How to USA listed China Company privatized?

How to USA listed China Company privatized?

2011Years, in America throughRTOListed companies, is the disaster of a year.16Only questioned the financial fraud ChinaRTOThe shares are substantially short after the suspension, several USA law firm announced an investigation of Chinese enterprise and launch collective action, USA SFC lists170A blacklist of backdoor listing, most of them are China enterprises. It be besieged on all sides China enterprise USA listed, scene worthy

USA listed Chinese enterprise is pushed in the teeth of the storm, at this time should decide on what path to follow? Privatization is a good choice. Implementation of the transaction to the private, advantages and disadvantages of privatization, the focus of American regulators are discussed to explain profound theories in simple language, decided to adopt the privatization way to leave USA capital market China business help.

RE: Going Private Transactions

Theme: privatization transactions

This Memorandum explores the various ways that a public company can go private and outlines the potential benefits and disadvantages of these types of transactions

This paper aims to explore the public corporation in the implementation of various ways of going private transactions, and transactions of this kind of potential advantages and disadvantages.

What is a "Going Transaction Private"?

What is the "privatization" transaction?

A company is considered by the Securities and Exchange Commission (the "SEC") to be going private when a transaction would either result in its public securities being held of record by fewer than 300 persons or cause any class of its securities to be de-listed from a national securities exchange or removed from an inter-dealer quotation system of a national securities Association, such as Nasdaq. Going private transactions may take many different forms, most typically through (I) a cash tender offer by a newly formed company, (II) a "cash out merger" of the company with a newly formed company or (III) a reverse stock split, often accompanied by a self-tender by the company for its own shares

When a public corporation registered equity holders lack300People, orFrom the national securities exchange or the National Association of securities dealers quotation system of intermediate(such as NASDAQ)Next, or no longer offerAmerican, the securities and Exchange Commission (hereinafter referred to as"SEC") will think this company privatised. Going private transactions can be achieved through different ways, including the following: (I) acquired by the new company cash offer (II) by the newly established company cash out merger (III) reverse stock split, usually accompanied by a company on its holdings of equity securities self tender.

Going private transactions are governed by Rule 13e-3 under the Securities Exchange Act of 1934, in addition to laws and regulations applicable to the specific type of transaction. For example, a cash tender offer by the majority stockholder of a public company would be subject to standard tender offer rules and disclosure requirements under Schedule 14D, as well as Rule 13e-3

Going private transactions are subject to1934The Securities Act rules13e-3Constraint, in addition to some special transactions but also by other applicable laws, regulations. For example, public corporation shareholders initiated a cash tender offer in addition to meet the rules13e-3Requirements, must also meet14DTable standard tender offer rules and disclosure requirements.

Potential Advantages of Going Private

The potential advantages of going private transactions

Because a going private transaction results in a company no longer being subject to the periodic filing requirements of the SEC, going private can result in a significant reduction in legal and accounting costs and the elimination of major internal costs related to SEC compliance, including senior management time spent on compliance

Due to the privatization deal make the company no longer subject toSECRegularly report information requirements, privatization can greatly reduce the company lawyer fees, audit fees and points out that, while eliminating to meetSECRequirements and make the internal sacrifice, for example on compliance issues to senior management time spent.

Other possible advantages include the following

There are also other potential advantages, as follows:

Realizing the full value of a company where the public market does not adequately value the company and enhancing the company 's ability to pursue outside financing based on cash flow, revenue projections and cash balance rather than on a possibly undervalued stock price;

When the reaction, the open market is not an accurate value, realize the company's value; do not use undervalued stock price, but depends on the company's cash flow, earnings forecast, cash payments, is conducive to improve the company in the open market financing ability.

Allowing management to focus on long-term goals and objectives, rather than short-term management of market expectations;

Allow management to focus on long-term goals and objectives, rather than short-term market expectations.

Removal of the company 's operations from public scrutiny and minimization of the need to disclose sensitive information that competitors can utilize;

The company will no longer be subject to public supervision, can reduce to disclose sensitive information that competitors can use.

