Oct 07, 2008

Cleary Gottlieb is representing BNP Paribas in its announced acquisition of Fortis' operations in Belgium and Luxembourg, as well as the international banking franchises, for a total consideration of €14.5 billion.

Following the acquisition by the government of the Netherlands of Fortis Bank Nederland (Holding) N.V., including Fortis' interest in ABN Amro Holding N.V. and the Dutch insurance activities, the State of Belgium will raise its stake in Fortis Bank SA/NV to 100%.

Under the terms of the transaction, BNP Paribas will then acquire from the Belgian State 75% of Fortis Bank SA/NV and 100% of Fortis Insurance Belgium, and acquire 16% of Fortis Banque Luxembourg from the Luxembourg State, taking its controlling interest in Fortis Banque Luxembourg to 67%. BNP Paribas will acquire its interest in Fortis' banking business in Belgium and Luxembourg for €9 billion paid in newly-issued BNP Paribas shares. Fortis Insurance Belgium will be acquired for a cash consideration of €5.5 billion. As a consequence, the Belgian and Luxembourg states will become shareholders of BNP Paribas, with stakes of 11.6% and 1.1% respectively, and Belgium will appoint two new members to join the BNP Paribas board.

Oct 01, 2008

Cleary Gottlieb is representing Dexia on all aspects of its recapitalization plan. After three days of intense negotiations between Dexia, its shareholders and the Belgian, French and Luxembourg governments, and on the back of heightened crisis in the European banking sector, a €6.4 billion recapitalization plan was put together in record time. Under the plan, the Belgian state and regions as well as the existing core Belgian shareholders of Dexia, on the one hand, and the French government and the CDC on the other, will each inject €3 billion into Dexia SA. In parallel, the Luxembourg government will be subscribing for €376 million in convertible bonds issued by Dexia BIL.

Dexia's recapitalization is the second instance of urgent, large scale support by European governments to Belgian financial institutions in the last few days, after the rescue, over the course of last weekend, of Fortis. A Cleary Gottlieb team is representing BNP Paribas in its announced acquisition of Fortis' operations in Belgium and Luxembourg, as well as the international banking franchises, for a total consideration of €14.5 billion.

Nov 13, 2007

Cleary Gottlieb advised long-time client Mittal Steel in its unsolicited but ultimately recommended bid for Arcelor, which was first announced on January 27, 2006 and culminated in the announcement on July 26, 2006 that approximately 92% of Arcelor’s shares had been tendered into Mittal Steel’s €26.6 billion offer. Settlement of the offer occurred on August 1, 2006, with a subsequent offering period that closed in mid-August and settled in early September 2006. After representing Mittal Steel in its bid for Arcelor, Cleary Gottlieb acted as deal counsel in the two-step cross-border merger of Mittal Steel into Arcelor in 2007.  The combined entity, ArcelorMittal, is, at 100 million tons of steel shipped per year, the world’s largest steel company, more than three times larger than its closest rival.

Mittal Steel's bid for Arcelor attracted a great deal of media attention for reasons including the initially hostile nature and the prolonged (five month) and hard-fought takeover battle; the nature and histories of the companies involved; political considerations (Arcelor results from the combination of three European steel companies and operated in a symbolic and politically-charged sector, and several governments initially expressed opposition to or reservations about the bid); and the role of shareholder activism and importance of corporate governance considerations in the takeover battle.

The bid was extremely complex from the regulatory perspective. The terms and documentation of the offer required the approval of the Belgian, French, Luxembourg and Spanish securities regulators since Arcelor was listed on markets in all four jurisdictions. The applicable regulatory framework for the bid therefore had to be constructed sui generis since the European Takeover Directive had not yet been implemented in the relevant jurisdictions. The share offering prospectus required the approval of the Dutch securities regulator as Mittal Steel was a Dutch company, and the offering was registered with the SEC (among other reasons because Mittal Steel’s shares are NYSE-listed). Antitrust filings were necessary in the EU, U.S., Canada and various other jurisdictions around the world. The bid was further complicated by Mittal Steel’s agreed on-sale for approximately C$5.6 billion to Thyssen-Krupp of Dofasco, a Canadian steel company acquired by Arcelor after a prolonged take-over battle that ended just before the launch of Mittal Steel’s bid and the possibility that Mittal Steel might have to launch an offer to buy out the minority interests in Arcelor’s listed Brazilian subsidiaries for over €3 billion.

