanding shares of Genzyme.
- NSTAR (now “Eversource”) in connection with nine shareholder class actions filed immediately following the announcement of NSTAR’s $17 billion merger of equals with Northeast Utilities.
- Sungard Data Systems, in three shareholder class actions following its $11.3 billion acquisition by a private equity consortium, in the largest PE club deal ever.
- Affiliated Computer Services’ board of directors (strategic transaction committee), in multiple state litigations filed in connection with ACS’s $6.4 billion merger with Xerox.
- Applied Materials in the company’s $5 billion acquisition of Varian Semiconductor. Injunctions were denied and the suit was ultimately dismissed, allowing the transaction to close.
- TPG Capital in connection with intensely followed shareholder litigation that challenged TPG’s $3 billion acquisition of J.Crew Group.
Comprehensive Capabilities
Our corporate lawyers and litigators work hand in hand on transactions, ensuring that each and every deal is crafted and reviewed from both a business and litigation standpoint. As a result, our clients frequently avoid litigation—or have the best possible record for defending an action if one is brought.
Representing buyers, sellers, companies, officers, directors and special committees, our attorneys have successfully litigated virtually every type of M&A transactional dispute, including:
- Friendly and hostile takeovers
- Contests regarding fiduciary duties and responsibilities
- Litigation arising out of large, complex going-private transactions
Experience
Our litigators have an impressive track record of wins in virtually every key court in the country, including the Delaware Court of Chancery. We have established important precedents that substantially limit the scope of claims against issuers and their directors and officers, shrinking the class of possible claimants and claims.
Clients regularly turn to us to defend their strategic interests when multibillion dollar deals are on the line. Our recent successes for our clients include prevailing in litigation arising in:
- Recent High Profile Matters
- Strategic M&A Transactions
- Going-Private Transactions
Recent High Profile Matters
Our successes on behalf of clients include representing:
- Goldman Sachs in securing a unanimous jury verdict following a five-week trial in federal court that was upheld by the First Circuit. After Dragon Systems was sold in an all-stock transaction, the buyer was exposed in an accounting fraud and went bankrupt rendering the transaction currency worthless. Dragon’s founders sought over $1 billion in damages alleging that Goldman, as their financial advisor, failed to detect the fraud or otherwise prevent the transaction.
- OTK, a minority shareholder in Morgans Hotel Group, in fast-moving deal litigation in Delaware. We secured a ruling blocking a proposed recapitalization transaction that Morgans planned to rush through with its controlling shareholder—billionaire Ron Burkle—before OTK could remove the company’s board through a proxy fight.
Strategic M&A Transactions
We regularly advise boards of directors, independent committees and investment bankers in both friendly and hostile takeovers, as well as in contests regarding fiduciary duties and responsibilities. Our successes on behalf of our clients include representing:
- The Gillette Company in its $57 billion acquisition by Procter & Gamble. We successfully defeated a Massachusetts Secretary of State subpoena, allowing the transaction to proceed.
- Covidien plc in its $42.9 billion acquisition by Medtronic Inc. Shareholders filed challenges in Massachusetts federal and state courts claiming breach of the directors’ fiduciary duties (under laws of Ireland, where Covidien is incorporated). Working closely with co-counsel the litigation settled on favorable disclosure-only terms, allowing the deal to move forward on schedule.
- Genzyme in Sanofi-Aventis’s $18.5 billion hostile tender offer for all of the outstanding shares of Genzyme. We successfully opposed all of plaintiffs' requests for expedited discovery and injunctive relief, and prevented plaintiffs from obtaining a $2 million escrow in proceeds from the merger to cover attorneys’ fees, clearing the way for the transaction to close.
- Pfizer, Inc. in connection with shareholder litigation challenging its $17 billion acquisition of Hospira.
- NSTAR in nine shareholder class actions filed immediately following the announcement of its $17 billion merger of equals with Northeast Utilities.
- Sungard Data Systems, in three securities class actions resulting from its $11.3 billion acquisition by a private equity consortium made up of Bain Capital, Blackstone Group, Goldman Sachs, KKR, Providence Equity Partners, Silver Lake and TPG Capital.
- Cubist Pharmaceuticals Inc. and its board of directors in four different actions brought in Delaware Chancery Court seeking to enjoin Merck’s $9.5 billion acquisition of Cubist. The deal closed without an injunction or other judicial intervention.
- Affiliated Computer Services’ board of directors (strategic transaction committee), in multiple state litigations filed in connection with ACS’s $6.4 billion merger with Xerox Corporation. We secured a partial settlement resolving both the Delaware and Texas claims, allowing the merger to proceed.
- Applied Materials in the company’s $5 billion acquisition of Varian Semiconductor. The suit was ultimately dismissed, allowing the transaction to close.
- The Timberland Company and its directors in litigation alleging breaches of fiduciary duties in connection with VF Corporation’s agreement to purchase Timberland for approximately $2 billion. We ultimately negotiated a favorable disclosure-only settlement for our clients, and the transaction closed as scheduled.
- Entegris, Inc. in merger litigation relating to its $1.5 billion acquisition of ATMI. Two ATMI shareholders, purportedly on behalf of a class of all ATMI shareholders, sought expedited discovery and filed a motion to enjoin the merger – no injunction was granted and the Court dismissed all of the plaintiffs’ claims.
Going-Private Transactions
We have also represented most of the major private equity firms in the inevitable shareholder litigation arising out of large, complex going-private transactions, including most recently:
- TPG Capital in connection with intensely followed shareholder litigation that challenged TPG’s $3 billion acquisition of J.Crew Group. Fifteen lawsuits were filed in three different jurisdictions in connection with the transaction. We successfully guided TPG through closing, forced a dismissal of the New York State and S.D.N.Y. actions, and reached a global settlement for the Delaware actions on terms highly favorable to TPG and J.Crew.
- Blackstone Capital Partners in six shareholder lawsuits challenging the $3 billion acquisition of Emdeon. These actions were dismissed and Emdeon stockholders approved the transaction.
- TPG Capital in shareholder litigations filed in Delaware and New Jersey challenging TPG’s $2 billion acquisition of Par Pharmaceutical Companies. After the transaction was announced, shareholders filed nine lawsuits against the Par board of directors, Par and TPG in multiple jurisdictions. We secured a favorable disclosure-only settlement in the Delaware action; the New Jersey actions remain pending.
- TPG Capital in shareholder litigation challenging TPG’s $1.97 billion tender offer to acquire Immucor. We defeated the plaintiffs’ attempts to enjoin the transaction, which resulted in TPG’s successful acquisition of the company.
- Bain Capital in multiple state class action suits filed in connection with Bain’s $1.8 billion acquisition of Gymboree Corporation. Following limited document discovery, we negotiated a favorable settlement with the plaintiffs, allowing the transaction to close.
- HIG Capital in an expedited litigation in the Delaware Chancery Court concerning HIG's quarter-billion dollar acquisition of Hooters. HIG ultimately prevailed, closing the transaction and acquiring the global Hooters franchise. In addition, HIG was granted summary judgment on post-closing damages claims against the sellers exceeding $20 million.
- HIG Capital and its target, AmPac and its board of directors, against multiple shareholder suits in multiple jurisdictions after the announcement of HIG's proposed $400 million tender offer for AmPac. Plaintiffs allege that AmPac's board breached its fiduciary duties in connection with the transaction, and that HIG supposedly aided and abetted those alleged breaches. We successfully avoided injunctive relief and HIG successfully completed the tender offer and its acquisition of AmPac.