Increased knowledge of and control over the company 's stockholder base, and reduction in the cost of servicing the remaining, smaller stockholder group;

Increased understanding of the shareholder group and control, reduce service privatization of the shareholder group (compared to small groups of shareholders) cost.

Additional corporate governance flexibility;

To increase the flexibility of the company's management.

And providing stockholders who are not part of the acquisition group with an opportunity to maximize the value of their stock in a depressed market

Provide the opportunity to achieve their value of equity securities held in the greatest degree of open market depression for other shareholders not M & a group of.

Potential Disadvantages of Going Private

The potential disadvantages of going private transactions

There are many disadvantages to going private. First of all, going private transactions can be costly. A stockholder or affiliate group seeking to acquire the entire equity interest in a company will have to hire lawyers to prepare and file a Schedule 13e-3 and other applicable disclosures with the SEC and to draft documents providing information to stockholders. The acquirer will also have to pay fees to accountants and financial advisers, financing fees for the transaction, printing costs, and any costs of litigation from current stockholders and/or the company. The potential for litigation can be decreased if the target company sets up an independent committee to negotiate the transaction, as discussed below, but litigation should be anticipated if not expected, especially if the transaction value is significant. As discussed below, Delaware courts employ a heightened level of judicial review in going private transactions. In addition, the SEC carefully reviews going private transactions, viewing them as One-sided, and typically does an extensive review of filings made in connection with these transactions. These and other costs associated with going private transactions may be very quite significant

There are many disadvantages of going private transactions. First of all, the privatization transaction costs. A shareholder or a group to the overall interests of shareholders to acquire a company, need to hire lawyers to prepare and toSECSubmit13e-3Tables and other requirements of the disclosure of information, at the same time writing disclosure documents to the other shareholders. The merger also need to pay fees to accountants and financial advisers, trade financing costs, printing costs, and the potential costs (if the litigation of shareholders or the company). If the Target Corp to set up an independent committee to negotiate the transaction, litigation risk can be reduced, the following will further explore this question. But the risk of litigation if not expected, but also should be predicted, especially when the value of the transaction is large. The following paper will discuss that, in Delaware, privatization transactions are subject to judicial review is very strict. In addition,SECReview the privatization transactions have one sidedness, usually all reports related to the transaction, are very thorough review. The above expenses and other related expenses and privatization transactions will be enormous.

Other factors may weigh against a going private transaction. Most significantly, there will no longer be a public market for a company 's stock which will

Privatisation and other serious defects, may prevent policymakers decided to privatisation deals. Most of all, because of the company's equity securities will no longer be traded in the open market, which will lead to:

Reduce liquidity for the remaining shareholders;

Limit the company 's ability to access capital markets to raise money;

Reduce the company through open market financing ability;

Impact the company 's ability to make acquisitions utilizing its stock as currency; and

Company through the use of its stock as payment for the acquisition of skills; and

Reduce the attractiveness of stock-based incentive plans to employees

Reduce the company's stock based incentive scheme attractive.

Alternative Approaches to Going Private Transactions

Other ways of going private transactions

There are several ways that a stockholder or affiliate group may acquire a public company in a going private transaction. One popular approach is to pursue a tender offer, either with or without the prior approval of the target 's board of directors. A tender offer for the target company' s stock by the acquirer followed by a short-form merger is a commonly used method because if at, least 90% of the outstanding shares are tendered by target 's stockholders, the acquirer may be able to complete the going private transaction without a vote of the target company' s minority stockholders. However, if the target board of directors does not support the tender offer by the acquirer, the tender offer may be perceived negatively by the target 's stockholders and may not be successful. Tender offers should be subject to a non-waivable requirement that a majority of the shares held by the minority stockholders must be tendered in the offer in order to avoid litigation risks. Another advantage to using a tender of Fer is that such a transaction may allow the acquirer to set the terms of the transaction without having to prove its fairness in a subsequent litigation, as discussed further below

A shareholder or a shareholder groups can achieve privatization transaction public corporation through a variety of ways. The most common way is to offer, this way whether or not obtain permits for the board of directors of Target Corp, can implement. M & a party to offer the Target Corp's stock, often accompanied by simple combination, because if the shareholders of the Target Corp has transferred its90%The shares, the acquirer may not through the Target Corp minority shareholders voting, complete privatization transactions. However, if the Target Corp's board of directors does not support the tender offer, shareholders of the Target Corp will not be a positive acceptance of tender offer, which leads to failure of the acquisition. In order to avoid potential disputes, the offer shall not revoke the "small shareholders the majority agreed to sell shares" constraint. Another advantage of tender offer, the merging party can set the terms of the deal, and without the need to prove its fairness in litigation, which will be discussed later.

