Big Deals

Aetna/Coventry; BC Partners and CPP Investment Board/Suddenlink; NRG/GenOn

, The American Lawyer



Aetna Inc. agreed to pay $5.7 billion in cash and stock for health insurer Coventry Health Care Inc. on August 20. The buyer will also assume $1.7 billion in Coventry debt, giving the deal a total value of $7.3 billion. The target's shareholders will receive $27.30 in cash and 0.3885 Aetna shares per Coventry share, consideration worth $42.08, a 20 percent premium to Coventry's closing price on August 17, the last trading day before the deal was announced. The deal would be the largest that Aetna has signed up since it completed a major reorganization in 2000 by selling its financial services and international businesses to ING Groep N.V. for $7.7 billion.

The acquisition would bolster Aetna's ability to provide government-supported health care plans, and the market applauded the deal, bidding Aetna's stock up by 4 percent on the news. WellPoint Inc. was motivated by the same goal in agreeing to buy managed care company Amerigroup Corporation for $4.9 billion in cash on July 9 [see Deals in Brief]. Aetna and Coventry hope to close the deal by the middle of next year, pending approvals by regulators and Coventry shareholders.

For acquiror Aetna Inc. (Hartford)

In-House: General counsel William Casazza, head of corporate legal group Michelle Matiski, senior corporate counsel William Baskin, counsel Traci Kosak and Adam McAnaney, corporate secretary Judith Jones, chief Medicare counsel Christine Rinn, and chief Medicaid counsel Robert Kessler.

Davis Polk & Wardwell: Corporate: David Caplan, H. Oliver Smith, counsel Ajay Lele, and asso­ciates Lee Hochbaum and Evan Rosen. Executive compensation and employee benefits: Edmond FitzGerald and asso­ciate Jennifer Freiman. Tax: Harry Ballan and associate William Curran. Credit: Jason Kyrwood and associate Darren Mahone. (All are in New York.) Davis Polk is longtime counsel to Aetna. The firm represented Aetna last year on several deals, including its $202 million purchase of PayFlex Holdings Inc.; its $290 million purchase of Genworth Financial Inc.'s Medicare supplement business; and its $600 million purchase of Prodigy Health Group Inc. from One Equity Partners. And in 2010 Davis Polk represented Aetna on its $500 million acquisition of Medicity Inc. Davis Polk also represented Aetna on the ING deal.

Jones Day: Antitrust: Phillip Proger, Margaret "Peggy" Ward, and associate Ausra Deluard. (Proger is in Washington, D.C. Ward is in Palo Alto. Deluard is in San Francisco.)

Locke Lord: Insurance regulatory: Jon Biasetti, Elizabeth Tosaris, Paige Waters, and senior counsel Timothy Farber, Jay Kallas, and Jan Reimann Newsom. (All are in Chicago except for San Francisco–based Tosaris and Dallas-based Newsom.) Both Jones Day and Locke Lord have advised Aetna for many years.

Manatt, Phelps & Phillips: Medicare and Medicaid managed care regulatory: Wendy Krasner. New York state health care regulatory: Mark Ustin. Health care corporate: Bruce Wolff and associates Karen Lam and Emily Lee. (All are in Washington, D.C., except for Albany-based Ustin and New York–based Lee.)

For target Coventry Health Care Inc. (Bethesda, Maryland)

In-House: General counsel Thomas Zielinski and deputy general counsel Jonathan Weinberg.

Wachtell, Lipton, Rosen & Katz: Corporate: David Katz and asso­ciate Donald Casey. Antitrust: Ilene Knable Gotts and asso­ciate Lori Sherman. Tax: Deborah Paul and associate Rachel Reisberg. Executive compensation and benefits: Jeremy Goldstein and associate D. Miishe Addy. Finance: Eric Rosof and asso­ciates Gregory Pessin and Austin Witt. (All are in New York.)

Bass, Berry & Sims: Corporate: Bob Thompson and senior asso­ciate Price Wilson. Health care M&A: Angela Humphreys and J. James Jenkins Jr. Antitrust: R. Dale Grimes. Tax: R. Todd Ervin. (All are in Nashville.) Thompson introduced Wachtell's Katz to the client many years ago and with Coventry GC Zielinski called him again when Aetna first approached Coventry.

Bass Berry began working for Coventry in the 1990s when the company was still headquartered in Nashville, prior to its move to Bethesda. The firm has represented the company on more than two dozen health plan transactions, including the 1998 merger with Principal Health Care Inc. The firm also counseled Coventry on its $685 million purchase of Florida Health Plan Administrators LLC in 2007 and on its $1.8 billion acquisition of First Health Group Corp. three years earlier.

