Here’s something Dave shared yesterday on TheCorporateCounsel.net:

Back in April, Corp Fin’s Office of Mergers and Acquisitions issued an exemptive order providing issuers and, in some cases, third party bidders with the flexibility to shorten the time period during which tender offers for equity securities must be open from 20 to 10 business days.

Yesterday, the Office of Mergers and Acquisitions revisited its existing relief for certain types of non-convertible debt tender or exchange offers in a new exemptive order, expanding the availability of a five business day minimum offering period that had been established through a series of no-action letters. The exemptive order permits a tender or exchange offer for any class or series of non-convertible debt securities to remain open for a minimum period of five business days, so long as several conditions are met, including that the offer is made by the issuer of the subject non-convertible debt securities, a direct or indirect wholly owned subsidiary of such issuer, or a parent company that directly or indirectly owns 100% of the capital stock (other than directors’ qualifying shares) of such issuer, and the offer is made for cash and or consideration consisting of certain “Qualified Debt Securities.” The commencement of the offer and any material changes to the terms of the offer must be announced via a press release, and the issuer must provide certain withdrawal rights.

This new exemptive order supersedes the Staff’s no-action letter Cahill Gordon & Reindel LLP (January 23, 2015) and any similar letters relating to abbreviated offering periods in tender or exchange offers for non-convertible debt securities.

Programming Note: Our blogs will be off tomorrow and back Monday after the holiday weekend. Wishing you a safe and happy Semiquincentennial Fourth of July.

– Meredith Ervine 

As John and Liz shared on TheCorporateCounsel.net, the Delaware General Assembly passed this year’s amendments to the Delaware General Corporation Law in May, and Delaware Governor Matt Meyer signed the amendments into law in mid-June. They will, as usual, go into effect on August 1st. Everything about this year’s amendments – from process to substance – is far less controversial than the last few years. As John noted, nobody’s been running around with their hair on fire about proposed changes to the DGCL this year. It was kind of nice that at least this one thing was a bit back to business as usual.

In fact, this Greenberg Traurig alert — their annual alert on the ways the DGCL changes are relevant to drafting corporate and M&A documents — characterizes the changes as relatively minimal. The relevant changes include:

– An important clarification regarding the voting standard for class votes required to change the amount of authorized stock of that class.

– A required agreement by a dissolving corporation for service of process after dissolution.

Here’s what the alert says about the class votes clarification:

Section 242(b)(2) provides that a class vote is required to increase or decrease the authorized number of shares of that class, unless the certificate of incorporation includes a provision that such change in authorized shares may be approved by holders of a majority of the total outstanding shares irrespective of Section 242(b)(2). For decades, such “opt-out” provisions were relatively common in certificates of incorporation. In 2023, however, subsection (d) was added to Section 242, and subsection (d)(2) provides that, under certain circumstances for corporations with publicly listed stock and unless otherwise expressly provided in the certificate of incorporation, approval by only a majority of votes cast is required for those votes on changes to authorized shares of a class.

Some uncertainty arose in practice and case law over whether provisions in certificates of incorporation opting out of the class vote requirement under subsection (b)(2) would also operate to opt out of the votes cast standard under subsection (d)(2). As a result, Section 242(d)(2) has been amended to clarify that only a provision that expressly states that the corporation is not to be governed by Section 242(d)(1) or (2) (or both) or requires a greater or additional vote than the majority of total outstanding voting standard contemplated by subsection (b)(2) will effectively opt out of the subsection (d)(2) votes cast standard. This amendment should provide greater clarity and comfort for corporations with certificates of incorporation that include traditional Section 242(b)(2) opt-out provisions, while providing a roadmap for language to include in newly adopted and amended certificates of incorporation.

We’ll be posting memos in our “State Law” Practice Area.

– Meredith Ervine