Tender Offer - Equity Derivatives Provision
2002 ISDA Equity Derivatives Definitions
Section 12.1(d) in a Nutshell™
Full text of Section 12.1(d)
Content and comparisons
- 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”
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.
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.
Mandatory GDR Conversion
Could you slip in a mandatory ADR or GDR conversion into this provision? you know, if a warring Eastern European govenment announced that local issuers of GDRs must forcibly exchange them for local Shares? We will have to hope so, because it is hard to see what other category of Extraordinary Event this would fit into.
Section 12.1(e) Tender Offer Date
...and in Nutshell™:
Not really much to see here, we think you will agree.