DOCSLIB.ORG

Practical Aspects of Tender Offers and Acquisitions

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Practical Aspects of Tender Offers and Acquisitions CHAPTER 1 Practical Aspects of Tender Offers and Acquisitions Chapter Contents § 1.01 General Perspectives [1] Deal Activity [2] Unsolicited Deals [3] Private Equity Trends [4] Acquisition Financing [5] Hedge Fund Activism [6] Governance Activism [a] Proxy Access [b] Rights Plans [c] Staggered Boards [d] Majority Voting [7] Shareholder Litigation [8] Regulatory Trends in M&A Activity § 1.02 Takeover Regulation [1] The Williams Act [2] Other Federal Securities Laws [3] Margin Regulations: Financing an Acquisition [4] Regulatory Approvals [5] Notification Under the Hart-Scott Act [6] State Takeover Statutes § 1.03 The Acquiror’s Decision [1] Why Acquire by Tender Offer [2] Identifying the Takeover Target [3] Form of Offer [a] Cash Tender Offer [b] Exchange Offer [c] The Cash Option Transaction [i] Tax Considerations [ii] Structuring the Transaction [iii] Securities Law Questions 1-1 (Rel. 54) TAKEOVERS & FREEZEOUTS 1-2 § 1.04 Preparing the Attack [1] Creation of a Team [2] Pre-Offer Confidentiality [3] Organizing for a Tender Offer § 1.05 Tender Offer Financing [1] Junk Bond, Bust-Up, Bootstrap Takeovers [2] Bridge Financing [a] Investment Banker as “Bidder” [3] The Federal Reserve Board Ruling [4] The Policy Debate [5] Is There a Duty Owed to Bondholders? § 1.06 Takeover Approaches [1] Bear Hugs [a] Examples of the Bear Hug Approach [2] The Casual Pass [3] Multistep Transactions [4] Open Market Purchases and Street Sweeps [a] General [b] Secret Accumulations [c] Street Sweeps [d] Statutory Provisions Applicable to Pur- chases [i] Section 13(d) [ii] Definition of Tender Offer [iii] Best-Price Rule [iv] Hart-Scott Act [5] Purchases from Control Shareholders Followed by a Tender; Equal Opportunity Doctrine [6] Proxy Fights and Institutional Activism [a] Overview [b] Solicitations in Support of a Pending Ten- der Offer or Acquisition Proposal [i] Overview [ii] Examples [iii] Disclosure Issues [c] Solicitations to Promote Sale, Liquidation or Restructuring [i] Overview [ii] Examples [d] Solicitations to Change Management [i] Overview [ii] Examples 1-3 PRACTICAL ASPECTS OF TENDER OFFERS [e] Other Proxy Solicitations: Rule 14a-8 and Institutional Activism [i] Rule 14a-8 Proposals [A] Procedural Requirements [B] Grounds for Omission [C] Omissions Rejected [D] Omissions Accepted [E] Precatory Proposals [ii] Proposals to Change the Proxy Mechanism [f] Other Developments [i] Virginia Bankshares [ii] NCR [iii] Delaware Law Changes [A] Stockholder Proxies [B] Voting Procedures; Inspectors of Elections [7] Stock Repurchases/”Greenmail” [a] Overview [b] Alternative Stock Repurchase Techniques [c] “Greenmail” Excise Tax [8] Substantial Shareholders Inviting a Takeover § 1.07 Takeover Negotiations [1] Disclosure of Merger Negotiations [a] Overview [b] Rule 10b-5 [2] Lock-up Options [a] Overview [b] Analysis of Cases [3] Merger Agreement “Exclusivity” Provisions [a] No-Shop Provisions [b] Fiduciary Out Provisions [c] Tortious Interference [4] Agreements in Principle § 1.08 Takeover Techniques [1] Two-Tier, Front-End Loaded Bids [2] Conditional Bids [a] Conditional Financing [b] Changes Requiring Extension of Offer [c] The Two-Price Bid [3] The Decreasing Bid [4] Joint Bids [5] Topping One’s Own Bid (Rel. 54) TAKEOVERS & FREEZEOUTS 1-4 § 1.09 Structuring the Offer [1] Who Should Be the Offeror [2] Impact of Institutional Investors and Arbitrage [3] Any and all Offers vs. Partial Offers [a] Advantages of the Any and All Offer [b] Advantages of the Partial Offer [4] Pricing the Offer/Premiums [5] Contractual Provisions [a] Nature of “Offer” and “Acceptance” [b] Conditions to Purchase and Payment [6] Conditions [a] Minimums and Limits [b] Non-Occurrence of Specified Events [c] Financing [d] Prior Regulatory Approval [e] Litigation or Antitrust [f] Approval by Shareholders of Offeror [7] Treatment of Rights Plans [8] Notice of Guaranteed Delivery [9] Mailing and Publishing [10] Special Accommodations [a] Buy-Out of Employee Stock Options [b] Long Offer Periods and Installment Purchases [c] Amendment to Alternate Form of Acquisition § 1.10 Structural Alternatives and Other Considerations in Business Combinations [1] Federal Income Tax Considerations [a] Direct Merger [b] Forward Triangular Merger [c] Reverse Triangular Merger [d] Section 351 “Double-Dummy” Transaction [e] Multi-Step Transaction [2] Acquisition Accounting [a] Purchase Accounting: Elimination of Pooling-of-Interests Accounting [b] Push Down Accounting [3] Corporate and Other Structural Factors [4] Tender Offers [a] Advantages of the Tender Offer Structure [b] Top-Up Options [c] The “All-Holders, Best-Price” Rule 1-5 PRACTICAL ASPECTS OF TENDER OFFERS [5] All-Cash Transactions [6] All-Stock Transactions [a] Pricing Formulae and Allocation of Market Risk [i] Fixed Exchange Ratio [ii] Fixed Value With Floating Exchange Ratio; Collars [iii] Fixed Exchange Ratio Within Price Collar [b] Walk-Aways [c] Finding the Appropriate Pricing Structure [7] Hybrid Transactions: Stock and Cash [a] Possible Cash-Stock Combinations [b] Allocation and Oversubscription [8] Contingent Value Rights [9] Mergers of Equals [a] The Advantages of an MOE Structure [b] Resolving the Key Governance Issues [c] Contractual, Fiduciary and Other Legal Issues Relating to MOEs § 1.11 Cross-Border Transactions [1] Overview [2] Special Considerations in Cross-Border Deals [a] Political and Regulatory Considerations [b] Integration Planning and Due Diligence [c] Competition Review and Action [d] Deal Techniques and Cross-Border Practice [e] U.S. Cross-Border Securities Regulation [3] Notable Developments [a] Sovereign Wealth Fund Activity [b] Harmonization of Accounting Standards [4] Deal Consideration and Transaction Structures [a] All-Cash [b] Equity Consideration [c] Stock, Depositary Receipts and Global Shares [d] “Dual Pillar” Structures § 1.12 Communication with Stockholders § 1.13 Implications of the Sarbanes-Oxley Act [1] General Implications of SOX for M&A [2] CEO/CFO Certifications: Acquirors Must Certify as to Targets Post-Closing (Rel. 54) § 1.01 TAKEOVERS & FREEZEOUTS 1-6 [3] Disclosure of Non-GAAP Financial Measures: Selling the Deal to Shareholders [4] Disclosure of “Off-Balance Sheet Arrangements”: Some Targets May Be Less Attractive [5] Limits on Non-Audit Services: How (or Who) to Do Diligence After SOX [6] Auditor Independence: Acquiror’s Auditor and the Target [7] No Loans to Directors or Executive Officers: LBOs, Target Loans and Loan Forgiveness [8] Trading by Insiders: Technical Concerns with Blackout Periods [9] Beyond SOX—Other Recent Regulations and M&A § 1.01 General Perspectives Takeovers of public companies, both negotiated and contested, are a major facet of U.S. business activity and the preeminent mode of corporate expansion and diversification. Since the adoption of the Williams Act in 1968, the popularity and acceptability of takeover or “tender offer” bids has grown dramatically. During the past several decades, takeover battles have not only increased in number, but also in scope and intensity. Many of the large and more highly-publicized bids have involved vigorously contested struggles for corporate con- trol of a kind which has become a regular feature of the business landscape. As a result of this activity, there has been a proliferation of regulations, case law and commentary dealing with the various aspects of takeover bids. The takeover process is fundamentally a process of bargaining and negotiation. As bidders develop new and more aggressive techniques to make any corporation a potential target and to increase their abili- ty to consummate the acquisitions