Thread by @rdlowrey

Possible #BBBY M&A is heavily dependent on the FTC (and the requisite HSR consent).

As a result, it's important to understand the commission's make-up and attendant political implications.

With this background we can seek out circumstantial clues pointing to M&A activity.

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The FTC has 5 commissioners. The sitting US President nominates commissioners when a vacancy arises and the Senate approves nominations. Partisan effects are (theoretically) limited by statute; no more than 3 members from a single party may sit on the commission at one time.

Commissioners serve 7 year terms (unless they resign). Historically, it's *generally* the case that FTC commission Rs are more friendly to M&A than Ds. Assume Ds nominate Ds, Rs nominate Rs.

At the onset of the Biden term, the commission consisted of 3 Rs and 2 Ds (pic).

Rs were expected to retain FTC control until late 2023, but Jan 29 2021 (interesting date), Chairman Joseph Simons resigned, opening the door for President Biden to nominate a third Democrat and wrest regulatory control of the commission from Republicans with a new chair.

Biden promptly nominated D Lina Khan, who was confirmed and became the new chairwoman of the new Democrat FTC majority.

As a result, understanding Khan's philosophy and background is *crucial* to gauging the likelihood of subsequent M&A success for any deal.

Khan rose to prominence on the back of her staunch anti-monopolist views. Specifically her paper on "Amazon's Antitrust Paradox" set the tone for a regulatory agenda running counter to the past ~50 years of antitrust enforcement:
yalelawjournal.org/pdf/e.710.Khan…

The FTC under Khan has taken a tough stance on antitrust matters and has been particularly hard on big tech. Over the past few months, the remaining R commissioners -- Phillips and Wilson (both Trump appointees) -- have resigned and expressed strong disagreement w/ D majority.

With this understanding of basic FTC workings in the rearview mirror, we can start looking for circumstantial hints linking #BBBY, Icahn and the possibility M&A interaction with the commission over the past few months ...

⚠️ Heavily-researched speculation follows ⚠️

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Icahn's and Donald Trump's paths intersect:

- Both from Queens, NY
- Both NYC business moguls in the 80s/90s
- Icahn was involved in post-bankruptcy deals w/ Trump's Atlantic City casino and ultimately bought and closed it

They've known each other for decades.

By December 2016, Donald Trump had yet to be sworn in as president but had already named Carl Icahn as "special adviser to the president on regulatory reform."

Icahn's position as "special adviser" was not an official job. This meant Icahn was exempt from federal ethics laws.

Regardless of political leanings, most agree Trump was one of the most overtly "pay-to-play" politicians we've seen.

If you're a business titan, you don't pander to Trump (or any politician) out of patriotic duty and civic altruism; you do it for favorable regulatory treatment.

But by mid 2017, Icahn was under fire amidst questions of potential conflicts of interest in his dealings with regulators.

By August 2017, Icahn had resigned. But as Carl mentioned, he had "a right to talk to the president like any other citizen ... why the hell shouldn't I call him?"

The president remained a phone call away.

In 2018 when Maureen Ohlhausen resigned from the FTC, Trump needed a replacement. He chose Christine S. Wilson, who had previously spent 5 years as Partner at Kirkland & Ellis and 6 years as Partner at O'Melveny & Myers (both firms have had extensive Icahn-adjacent dealings).

If you're unfamiliar with K&E's work (where Wilson was a Partner for 5 years), it's the firm that worked on the #BBBY equity financing unveiled last month.

K&E has a long history of working with Icahn companies.

Commissioner Wilson advised Teva in her time at K&E. Guess who made a $40B acquisition of an Icahn-owned Allergan subsidiary (one that Wilson very likely worked on)?

Icahn also became involved with Bristol-Meyers Squibb not long after Wilson left K&E (where she worked heavily on antitrust issues).

Icahn has also had numerous interactions with Wilson's former firm, O’Melveny & Myers, in M&A deals. Notably, in his 2010 fight against Lions Gate, Icahn was on the opposite side of the table from Wilson's firm.

The FTC (with Wilson sitting on it), somewhat surprisingly ruled in favor of Icahn in the famous Herbalife case.

There's no doubt Icahn knows the power of friendly regulators.

We'd be silly not to assume Icahn was aware of Christine Wilson prior to her FTC nomination by Trump.

Icahn's an industrialist who's repeatedly tangled with the FTC on antitrust; it's not a leap to guess Wilson may have been nominated to the FTC at Icahn's specific urging 🤔

Now that we've established the basics of how the FTC works, Icahn's political affiliations with Trump, and Icahn's possible connections to (now-former) FTC commissioner Christine S. Wilson, let's fast-forward to 2023 to see how the FTC has evolved under a Democrat-led majority.

We began with a brief coverage of the partisan nature of the FTC. By early 2023, the slate of commissioners was stacked heavily in Democrats' favor. The commission was made up of 3 Democrats with Christine S. Wilson the lone Republican.

On Feb 14, 2023 Wilson resigned. BUT she did NOT go quietly. On the way out, Wilson BLASTED the current FTC for what she called its "disregard for the rule of law and due process," as well as a fragrantly anti-M&A, anti-business bias.

On 2/14 we have:

- An Icahn-adjacent FTC commissioner resigning

- A partisan regulatory body that *HATES* anything Trump related

- A "greedy monopolist" who's frequently in need of FTC approval (Icahn)

What else did we see on *exactly* the same day as Wilson's resignation?

On the day our Icahn-adjacent commissioner resigns in frustration from the FTC, RC tweets about the government "shooting down" his 🎈.

🤔🤔🤔

Out of space now, but in the next thread we'll get into the vast circumstantial evidence for Icahn-adjacent M&A activity in Jan/Feb '23.