On May 8, 2018, partners Benet O’Reilly and Adam Fleisher participated in a panel co-hosted by The Conference Board and Cleary Gottlieb to discuss Private Investment in Public Equity (PIPE) transactions, both for capital formation and strategic purposes.

Moderator Doug Chia, executive director of The Conference Board, Benet and Adam outlined the framework for a PIPE transaction, including the topics a company should consider when contemplating a PIPE. They covered the different structures and types of securities frequently used in the PIPE market, as well as typical types of PIPE investors.

The session also focused on related governance considerations and regulatory approvals. Additionally, they addressed how to manage the confidential nature of the PIPE and when disclosure may be necessary. They also explained what securities filings may be triggered for investors.

A replay of the webcast is available here (please note that your browser may require you to run an Adobe plugin to access this content).

Lenders’ freedom to transfer their participations in large leveraged loans has been gradually eroded by developments introduced through the last few credit cycles.

This market wrap covers the development of the transferability clause from the early 2000s through to post-crisis developments.

If you have any questions concerning this memorandum, please feel free to contact the authors or your regular contacts at the firm.

On March 15, 2018, the UK Government published new merger thresholds to allow greater intervention in transactions raising national security concerns. The new thresholds will apply to firms that develop or produce items for military use, computer hardware, or quantum technology. The Government will be able to intervene in mergers in these sectors where the target’s UK turnover exceeds £1 million or the target has a UK share of supply of at least 25% (even where that share will not increase following the merger).

Please click here to read the full alert memorandum.

On December 2, 2017, the U.S. Senate passed the Tax Cuts & Jobs Act. Two weeks earlier, on November 16, the U.S. House of Representatives passed its version of the bill. The Senate and House bills, while broadly similar, also have many important differences.

The Senate and the House will need to agree on one consistent bill before it can become law. The Senate and the House will engage in significant negotiations over the coming days/weeks, which would require additional modifications to the bill before it is enacted.

Recent press reports have suggested that the House may seek to adopt a revised bill substantially similar to the bill passed by the Senate, but the situation remains fluid and unpredictable, and additional changes are anticipated for the Senate bill as well. This memorandum sets forth a few key observations about the proposed bills that may be relevant to M&A transactions.

Click here, to read the full memo.

On November 2, 2017, the much anticipated Tax Cuts & Jobs Act was introduced in the U.S. Congress. The bill has been amended twice, on November 3 and November 6.

This memorandum sets forth a few key observations about the proposed bill, as amended, that may be relevant to M&A transactions. It must be emphasized, however, that the bill is likely to go through many additional changes before it becomes law, if ever.

Click here, to continue reading.

For the past several years Cleary Gottlieb has published legal and practical information regarding German public M&A transactions.  For the new edition of the compilation Public Bids and Squeeze-Outs in Germany, a Statistical Survey (2002 – 2016), we have collected and analyzed information related to public bids and squeeze-outs in Germany from January 2002 through December 2016. Continue Reading Public Bids and Squeeze-Outs in Germany, a Statistical Survey (2002-2016)

U.S. and European companies continue to receive bids to sell themselves and their significant assets to companies based in the People’s Republic of China.  Evaluation of these proposals requires due diligence of the acquiror’s ownership structure, assets, cash position, and financing sources.  Moreover, even if this due diligence exercise gives rise to satisfactory results, the continued unpredictability of the PRC government (including its recently enhanced foreign exchange control measures), coupled with the ties of some of these buyers and financing sources to governmental entities in the PRC, as well as the challenges that a non-PRC counterparty faces when seeking to enforce contractual obligations and non-PRC judgments in PRC courts, merit the implementation of an array of innovative provisions in M&A Agreements to protect the seller/target.  Several months ago, we reviewed these provisions in a popular post.  This new post updates that earlier post to reflect recent regulatory developments and the evolution of market practice. Continue Reading An Updated Look at How M&A Agreements Handle the Risks and Challenges of PRC Acquirors

In 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-01, which adopts a new standard that will require companies to generally change the way they account for equity investments of less than 20%. Continue Reading Accounting for Minority Equity Investments: A Small Change with Significant Implications

Investors frequently negotiate for a redemption right to ensure at least some return on preferred stock investments in a “sideways situation”—where the target company is neither a huge success nor an abject failure.  Continuing a consistent theme in recent Delaware jurisprudence, the Delaware Court of Chancery declined to dismiss a complaint alleging directors breached their duty of loyalty in taking steps to satisfy an investor’s redemption request.

Continue Reading Between Contractual and Fiduciary Duties: ODN Holding and the Rights of Preferred Stockholders

When a corporation sells corporate assets to its (or an affiliate of its) controlling stockholder, Delaware courts generally will review that transaction under the exacting “entire fairness” standard.[1]  But what if the corporation’s minority stockholders are given the opportunity to participate along with the controlling stockholder in the purchase of the corporate assets pro rata to the extent of their stock ownership? Continue Reading Chancery Court Suggests that Rights Offerings May Limit Liability in Transactions with Controlling Stockholders