Question
From:
(redacted)
Sent:
Tuesday, June 17, 2008 11 :30 AM
To:
Verne, B. Michael
Subject: Foreign Issuer / "Scheme of Arrangement"
Mr. Verne:
I'm troubling you withlots of questions this week. Sorry for the deluge. I am always grateful foryour assistance.
Here's another.
I have atransaction in which a U.S. issuer is making an all-cash offer to buy 100% ofthe outstanding voting securities of a foreign issuer. The transaction does notqualify for the 801.51 exemption because the target has too much in the way of U.S. assets, so an HSR filing will be required. The offer is conditioned on expiration ofthe HSR waiting period and expiration of waiting periods for antitrust filingsin various European countries.
What I am trying todetermine is whether the transaction constitutes a cash tender offer (withinthe meaning of Rule 801.1 (g that would make it subject to the 15-daywaiting period as an 801.30 transaction, or whether the full 30-day periodwould apply. The transaction is structured as a "scheme ofarrangement" under English law (the target is a publicly traded Englishcompany). Because it is a scheme of arrangement, it is not subject to Section14 of the Exchange Act. It is my understanding, however, that the PNO takes theview (per Informal Interpretation 71 in the Premerger Notification PracticeManual) that cash tender offers for control of a foreign issuer which are notsubject to Section 14 of the Exchange Act are nevertheless entitled to the15-daywaiting period.
This begs thequestion of whether a "scheme of arrangement" constitutes a de facto"cash tender offer," which raises the underlying question of what a"tender offer" is. From my research, I understand that the term"tender offer" has no established regulatory or statutory meaning.Many courts have followed an eight-factor test, the elements of which areconsidered to be characteristic of a "tender offer." It appears thata number of these factors are present in the transaction I am working on. Theprimary difference is that pursuant to the "scheme of arrangement," avote of the target's shareholders would be taken on the transaction based on apositive recommendation from the target's board of directors.
Does the PNO have acurrent position on whether "schemes of arrangement" of this typeunder English law are, in effect, cash tender offers entitled to the 15-daywaiting period?