{"id":5378,"date":"2012-09-30T00:00:00","date_gmt":"2012-09-30T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2012\/09\/burger_king_structure_could_ac"},"modified":"2022-04-28T14:56:50","modified_gmt":"2022-04-28T19:56:50","slug":"burger-king-structure-could-ac","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/burger-king-structure-could-ac\/","title":{"rendered":"Burger King Structure Could Activate Certain 1934 Securities Exchange Act Prohibitions, Says SEC&#8217;s Special Counsel"},"content":{"rendered":"\n<p>According to Attorney Daniel Duchovny, who is the special counsel to the Securities and Exchange Commission Corporation Finance Division&#8217;s Office of Mergers and Acquisitions, a two-track merger and acquisition structure known as the Burger King structure could cause certain 1934 Securities Exchange Act provisions to be triggered. Named after the burger chain\u2019s private acquisition equity that took place in 2010, the Burger King structure allows companies to go after a traditional one-step merger and a tender offer at the same time. Firms involved in such deals have to agree that if the company that is doing the acquiring is unable to arrive at the majority of shares (usually 90%) through the tender offer, midway through the process they can choose to do a one-step merger instead. Duchovny, who spoke during the Practising Law Institute webcast on September 6, made clear to emphasize that these views are his own. <\/p>\n<p>At issue, says Duchovny, is that this dual structure may conflict with the 1934 Act\u2019s Rule 14e-5, which, reports BNA, \u201cprohibits buying or offering to buy the target company&#8217;s securities outside a tender offer.\u201d The one-step merger path could activate this prohibition because the acquiring company has to submit a preliminary proxy statement with the Commission. Duchovny noted that this filing could be viewed as a deal to buy securities \u201coutside the tender offer.\u201d <\/p>\n<p>The SEC is currently trying to see whether the transaction structure does actually violate rule 14e-5. Meantime, Commission staff intend to get in touch with acquiring firms that exhibit plans to submit a preliminary proxy statement related to a Burger King-style transaction, warn about the possible \u201capplication of the rule,\u201d and ask for a hold off on the submission of a definitive proxy statement before the expiration of the tender offer period. However, bidders looking for no-action relief from the Commission to submit a definitive proxy statement should be ready to tackle the agency\u2019s concerns, said Duchovny, including that this type of solicitation is only speculative, the filer may not have to complete it, there may be a possible exception  that the deal is one that not many shareholders support, there may be potential shareholder confusion, and that, seeing as there are other deal tools, there may not be a compelling enough need for the exception. Duchovny said that although the SEC has granted no-action relief before under Rule 14e-5, he emphasized that companies shouldn\u2019t assume that this relief exists for general reliance.<\/p>\n<div class=\"read_more_link\"><a href=\"https:\/\/www.investorlawyers.com\/blog\/burger-king-structure-could-ac\/\"  title=\"Continue Reading Burger King Structure Could Activate Certain 1934 Securities Exchange Act Prohibitions, Says SEC&#8217;s Special Counsel\" class=\"more-link\">Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>According to Attorney Daniel Duchovny, who is the special counsel to the Securities and Exchange Commission Corporation Finance Division&#8217;s Office of Mergers and Acquisitions, a two-track merger and acquisition structure known as the Burger King structure could cause certain 1934 Securities Exchange Act provisions to be triggered. Named after the burger chain\u2019s private acquisition equity [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3740],"tags":[],"class_list":["post-5378","post","type-post","status-publish","format-standard","hentry","category-miscellaneous"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Burger King Structure Could Activate Certain 1934 Securities Exchange Act Prohibitions, Says SEC&#039;s Special Counsel &#8212; Investor Lawyers Blog &#8212; September 30, 2012<\/title>\n<meta name=\"description\" content=\"According to Attorney Daniel Duchovny, who is the special counsel to the Securities and Exchange Commission Corporation Finance Division&#039;s Office of &#8212; September 30, 2012\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/burger-king-structure-could-ac\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Burger King Structure Could Activate Certain 1934 Securities Exchange Act Prohibitions, Says SEC&#039;s Special Counsel &#8212; 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