THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT ONE MINUTE FOLLOWING 11:59 P.M., NEW YORK CITY TIME, ON WEDNESDAY, JULY 1, 2020, UNLESS THE OFFER IS EXTENDED, OR EARLIER TERMINATED.The date and time given is the previously announced closing date and time of the tender offer. Frequent questions that are often answered in documents of this type are
May I withdraw previously tendered Shares? Yes. To withdraw previously tendered Shares, you must deliver a written notice of withdrawal (or a manually signed facsimile thereof) with the required information to the Depositary while you still have the right to withdraw Shares. If you tendered Shares by giving instructions to a broker, dealer, commercial bank, trust company or other nominee, you must instruct the broker, dealer, commercial bank, trust company or other nominee to arrange for the withdrawal of your Shares. Upon the date and time at which Purchaser accepts Shares for payment pursuant to the Offer, you will no longer be able to withdraw them. See Section 4—”Withdrawal Rights.” Until what time may I withdraw Shares that I have tendered? You may withdraw your previously tendered Shares at any time prior to the Offer Expiration Time. In addition, if we have not agreed to accept your Shares for payment by July 26, 2020, you may withdraw them at any time thereafter until we accept them for payment. See Section 1—”Terms of the Offer” and Section 4—”Withdrawal Rights.”
Reclaiming the Stock
If the offer initially fails to reach the minimum tender condition, a top up option can be used in order to proceed to the short form merger stage. If however, the minimum tender condition is not reached and a top up option is not sufficient, the tender offer is usually extended. This is often the case where a regulatory approval such as HSR is delayed. At this point, the tendered stock remains with the depository trust company.
In some instances, investors may wish to exit their merger arbitrage strategy and sell some or all of their investment holding in the target firm. Should the arbitrageur wish to sell their stock they must correctly withdraw the stock from the DTC. This is often done electronically through a broker. Each broker may have a slightly different procedure for doing this. However, for an immediate sale, traders may consider shorting the stock. Once the original stock is withdrawn and received, it will cancel out the short position. This may however incur short stock borrowing fees from the broker. Traders are advised to check these fees beforehand.
If the offer continues to fail to reach the minimum condition the acquirer may choose to abandon the deal. Similarly, if the outside date is reached and shareholders still have not given approval in the tender offer the deal may be dropped. In either case, the stock is automatically returned to the tendering shareholder.
Withdrawal Rights Example
The following text is taken from the Form SC TO-T – Tender offer statement by Third Party filing with the SEC made by Portola Pharmaceuticals (PTLA) on May 27, 2020 in relation to the proposed takeover by Odyssey Merger Sub a direct, wholly owned subsidiary of Alexion Pharmaceuticals
Except as provided in this Section 4, or as provided by applicable law, tenders of Shares are irrevocable. Shares tendered in the Offer may be withdrawn according to the procedures set forth below at any time prior to the Offer Expiration Time and, unless irrevocably accepted for purchase and paid for by Purchaser in the Offer, may also be withdrawn at any time after July 26, 2020, pursuant to Section 14(d)(5) of the Exchange Act.
For a withdrawal to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase and must specify the name of the person who tendered the Shares to be withdrawn, the number and type of Shares to be withdrawn and the name of the registered holder of the Shares to be withdrawn, if different from the name of the person who tendered the Shares. If certificates representing Shares have been delivered or otherwise identified to the Depositary, then, before the physical release of such certificates, the tendering stockholder must also submit the serial numbers shown on the particular certificates evidencing such Shares and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution. If Shares have been tendered according to the procedures for book-entry transfer as set forth in Section 3—”Procedure for Tendering Shares,” any notice of withdrawal must also specify the name and number of the account at DTC to be credited with the withdrawn Shares and otherwise comply with DTC’s procedures. Withdrawals of tenders of Shares may not be rescinded, and any Shares validly withdrawn will no longer be considered validly tendered for purposes of the Offer. However, withdrawn Shares may be retendered by following one of the procedures described in Section 3—”Procedure for Tendering Shares” at any time prior to the Offer Expiration Time.
All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by Purchaser, in its reasonable discretion, which determination will be final and binding. None of Purchaser, Parent, the Depositary, the Information Agent, the Company or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. Notwithstanding the foregoing, stockholders of the Company may challenge a determination made by Purchaser in a court of competent jurisdiction and a final, non-appealable order or judgment of a court of competent jurisdiction will be final and binding on all parties.
The method for delivery of any documents related to a withdrawal is at the risk of the withdrawing stockholder. Any documents related to a withdrawal will be deemed delivered only when actually received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.
In this document, withdrawal rights are clearly stated and it is clearly shown what is required of shareholders in order to complete the action. In this respect, the burden of responsibility is upon shareholders to correctly supply the required information on the form and deliver it appropriately. It is vital this is done correctly as no notification is given in the case of an error.