Crowell & Moring: Antitrust: Arthur Lerner, counsel Shawn Johnson and Barbara Ryland, and associates Elliot Golding and Lauren Patterson. (All are in Washington, D.C.) The firm is Coventry's regular antitrust counsel.

Potter Anderson & Corroon: Corporate: Mark Morton and associate Pamela Millard. Litigation: Donald Wolfe Jr. (All are in Wilmington.) Wachtell's Katz tapped Morton as Delaware counsel on the deal. Coventry is incorporated in the state.

BC Partners and CPP Investment Board/Suddenlink

BC Partners Limited and CPP Investment Board joined forces to strike a $6.6 billion deal to buy Cequel Communications Holdings LLC on July 19. Cequel operates Suddenlink Communications, the seventh-largest cable television operator in the United States. The buyout would be the second-largest of 2012 after the $7.15 billion sale of El Paso Corporation's oil and gas exploration and production unit to Apollo Global Management LLC, Riverstone Holdings LLC , and Access Industries Inc. [Big Deals, April].

The deal would allow Cequel's current investors to monetize their investments. GS Capital Partners L.P. owns 36 percent of Cequel; Quadrangle Group LLC, 17 percent; Oaktree Capital Group LLC, 10 percent; and Jordan Company, 8 percent. BC Partners and CPPIB will pay the foursome $2.5 billion and assume $4.1 billion in debt.

Much of the remaining 29 percent of Cequel is owned by a management team led by chairman and CEO Jerald Kent, who will continue running the company he cofounded a decade ago. Kent and his team will retain their stake, while BC Partners and CPPIB will own equal shares in a majority stake in the company. The deal is expected to close in the fourth quarter pending approvals from regulators.

BC Partners Limited (London) and CPP Investment Board (Toronto)

In-House: At CPPIB: General counsel John Butler.

Latham & Watkins: M&A : Raymond Lin, Taurie Zeitzer, and associates Gareth Clark and Liliana Párias Neuburg. Communications law: Matthew Brill. (All are in New York except for Washington, D.C.–based Brill.) Latham frequently works with BC Partners. Lin and Zeitzer also represented BC Partners on its $5.2 billion sale of Unitymedia GmbH to Liberty Global Inc. in 2009. BC Partners owned the cable operator along with Apollo. Lin also represented BC Partners in 2007 on its purchase of a controlling stake in satellite operator Intelsat Ltd. Kirkland & Ellis announced on August 21 that it had hired Zeitzer away from Latham.

Wachtell, Lipton, Rosen & Katz: Corporate: Steven Cohen and associate Donald Casey. Finance: Joshua Feltman and associate Gregory Pessin. (All are in New York.)

Torys: Corporate: Guy Berman and Matthew Cockburn, and R. John Cameron. (All are in Toronto.) Torys advised only CPPIB, a longtime client of the firm. Butler is a former Torys partner.

Cequel Communications Holdings LLC (St. Louis)

In-House: General counsel Wendy Knudsen and vice counsel Craig Rosenthal.

Paul Hastings: M&A: Barry Brooks, Luke Iovine III, and associates Karen Contoudis Buzard, Heather Davis, and Hyunah Kang. Leveraged finance: Jeffrey Pellegrino. Bank finance: Richard "Rick" Denhup. (All are in New York.) Paul Hastings is representing both the company and the management team led by Kent that will retain a stake in the company after the deal closes. Cequel used Paul Hastings in 2005 when it paid $2.5 billion to Cox Communications Inc. for regional cable systems. The firm also represented the company on a $475 million recapitalization in 2004. Daniel Bergstein, one of Cequel's founding partners, cochairs the telecommunications department at Paul Hastings. Kent was previously cofounder and CEO of Charter Communications Inc., which Paul Hastings represented when it was sold for $4.5 billion in 1998 to Paul Allen's investment vehicle Vulcan Ventures.

Seyfarth Shaw: M&A: Stanley Bloch, Andrew Lucano, and associate Georgia Quinn. (All are in New York.) The firm represented the company on its $350 million purchase of cable systems owned by News-Press & Gazette Company in 2010.

