13.1.1. Commencing the Tender Offer
The offeror must file the public announcement of the tender offer with the SEC the day the announcement is made. The public announcement of a tender offer is the offeror’s first communication publicly in writing that the tender offer will occur. It could be a press release, a tombstone ad, or an announcement on the offeror’s website. The public announcement must contain a legend telling investors that the tender offer statement (in other words, the Schedule TO) contains important information that investors should read when it becomes available. The legend must state that the tender offer statement will be available for free on the SEC’s website. The legend must also explain which documents the offeror will provide for free.
The same requirements apply to other written communications that occur before the start of the tender offer. They must be filed same-day and must contain the legend.
On the day the tender offer begins, the offeror must file Schedule TO with the SEC, and also disseminate the following information to shareholders:
• The summary term sheet required by Item 1 of Schedule TO. This is an explanation of the tender offer’s basic terms, provided in bullet points and written in plain English. It is sort of like a mini-prospectus for the tender offer. The SEC requires the summary term sheet to contain “sufficient information to understand the essential features and significance of the proposed transaction.” Typically, the contents of a summary term sheet include:
» The total number of shares sought
» The type and amount of consideration offered
» The expiration date of the offer
» The procedures to be followed for tendering shares
» The terms of any agreement between the company and any third party relating to the securities
» Financial statements relevant to the transaction
» The purpose of the offer and plans related to the contemplated transaction
» The planned