An acquirer in a going private transaction may also decide to acquire target 's stock through a merger, rather than a tender offer. In this case, the acquirer would engage in direct negotiations regarding the transaction with a special independent Committee of the target' s board of directors and enter into a merger agreement with the target. The merger would then require the approval of the majority of the stockholders of the target. As further described below, the parties should require that the transaction be approved by a majority of the minority stockholders in order to reduce the litigation risks

The acquirer may decide to use mergers and acquisitions, rather than offer a way to achieve privatization transactions. In this case, a special Independent Commission Consultation merger will directly deal with the directors of the Target Corp for, and reached a merger agreement with Target Corp. Mergers and acquisitions require Target Corp majority shareholder approval. Will continue to be discussed below, in order to reduce the possibility of litigation, the parties on the merger should most small shareholder approval.

A company may also use a reverse stock split to reduce the number of stockholders of record to below the applicable threshold, suspending the company 's SEC filing requirements. If the acquirer' s interest in the company is larger than any other unaffiliated holder, the acquirer may attempt to execute a reverse stock split, in which the corporation issues one new share in exchange for a number of old shares in excess of the largest unaffiliated block of shares. Completion of a reverse stock split involves cash payments for unaffiliated holders in lieu of fractional shares, generally without the availability of appraisal rights for such stockholders. However, because the Charter of the target company must be amended, a reverse stock split requires approval by holders of a majority of the company 's stock. Also, if the number of stockholders of record were to increase above the applicable threshold at some later date because stockholders sell their securities or begin holding their shares directly, as oppos Ed to holding them through a bank or nominee, the company would once again be obligated to satisfy reporting obligations under the Exchange Act

The company may also use a reverse stock split to reduce the number of shareholders registration, the number of shareholders belowSECRequirements, so there is no need to continue to submit information report. If the merger is greater than that of any other non associated shareholders in the interests of the company, the acquirer may be a reverse stock split, the issue of new shares, before merging several copies of the old stock, at the same time, this is a new stock amount will exceed the maximum non associated shareholders rights. A reverse stock split will be completed relates to non associated shareholders cash payments for the reverse split the broken stock, in this case, non associated shareholders do not evaluate the request right. However, in this case, the constitution of Target Corp need to be modified, so the reverse acquisition of shares need to get the company most of the shareholders consent. Similarly, if in the future the operation number of shareholders of the company, the registration of more thanSECThe threshold, such as shareholders to sell their shares or direct holdings of the stock not held by banks or clients, companies will need to once again take the trade bill reporting responsibilities.

Going private transactions generally require significant financing. Such financing may be in the form of debt secured by the assets of the target company. The transaction may also be financed by selling common or preferred stock to private equity firms looking to invest in the resulting private company, but care must be taken to limit the number of purchasers so that a public company is not inadvertently created

Privatization transactions often requires a large amount of financing. This financing is often based on the Target Corp's assets as collateral for loans. There may be through to the private equity investment institutions (interested in investing in privatization of the non public corporation investment institutions) the sale of common stock or preferred stock to achieve the purpose of financing. But in this process, the need to pay attention to the number of investors, not to inadvertently create a public corporation.

Candidates for a Going Private Transaction

Candidates for a going private transaction

Given the time, money and effort going private transactions require, the decision to take a public company private should be made carefully. Good candidates for going private transactions are companies with

Taking into account the privatization transactions need time, money and effort, whether private transactions need careful choice. Private trading company need to meet the following conditions:

Enterprise value that is a single-digit multiple of their EBITDA;

The value of the company's earnings before interest, tax unit multiples, depreciation and amortization income;

Strong cash flow projections or cash on the balance sheet with low stock price or trading volume;

The balance sheet of the cash flow forecasts and are good, but the price and trading volume is low;

Adequate debt capacity to complete the transaction;

On the completion of the transaction have plenty of debt capacity;

Strong management;

Earnings volatility causing frequently missed analyst projections;

The fluctuation of income to analysis and forecast the absence of regular;

Lack of access to public markets for cash or credit; and

Lack of access to public markets for cash or credit;

An inability to make strategic acquisitions due to dilution concerns

Due to dilution concerns and unable to be strategic merger.

