Putting mergers, acquisitions into recent context
By Michael Lee
Feb. 26, 2004 9:00 p.m.
Law Professor Samuel Thompson has been fascinated with mergers
and acquisitions since his earliest days in law school ““ not
because it’s a lucrative profession, but for the intellectual
stimulation.
After leaving the UCLA School of Law faculty to become dean of
the University of Miami Law School in 1994, he founded the Center
for the Study of Mergers and Acquisitions at the Florida
school.
When he returned to UCLA last year, he brought the
center’s concept ““ and its annual conference ““
with him.
On Wednesday, UCLA kicked off its first ever “Seven Days
of M&A at UCLA,” a weeklong conference held at the
Ritz-Carlton Marina Del Rey.
“(Mergers and acquisitions) is one of the most dynamic and
exciting areas of law practice,” Thompson said in a phone
interview.
“When you pick up the paper, you can’t miss seeing
news about a new deal.”
The conference program was definitely arranged with recent news
in mind.
Thursday’s keynote speaker was Martin Lipton, of Wachtell,
Lipton, Rosen and Katz, currently representing Disney in its
wrangle with Comcast.
Lipton is the inventor of the poison pill defense against
hostile takeover bids. In a poison pill strategy, a company
targeted for acquisition plans to sell its stock at a discount,
thus forcing the acquiring company to purchase at a loss.
“We’re in a period of excitement,” Thompson
said. “(Mergers) go hand in hand with a better economy and a
bigger stock market.”
In his lecture on Wednesday evening, Thompson said the period
from 1999 to 2003 has been quiet, but the last quarter of 2003 saw
a pick-up, with AT&T-Cingular and Comcast-Disney.
Attorney Keith Flaum of Cooley Godward, commenting on
Thompson’s remarks, predicted that mergers and acquisitions
deals may increase in frequency, but will be conducted at a much
slower pace than they were before.
“You’d get a call on Friday, and by Monday announce
a $7 billion deal,” he said, referring to the rapid nature of
mergers and acquisitions deals in the past.
But in the wake of scandals involving firms like Enron and
WorldCom, lawyers and accountants are devoting more time to
“due diligence” ““ legal parlance for making sure
the sums add up and that the deal is not skirting the edge of
illegality.
In response to the constant change, Thompson stressed that the
basic principles governing mergers and acquisitions remain the
same.
“Get a good, solid background in corporations law,
securities regulation and antitrust law,” he advised
prospective law students. “Most of the changes are governed
by these fundamentals … you don’t try to catch a
fad.”
These fundamentals are necessary to guide an attorney through
every deal he handles. Each one calls for something different,
depending on the parties’ business needs, and the laws of
different states ““ or countries ““ both of which are
constantly changing.
Wednesday’s event featured representatives from regulatory
agencies from all over the world, each offering different
perspectives on how its country approaches the issue.
A panel on Canadian securities law said Canada currently has
eight varieties of regulatory law among its provinces, but may soon
adopt the U.S. model of a national agency like the Securities and
Exchange Commission.
Stanley Yukevich, an American attorney who practiced in Japan
for four years, said that Japan, traditionally paternalistic toward
its companies and guarded against foreign investment, is gradually
becoming more receptive to foreign ownership.
“There will always be new and unique issues,”
Thompson said, summing up why he enjoys mergers and acquisitions so
much.
