Federal Trade Commission (FTC) Proposes Amendments To The Hart-Scott-Rodino Rules Regarding Withdrawal Of A Premerger Notification Filing
On February 1, 2013, the Federal Trade Commission (FTC) published a notice of proposed rulemaking in the Federal Register to amend the Rules under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 regarding the withdrawal of a premerger notification filing. The amendments would add a new §803.12 “Withdraw and refile notification,” to the HSR Rules.
When will a party be allowed to voluntarily withdraw a premerger notification?
Under proposed §803.12(a), an acquiring person or, in non-tender offer transactions, either an acquiring or an acquired person may withdraw its premerger notification at any time by notifying the FTC and the Antitrust Division in writing. Doing so will nullify the filing and, if the parties wish to pursue the acquisition at a future date, new notifications will be required.
When will a premerger notification filing be automatically withdrawn under the new rule?
Proposed §803.12(b) provides that a notification will be deemed to have been withdrawn automatically if any filing that publicly announces the expiration, termination or withdrawal of a tender offer or the termination of an agreement or letter of intent is made by the acquiring person or the acquired person with the U.S. Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934. The acquiring person or acquired person must notify the FTC and the Antitrust Division of the SEC filing in writing and the withdrawal is deemed effective as of the date of the SEC filing.
However, the premerger notification will not be automatically withdrawn:
(1) if the initial waiting period has expired without the issuance of a request for additional information or documentary materials (a “second request”) and without an agreement with either the FTC or the Antitrust Division to delay the closing of the transaction (a “timing agreement”); or
(2) if early termination of the waiting period has been granted without a timing agreement; or
(3) if a second request has been issued and the Antitrust Agencies either have granted early termination or have allowed the extended waiting period to expire without a timing agreement.
When will a party be allowed to withdraw and refile a premerger notification?
For years, the FTC has informally permitted an acquiring person to voluntarily withdraw a pending premerger notification and resubmit it within two business days without paying an additional filing fee in order to restart the waiting period. This benefits the filing parties by providing an additional waiting period for the Antitrust Agencies to review the transaction without issuing a second request. Through new §803.12(c), the FTC proposes to formalize this procedure.
Under proposed §803.12(c), the acquiring person may use the procedure only once and only under the following circumstances:
(i) the proposed acquisition has not changed in any material way;
(ii) the resubmitted filing must be recertified and Item 4 of the Form must be updated;
(iii) a new affidavit must be executed; and
(iv) the resubmitted notification is refiled prior to the close of the second business day after withdrawal.
In connection with the new §803.12(c) rule, the FTC also proposes to add a new §803.9(f), which will provide that no additional filing fee will be required for a transaction subject to the provisions of new §803.12(c).
The FTC notice regarding the new rules is subject to public comment until April 15, 2013.