they attempt, target corporations counter with new defensive techniques designed for the most part to increase the bargaining position of the board of directors. No takeover defense technique (other than concentrating the voting securities in friendly hands) has ever made a corporation acquisition-proof. Defen- sive techniques have, however, increased the leverage of the board of directors in finding a better deal. 1-7 PRACTICAL ASPECTS OF TENDER OFFERS § 1.01 Takeover activity and the techniques used by companies to protect against hostile raids have changed dramatically in the last few decades. The most powerful takeover tactic used to be the unsolicit- ed all cash tender offer for the entire target company.1 With the advent of junk bond financing2 in the early 1980s, however, raids began to be structured coercively as partial two-tier offers with junk bonds imposed on shareholders in the second step squeeze-out trans- action. Then, with the enormous increase in the size and liquidity of the junk bond market, all cash deals were initiated by takeover entre- preneurs, financed by private placement of junk bonds sold on the basis of the target’s cash flow and asset base. As an alternative to junk bond financed deals, investment banks put up enormous sums of their own money in order to finance all cash deals with the expectation that these “bridge loans” would later be refinanced by the sale of junk bonds.3 Investment banks have also taken equity positions in acquir- ing entities and operated as joint bidders. Over time, public perceptions changed, and by the late 1980s the cultural barrier to hostile bids had almost disappeared. Many compa- nies believed that if they were not taking over other companies and not increasing their size and leverage they too would become targets. In order to remain independent, companies became raiders. Managers took over companies through leveraged buyouts.4 With the huge amount of LBO capital
Load more

Recommended publications
  • Chambers Global Practice Guides Corporate M&A Japan 2017
    CHAMBERS Global Practice Guides JAPAN Corporate M&A LAW & PRACTICE: p.3 ContributedContributed by Mori Hamada by & Matsumoto MoriThe Hamada‘Law & Practice’ & Matsumoto sections provide easily accessible information on navigating the legal system when conducting business in the jurisdic- tion. Leading lawyers explain local law and practice at key transactional stages and for crucial aspects of doing business. DOING 2017BUSINESS IN JAPAN: p.283 Chambers & Partners employ a large team of full-time researchers (over 140) in their London office who interview thousands of clients each year. This section is based on these interviews. The advice in this section is based on the views of clients with in-depth international experience. JAPAN LAW & PRACTICE: p.3 Contributed by Mori Hamada & Matsumoto The ‘Law & Practice’ sections provide easily accessible information on navigating the legal system when conducting business in the jurisdic- tion. Leading lawyers explain local law and practice at key transactional stages and for crucial aspects of doing business. LAW & PRACTICE JAPAN Contributed by Mori Hamada & Matsumoto Authors: Hajime Tanahashi, Takayuki Kihira, Kenichi Sekiguchi, Akira Matsushita Law & Practice Contributed by Mori Hamada & Matsumoto CONTENTS 1. Trends p.5 6.6 Additional Governance Rights p.12 1.1 M&A Market p.5 6.7 Voting by Proxy p.12 1.2 Key Trends p.5 6.8 Squeeze-Out Mechanisms p.12 1.3 Key Industries p.5 6.9 Irrevocable Commitments p.12 2. Overview of Regulatory Field p.5 7. Disclosure p.13 2.1 Acquiring a Company p.5 7.1 Making a Bid Public p.13 2.2 Primary Regulators p.5 7.2 Types of Disclosure p.13 2.3 Restrictions on Foreign Investment p.5 7.3 Requirement for Financial Statements p.13 2.4 Antitrust Regulations p.6 7.4 Disclosure of the Transaction Documents p.13 2.5 Labour Law Regulations p.6 8.
