The Securities and Exchange Commission on Tuesday approved regulations that relax restrictions on written communications during tender offers and mergers, among other things.
The regulations, effective in January, will have a positive impact on banking companies that agree to merge, but a negative one those that are hostile takeover targets, said David F. Scranton, a senior banking partner with Stradley Ronon Stevens & Young of Philadelphia. It "gives more power to the offeror to sell the idea directly to shareholders," he said.
Current SEC regulations limit the written and oral information companies can provide to the public to basics, such as terms, party names, and a brief description, between the time an announcement is made and the effective date of either a registration or proxy statement.
The new regulations, which only cover written materials, remove the content restrictions, but require the materials to be filed with the SEC on the first day they are used.
-- Cheryl Winokur