Thread by @rdlowrey

In the previous thread (linked below) we covered the FTC, politics, Carl Icahn, and made a speculative connection to a certain person's 🎈

I had planned to go into #BBBY next, but we got a MASSIVE $NWL filing yesterday that accelerated the timeline.



👇

Note: none of my tweets should be construed as legal, tax, financial, or investment advice. I'm sharing my personal research as an individual investor for educational purposes.

⚠️ INVESTING IS RISKY ⚠️

I hold a BBBY position because my personal risk tolerance is off-the-charts.

Our previous thread discussed how today's FTC is increasingly hostile to M&A activity. In order to understand WHY the 3/15 $NWL filing is so important for potential #BBBY M&A, we need to go in-depth on exactly HOW the FTC has changed its enforcement focus over the past two years.

Antitrust regulations dictate that if a business combination or acquisition could create anticompetitive effects, the government can either block it or work to negotiate an acceptable settlement.

However, previously acceptable remedies are less palatable for today's FTC.

Regulators are cracking down hard on private equity M&A and disallowing asset and business divestitures it once considered kosher.

Antitrust enforcers are increasingly skeptical of leveraged buyouts 👀 and rollup deals combining multiple smaller entities.

More interesting in the context of recent NWL filings is the heavily increased emphasis on enforcement action targeting "interlocking directorates" defined in Section 8 of the Clayton Act.

Section 8 received little enforcement attention for decades, but it's roaring back, baby.

Clayton Sec 8 prohibits simultaneous service as an officer or director of competing companies. This rule used to apply only to the same person serving. But now regulators are now using it to prevent service by different people representing the same entity across competing boards.

This is exactly the type of enforcement Icahn-adjacent ex-commissioner Christine Wilson decried as a "disregard for ... due process."

Wilson targeted "interlocking directorate" enforcement specifically in Nov 2022 in a dissenting policy statement (pic).

Directorate overlap is a *big* problem for potential Icahn involvement with BBBY. Since March 2018, Icahn has controlled the $NWL Board when a nomination agreement was struck giving him the Chair and 3 "Icahn Designees."

sec.gov/Archives/edgar…

As an aside, consider NWL Director and Icahn Designee Courtney Mather:

- Icahn Capital Portfolio Manager
- BoD at Trump Entertainment Resorts
- 13 yrs @ Goldman Managing Director of Distressed Trading and Investing

Distressed trading/investing? I know a distressed company 👀

Icahn reps on the NWL board mean Icahn BBBY board = an immediate antitrust🚩

But guess what happened on Feb 8, 2023?

An AMENDMENT was filed to Icahn's Director Nomination agreement w/ NWL that meaningfully limited Icahn control. 👀

sec.gov/Archives/edgar…

Even with these changes, Icahn reps on the NWL board would represent an interlocking directorate problem if Icahn M&A'd BBBY.

But: loophole!

If the competitive sales of either corporation are less than 2 percent of that corporation's total sales there's no Section 8 violation.

2%? Really? Because Feb 10 (2 days after Icahn/NWL board amendments) NWL President Christopher Peterson COULDN'T WAIT to let analysts know that BBBY represents less than 2% of its revenue!

Bed Bath wasn't even mentioned by name and Chris was Johnny on the Spot with that nugget.

Yet on March 13 we got another change.

🔥 OHH. EMM. GEE. 🔥

BRETT ICAHN RESIGNS FROM THE NEWELL BOARD

🚨 SPECULATION 🚨

Why did Brett resign if Newell already had the 2% sales exemption in the bag w/ BBBY? Maybe for the same reason he sold exactly 50.2% of his NWL shares on 2/16 when everyone else was buying ...

AGGRESSIVE, PUNITIVE, AND POLITICALLY-MOTIVATED FTC ENFORCEMENT?

Between the NWL BoD changes and Brett's resignation/sales, we're seeing what looks exactly like antitrust enforcement concessions.

It's like a very capable M&A legal team was working ahead of time to keep things legal but was hit with crazy regulatory demands for consent ...

🚨 SPECULATION 🚨

But how has Icahn/BBBY flown under the radar in prepping for this deal?

Perhaps they took some good advice and involved counsel much earlier than anyone realized? Perhaps working with a firm whose "antitrust team is the best of the best?"

🤔🤔🤔

In short: Brett Icahn's status changes look for all the world like antitrust concessions.

At the same time, ANY Icahn M&A involving BBBY would be immediately problematic from an antitrust perspective and require concessions 🎈 to gain consent from the current regulatory regime.

Even still, there's much more evidence suggesting possible BBBY/Icahn M&A. Brett's NWL BoD resignation forced this thread to happen quickly, but there's more to discuss.

If you haven't, read the earlier thread too:

IT'S NOT FINANCIAL ADVICE, DEGENS.

🏴‍☠️

📝 BONUS NOTE 📝

- NWL doesn't need to be involved at all in BBBY M&A
- Antitrust problems arise without NWL involvement
purely on the basis of Icahn controlling the NWL board
- There's no need for NWL itself to play any role
- Interlocking directorates are the issue