There is no specific formula to determine whether a going private transaction is right for a particular company, but any company burdened by a combination of any of these factors might want to consider going private

Without what special standard to measure a company Is it right? For privatization transactions, but any one of the above conditions with or burden of companies may consider going private transactions.

Legal Scrutiny of Going Private Transactions

Legal scrutiny of going private transactions

Depending on the structure and size of the transaction and the source of financing, the risk that the going private transaction will attract litigation from minority stockholders varies but is generally substantial. Should the plaintiffs prevail, the court may grant an equitable remedy such as rescission or punitive damages. However, an equitable remedy is typically not granted unless the court finds fraud, self-dealing or other Misrepresentation on the part of the defendants

Different privatization transaction structure, size and source of cash, attract litigation from minority stockholders are not the same, but the possibility is very big. If the plaintiff, the court may grant an equitable remedy, such as rescission or punitive damages. However, in general, unless they find the fraud, self dealing or misleading, the court is not the use of an equitable remedy.

Going private transactions have been subject to two different standards of review, depending on the type and structure of the transaction. The "entire fairness" standard requires that the target board of directors show proof of fair dealing and inherent fairness of the transaction to the company 's stockholders. The burden of proof is on the board of directors of the target to establish that the transaction is inherently fair to its stockholders. By contrast, the "business judgment rule" presumes that parties having a fiduciary duty to the company acted in the best interests of the company unless there is a showing of self-dealing, or uninformed or irrational decision making by such parties

The type and structure of different transactions based on the privatization transactions, subject to two different standards of review. "Entire fairness standard" Target Corp's board of directors that fair trade, and the nature of trading is fair to shareholders. The onus of proof is on the board of directors of the Target Corp, the transaction is fair and the nature of shareholder's equity. On the contrary, "the business judgment rule" presumes that parties have the duty of loyalty to the company, its behavior are the best interests of the company, unless there is evidence to prove the counterparty or counterparties make self dealing, without notice or unwise decision.

In the case of going private transactions structured as mergers requiring stockholder approval, Delaware courts have typically applied the more onerous entire fairness standard of review. There are certain procedural protections that the target and acquirer can take to shift the burden of showing that the transaction is unfair back to the minority stockholders, including establishing a special committee of independent directors to evaluate and approve the transaction. One recent Delaware case has intimated that the Delaware courts may begin to apply the more director-favorable business judgment rule to going private transactions effectuated by a merger if the merger is approved by both the target 's independent directors and a majority of the minority stockholders[1]

In the realization of privatisation deal case by M & A, Delaware courts generally adopt a strict "entire fairness standard". Include the establishment of special committee of independent directors to evaluate and approve the transaction protection Target Corp and acquirer procedural approach in this standard, the inversion of burden of proof in the small shareholders that the transaction is unfair. One of the latest Delaware case suggests that the courts may be in the future, when most Target Corp independent directors and small shareholder approval for mergers and acquisitions, tend to the "business judgment rule".

Delaware cases suggest that the business judgment rule will apply to a going private transaction effectuated by a tender offer followed by a short-form merger as long as the transaction is viewed as non-coercive[2] These cases have found that if the transaction is approved by a majority of the minority stockholders and there has been full disclosure, the transaction will be so viewed and the "business judgment rule" will apply

Delaware case that the privatization transactions tender offer and simple with implementation, as long as there are no forced, will apply "business judgment rule". These cases that transaction if small shareholders most agree, at the same time completely were disclosed, will apply "business judgment rule".

