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Williams Act MFEs: Is there a tender offer & required disclosures in this hypo?
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Date: February 5th, 2016 2:02 AM Author: provocative smoky ticket booth CorpX, a public DE corp, has 2 divisions, XA (since the beginning) & XB, a wholly owned subsidiary acquired 3yrs ago.
During prelim negotiations w/ CorpY (public DE corp) & CorpZ (privately held NV corp, all voting stock owned by founder Zman), they come up with this 2part plan:
1. 21 of XB shareholders, including several CorpX officers & hedge funds, will vote to approve XB (spun off)merging into a newly formed acquisition subsidiary of CorpZ. The 21 XB shareholders will get newly issued *nonvoting* CorpZ stock. This nonvoting stock would not be SECregistered, b/c of the small # of shareholders.
2. The boards of CorpX & Corp Y will approve & recommend that CorpY acquire CorpX (now only comprising division XA) using a reverse subsidiary merger. CorpY will form an acquisition subsidiary that will then merge into CorpX, and all CorpXcommon stock will be exchanged for newly issued, and SEC-registered, CorpY preferred stock paying annual interest of 4%, convertible after a year to CorpY common stock.
Q1: Is there a tender offer according to the SEC's 8-factor test? Q2: Any R13 or R14 disclosures? |
Date: February 5th, 2016 11:51 AM Author: provocative smoky ticket booth (http://www.autoadmit.com/thread.php?thread_id=3119056&forum_id=2#29757831) |
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Date: February 5th, 2016 5:54 PM Author: provocative smoky ticket booth (http://www.autoadmit.com/thread.php?thread_id=3119056&forum_id=2#29760783) |
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Date: February 5th, 2016 2:33 PM Author: provocative smoky ticket booth (http://www.autoadmit.com/thread.php?thread_id=3119056&forum_id=2#29759105) |
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Date: February 5th, 2016 4:58 PM Author: comical ultramarine bawdyhouse i don't get how this isn't just a straight up merger - why would there be a tender offer concern, that the consideration is pref shares? (http://www.autoadmit.com/thread.php?thread_id=3119056&forum_id=2#29760419) |
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Date: February 5th, 2016 5:20 PM Author: provocative smoky ticket booth I thought it was a straight up merger too. But are the 21 bros crossing DAT Williams Act 13(d) 5% threshold? (http://www.autoadmit.com/thread.php?thread_id=3119056&forum_id=2#29760554) |
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Date: February 6th, 2016 1:19 AM Author: comical ultramarine bawdyhouse what? 13d threshold only triggers beneficial ownership filing for a public company, it's NBD and doesn't trigger anything else, and it doesn't mean it's a tender offer. Also you only trigger it when the persons are considered a group, which is doubtful here. (http://www.autoadmit.com/thread.php?thread_id=3119056&forum_id=2#29763111) |
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Date: February 6th, 2016 1:21 AM Author: provocative smoky ticket booth The 21 major CorpX shareholders (including founder-CEO and several hedge funds) are operating in concert.
When they get CorpY's preferred stock, don't they acquire beneficial ownership (since CorpY is a public DE corp)? Then all they have to do is disclose Schedule 13D? But no more obligations after that? |
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Date: February 6th, 2016 1:58 AM Author: comical ultramarine bawdyhouse yeah that's right, they just need to file a form 13d; even then I don't know if iust pref shares would trigger a filing requirement if they're not convertible until 1 year later. Probably so. (http://www.autoadmit.com/thread.php?thread_id=3119056&forum_id=2#29763292) |
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Date: February 6th, 2016 2:10 PM Author: provocative smoky ticket booth Well pref shares might not give them control/voting power, but they're disposable at the 21 bros' command.
So on an exam, would you just say: maybe they need to file 13D because ___; maybe not because ___; either way, no other Williams Act obligations? |
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Date: February 7th, 2016 11:53 AM Author: Submissive brunch You need to ask why are you even considering Willis Act. Is the merger going to be achieved via tender offer? Or straight merger?
The 21 shareholders dont have anything to do with Williams Act - they are part of XB wjich has nothing to do with thr CorpX amd CorpY merger.
They wont even have to file 13D because XB is a private co with no losted shares.
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Date: February 5th, 2016 6:36 PM Author: provocative smoky ticket booth
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Date: February 7th, 2016 6:00 AM Author: Submissive brunch I don't get why you are assuming this is a straight up merger. They can achieve the same effect by tender offer. (http://www.autoadmit.com/thread.php?thread_id=3119056&forum_id=2#29771260) |
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Date: February 5th, 2016 8:13 PM Author: provocative smoky ticket booth (http://www.autoadmit.com/thread.php?thread_id=3119056&forum_id=2#29761493) |
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Date: February 5th, 2016 11:35 PM Author: provocative smoky ticket booth (http://www.autoadmit.com/thread.php?thread_id=3119056&forum_id=2#29762692) |
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Date: February 7th, 2016 11:54 AM Author: rusted bearded lodge lol DVP (http://www.autoadmit.com/thread.php?thread_id=3119056&forum_id=2#29771991) |
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Date: February 7th, 2016 11:55 AM Author: boyish sexy native pozpig Don't know anything about law BUT:
Not a tender
Disclosures likely required |
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Date: February 7th, 2016 1:33 PM Author: Submissive brunch All we know is CorpY and CorpX are merging. We don't know whether it's a tender or straight merger. It's up to CorpY and CorpX to decide. (http://www.autoadmit.com/thread.php?thread_id=3119056&forum_id=2#29772546) |
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Date: February 7th, 2016 11:56 AM Author: idiotic corner go beat your baby cousin you weirdo (http://www.autoadmit.com/thread.php?thread_id=3119056&forum_id=2#29771999) |