Tuesday July 12 2016

News Source: Global Exchanges

Focus: Other

Type: General




The recommended all-share merger between London Stock Exchange Group plc and Deutsche Borse AG to be implemented by a new UK holding company, HLDCO123 plc (“HoldCo”) is subject to certain conditions, including one which requires HoldCo to receive valid acceptances in respect of the Exchange Offer of at least 75% of the Deutsche Borse Shares (less treasury shares) at the time of expiration of the Acceptance Period under the Exchange Offer. The Exchange Offer Acceptance Condition is LSEG Condition 2 to the LSEG Acquisition as set out in Part IV of the Scheme Document and is Deutsche Borse Condition 1 to the Deutsche Borse Acquisition as set out in Section 14.1 A.1 of the Exchange Offer Document.

HoldCo has announced that it has lowered the threshold required for acceptances under the Exchange Offer Acceptance Condition in respect of both the LSEG Acquisition and the Deutsche Borse Acquisition from 75% to 60% of the Deutsche Borse Shares (less treasury shares) at the time of expiration of the Acceptance Period.

This decision reflects feedback from a number of institutional index funds that are only technically capable of tendering their Deutsche Borse shares after the minimum acceptance threshold has been reached and once the untendered shares are replaced by the tendered shares in the respective index. 

Index funds represent up to 15% of Deutsche Borse shares.

  • For the DAX, as the most relevant index, the replacement takes place two trading days after 50% of the Deutsche Borse shares have been tendered.
  • For STOXX and MSCI, the thresholds are 75% and above.

As most institutional shareholders only tender their shares on the last day of the initial offer period the 50% threshold will not be achieved prior to that day, hence the replacement will take place after the end of the initial offer period. The reduction of the acceptance threshold to 60% addresses that technical issue, enabling index funds to tender their shares in the extended initial offer period (or the two week additional offer period which follows if the offer threshold has been met). HoldCo published this offer amendment on HoldCo`s on 11th July 2016.

Due to this offer amendment, the Acceptance Period of the Exchange Offer will be extended by two weeks and will now expire on 26 July 2016 at 24:00 (CEST). The lowering of the minimum acceptance threshold is in line with the German Securities Acquisition and Takeover Act.

In the event that the reduced minimum acceptance threshold is met during the Acceptance Period of the Exchange Offer, a subsequent acceptance period will be open for two weeks to allow any remaining Deutsche Borse Shareholders to tender their Deutsche Borse Shares to the Exchange Offer.

Consequential changes to the expected dates relating to the Exchange Offer as a result of the extension of the Acceptance Period are set out below for reference.

  • Expiration of Acceptance Period under the Exchange Offer………24:00 (CEST) on 26 July 2016
  • Expected publication of the results of the Acceptance Period………………..29 July 2016
  • Expected beginning of additional Acceptance Period……………………………….30 July 2016
  • Expected end of the additional Acceptance Period……………..24:00 (CEST) on 12 August 2016
  • Expected publication of the results of the additional Acceptance Period………17 August 2016

Click on the link above for further details