    [Show full text]
  • The Use of Contingent Value Rights in M&A
    Norwegian School of Economics Bergen, Autumn 2017 The use of Contingent Value Rights in M&A An empirical review Eivind K. Fosheim & Niklas Olufsen Langerød Supervisor: Associate Professor Francisco Santos Master of Science in Economics and Business Administration, Finance NORWEGIAN SCHOOL OF ECONOMICS This thesis was written as a part of the Master of Science in Economics and Business Administration at NHH. Please note that neither the institution nor the examiners are responsible − through the approval of this thesis − for the theories and methods used, or results and conclusions drawn in this work. 2 Abstract This paper contributes to the literature on payment methods in Mergers and Acquisitions (M&A). It seeks to establish how the use of Contingent Value Rights (CVRs) in M&A affect the probability of deal completion following a bid announcement. Further, the paper provides answers on how the stock market reacts to bidders’ issuing CVRs as part of their deal consideration package by estimating the bidders’ cumulative abnormal returns (BCAR). It also presents a general definition of a CVR that acknowledges that there exist two main categories of the instrument. Namely, event-driven CVRs and performance CVRs. By utilizing more than 1,800 U.S. transactions, including 41 observed CVRs, we find robust evidence in favour of that CVRs have a significant positive impact on the probability of deal completion in M&A. More precisely, we run Probit regressions on matched sub-samples and estimate that the marginal probability increase on deal completion when using CVRs are 13.9% to 22.1%. BCAR is estimated using a market model.
    [Show full text]
  • Initial Public Offerings
    November 2017 Initial Public Offerings An Issuer’s Guide (US Edition) Contents INTRODUCTION 1 What Are the Potential Benefits of Conducting an IPO? 1 What Are the Potential Costs and Other Potential Downsides of Conducting an IPO? 1 Is Your Company Ready for an IPO? 2 GETTING READY 3 Are Changes Needed in the Company’s Capital Structure or Relationships with Its Key Stockholders or Other Related Parties? 3 What Is the Right Corporate Governance Structure for the Company Post-IPO? 5 Are the Company’s Existing Financial Statements Suitable? 6 Are the Company’s Pre-IPO Equity Awards Problematic? 6 How Should Investor Relations Be Handled? 7 Which Securities Exchange to List On? 8 OFFER STRUCTURE 9 Offer Size 9 Primary vs. Secondary Shares 9 Allocation—Institutional vs. Retail 9 KEY DOCUMENTS 11 Registration Statement 11 Form 8-A – Exchange Act Registration Statement 19 Underwriting Agreement 20 Lock-Up Agreements 21 Legal Opinions and Negative Assurance Letters 22 Comfort Letters 22 Engagement Letter with the Underwriters 23 KEY PARTIES 24 Issuer 24 Selling Stockholders 24 Management of the Issuer 24 Auditors 24 Underwriters 24 Legal Advisers 25 Other Parties 25 i Initial Public Offerings THE IPO PROCESS 26 Organizational or “Kick-Off” Meeting 26 The Due Diligence Review 26 Drafting Responsibility and Drafting Sessions 27 Filing with the SEC, FINRA, a Securities Exchange and the State Securities Commissions 27 SEC Review 29 Book-Building and Roadshow 30 Price Determination 30 Allocation and Settlement or Closing 31 Publicity Considerations
    [Show full text]
  • KL Event Driven UCITS Fund
    The Directors of KL UCITS ICAV (the "ICAV") whose names appear in the section of the Prospectus entitled "THE ICAV" are the persons responsible for the information contained in this Supplement and the Prospectus. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this Supplement and the Prospectus is in accordance with the facts and does not omit any material information likely to affect the import of such information. The Directors accept responsibility accordingly. If you are in any doubt about the contents of this Supplement or the Prospectus you should consult your stockbroker, bank manager, solicitor, accountant or other financial adviser. KL EVENT DRIVEN UCITS FUND (A sub-fund of KL UCITS ICAV an Irish collective asset-management vehicle with variable capital constituted as an umbrella fund with segregated liability between sub-funds pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (as amended)) SUPPLEMENT DATED: 29 MARCH 2018 INVESTMENT MANAGER Kite Lake Capital Management (UK) LLP This Supplement forms part of, and should be read in the context of and together with, the Prospectus dated 29 March 2018 as may be amended or updated from time to time (the "Prospectus") in relation to the ICAV and contains information relating to the KL Event Driven UCITS Fund (the "Fund") which is a separate portfolio of the ICAV. The Fund may be exclusively invested in financial derivative instruments ("FDI"), therefore prospective investors should ensure that, before investing, they understand the relevant risks and are satisfied that an investment is suitable.
