June 18, 1990
TO: INVESTMENT ADVISERS COMMITTEE NO. 19-90
SEC RULES COMMITTEE NO. 34-90
CLOSED-END FUND COMMITTEE NO. 14-90
INTERNATIONAL FUNDS TASK FORCE NO. 14-90
RE: SEC ISSUES CONCEPT RELEASE ON MULTINATIONAL TENDER
AND EXCHANGE OFFERS
__________________________________________________________
The SEC is seeking comments on a proposed conceptual
approach intended to encourage foreign bidders and issuers to
extend offshore cash tender and exchange offers to U.S.
securityholders, where U.S. securityholders own a small
percentage of the securities that are the subject of such offers.
A copy of the related concept release is attached.
Currently, in transactions where U.S. investors comprise
only a small portion of a company's securityholder base, foreign
bidders or issuers often exclude those investors from
multinational tender and exchange offers because of the costs and
delays associated with compliance with applicable U.S. laws and
regulations. As a result, U.S. securityholders may lose the
opportunity to realize significant value on their foreign
investments and may be forced to decide whether to retain or sell
their foreign securities into the secondary market without the
benefit of either U.S. or foreign regulatory safeguards. To
address this problem, the proposed conceptual approach would
permit foreign bidders and issuers to make multinational tender
and exchange offers in the United States on the basis of
applicable foreign disclosure, procedural and accounting
requirements where U.S. holdings constitute a small portion of
the transactions.
The attached release requests comments on the
appropriateness of this approach and asks specific questions
about its scope and implementation. The release also requests
suggestions as to other potential approaches to the problems
outlined. The comment period expires on September 21, 1990. If
you would like the Institute to submit a comment letter and there
are positions you would like us to consider, please contact me.
Frances M. Stadler
Assistant General Counsel
Attachment