New York Boutiques Take Center Stage on AT&T-Discovery Megadeal

Three New York boutique advisory firms -- Allen & Co., LionTree LLC and Perella Weinberg Partners -- are among those in line for chunky fees after joining Wall Street’s big guns on the year’s largest deal.

AT&T Inc. said Monday it will merge its WarnerMedia business with Discovery Inc. The deal, first reported by Bloomberg News, values the combined entity at about $130 billion including debt, based on WarnerMedia’s estimated enterprise value of more than $90 billion.

LionTree and Goldman Sachs Group Inc. advised AT&T, while Allen & Co. and JPMorgan Chase & Co. worked with Discovery. There was also a plum role for Perella as adviser to Discovery’s independent directors.

Royal Bank of Canada advised family-controlled Advance, the owner of media company Conde Nast which also holds a big stake in Discovery. Ex-Perella banker Anne Hamilton, who is now at RBC, led that bank’s team on the deal along with Larry Grafstein, a former UBS Group AG banker.

Low Profile

While the transaction merely cements the positions of Goldman Sachs and JPMorgan as the top two deal advisers globally, it’s particularly transformational for the boutiques in their places alongside the big Wall Street firms.

Allen & Co. jumped from 33rd to ninth on this year’s league table rankings, with more than $102 billion worth of deal credit to its name, according to data compiled by Bloomberg. LionTree, meanwhile, leaped from 92nd to 11th with a role in deals totaling almost $92 billion.

The two firms have taken very different routes to top-of-the-charts status, though. The century-old Allen & Co. doesn’t even have a website, while LionTree, started less than a decade ago, has its own digital media company.

Neither is a stranger to headline-making deals in the technology, media and telecommunications sector, despite their small size relative to the likes of Goldman Sachs and JPMorgan.

Founded in the 1920s, New York-based Allen & Co. had worked across the table from AT&T and Discovery in recent years. It advised Time Warner Inc. on its roughly $85 billion takeover by AT&T in 2016 and also advised Scripps Networks Interactive Inc. on its sale to Discovery in 2018, Bloomberg data show.

The firm, which keeps a low profile, is known for cultivating tight relationships with media and technology executives at its exclusive summer retreat for billionaires in Sun Valley, Idaho. Allen & Co.’s Discovery deals team was led by Ketan Mehta, a former Citigroup Inc. banker who joined the firm in 2015.

High Profile

Its New York-based neighbor LionTree was founded in 2012 by UBS veterans Aryeh Bourkoff and Ehren Stenzler to focuses on TMT deals. It also has a merchant bank that invests in technology and media companies and it started its own digital media company, Kindred Media, which produces the KindredCast podcast.

LionTree has been close to companies associated with billionaire John Malone, who was a controlling shareholder at Discovery. Shortly after its launch, the firm advised Malone’s Liberty Global Plc on a $16 billion purchase of U.K. cable-television provider Virgin Media Inc.

In 2015, LionTree advised Malone-backed Charter Communications Inc. on its acquisition of Time Warner Cable Inc. for about $55 billion.

Bourkoff, a master networker, has become somewhat of a media figure in his own right. Last month, he was featured in a Barstool Sports podcast. His Instagram page has photos of him posing with supermodel Naomi Campbell and members of the Chainsmokers band, who last year started their own venture investing fund.

Earlier this month, LionTree advised Apollo Global Management Inc. on its deal to acquire the Yahoo and AOL brands from Verizon Communications Inc. while investing alongside Apollo, a statement showed.

Allen & Co., LionTree and Perella are among a growing cadre of specialists carving out lucrative niches in M&A advice. These firms are often stocked with former dealmakers from so-called bulge-bracket banks and are able to leverage years of contact-building and sector expertise to win roles on some the world’s biggest transactions.

©2021 Bloomberg L.P.

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