    [Show full text]
  • Overview of Public Merger & Acquisition Regulations of The
    FIRST ISSUED FEB 2018, UPDATED AUGUST 2019 Overview of Public Merger & Acquisition Regulations of the Kingdom of Saudi Arabia IN THIS ISSUE: Introduction Introduction Since the introduction by the Capital Market Authority (the “CMA”) of the Key Legislation Kingdom of Saudi Arabia (the “Kingdom”) of the amended Merger and Scope of Application of M&A Acquisition Regulations1 (the “M&A Regulations”) there has been a distinct Regulations increase in market activity2, indicating that public M&A transactions will Appointment of Advisers continue to drive deal flow in the Kingdom. Competition Law Considerations This note, updated in August 2019, provides a high-level overview of the Private Transactions current regulatory regime of the Kingdom governing public M&A Rules of Tender Offers transactions, and how certain of the M&A Regulations are tending to be applied in practice No Squeeze-Out Right Merger Transactions Key Legislation The principal legislative acts which regulate public M&A transactions in the Kingdom are: the Companies Law (the “Companies Law”) issued by Royal Decree No. M/3 dated 28/01/1437H (corresponding to 10 November 2015); the Capital Market Law (the “CML”) issued by Royal Decree No. M/30 dated 02/06/1426H (corresponding to 31 July 2003); the M&A Regulations; 1 As issued by the CMA pursuant to its Board Resolution No. 2-94-2017 dated 25/01/1439H (corresponding to 15 October 2017), which became effective as of 19 October 2017, as further amended pursuant to its Resolution No. 3-45-2018 dated 7/8/1439H (corresponding to 23
    [Show full text]
  • '' Criticizing the Mandatory Bid Rule of the Takeover Bid Directive ''
    School of Economics and Business Administration LLM in Transnational and European Commercial Law & Alternative Dispute Resolution DISSERTATION ‘’ Criticizing the mandatory bid rule of the takeover bid Directive ‘’ IOANNA BALTA Stud. ID: 1104120054 Under the supervision of Dr. Thomas Papadopoulos Thessaloniki, 29 November 2013 International Hellenic University Criticizing the mandatory bid rule of the Takeover Bid Directive S Acknowledgements The writing of this dissertation has been one of the most significant academic challenges I have ever had to face. Without the support, patience and guidance of the following people, this study would not have been completed. I owe my gratitude to Dr. Thomas Papadopoulos, who undertook to act as my supervisor despite his many other academic and professional commitments. His wisdom, kindness and knowledge to the highest standards inspired and motivated me. I will always be grateful to my family, that have supported, encouraged and believed in me, and in all my endeavours who so lovingly and unselfishly cared for me. This dissertation is dedicated to my family. 1 International Hellenic University Criticizing the mandatory bid rule of the Takeover Bid Directive ABSTRACT This paper analyses the efficiency of the mandatory bid rule under the framework of Directive 2004/25/EC on takeover bids. The rule requires that anyone acquiring control of a listed company is obliged to make an offer to be addressed to all the shareholders of the target company for all their holdings at an equitable price. In the efforts of the EU to promote more efficient capital structures in Europe, the rule is mainly regarded as a protection mechanism for the minority shareholders.
    [Show full text]
  • 2019 Annual Information Form
    MOUNT LOGAN CAPITAL INC. _____________________________________________ ANNUAL INFORMATION FORM For the Financial Year Ended December 31, 2019 _____________________________________________ March 25, 2020 TABLE OF CONTENTS EXPLANATORY NOTES ............................................................................................................................................ 1 General ..................................................................................................................................................................... 1 Forward-Looking Information .................................................................................................................................. 1 CORPORATE INFORMATION .................................................................................................................................. 2 Name and Organization ............................................................................................................................................ 2 Structure of the Corporation ..................................................................................................................................... 3 GENERAL DEVELOPMENT OF THE BUSINESS ................................................................................................... 3 Description of the Business ...................................................................................................................................... 5 DESCRIPTION OF CAPITAL STRUCTURE ............................................................................................................
