Tender Offer - Equity Derivatives Provision
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2002 ISDA Equity Derivatives Definitions A Jolly Contrarian owner’s manual™
12.1(d) in all its glory
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Overview
Section 12.1. General Provisions Relating to Extraordinary Events
- 12.1(a). “Extraordinary Event”
- 12.1(b). “Merger Event”
- 12.1(c). “Merger Date”
- 12.1(d). “Tender Offer”
- 12.1(e). “Tender Offer Date”
- 12.1(f). “Share-for-Share”
- 12.1(g). “Share-for-Other”
- 12.1(h). “Share-for-Combined”
- 12.1(i). “New Shares”
- 12.1(j). “Other Consideration”
- 12.1(k). “Combined Consideration”
- 12.1(l). “Announcement Date”
- 12.1(m). “Implied Volatility”
- 12.1(n). “Affected Shares”
Summary
If you’re like the JC you will be wondering how a single holder could acquire more than 100 per cent of the extant Shares of an Issuer. But, to an ISDA ninja, that is to rather miss the point. We are not talking about the practical, but the conceptually possible. Perhaps in a parallel universe, where normal rules of Euclidean geometry don’t apply. Or down a gravity well or something.
Sleep assured that, however conceptually difficult — logically difficult — such a feat might be, if someone does manage it then ISDA’s crack drafting squad™ has your — or her — back.
Actually, come to think of it, they don’t, because an acquisition of more than 100% would not count as a Tender Offer at all.
Eheu. I suppose we had all better hope and that normal rules of Euclidean geometry continue to apply for the time being.
Also, is not clear what is meant to happen if the Tender Offer relates to exactly 100 per cent of the outstanding Shares.
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- The JC’s famous Nutshell™ summary of this clause
- Mandatory GDR conversions