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SEC Approves Amendments to Best Price Rules
October 18, 2006 Full PDF
At today's open meeting, the SEC unanimously approved final rules to modify the "all-holders, best-price" requirements of Exchange Act Rules 14d-10 and 13e-4 to exempt certain compensation, severance and other employee benefit arrangements from those requirements. These amendments are intended to resolve the uncertainty that has resulted from a split among the U.S. Circuit Courts as to whether these arrangements violate the best price requirements. The possibility of litigation in tender offer transactions where payments are made to employees, directors and certain shareholders outside of the tender offer has led to a significant decrease in U.S. tender offer activity in recent years.