When a going private transaction is challenged in court, the process of negotiation among the interested parties is viewed critically with regard to fiduciary duties and fair dealing. For this reason, the parties to a going private transaction must implement procedural safeguards during the negotiation. First, to avoid or discourage litigation, an independent committee of the board of directors of the target company composed solely of non-interested directors should be created to deal with offers by potential acquirers. Interested directors not on the independent committee should not take part in the negotiation process. Second, the independent committee should retain independent legal counsel and financial advisers to evaluate offers. The use of an independent Committee and an independent financial adviser will often result not only in a higher negotiated purchase price for the minority stockholders but also reduce the appearance of improper dealing. The independent committee should obtain a fairness opinio N from an independent investment bank with respect to the consideration. The independent committee should thoroughly document all meetings, negotiations and discussions, noting that this documentation, as well as any board books, memos, background materials and the like, will likely be disclosed to the SEC

When a going private transaction be prosecuted, consultations will be between related parties is considered important, especially the parties in this process is to do the loyal responsibility of their own, and trade fair. So, the parties to a going private transaction must meet all the procedural requirements and security in consultation. First of all, to avoid or reduce litigation, Target Corp should set up independent board committee, processing of potential mergers offer, the committee shall be composed of a disinterested directors. Not in the independent committee interested directors should not participate in the consultation process. Second, the independent committee should have independent legal consultants and financial advisers, to evaluate offers. Using the independent commission and the independent financial consultants to help to improve the minority shareholders to sell shares price, also helps to reduce the possibility of inappropriate transactions. The independent committee should be from the independent investment banks trading advice on issues of price fairness. The independent committee should complete records of all meetings, consultations, discussions, note that all of these documents and the board of directors, the memorandum records, background information and similar files may need toSECDisclosure.

If possible, approval of a merger transaction by a vote of a majority of the minority stockholders also helps to reduce any charges of unfairness to the minority stockholders, or, in the case of a tender offer, the tender offer is subject to a non-waivable requirement that the majority of the shares held by minority stockholders are tendered. These conditions are often required by an independent committee as a condition to approving or recommending a deal to the minority stockholders. It is important that the independent committee and the minority stockholders receive all material information, including any fairness opinion, before voting on the deal. Complete disclosure including financial projections, if they are available to the acquirer, will significantly reduce the risk of a finding of unfair dealing by the courts

If possible, to reduce the small shareholders are accused of unfair treatment, in the M & A transactions is best made small shareholders agree with; in the tender offer, the best offer cannot be revoked by the majority of small shareholders agreed to sell shares of constraint. An independent committee of these conditions are often required as a prerequisite for its approval or recommendation and small shareholders of the transactions. The independent committee and small shareholders before voting on the deal, get all the main information is very important, these data include any fairness opinion. Full disclosure of information include financial projections, if the merger to obtain such information, will significantly reduce the court that is not even bargain may.

SEC Requirements and Scrutiny of Going Private Transactions

SECGoing private transactions request and review

Acquirers in going private transactions must satisfy disclosure requirements pursuant to Rule 13e-3 under the Exchange Act, which is designed to protect minority stockholders in a going private transaction by requiring disclosure as to the fairness of the transaction and any related material information. The information contained in a Schedule 13e-3 filing includes

M & A privatisation deals must satisfy the exchange act rules13e-3The disclosure requirements under these rules, the protection of minority shareholders by full disclosure of transaction to the small shareholder equity and other relevant information.13e-3The information contained in the following table:

The terms of the transaction;

The terms of the deal;

The post-transaction plans of the acquirer for the target company and its business;

The merger in the completion of the transaction Target Corp and its business plan;

The source and amount of the funds used in the transaction;

The source and amount of financial transactions;

The purposes and effects of the transaction as well as any alternatives to accomplish the stated purposes and effects;

The purpose of the transaction and the effect and the realization of the purposes and effects of alternative;

A statement by the acquirer that it believes the transaction is fair to the minority stockholders and any factors supporting that belief;

The merging party said that trading on small shareholders' equity statement, and the factors that support the statement;

Reports, opinions and appraisals by financial and legal advisers; and

Financial and legal advisers report, opinion and assessment; and

Pro forma data regarding the effect of the transaction

Effects of transactions expected data.

