Have restrictions on purchases of target company securities by an acquiror during an exchange offer been eliminated?
Regulation M generally does not apply to purchases of the target security by an acquiror or target during a merger or exchange offer. Purchases of the target stock are restricted, however, where the acquiror’s securities have a feature that ties its value directly to the price of the target securities. We also note that Rule 14e-5 under the Exchange Act generally will prohibit purchases of the target security by the bidder during an exchange offer.
Related Questions
- An acquiror and a target company have signed a merger agreement. Would the target be an "affiliated purchaser" of the acquiror?
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