DealLawyers.com Blog

Yesterday, the SEC’s Division of Corporation Finance issued a handful of new CDIs relating to Form S-4, Going Private Transactions and Tender Offers. Below are summaries and links to the full CDIs.

Securities Act Rules Forms Revised 225.03 (redline) permits using a business combination Form S-4 to register for resale the securities previously offered and sold to officers, directors, and affiliates of the target company in connection with the business combination transaction pursuant to an exemption (e.g., in connection with written consents or lock-up agreements per recently updated Securities Act Sections Questions 139.29, 130.30, and 239.13).

Going Private Transactions, Exchange Act Rule 13e-3 and Schedule 13E-3 New Question 112.03 provides that the Rule 13e-3(g)(2) exception to Rule 13e-3’s requirements for going privates is available if the class of equity securities is not listed on a national securities exchange at the time the transaction is announced but the registration and approval for listing (or authorization to be quoted in an inter-dealer quotation system) are express conditions to closing, disclosed as such and all other conditions of the exception are satisfied. Revised Question 212.01 (redline) has been revised accordingly.

New Question 112.04 provides that Rule 13e-3 would generally not apply to transactions where there is an express non-waivable condition in the tender offer that the issuer would not purchase an amount of subject equity securities that would have a reasonable likelihood or purpose of producing any of the effects described in Rule 13e-3(a)(3)(ii) (e.g., causing the class of subject equity securities to become eligible for termination of Section 12 registration under Rules 12g-4 or 12h-6 or causing the suspension of Section 15(d) reporting obligations under Rule 12h-3.)

Tender Offer Rules and Schedules New Question 101.22 provides that a parent company’s tender offer for Section 12 registered equity securities issued by its affiliate is subject to Section 14(d) and Regulation 14D and exempt from Rule 13e-4 by virtue of Rule 13e-4(h)(4). Section 14(d)(8)(B)’s exception for tender offers by “the issuer of such security” is not available for any affiliates of the issuer other than a 100%-owned subsidiary of the issuer.

New Question 163.02 provides the staff will not object to an issuer’s failure to comply with the 10 business day requirement of Rule 14e-2 if the issuer was unaware of the existence of a third-party mini-tender offer and the issuer publishes, sends, or gives to security holders the required statement as soon as possible after it becomes aware.

– Meredith Ervine