In addition to the acquirer 's filing obligations, the target company may also have to file Schedule 13e-3 if its board of directors or a special committee of directors recommends the acquirer' s tender offer to stockholders. Because Rule 13e-3 was designed to protect minority stockholders, the disclosure regarding the fairness of a going private transaction is likely to receive close scrutiny from the SEC

In addition to the acquirer's reporting obligations, if the board of directors of a Target Corp or a special committee of Directors recommended a tender offer to shareholders, the Target Corp may also need to submit13e-3Table. Because the rules13e-3The design objective is to protect small shareholders, of going private transactions fair disclosure may beSECScrutiny.

The SEC reviews carefully filings made in connection with going private transactions, and companies can expect extensive comments and a long review period. Among other things, the SEC will review disclosures relating to valuation, fairness of the transaction price, transaction background and history, and the independence of directors and any independent committee recommending or approving the transaction

SECCarefully review and privatization deals on all reports, so a lot of the audit opinion and the long review period can be expected. In all the problems,SECReview on the evaluation, fairness of the transaction price, the transaction background and historical information disclosure, and independence of recommendation or agree to a deal on board or independent committee.

Other Potential Traps for the Acquirers and Targets

Other potential limitations on M & A and the Target Corp

SEC disclosure requirements pose significant risks for parties to going private transactions. In particular, disclosure of the transaction is required as soon as the transaction commences, and the SEC often takes a broad view as to when this has occurred. Transactions in the target 's stock by members of the acquiring group that occur as much as two years prior to the public announcement of the transaction could be viewed as the beginning of a series of transactions that are the first steps in going private. In addition, if a group of senior executives has agreed in principle among themselves to make a proposal to acquire a public company, even if not in writing, there is a significant risk that the group has triggered filing requirements

SECInformation disclosure requirements that private parties are at greatest risk. Especially the transaction begins with a need for information disclosure, andSECJust when a transaction starts to take a broad view. The merging party members in the publicly announced two years ago the privatization deal to buy the shares of the Target Corp may be thought of as a series of private begin transaction. In addition, if the top overall agreed a deal, although not written consent, is likely to have started information reporting program.

Other issues related to public disclosure of the transaction include the following

Other transaction information disclosure includes the possible problems:

Public announcement of the transaction may put the company in play and result in third parties making bids at a higher price;

Publicly traded companies in public situation, may lead to the third party put forward higher prices;

The SEC takes a broad view as to who is required to make filings, and equity sponsors, members of management, subsidiaries and other parties may be required to make filings; and

SECWho should submit a report to take a broad view, equity sponsors, members of management, subsidiaries and other parties may be required to submit the report;

Nearly all materials relating to a fairness opinion rendered in connection with the transaction will be subject to disclosure, including handouts, drafts and discussion materials

Almost all of the transaction is fair comments will be required to disclose, including circulars, draft and discussion papers.

Typical Timeline for a Going Private Transaction

A typical schedule of going private transactions

The following timeline assumes the going private transaction is structured as a cash tender offer followed by a short-form merger. In this transaction, the acquirer (the "Acquirer") will form a wholly-owned subsidiary (the "Acquisition Sub") to which it will contribute all shares of target company (the "Target") stock held prior to the transaction in exchange for all the shares of the newly-formed subsidiary. The Acquisition Sub will initiate a cash tender offer for all of the shares of the Target not already held and this timeline assumes that at least 90% of the outstanding capital stock of the Target will be tendered or otherwise owned by the Acquisition Sub by the end of the tender offer period

The following schedule is based on the completion of privatization transactions to offer cash and simple merge situations. In this case, the acquirer will set up a wholly owned subsidiary, and it is currently used for the replacement of the wholly-owned subsidiary of the company all the shares in the Target Corp. Wholly owned subsidiary will launch a tender offer, the acquisition is not holding the shares of the Target Corp. The following schedule assumptions Target Corp90%The shares are bought by a wholly owned subsidiary of or at least offer at the end of a wholly owned subsidiary of holdings.

Date Event

Day 1 Acquirer, having completed its due diligence, finalizes its transaction

(All days Strategy, including consideration of financing, tax, blue sky and

Are U.S. Antitrust issues

Business The merger has finished its due diligence, to complete their trading strategies, including financing on price,

Days) Tax, blue sky law and antitrust problem.