    [Show full text]
  • The New Law of Squeeze-Out Mergers
    Washington University Law Review Volume 62 Issue 3 1984 The New Law of Squeeze-Out Mergers Marc I. Steinberg University of Maryland Evalyn N. Lindahl Emory University School of Law Follow this and additional works at: https://openscholarship.wustl.edu/law_lawreview Part of the Law Commons Recommended Citation Marc I. Steinberg and Evalyn N. Lindahl, The New Law of Squeeze-Out Mergers, 62 WASH. U. L. Q. 351 (1984). Available at: https://openscholarship.wustl.edu/law_lawreview/vol62/iss3/2 This Article is brought to you for free and open access by the Law School at Washington University Open Scholarship. It has been accepted for inclusion in Washington University Law Review by an authorized administrator of Washington University Open Scholarship. For more information, please contact [email protected]. Washington University Law Quarterly VOLUME 62 NUMBER 3 FALL 1984 THE NEW LAW OF SQUEEZE-OUT MERGERS MARC I. STEINBERG* & EVALYN N. LINDAHL** CONTENTS Page I. INTRODUCTION .......................................... 352 II. PRIOR DELAWARE CASE LAW ............................ 355 A. Singer and Its Progeny.............................. 357 B. Reaction of Other States ............................ 360 III. WEINBERGER V UOP, INc.-AN OVERVIEW ............ 361 4. Background ......................................... 362 B. The Delaware Supreme Court's Decision ............. 364 IV. FAIR DEALING UNDER WEINBERGER .................... 366 A. Presence of Independent Negotiating Committee ..... 367 B. Use of Majority of Minority Vote .................... 371 C Relation of Procedural Safeguards to Substantive Fairness ............................................. 373 V. FAIR VALUE UNDER THE APPRAISAL STATUTE .......... 376 A. Elements of Future Value ............................ 379 B. Availability of Injunctive Relief ...................... 381 C. Two-Tier Offers ..................................... 384 © 1984 by Marc I. Steinberg and Evalyn N. Lindahl. All rights reserved.
    [Show full text]
  • Mergers & Acquisitions 2021
    Mergers & Acquisitions 2021 A practical cross-border insight into mergers and acquisitions 15th Edition Featuring contributions from: Aabø-Evensen & Co Advokatfirma Dittmar & Indrenius Oppenheim Law Firm Advokatsko druzhestvo Stoyanov & Tsekova in E&G Economides LLC Philip Lee cooperation with Schoenherr GDA Advogados Roca Junyent SLP APM & Co. GSK Stockmann Rokas ASP Advogados Hogan Lovells Schoenherr Atanaskovic Hartnell Houthoff Shardul Amarchand Mangaldas & Co Bär & Karrer Ltd Skadden, Arps, Slate, Meagher & Flom LLP Lee and Li, Attorneys-At-Law BBA//Fjeldco URBAN STEINECKER GAŠPEREC BOŠANSKÝ LEGIS and Partners Ltd Bech-Bruun Vieira de Almeida Lexel Juridique & Fiscal Blake, Cassels & Graydon LLP Wachtell, Lipton, Rosen & Katz Maples Group Bowman Gilfillan Inc. Walalangi & Partners (in association with Nishimura MJM Limited & Asahi) Cektir Law Firm Moravčević Vojnović and Partners in Walkers de Bedin & Lee LLP cooperation with Schoenherr WBW Weremczuk Bobeł & Partners Attorneys at Law DealHQ Partners Nishimura & Asahi Wolf Theiss DF Advocates NUNZIANTE MAGRONE Table of Contents Expert Chapters Global M&A Trends in 2020 1 Scott C. Hopkins, Adam Howard & Craig Kelly, Skadden, Arps, Slate, Meagher & Flom LLP M&A Lessons from the COVID Crisis 4 Adam O. Emmerich & Trevor S. Norwitz, Wachtell, Lipton, Rosen & Katz Q&A Chapters Angola Indonesia 9 Vieira de Almeida / ASP Advogados: Susana Almeida 143 Walalangi & Partners (in association with Nishimura Brandão & Hugo Sipitali & Asahi): Miriam Andreta & Siti Kemala Nuraida Australia Ireland
    [Show full text]
  • Fairness Opinion Regarding Announced Mandatory Offer from Canica AS
    Arcus ASA Destilleriveien 11 1481 Hagan Norway Attention: The Board of Directors Oslo, 9 July 2018 Fairness Opinion regarding announced mandatory offer from Canica AS 1. BACKGROUND Carnegie AS (“Carnegie”) has been retained by the Board of Directors (the “Board”) of Arcus ASA, a company incorporated under the laws of Norway (“Arcus” or the “Company”), in connection with the mandatory offer by Canica AS (“Canica” or the “Offeror”) to acquire all outstanding shares in Arcus for a cash consideration of NOK 45.00 per share (the “Offer Price”), as announced 4 July 2018 (the “Offer”). The Offer was formally set forth in the offer document (the “Offer Document”) published 4 July 2018, and values