Cross-Border Tender Offer Rules

Definition:

The rules that govern Cross-Border Tender Offers. Cross-Border Tender Offers involve a broad solicitation in two or more jurisdictions to purchase a substantial percentage of a company’s securities during a limited tender offer period.

In the United States, Tender Offers are subject to Sections 14(d) (in some cases) and 14(e) of the Exchange Act and the applicable rules of Regulation 14D and Regulation 14E. The scope and applicability of Cross-Border Tender Offers Rules, and the availability of exemptions thereunder (Tier I and Tier II), for Tender Offers principally depends on the percentage of the company’s securities held by US residents, whether or not the Tender Offer is for registered equity securities, and whether the company is a Foreign Private Issuer. Section 14(e) and Regulation 14E apply to Tender Offers for any security made, directly or indirectly, using US jurisdictional means. Section 14(d) and Regulation 14D apply to Tender Offers for any class of SEC-registered equity securities (regardless of whether the company is a Foreign Private Issuer) if the purchaser would, after completion of the Tender Offer, directly or indirectly, beneficially own more than 5% of such securities. Tier I and Tier II exemptions from all or a portion of the Tender Offer rules are only available if the target is a Foreign Private Issuer.

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