Summary Hybrid structure enables an issuer to achieve the speed of a Rule 144A offering but with the pricing of a fully-registered offering As a first step, issuer privately places debt securities - often under Rule 144A Issuer [more...]
Summary Collects precedent A/B exchange offers Other than M&A-related deals Which can be found here A/B Exchange Offer Topic Page Covers substantive issues Reebok International Convertible Debentures - SEC Comments Exchange offer for $350 mm 2% convertible debentures Announced 10.26.04 Press release Completed 11.24.04 Press release [more...]
Developments Kerkorian increases his GM stake to 9.9% GM and Kerkorian fail to agree on board representation Carl Icahn makes an unsolicited offer for Fairmont Hotels Carl Icahn and others pressure Time Warner Knight Ridder's largest shareholder pushes for sale Wendy's to sell part of Tim Hortons in IPO Icahn drops lawsuit against Mylan Labs [more...]
Summary Covers M&A asset purchase transactions For tax treatment see Taxable Asset Purchases Precedent Deals Tidel Technologies 2006 Press release Form 8-K Preliminary proxy statement 2.03.06 Asset purchase agreement Exercise and conversion agreement Cash collateral deposit letter Stock redemption agreement Reaffirmation, ratification and [more...]
Summary Long-term bonds and preferred stocks with short-term yields Interest rates are reset periodically Usually every 7, 28, 35, or 49 days So that yield is typically priced by reference to shorter-duration fixed income securities Even though auction-rate securities (ARS) typically have 20 or 30 year maturities Reset by a modified Dutch [more...]
Securities Act § 3(a)(3) Exemption Summary Commercial paper is short-term unsecured notes, typically With maturities of 30 to 90 days Issued by finance companies and banking companies Bought by money-market funds Sold with a $25,000 minimum denomination Having a high credit rating Sold without Securities Act registration using the [more...]
Summary Covers situations where a third party bidder attempts to acquire one of the parties to a pending M&A transaction Recent Competing Offers ABN AMRO : Barclays - Ameristar Aztar : Pinnacle - Colony Capital - Ameristar Guidant : Johnson & Johnson - Boston Scientific Inamed : Medicis - Allergan ShopKo [more...]
Debt Covenant Waivers United Rentals - Late SEC Filings (2005) Announced (8.22.05) Consent solicitation statement (Debt) Consent form Consent solicitation statement (QUIPs) Consent form Related Topics Covenants
PMI Group PMIs 2.50% Senior Convertible Debentures due 2021 SEC no-action SEC letter 7.06.06 Request letter 7.06.06 Press releases Purchase option to be paid in cash 6.16.06 Interest rate locks 6.16.06 Trading price condition met 6.29.06 Form S-4 filed 7.03.06 Results of offer to purchase 7.18.06 $77,000 tendered, out of $359 mm [more...]
Accounting Issues FASB 84 1985 Induced Conversions of Convertible Debt Amends APB 26 FASB summary FASB status EITF 00-19 SEC disclosure issues 12.01.05 Tax Issues Use of hedges IRS can re-characterize to require OID treatment By integrating convertible debt with hedge to create a synthetic debt instrument subject to original [more...]
Deal Related Topic Pages Precedent Transactions by Deal Type A/B Exchange Offers Activist Shareholders Asset Purchases Auction Rate Securities Automatic Shelf Registrations Commercial Paper Convertible Securities Dutch Auctions Income Deposit Securities (IDSs) Joint Ventures Leveraged Buyouts (LBOs) Mergers Cash Cash Election Cash / Stock [more...]
Summary Programs to reserve shares in a public offering Shares are reserved for sale to employees, customers or others with a relationship to the issuer Sometimes called a friends and family program Use of DSPs has raised concerns NYSE/NASD IPO Advisory Committee recommended that DSPs be limited to 5% of issue Committee report [more...]
Summary Form of tender offer in which the security holders, rather than the buyer, determine the price to be paid for the shares purchased Also called a descending price auction Named after 17 th century Dutch tulip bulb auctions Often modified as security holder can select either: A minimum price within a specified range, or Not specify, and be [more...]
European Investment Bank EIB is the financing arm of the European Union Homepage Province of Quebec 5% Global Notes - US$ 1.25B - February 2006 Prospectus supplement 2.22.06 Preliminary prospectus supplement 2.21.06 Term sheet Free writing prospectus 2.22.06 Medium Term Notes - US$ 3.0B - November 2005 [more...]
Bottom AGREEMENT AND PLAN OF MERGER BY AND AMONG HCA INC., HERCULES HOLDING II, LLC AND HERCULES ACQUISITION CORPORATION JULY 24, 2006 AGREEMENT AND PLAN OF MERGER This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered [more...]
