In a move aimed at alleviating uncertainty related to the so-called “best-price” rule, the Securities and Exchange Commission has voted unanimously to amend the rule to clarify how it applies to employment arrangements hatched during tender-offer mergers—changes that should “level the playing field” between those offers and statutory mergers and acquisition vehicles, according to the SEC.
The amendments, approved at an Oct. 18 meeting, confirm that the best-price rule applies only with respect to the consideration offered and paid for securities tendered in a tender offer. They also exclude compensation arrangements, so long as they meet certain requirements and provide a safe harbor for compensation arrangements approved by independent directors.
