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Summary
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 Form
of tender offer in which the security holders, rather than the buyer, determine
the price to be paid for the shares purchased
- Also
called a descending price auction
- Named
after 17th century Dutch tulip bulb auctions
Often
modified
as security holder can select either:
- A minimum price within a specified range, or
- Not specify, and be deemed to accept the clearing price
- Buyer then determines the lowest price at which
it can purchase the number of shares it needs, and buys at that price
- Any shares tendered above that price are excluded
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SEC No-action Letters
Cases
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 Frank
v Arnelle
[WMX Technologies] (Del 1998)
- Dismisses challenge of Dutch auction tender offer
Cottle
v Standard Brands Paint 1990 Del Ch LEXIS 40
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Notable Transactions
Mylan Laboratories
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$1.0 billion common
stock repurchase
Up
to 25% of outstanding common
- $250 million in follow-on purchases
- At $18.00 to $20.50 per share
- Response to
Carl Icahn
reiterating bid for company
- Stock reacts favorably
Nears Icahn's $20 offer, but well below 2-year high of $28
Announced
6.14.05
Up to 23.5 million common shares
OfficeMax
was pressured by hedge fund, K Capital
Completed
5.19.05
- 25,327,441 shares tendered at or
below $33.00
- Company accepts 23,500,000 at $33.00
- Proration factor of 92.852%
- Odd-lots accepted without proration
-
Press release
Schedule TO
6.16.05
 Amendment #1
6.17.05
Amendment
# 2
- Changes to financing condition
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OfficeMax Inc
Kerr-McGee
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Common
stock repurchase
Up
to $4 billion of common shares
Kerr-McGee
was pressured by
Carl Icahn vehicle
- Repurchase was part of settlement with Icahn
$6.0
billion in financing committed by JPMorgan/Lehman
Announced
4.14.05
Completed
5.19.05
- Accepts 46,727,763 shares
at $85 (29% of outstanding)
- Proration factor of 33.64%
Schedule TO
4.18.05
Interim
filings
Amendment #1
4.26.05
- Updating amendments
- Adds information about UK employee plans
Amendment #2
4.27.05
Amendment #3
4.21.05
Amendment #4
4.29.05
SEC_CODE_REF_0090001192884
Amendment #5
5.03.05
Amendment #6
5.06.05
Amendment #7
5.10.05
Amendment #8
5.18.05
Amendment #9
5.19.05
Amendment #10
5.24.05
Advisors
- Kerr-McGee: Covington
- JPMorgan / Lehman (Dealer Managers)
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Limited Brands Inc
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Common
stock repurchase
Repurchase
of up $1 billion of common shares
- Range set at $19.75 to $22.50 per share
- Prior day's closing price was $20.20
- Offer
was oversubscribed at minimum price
Offer
followed settlement of shareholders litigation
Announced
2.26.04
Filing
2.26.04
Initial
filing 2.27.04
Interim
filings
Amendment
#1 3.04.04
Amendment
#2 3.11.04
Amendment
#3 3.22.04
Amendment
#4 3.23.04
Amendment
#5 3.29.04
Final results
4.01.04
Advisors
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Akamai
Technologies Inc
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Convertible subordinated note repurchase
$101
million convertible subordinated note repurchase
using modified "Dutch Auction" tender offer
- Range
set at $1,000 to $1,005 per $1,000 principal amount
- Maximum
was raised to $1,012.50
- $39.9
million purchased at the maximum price
Initial
filing 2.10.04
Interim
filings
Amendment
#1 2.19.04
Amendment
#2 3.10.04
Final results
3.24.04
Advisors
- Hale
& Dorr
- Blackstone Group (Dealer Manager)
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Metro-Goldwyn-Mayer
Inc
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Common
stock repurchase
Repurchase
of up to 10 million common shares
- Range
set at $16.25 to $18.00 per share
- Also
announces increase in authorization of open market share repurchase program
16.2
million shares tendered at $17 per share
Announced
11.12.03
Initial
filing 12.04.03
Interim
filings
Amendment
#1 12.15.03
Amendment
#2 1.16.04
Final results
1.27.04
Advisors
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Related Topics
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Share
repurchases
Debt
repurchases Issuer
tender offers
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