(all day Acquirer distributes 13e-3 Questionnaires to its directors and officers

Stage beauty Direction of the M & A of its directors and management personnel distribution13e-3Questionnaire.

Our working day) Acquirer 's board authorizes the proposal terms of the tender offer, and authorizes its officers to approach Target board and management with the proposed tender offer transaction

The merging party approved by the board of directors of the proposed terms of tender offer, and allows the management personnel contact the Target Corp board of directors and management, the approval of proposed terms of the offer.

Day 3 Acquirer proposes the tender offer transaction to the independent

Article3Day Directors of Target; parties sign confidentiality agreement

Direction of the M & a Target Corp independent directors to make a tender offer, the parties signed a confidentiality agreement.

Day 5 Target board forms an independent committee of uninterested

The fifth day The board of directors of the Target Corp set up non related party independent commission ("Commission").

Day 8 Independent Committee hires independent legal counsel and an

Article8Day Investment bank or valuation expert to evaluate terms of the proposed offer; Independent Committee may decide to "shop" for alternative transactions and parties

Independent commission to hire an independent legal consultant and investment banking or evaluation expert evaluation to the terms of the offer;

The independent committee can trading decisions and other third party.

8 - Days Independent Committee and its advisers evaluate Acquirer 's proposal

35 The independent committee and its Advisory assessment of M & a bill.

Article8To Independent Committee negotiates terms of transaction with Acquirer

Article35Day Independent commission with the acquiring party consultations terms.

Investment banking firm or other valuation expert issues a fairness opinion

Investment banks or other assessment experts to provide the fairness opinion.

Day 35 Independent Committee report is completed; Target Board reviews

Article35Day Independent Committee Report

The independent committee report, the board of directors of Target Corp review report.

Acquirer/Acquisition Sub issues a press release announcing the transaction

M & a party or its wholly owned subsidiary organization news conference announced transactions.

Acquirer/Acquisition Sub files first Schedule TO with the SEC covering the press release announcing the transaction

M & a party or its subsidiary company toSECWe report the first news conferenceTOTable.

Target distributes 14d-9[3] Questionnaires for its Directors and Officers

Issued to the directors and management of Target Corp14d-9Questionnaire.

Acquirer & Acquisition Sub 's boards approve the transaction and select Dealer Manager and depository, paying, and information agents

The acquirer and its subsidiary company board of directors agreed to the transaction and pick the trading agent, depositary agency, payment agency, information agent.

Acquirer prepares tender offer materials

The merger is ready to offer material.

Acquirer and Target prepare any necessary antitrust of other regulatory filings

The acquirer and Target Corp to prepare anti monopoly materials submitted for other provisions.

Day 49 Acquirer/Acquisition Sub delivers final tender offer materials and

Article49Day Target stockholder mailing labels to printer

M & a party or its subsidiary companies provide the final offer, shareholders of the Target Corp to send the label printer.

Day 50 Acquirer/Acquisition Sub files Schedules 13e-3 and TO[4]With the

Article50Day SEC and Amendment to Schedule 13D[5].

M & a party or its subsidiary company toSECSubmit13e-3Table andTOTable and13DRevised table.

Acquirer/Acquisition Sub mails tender offer materials to stockholders

M & a party or its subsidiary company to the shareholders offer data acquisition transmission.

Acquirer/Acquisition Sub runs summary advertisement and issues press release

M & a party or its wholly owned subsidiary of advertising and news conference.

50 - Days Target files Schedule 14d-9 [6]With the SEC

60 Target Corp toSECSubmit14d-9Table.

Article50To

Article60Day

51 - Days Target litigates stockholder strike suits (if any)

Close Target Corp solve shareholder litigation (if any).

Article51To Acquirer/Acquisition Sub files amendments to Schedules 13e-3 and

The end of the transaction TO and Target files amendments to Schedule 14d-9 "promptly" as needed and disseminates additional material to Target stockholders as required

We need, M & a company or its subsidiary companies submit13e-3Table andTOAmendment list submitted, Target Corp14d-9Amendment table, and in accordance with the requirements to the shareholders of the Target Corp circulated supplementary information.

