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Big Deals: Temple-Inland | Gaylord Container

Temple-Inland Inc. has finally boxed up its purchase of rival packaging company Gaylord Container Corporation in a deal that will pay about $65 million to shareholders and roughly $782 million to bondholders.

Gaylord, which had amassed heavy debt through numerous earlier acquisitions, began to shop itself around to potential buyers two years ago. Temple-Inland emerged as the most likely buyer, but held off until Gaylord was able to resolve tort claims arising out of a 1995 chemical explosion at a plant in Bogalusa, Louisiana.

Once Temple-Inland announced its tender offer last September, however, bondholders balked on the deal, unhappy with the initial price of about 75 cents on the dollar for their senior notes. Finally, after Temple-Inland boosted its offer to 90 cents on the dollar, bondholders came on board. At press time, enough Gaylord investors had tendered their shares for the deal to go through.

For Acquirer Temple-Inland Inc. (Austin)

In-House: General counsel M. Richard Warner and senior counsel Grant Adamson.

Skadden, Arps, Slate, Meagher & Flom (New York): Corporate: Stephen Hamilton, counsel Nancy McGlynn, and associates Eric Burt and J. Russell McGranahan. Employee benefits: Associate Michael Bergmann. Tax: James Alpi and associate Jessica Hough. Litigation: Richard Brusca and associate Mary Smith. (All are in the firm's D.C. office, except for McGlynn, who is in Reston, Virginia.) Skadden is longtime outside counsel to Temple-Inland.

For Temple-Inland Financial Adviser Citigroup Inc.

Cleary, Gottlieb, Steen & Hamilton (New York): David Leinwand, Allan Sperling, and associates Patrick Barrett, Trecia Canty, Eric Kuhn, Lazlo Kulin, and John Sorkin.

For Gaylord Container Corportation (Deerfield, Illinois)

In-House: General counsel David Tanaka.

Kirkland & Ellis (Chicago): Corporate: Brian Boch, William Kirsch, Jack Levin, Dennis Myers, John Schoenfeld, and associates Daniel Gordon, Mariano Eli Martinez, and Andrew Terry.  Employee Benefits: Toni Merrick and associate Jack Bernstein. Tax: Donald Rocap and associate Kevin Coenen. Environmental: Brian Land and Walter Lohmann, Jr. Litigation: Thomas Campbell, Peter Doyle,  Timothy Duffy, Lisa Esayian, Thomas Kuhns, and associates Joel Blanchet, Joseph Jaros, James Joslin, and Michael Slade.  Bankruptcy: Theodore Freedman, James Sprayregen, James Stempel, and associate Shirley Cho.  (Doyle and Freedman are in the firm's New York office.) Kirkland has represented Gaylord since its formation in 1986.

For Gaylord Financial Advisers Deutsche Bank AG and NM Rothschild & Sons Limited

Debevoise & Plimpton (New York): Meredith Brown, Alan Paley, and associate Marlies Braun. 

This article is reprinted with permission from the May 2002 edition of The American Lawyer. © 2002 NLP IP Company