In addition to clearing the regulatory hurdles, Mittal Steel had to overcome a wide array of defensive measures employed by Arcelor. These included: a concentrated effort to obstruct or delay the necessary regulatory approvals; the placing of Dofasco into a stichting (a Dutch foundation), the unanimous approval of whose board is required for any sale of the company; and the signing an agreement with the controlling shareholder of Severstal, a Russian steel company, providing for the acquisition of a controlling interest in Arcelor without a premium or a subsequent mandatory bid, subject only to antitrust approval and the veto of 50% of the total outstanding share capital (where historical EGM attendance averaged around 35%).

Mittal Steel overcame each of these hurdles. The regulatory approvals were obtained after months of protracted effort and negotiation. The Dofasco stichting proved non-dissuasive. A shareholder revolt led to the withdrawal of the proposed share buyback and undid the Severstal stitch-up, which was ultimately rejected by 60% of total outstanding shares at an EGM. Mittal Steel continued to seek negotiations with Arcelor’s Board throughout the process with the goal of obtaining a recommendation, which it did on June 25, 2006 after having seen off the various defensive measures, revising its offer on two separate occasions and signing a Memorandum of Understanding relating, among other things, to revised offer terms and corporate governance matters.

Cleary Gottlieb acted as sole transaction counsel to Mittal Steel and handled all aspects of the transaction, working with local counsel in various jurisdictions (principally Luxembourg, Spain and the Netherlands).

Nov 01, 2007

Cleary Gottlieb represented the underwriters UBS, Deutsche Bank, Goldman Sachs, Fortis Bank and KBC Securities in Nyrstar’s €2 billion initial public offering and Euronext Brussels listing. The offering included a global institutional placement, including a 144A tranche, and a Belgian retail offering. Nyrstar’s IPO is one of Europe’s largest this year, and is Belgium’s largest since Belgacom’s IPO, which Cleary Gottlieb also handled. The deal priced on October 29 and closed November 1.

The deal was structured using an innovative "extension clause" that is new in local securities law and a customary overallotment facility. Both were exercised in full, resulting in a complete exit by the two selling shareholders.

Several banks involved said the deal was one of the most complex ECM deals they had seen. Nyrstar is a newly-formed entity created from the carve-out and merger of the zinc groups of Umicore, a Belgian Euronext-listed industrial company, and Zinifex, an Australian mining and smelting business. The deal presented several major challenges, including issues related to the historical financial information for both carve-out groups.

Nyrstar employs over 4,000 people across four continents and in 2006 produced more than one million tons of zinc.

Oct 14, 2005

Cleary Gottlieb represented Telenet Group Holding NV in a €985.8 million IPO of approximately 13 million new ordinary shares and approximately 34 million existing ordinary shares. The offering consisted of a public offering in Belgium and a Rule 144A/Reg S placement to institutional investors.

The joint bookrunners, who were appointed following a competitive process, have an option to purchase an additional 6.6 million shares from certain existing shareholders to cover over-allotments. Most of the Telenet's existing shareholders sold the majority of their collective stake in the IPO. However, affiliates of U.S.-based telecommunications company Liberty Global, Inc., which jointly owned a 21% stake in Telenet, participated in the offering and exercised certain rights of first offer so as to maintain their stake.

Telenet is Belgium's largest broadband provider offering telephony, Internet and cable TV services, including a recently launched digital interactive television service. The proceeds from the primary offering will be used to prepay a portion of the high yield senior and senior discount notes that were issued in December 2003 and for which Cleary had acted as issuer's counsel.