Day 70 Closing of tender offer/purchase of shares[7]

("Close") The end of tender offer or share buy.

Article70Day Acquirer/Acquisition Sub issues press release regarding completion

(transaction Of tender offer

Beam) M & a party or its wholly owned subsidiary will offer over issued a press conference.

Acquirer board approves short-form merger

M & a board of directors agreed to a simple merge.

Acquirer/Acquisition Sub closes merger transaction and files certificate of ownership and merger with Delaware Secretary of State; merger effective

M & a party or its wholly owned subsidiary end transaction, to the Delaware Secretary of state ownership certificates and vouchers submitted merger, merger effect.

Acquirer and Target issue joint press release announcing effectiveness of merger

The acquirer and Target Corp jointly organized a press conference announced the merger and acquisition effect.

Acquirer/Acquisition Sub files Form 15 with SEC deregistering Target 's stock under the Exchange Act, and de-lists Target stock from public exchange (s)

M & a party or its subsidiary company toSECSubmit15Table, the cancellation of the Target Corp in accordance with the exchange act registration of stock, and from the open market delisting.

Acquirer/Acquisition Sub mails letter of transmittal and notice of merger to former Target stockholders

Notice the buyer or its wholly owned subsidiary of Target Corp, the original shareholders to send the letter of transmittal and merging.

Payment agent pays for remaining shares as submitted by remaining stockholders

Remaining shares as payment intermediary costs remaining shareholders.

Day 71 Acquirer/Acquisition Sub files final amendment to Schedule 13e-3

Article71Day M & a party or its subsidiary company submitted13e-3Finally amendment table.

(Note: This article is part of English partner Foerster book)

[1] SeeIn re Cox Communications2005, Del. Ch. LEXIS 79 (Del. Ch. June 6, 2005)

SeeIn re Cox CommunicationsDel. Ch., 2005 LEXIS 79 (Del. Ch. June 6, 2005)

[2] See In re Pure Resources, Inc. Shareholders LitigationA.2d 421, 808 (2002);Glassman v. Unocal Exploration CorpA.2d 242, 777 (2001);In re Siliconix Incorporated Shareholders LitigationDel. Ch., 2001 Lexis 83 (2001)

SeeIn re Pure Resources, Inc. Shareholders LitigationA.2d 421, 808 (2002);Glassman v. Unocal Exploration CorpA.2d 242, 777 (2001);In re Siliconix Incorporated Shareholders LitigationDel. Ch., 2001 Lexis 83 (2001)

[3] Schedule 14d-9 is a Solicitation Statement Under Section 14 (d) (4) of the Exchange Act and must be filed by the target company in a tender offer for securities

14d-9Table is the Exchange Act Article14(D)4.Paragraph inquiry statements, Target Corp must submit the table in a tender offer for securities.

[4] Schedule TO is a Tender Offer Statement Pursuant to Rule 14d-1 (b) of the Exchange Act and must be filed by a party making a tender offer for securities

TOTable isExchange Act Article14d-1 (b)The rules of the tender offer report, when one party makes a tender offer must submit this form.

[5] This assumes that Acquirer already owns shares of Target and has filed a Schedule 13D previously

Here is if the merger already owns shares in the Target Corp, and have submitted13DTable.

[6] Schedule 14d-9 must be filed by the target of a tender offer within 10 business days after dissemination of the tender offer materials to stockholders of the target corporation. In practice, however, the Schedule 14d-9 often is filed at the same time as the Schedule TO, so that the Schedule 14d-9 can be included in the mailing to stockholders made by the acquirer

14d-9Table in the tender offer to shareholders after the data release10Working days, submitted by the acquisition of Target Corp. But in fact,14d-9Table and oftenTOForm submitted together, so, M & a shareholders send data generally includes14d-9Table.

[7] The tender offer must remain open for a minimum of 20 business days, or (if applicable) at least 10 business days from the date the consideration offered for shares or the percentage of a class of shares sought by the tender offer was adjusted during the offering period

Offer to continue for at least20Working days, or (if used) in the offer period, the price or offer shares to determine the proportion of from the date payment for acquisition10Working days.