January 8, 2009
Corp Fin Issues No-Action Response on Israeli “Partial Offer”
Jim Moloney of Gibson Dunn notes: Yesterday, the SEC’s Division of Corporation Finance posted this no-action letter granted to Retalix. In this case, we have a cross-border tender offer transaction involving a bidding group that is making a “partial offer” for the ordinary shares of an Israeli company (target). The offer is structured as one offer designed to comply with both U.S. and Israeli securities laws.
The incoming no-action letter describes the level of U.S. ownership in the Israeli target as less than 40% (i.e., Tier II). In this case the bidding group only seeks to increase its total ownership by 5% to bring their total ownership slightly below 20%. Under the applicable Israeli securities laws a bidder is required to hold its offer open for an additional 4 business days (the additional offering period), without withdrawal rights once all conditions are satisfied and the initial offer expires.
Normally, such an additional offering period would be viewed as a “subsequent offering period” that is permitted under Rule 14d-11. However, Rule 14d-11 requires that the tender offer be for “any and all” outstanding securities. In this case, the offer is a partial one and the bidding group is seeking an additional 5% only. The SEC granted the requested exemption from Rule 14d-7(a)(1) which requires bidders to provide withdrawal rights during the entire offering period to provide for a four day additional offering period without withdrawal rights.