Arcus shares to approximately NOK 3,061 million (market capitalization). Under § 6-16 (1) of the Norwegian Securities Trading Act, the Board has a duty to issue a statement in relation to the Offer. The statement shall include an assessment of the impact of a potential completion of the Offer on the Company’s interests, including the effect, if any, of strategic plans by the Offeror as noted in the Offer Document on the employees and the location of the Company’s business, as well as other factors of significance for assessing if the Offer should be accepted by the Company’s shareholders. The Board has retained Carnegie to provide a Fairness Opinion of the Offer in accordance with the Norwegian Code of Practice for Corporate Governance – NUES. The opinions expressed in this Fairness Opinion are prepared for the Board in order for the Board to evaluate if the Offer is fair from a financial point of view.
    [Show full text]
  • Tender Offers in Italy
    May 2007 JONES DAY COMMENTARY Tender Offers iN ItalY Italy has not yet implemented the Directive on target company’s shareholders—hence the provi- Takeover Bids (Directive 2004/25/EC, the “Directive”) sion, in addition to the rules governing voluntary ten- in its internal legal system.1 However, Italian tender der offers, of a set of rules governing the so-called offer rules currently in force, as set forth in Legislative “mandatory tender offers.” Decree no. 58 of February 24, 1998, and CONSOB2 Regulation no. 11971 of May 14, 1999, already provide for In a nutshell, the concept of a mandatory tender offer many of the concepts set forth in the Directive, since is such that whoever comes to hold a controlling the Italian legislation, when enacted, was based on a stake in an Italian listed company shall be required to previous draft of the Directive. We will provide here an launch a tender offer for all of the remaining shares of overview of the main concepts and rules that apply to such company at an equitable price to be determined tender offers in Italy, noting where they differ from the in accordance with Italian law, thus allowing the minor- principles set forth in the Directive. ity shareholders to tender their shares to the bidder at a price that is the same as or comparable to that paid by the bidder to acquire the controlling stake in the ThE ConcepT Of Mandatory Tender target company. Offers Italian law provides for three main types of mandatory Both the Directive and Italian law aim to ensure equal tender offers: treatment of, and prevent discrimination against, the _______________ 1.
    [Show full text]
  • A New Era in Private Equity Deal Making
    Implications Of The Amended Best Price Rule: A New Era In Private Equity Deal Making Summary After many years of lobbying, the SEC has finally amended its Best Price Rule to revive the functionality of tender offers as a practical structural alternative to the conventional merger for the acquisition of public companies. While many will see the SEC rule revision as a modest, but long needed, correction of a dysfunctional misuse of the old rule by the plaintiffs’ bar, the consequences of the amended rule have the potential to be farther reaching. • Ironically, revitalization of the tender offer should not have much impact on hostile deal making, notwithstanding that hostile bids are often thought to be the principal function of tender offers. • Rather, the rule revision’s greatest impact will be on consensual deal making because the tender offer provides speed of execution which reduces exposure of buyers to topping bids and sellers to material adverse change and similar risks. • Speed of execution will be most telling in deals lacking regulatory issues, such as corporate diversifications and, more important in today’s market, leveraged buy-outs. • For corporate buyers, the practical availability of the tender offer structure will allow for the first real test of the SEC’s early commencement rule for offers involving the issuance of securities. If the implicit commitment of the SEC to process exchange offers on a 20 business day timetable is honored, the exchange offer will become competitive with the cash tender offer and will provide public company buyers greater structuring flexibility. • The critical issue for cash buyers, particularly private equity sponsors, will be financing the tender offer in compliance with the Federal Reserve Board’s Margin Rules.
    [Show full text]