Two Step Mergers

Two-step mergers are negotiated acquisitions that use a tender offer or exchange offer as the first step

First step enables buyer to acquire voting control
Second-step back-end merger is used to complete acquisition of 100% of target's stock

Can have advantages over a one-step merger

Offer need only be open for 20 business days
For exchange offers, SEC need only declare registration statement effective by end of this offering period
This advantage may be vitiated if lengthy regulatory approvals are required

Use can be complicated by best price rule

Class action lawsuits have been brought over asserted disparate payout to executives and others
SEC adopted rule changes in Nov 2006 to address this
See Best Price Rule

2007

Biomet Healthcare / Buyout

Laureate Education Education services / Buyout

SafeNet Software / Buyout

2006

2005

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