In mergers and acquisitions, a determination notice is a document often sent by the acquirer to the target board of directors and/or management specifying a specific set of actions to be carried out. In the example below the notice states what the board cannot do and what it is required to do. That is, not fail to publicly affirm the board recommendation. The notice goes on to specify the time period allowed to comply with the notice. During the course of the takeover, it is possible that more than one determination notice may be issued.
Determination Notice Example
The following text is taken from the Form SC TO-T filing with the SEC made by Forty Seven (FTSV) March 2, 2019 in relation to the proposed takeover by Gilead Sciences
Subject to Section 6.1(b), the Company hereby consents to the inclusion of a description of the Company Board Recommendation in the Offer Documents. During the Pre-Closing Period, subject to Section 6.1(b), neither the Board of Directors nor any committee thereof shall (i)
- (A) withdraw or withhold (or modify or qualify in a manner adverse to Parent or Purchaser), or publicly propose to withdraw or withhold (or modify or qualify in a manner adverse to Parent or Purchaser), the Company Board Recommendation,
- (B) adopt, approve, recommend or declare advisable, or publicly propose to adopt, approve, recommend or declare advisable, any Acquisition Proposal,
- (C) after public announcement of an Acquisition Proposal (other than a tender offer or exchange offer), fail to publicly affirm the Company Board Recommendation within three business days after a written request by Parent to do so (or, if earlier, by the close of business on the business day immediately preceding the scheduled date of the Offer Acceptance Time), provided, that Parent may only make such request once with respect to any Acquisition Proposal (provided, that each time a Determination Notice is given Parent shall, subject to the following provision, be entitled to make a new such request); and provided, further, that the Company shall not be required to provide any such affirmation during the two or three business day periods, as applicable, following the giving of a Determination Notice
In this document, a determination notice is clearly stated and it is shown when such a notice is applicable. In this instance, a notice, or written request specifying the behavior of the target board of directors.