Summary Innovative security developed by CIBC World Markets IDSs are yield-oriented securities that consist of debt and common stock paired together as a single unit for trading purposes Designed to distribute nearly all of a company's free cash flow to investors As interest payments on the debt and expected dividend payments on the common stock [more...]
Developments Keefe Bruyette considering an IPO Merrill Lynch buys Advest Perelman wins judgment against Morgan Stanley Over its role as financial advisor to Sunbeam, to which Perelman sold Coleman for stock and cash Judge entered a default judgment against Morgan Stanley over omissions and delays in producing e-mails Told jurors to [more...]
Developments Vonage Directed Share Program Aggressive use with retail customers leads to complications See Directed Share Programs Underwriter fiduciary duties EBC I v Goldman Sachs NY Ct App 6.07.05 held that underwriters can have fiduciary duties Some banks have been modifying their underwriting agreements in response See Underwriting [more...]
Selected Precedent United Launch Alliance Lockheed Martin / Boeing - Formation 50%/50% joint venture - formation of new company Combines US government rocket launch businesses Expected to save US $100-$150 million per year Eliminates money-losing rivalry Lockheed had sued Boeing over theft of proprietary information Announced [more...]
Summary Verizon and Qwest competed for MCI Jousted over what's a " superior proposal " As Qwest repeatedly offered 20%-30% more than Verizon With MCI then accepting a lesser 10%-15% raise from Verizon Initial Verizon offer of $20.75 per share was ultimately increased to $26.00 per share Qwest's "best and final" [more...]
Summary Two-step mergers are negotiated acquisitions that use a tender offer or exchange offer as the first step First step enables buyer to acquire voting control Second-step back-end merger is used to complete acquisition of 100% of target's stock Can have advantages over a one-step merger Speed Offer need only be open for 20 [more...]
Eon Labs / Novartis Acquisition of Hexal AG and Eon Labs, creating the world leader in generics Strengthens market positions globally Background Two-step cash merger $31.00 per share of common stock 1.3 billion total Summary term sheet Summary of agreements Conditions Advisors Novartis: Wachtell, Lipton, Rosen & Katz Eon Labs: Willkie Farr & [more...]
Notable Transactions Instinet / Nasdaq Stock exchanges United Defense Industries / BAE Systems Defense Industry Ascential Software / IBM Software AT&T Wireless Services / Cingular Wireless Telecom Commercial Federal / BancWest (BNP Paribas) Regional Banks Charter One / Citizens Financial / RBS Regional Banks Eyetech / OSI Pharma Biotech MA Vicuron [more...]
Notable Transactions North Fork / Capital One Financial services Siebel Systems / Oracle Software IVAX / TEVA Drug companies HUBCO / TD Banknorth Regional Banks Amegy / Zions Bancorp Regional Banks Staten Island Bancorp / Independence Community Banks Catellus Development / ProLogis REITs Premcor / Valero [more...]
Notable Transactions MCI / Verizon Telecom May Department Stores / Federated Retail MBNA / Bank of America Credit card Providian Financial / Washington Mutual Credit card Engineered Support / DRS Technologies Defense industry Skype / eBay E Commerce - Earnout Overture Services / Yahoo! E Commerce Vintage Petroleum / Occidental Petroleum Energy IMS [more...]
Notable Transactions US Airways / America West Airlines Macromedia / Adobe Systems Software Archipelago Exchange / NYSE Stock Traders Ask Jeeves / IAC/Interactive e-Commerce AT&T / SBC Telecom Gillette / Procter & Gamble Consumer Goods PSEG / Exelon Utilities Veritas / Symantec Software ILEX Oncology / Genzyme Biotech MA - Floating [more...]
Summary An M&A transaction structured as a true merger Rather than an acquisition by one party of the other Deal terms are negotiated with a view to parity Even so, from the outset, one company is often expected to be the dominant partner While many MOEs have been successful, particularly in the financial services sector, several have been [more...]
Summary Hybrid tax-free transaction Combines a tax-free spin-off with a tax-free reorganization Named after Commissioner v Mary Archer W Morris Trust 697 F2d 794 (4 th Cir 1966) Held that the tax-free acquisition of a parent company didn't disqualify the immediately preceding tax-free spin-off of a subsidiary Commentary CFO article [more...]
Private Investment in a Public Entity (PIPEs) Equity Line Financings Summary In a PIPEs transaction equity securities are privately sold but registered before or shortly after closing Typically used by issuers that need equity capital quickly or when public markets are closed to the issuer Stock is sold at a discount to market Can be structured [more...]
Private Investment in a Public Entity (PIPEs) Equity Line Financings Summary In a PIPEs transaction equity securities are privately sold but registered before or shortly after closing Typically used by issuers that need equity capital quickly or when public markets are closed to the issuer Stock is sold at a discount to market Can be structured using [more...]
