Page 30 - מיזוגים ורכישת חברות - ברקלי תשפא

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Note on Rules 14d‐10 and 13e‐4
Shortly after Unocal the Securities and Exchange Commission adopted Rule
14d‐10 and Rule 13e‐4 under the Securities Exchange Act of 1934. The rules provide that
no bidder (including a company bidding for its own shares) shall make a tender offer
unless the offer is open to all security holders of the class of securities subject to the
tender offer, and the consideration paid to any security holder pursuant to the offer is
the highest consideration paid to any other security holder during the offer. In the
following years, several federal circuit courts held that this so‐called "Best Price Rule"
applied also to compensation arrangements between the bidder and target managers
because these managers typically own target stock. This jurisprudence made tender
offers unpopular as a structure for negotiated (as opposed to unsolicited) acquisitions. In
2006, the Securities and Exchange Commission finally carved out compensation
arrangements from the rule.

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