Last week, as noted in this Bingham alert, the SEC’s Division of Trading & Markets has granted no-action relief – in Roland Berger Strategy Consultants (5/28/13) – to a non-US financial advisor if, after making contact with one or more potential US Targets, the non-US financial advisor engages in certain activities described in the no-action letter in situations where it interacts with either:
(1) a U.S. Target that is using internal or group level personnel with relevant M&A \experience (via in-person meetings or through other direct contacts) to negotiate a transaction, provided that non-US financial advisor personnel engaged in any contacts with U.S. Targets in the United States are limited to persons whom the non-US financial advisor would have determined satisfy the requirements for “foreign associated persons” in Rule 15a-6(a)(3)(ii)(B); or
(2) a U.S. Target that is using the services of an external advisor, such as a broker-dealer, attorney or other professional with relevant experience.
In furtherance of its request, the non-US financial advisor stated that (1) it would not receive, acquire or hold funds or securities in connection with any transaction it engages in with a U.S. Target in reliance on the requested no-action relief; (2) it would not represent or advise the U.S. Target in any regard with respect to the proposed transactions; and (3) the granting of the requested noaction relief would not relieve the non-US financial advisor of any obligations it has to comply with the antifraud provisions ofthe U.S. securities laws.
The activities described in the letter included:
– Identifying potential target buyers or sellers and making an initial contact with the targets to assess interest in a proposed transaction. Such contacts would include, for example, telephone calls, emails, and related mailings of general pitch materials regarding the proposed transaction.
– As part of its process of contacting potential target buyers or sellers in connection with M&A transactions, contacting one or more U.S.-based entities or non-U.S.-based entities that have U.S.-based parents involved in investment decisions of the non-U.S. entity (each such U.S.-based entity and each U.S.-based parent, a “U.S. Target”).
– If a potential buyer or seller becomes interested in a transaction with a Non-U.S. Client, the non-US financial advisor would develop and manage the data room and the information process, conduct negotiations on behalf of the Non-U.S. Client and advise the Non-U.S. Client on the terms of the transaction.
Importantly, the non-US financial advisor represented that any U.S. Target approached on behalf of its Non-U.S. Client would fall within the meaning of the term “Major U.S. Institutional Investor” as defined in Rule 15a-6(b)(4) under the Exchange Act.