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Modified Dutch Auction May Proceed

The staff agreed not to recommend enforcement under Rules 13e-4 or 14e-1 if a company conducted an exchange tender offer of its common stock for the common stock of another company and set the exchange ratio at a fixed value at the outset of the offer. Rule 13e-4 requires certain disclosures by a company in connection with any tender offer for its own securities and Rule 14e-1 specifies the time period required for such an offer.

The company requested the relief because the exact number of shares receivable by tendering holders would not be specified until the calculation of the final exchange ratio after the offer concluded. In granting the relief, the staff relied on the representation that the exchange offer would be extended for two business days if security holders were to receive a dollar value of the stock other than the specified dollar value disclosed in the tender offer materials. Further, the staff noted that the formula to calculate the number of received shares would be included in the tender offer materials and that the daily share values and the final exchange ratio would be published on the offer Web site.

Halliburton Co. (SEC) is reported at ¶79,489.