DealLawyers.com Blog

Meredith blogged about the new and updated M&A-related CDIs that Corp Fin issued in January. This Hunton Andrews Kurth memo highlights how one of those CDIs, which provides companies with greater flexibility on the timing of broker searches, will facilitate shareholder approval of M&A transactions:

Companies will have more leeway in scheduling and preparing for shareholder meetings. This flexibility is particularly beneficial when seeking shareholder approval of M&A transactions, where timing and coordination are critical. Effectively, the new guidance will enable some transactions to close more quickly by allowing the record date to be set sooner, thus reducing the parties’ exposure to market risk. It may also be helpful for companies seeking to set a record date quickly to reduce the risk that activists or other interlopers try to purchase shares after the transaction is announced for the purpose of voting against it.

The CDI is also a welcome step by the Staff in terms of modernizing the proxy process. Proxy solicitors and practitioners have long viewed the 20-business day requirement as antiquated and unnecessary. Parties should consult with their proxy solicitors and Broadridge when conducting a broker search, however, to determine what will be adequate.

– John Jenkins