Cotelligent, Inc. Narrowcasting Services Private placement of stock and warrants Sold 1.55 million shares of common and warrants Stock chart Business Announced 2.07.05 Form 8-K Agreements Stock and warrant purchase agreement Warrant
Developments Brookfield - Blackstone to buy Trizec for $8.9B Health Care Properties to buy CNL Retirement for $5.2B Shurgard accepts Public Storage's bear hug offer Affordable Residential to discontinue REIT status Blackstone to buy CarrAmerica for $5.6B GE to buy Arden Realty for $3.2B CalPERS and LaSalle to buy CenterPoint Morgan Stanley [more...]
Mercer International SEC filings Proxy statement 12.15.05 Form S-4 7.18.05 SEC no-action letter SEC letter 12.12.05 Request letter 12.12.05 Shire Pharmaceuticals Group plc SEC no-action letter SEC letter 11.17.05 Request letter 11.17.05 Aether Systems Reorganization to impose transfer [more...]
Accounting Issues FIN 41 (1994) Offsetting of Amounts Related to Certain Repurchase and Reverse Repurchase Agreements Interprets APB Opinion 10 and modifies FIN 39 FASB summary FASB status FIN 39 (1992) Offsetting of Amounts Related to Certain Contracts Interprets APB Opinion 10 and FASB 105 FASB summary FASB status Related Topics [more...]
Summary Method for companies to raise additional capital In US, typically only used by mutual funds and by distressed companies Often used in foreign countries such as England Notable Transactions Popular Foreign Regional Bank Rights offering by Puerto Rican bank Issued non- transferable rights to purchase common stock [more...]
Summary Perceived abuses in roll-up transactions became a focus of legislation and rule-making in the early 1990s In 1991, the SEC adopted Regulation S-K subpart 900 to enhance the quality of information provided to investors in connection with roll-up transactions, and established a minimum 60-day proxy solicitation or tender offer period for [more...]
Summary 3(a)(10) provides an exemption from Securities Act registration for specified exchange transactions Securities must be issued in exchange for securities, claims, or property interests Cannot be offered for cash Court or authorized governmental entity must approve the fairness of the exchange After a hearing Issuers often request SEC [more...]
Aetna Three Tranches June 2006 $2.0B three tranche senior notes offering Three tranches $450 mm 5.750% five year $750 mm 6.000% ten year $800 mm 6.625% twenty year AET press release 6.09.06 Form 8-K 6 .09.06 Shelf takedown Prospectus supplement 6.07.06 Final term sheet Free writing prospectus 6.07.06 Preliminary prospectus supplement [more...]
Summary Rule 10b-18 Dutch Auction Tender Offers Disclosure Requirements SEC Release 33-8335 2003 Accelerated Share Repurchases IBM Form 8-K 6.04.07 Reinsurance Group of America Form 8-K Repurchase agreement (Morgan Stanley)
Summary Covers spin-offs and other transactions s that rely on Internal Revenue Code § 355 Including split-offs and Morris Trust transactions Tax Law Internal Revenue Code § 355 IRS Revenue Ruling 2004-23 Desire to increase stock value can satisfy IRC § 355 business purpose requirement Can be a valid corporate business purpose [more...]
Notable Transactions Citigroup - Life Insurance Business J C Penney Co - Eckerd Drug Store Chain Safeco Corp - Life & Investments Operations Safeco Corp - Insurance Brokerages Operation J C Penney Co - Eckerd Drug Store Chain Bifurcated sale to two buyers, for total of $4.5 billion Sale of Subsidiary to Jean [more...]
Termination Agreements Mylan Laboratories / King Pharma (2005) Termination agreement Press release Form 8-K Related Topics Deals
Developments Pending Guidant Gets competing offer from Boston Scientific Sovereign - Independence Proxy fight Renegotiated deals Guidant - Johnson & Johnson Pacemaker recall (cut 17%) Hibernia - Capital One Hurricane Katrina (cut 9%) Riggs - PNC Financial Banking violations (cut 17.5%) Rent.com - eBay Buyer stock decline - [more...]
Summary Trust Preferred Securities (TPS) are hybrid securities Rely on a complicated structure to obtain favorable tax and accounting treatment Treated as debt for income tax purposes, so interest is tax deductible Can be counted as equity for regulatory capital and credit rating purposes e.g., Federal Reserve Board policy is to count [more...]
Accounting Issues EITF 00-19 SEC disclosure issues 12.01.05 Related Topics Convertible Securities
Summary Allows WKSIs greater latitude in going to market SEC summary Developments Several issuers have filed automatic shelf registration statements Beginning 12.01.05, the effective date of Securities Offering Reform See below for precedent filings EDGAR filing tip Must be filed on Form S-3ASR JP Morgan Chase [more...]