Long Relationship Gives Firm an Edge in JDS Uniphase Deal

11/13/2003

MoFo News Item

By Alexei Oreskovic and Renee Deger, The Recorder

JDS Uniphase Corp.'s $475 million convertible debt offering was a chance for old business partners to relive the glory days.

In a nine-month span between 1999 and 2000, Morrison & Foerster rode alongside JDS as it pursued a series of massive acquisitions valued at $2.8 billion, $15 billion and $41 billion, respectively.

But the subsequent economic downturn forced JDS to hunker down and abstain from significant deals for several years.

During the lull, MoFo "retained a good relationship while at the same time trying to not run up large bills, and the client has been able to now stick its head up above the parapet and do some interesting stuff again," says P. Rupert Russell, a partner at MoFo's San Francisco office.

Russell was the lead attorney on the MoFo team representing JDS, an optical networking equipment maker, in the private bond offering that closed Oct. 31. The Rule 144A deal unloaded $400 million of zero-interest convertible bonds and a $75 million over-allotment to Morgan Stanley, Goldman Sachs and CIBC World Markets. The notes are due 2010, but can be redeemed by holders in five years.

With interest rates back on the rise, Russell reckons this may be one of the last zero-interest rate deals for some time.

The after-market, or "overnight," bidding process employed in the transaction meant that it was unclear which of the three banks would serve as the lead underwriter until the 11th hour. As a result, says Russell, MoFo attorneys had to prepare three different versions of the documents.

But that extra work was worth it, since the overnight bidding process resulted in the underwriters putting forward their best prices.

The trio of underwriters were represented by Skadden, Arps, Slate, Meagher & Flom. Thomas Ivey, a partner in the Palo Alto office, was lead attorney for the underwriters and was assisted by associates Scott Joachim and Andrew Orr, Los Angeles tax partner Moshe Kushman and associate Sandra Strassner, and Palo Alto intellectual property counsel Joseph Yang and associate Karen Spindler.

MoFo's relationship with JDS stretches back some 10 years, Russell noted. MoFo partner Michael Phillips served a 4 1/2-year stint as the company's general counsel, and the current GC is former MoFo attorney Christopher Dewees. This connection helped preserve the relationship, despite the fact that most of the senior management team in place at JDS during the boom years has moved on.

Assisting Russell on the transaction were MoFo's Phillips, and San Francisco associate Russell Wood, as well as tax partners Stuart Offer and M. Ellen Robb, New York partner David Kaufman, and San Francisco of counsel Stephanie Oana.

Reprinted from The Recorder, November 13, 2003. This article first appeared on the web on law.com.

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