-- This article was written by David Marcus of The Deal
As the bidding for Yahoo! (YHOO) becomes more frenzied, advisors will likely play key roles given the complexity of the company's holdings and the multiple ways of splitting them up.
Law firms and banks are tight-lipped on whether they are working for various bidders, but recent history offers clues about who may have landed assignments.
The most information about advisors involves Yahoo! itself. On Feb. 19, the company issued a press release in which it said that Goldman Sachs (GS), JPMorgan Chase (JPM), PJT Partners (PJT) and law firm Cravath, Swaine & Moore LLP are advising a strategic review committee of the Yahoo! board about potential alternatives. Goldman declined to identify its bankers on the matter, though the firm's Andrew Gordon and Jon Woodruff advised Yahoo! when it fended off a $45 billion hostile bid from Microsoft (MSFT) in 2008. Woodruff has since retired, but Gordon now chairs the investment banking division at Goldman. Paul Taubman, from whose initials PJT Partners takes its name and its ticker symbol, advised Microsoft on its offer when he was at Morgan Stanley (MS).
Sources said at Cravath partner Faiza Saeed is counseling the committee set up by the Yahoo! board, but the law firm wouldn't confirm it.
According to sources familiar with the situation, Yahoo! itself is using Larry Sonsini, a name partner at Wilson Sonsini Goodrich & Rosati PC in Palo Alto and one of Silicon Valley's top lawyers since the 1970s.
Yahoo! has relied on several other firms for corporate advice over the years, especially Skadden, Arps, Slate, Meagher & Flom LLP, its counsel on the Microsoft bid as well as the sale of half of its then-40% stake in Alibaba Group (BABA) back to the Chinese online marketplace in 2012 and last year's attempt to spin out the rest of the Alibaba stake to Yahoo! stockholders, a plan scuttled because of its perceived tax risk. Yahoo!'s 15.5% stake in Alibaba is worth about $31 billion, and Skadden's familiarity with the structure could be critical to a sale of Yahoo.
Skadden's Marc Packer and Michael Hoffman, who worked on the potential Alibaba spinoff, are still advising Yahoo.
William Anderson, a banker at Evercore Partners (EVR), is advising Yahoo on a possible proxy fight launched by Starboard Value LP, according to a source close to the situation. An Evercore representative declined comment.
The activist hedge fund, meanwhile, is using Steve Wolosky and Andrew Freeman of Olshan Frome Wolosky LLP in New York as its regular counsel, according to an Olshan Frome representative.
Alibaba used several law firms on the 2012 deal, while major stockholder SoftBank Group (SFTBF), an early investor in Alibaba and still a major holder, tapped a Morrison & Foerster LLP team led by Kenneth Siegel in Tokyo. MoFo is the long-time law firm to Softbank, which also owns a large stake in Yahoo! Japan. Yahoo! owns a 35.5% stake worth roughly $10 billion. MoFo also represented Softbank on Alibaba's IPO, and partners Robert Townsend and Siegel are working for SoftBank and Yahoo! Japan on the current situation, a MoFo spokesman confirmed.
That leaves the various bidders for Yahoo, a large and hazily defined group. The leader seems to be Verizon Communications (VZ), which is reportedly using Guggenheim Partners LLC, LionTree LLC and Allen & Co. for banking advice on its bid.
LionTree's Aryeh Bourkoff and Ehren Stenzler teamed with a Guggenheim group led by Alan Schwartz and H. Andrew Decker to represent Verizon on its $4.4 billion purchase of AOL (AOL) last year. LionTree has also advised Verizon on media technology investments such as the purchase of a 24.5% stake in AwesomenessTV from DreamWorks Animation (DWA), which valued the online video group at $650 million, and the 2013 purchase of content delivery network EdgeCast Networks for a reported $350 million. Guggenheim was one of Verizon's banks on the $10.54 billion purchase of wireline operations from Frontier Communications (FTR), which closed in April.
On the AOL deal, Verizon used a Weil, Gotshal & Manges LLP team led by Frederick Greenand Randi Singer. Verizon has also frequently turned to Jeff Rosen at Debevoise & Plimpton LLP over the years, and he and Debevoise's Michael Diz represented the company on its $1.8 billlion agreement to buy XO Communications' fiber-optic network business earlier this year.
With several strategic bidders, including Time Inc. (TIME) and Alphabet (GOOGL) reportedly bowing out, another potential one, the U.K.'s Daily Mail & General Trust, has confirmed an interest in Yahoo! but just this week said it hadn't made a bid and is in discussions with parties that might be interested in making one.
Certainly, among the parties Daily Mail might consider hitching its wagon to would probably be private equity shops, and a few are reportedly interested in Yahoo!.
TPG Capital LP has made a number of media and technology investments in recent years, deals on which it has often turned to Paul Shim, a partner at Cleary Gottlieb Steen & Hamilton LLP in New York. He advised TPG on its $90 million investment in Uber in 2013; its $525 million acquisition of Primedia from KKR & Co. (KKR) in 2011; its purchase of a 35% stake in Creative Artists Agency in 2010 and of another 18% four years later; and its acquisition, side by side with Riverwood Capital, of a controlling stake in Aptina Imaging from Micron Technology (MU) Shim also advised Nortel Networks on the $4.5 billion sale of its patent portfolio in 2011, one of the most frenzied tech auctions of the last several years.
Bain Capital and Vista Equity Partners are reportedly teaming up on a bid. Vista is very close to Kirkland & Ellis LLP; chief legal officer David Breach is a Kirkland alumnus, and Daniel Wolf, a K&E partner based in New York, advised Vista earlier this month on its $1.65 billion agreement to buy Cvent (CVT). Breach and K&E's Sarkis Jebejian advised Vista on its 2014 acquisition of Tibco. The firm's Stuart Casillas also does a significant amount of M&A work for Vista.
Bain also uses K&E, whose partner Jon Ballis represented the Boston PE firm earlier this year on its $1.28 billion agreement to sell Physio-Control to Stryker (SYK) and in 2015 on the $2 billion sale of portfolio company Air Medical Holdings Group to KKR. But Bain is close to Ropes & Gray LLP, as well, with Ropes partner Will Shields advising Bain on its $2.4 billion acquisition of Blue Coat Systems last year and colleague Alfred Rose advising the financial sponsor on the $1.8 billion sale of Applied Systems to Hellman & Friedman LLC in 2014.
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