For GS Capital Partners L.P. and other Cequel equity holders

Fried, Frank, Harris, Shriver & Jacobson: Corporate: Gus Atiyah, Andrew Colosimo, Mario Mancuso, F. William Reindel, Robert Schwenkel, Steven Steinman, and associates Melissa D'Arcy, Lily Desmond, Benjamin Haskins, Erica Jaffe, Michael Schneider, and Ryan Williams. Executive compensation and employee benefits: Donald Carleen, Jeffrey Ross, and associate Mindy Meyers. Intellectual property and technology: Henry Lebowitz and associate Jason Greenberg. Tax: Robert Cassanos and associate Kenneth Rosenfeld. (All are in New York except for Washington, D.C.–based Atiyah and Mancuso.) Fried Frank represented GS Capital Partners in 2006 when Cequel bought cable systems in Virginia and West Virginia from Charter Communications Inc. 


NRG Energy Inc. agreed on July 22 to acquire rival independent power producer GenOn Energy Inc. for $1.7 billion in stock. GenOn shareholders will receive 0.1216 NRG shares for every GenOn share, consideration that reflected a premium of 21 percent to GenOn's closing price of $1.82 on July 20. NRG will also assume GenOn debt and lease obligations of $3.8 billion, giving the deal a total value of $5.5 billion. NRG stock rose by 8 percent on July 23, which suggests that its shareholders like the deal.

The parties hope to close the deal by the first quarter of 2013, pending approvals from regulators and both sets of shareholders. NRG shareholders would own 29 percent of the combined company, while GenOn shareholders would end up with 29 percent.

For acquiror NRG Energy Inc. (Princeton)

In-House: Assistant general counsel–securities and finance Brian Curci, assistant general counsel–transactions Kevin Malcarney, and regional general counsel–Texas Christopher O'Hara.

Kirkland & Ellis: Corporate: Thomas Christopher, Andres Mena, Gerald Nowak, Yi Claire Sheng, of counsel Paul Zier, and associates Roy Cho, James Markel, Dvir Oren, and Seniz Yakut. Energy: Mitchell Hertz and associate Karen Sheffler. Executive compensation: Scott Price and associate Suzi Sabogal. Employee benefits: Jeffrey Quinn and asso­ciate Margaret Hermes. Tax: Gregory Gallagher and associate Munsoor Hussain. Environmental: Paul Tanaka and associate Martin Sul. Intellectual property: Edward Sadtler and associate Daniel St. Onge. Real estate: John Caruso and associate David Curfman. Antitrust: Mark Kovner, Bilal Sayyed, and associate Marin Boney. Labor: Timothy Stephenson. (All are in New York except for the following: Nowak, Zier, Quinn, Hermes, Gallagher, Hussain, Caruso, and Curfman are in Chicago. Hertz, Sheffler, Kovner, Sayyed, Boney, and Stephenson are in Washington, D.C. Tanaka and Sul are in San Francisco.) Kirkland represented NRG on its 2003 bankruptcy and has continued to work with the company. The firm helped NRG fight off a hostile bid from Exelon Corporation in 2009. During the course of the takeover battle, Kirkland counseled NRG on its $353 million purchase of Reliant Energy Inc.'s retail business in Texas, after which Reliant assumed the name RRI Energy Inc. Kirkland also helped represent NRG on its $8.3 billion purchase of Texas Genco LLC in 2005, a deal on which Skadden also advised NRG.

For NRG board of directors

Potter Anderson & Corroon: Corporate: Michael Reilly, Michael Tumas, and associates David DiDonato and Roxanne Houtman. (All are in Wilmington.) Tumas has represented the board of NRG since Howard Cosgrove was named chairman of the board in 2003. Tumas also worked with Cosgrove when he was the chairman at Delmarva Power and Light Company and Conectiv. Tumas also advised the board on the Exelon and Texas Genco matters.

For target GenOn Energy Inc. (Houston)

In-House: General counsel and chief compliance officer Michael Jines, deputy general counsel–corporate Steven Nickerson, deputy general counsel–assets David Sladic, assistant general counsel–corporate Kathy Tedore, senior corporate counsel Allison Cunningham, assistant general counsel–government and regulatory affairs Debra Raggio, assistant general counsel–environmental policy Walter Stone, associate general counsel–labor Mark Artlip, and associate general counsel–benefits Nancy Brame.

Skadden, Arps, Slate, Meagher & Flom: M&A: Frank Bayouth and Michael Rogan. Energy: Clifford "Mike" Naeve. Antitrust: John H. Lyons. (All are in Washington, D.C., except for Houston-based Bayouth.) Skadden represented RRI Energy Inc. in the 2010 merger with Mirant Corporation that formed GenOn. Skadden also represented Reliant Energy on the 2009 sale of its retail business in Texas to NRG.

Marcus is a reporter at The Deal. Email:

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