CORPORATE TAKE-OVER LAW
Filing of ownership information.
Registration of take-over offers.
Filing of solicitation materials.
Fraudulent and deceptive practices.
Limitations on offerors.
Administration, rules and orders.
Fees and expenses.
Application of chapter.
Application of securities law.
In this chapter:
"Division" means the division of securities.
"Equity security" means any shares of stock or similar securities, or any securities convertible into such securities, or carrying any warrant or right to subscribe to or purchase such securities, or any such warrant or right, or any other security which, for the protection of investors, is deemed an equity security pursuant to rule of the division.
"Offeror" means a person who makes or in any way participates in making a take-over offer and includes all affiliates and associates of that person, and all persons acting jointly or in concert for the purpose of acquiring, holding or disposing of or exercising any voting rights attached to the equity securities for which a take-over offer is made. "Offeror" does not include any bank or broker-dealer loaning funds to an offeror in the ordinary course of its business, or any bank, broker-dealer, attorney, accountant, consultant, employe, or other person furnishing information or advice to or performing ministerial duties for an offeror, and not otherwise participating in the take-over offer.
"Offeree" means a record or beneficial owner of a security that an offeror acquires, or offers or proposes to acquire, in connection with a take-over offer.
"Take-over offer" means the offer to acquire or the acquisition of any equity security of a target company, pursuant to a tender offer or request or invitation for tenders, if after the acquisition thereof the offeror would be directly or indirectly a beneficial owner of more than 5% of any class of the outstanding equity securities of the issuer. "Take-over offer" does not include an offer or acquisition of any equity security of a target company pursuant to:
Brokers' transactions effected by or through a broker-dealer in the ordinary course of its business.
An exchange offer for securities of another issuer, if the offer is exempted from registration under ch. 551
and does not involve any public offering under the securities act of 1933.
An offer made to not more than 10 persons in this state during any period of 12 consecutive months.
An offer made to all the stockholders of the target company, if the number of its stockholders does not exceed 100 at the time of the offer.
An offer if the acquisition of any equity security pursuant thereto, together with all other acquisitions by the offeror of securities of the same class during the preceding 12 months, would not exceed 2% of that class of the outstanding equity securities of the issuer.
An offer by the target company to acquire its own equity securities.
"Target company" means a corporation or other issuer of securities:
Which is organized under the laws of this state or has its principal office in this state;
Which has substantial assets located in this state;
Whose equity securities of any class are or have been registered under ch. 551
or predecessor laws, or are registered under section 12 of the securities exchange act of 1934 or which is an entity identified in s. 551.22 (3)
Which has at least 100 record holders of securities qualifying under par. (c)
who are residents of this state or which has at least 5% of the securities qualifying under par. (c)
held by residents of this state.
State regulation of tender offers. Moylan, 58 MLR 687.
Challenges to state takeover laws: Preemption and the commerce clause. 64 MLR 657 (1981).
The corporate take-over game: A continuing search for constitutional state take-over regulation. Pelisek and Christiansen, WBB July, 1986.
Regulation of tender offers in Wisconsin and the effect of Great Western v. Kidwell: The day of reckoning approaches. Harth, 1978 WLR 833.
Risks and rewards of regulating corporate takeovers. (Symposium) 1988 WLR 353 (1988).
Filing of ownership information. 552.03(1)
Any person who, after acquiring directly or indirectly the beneficial ownership of any equity security of a target company, is directly or indirectly a beneficial owner of more than 5% of any class of the outstanding equity securities of the issuer shall, within 10 days after such acquisition, file with the division on a form prescribed by the division a statement containing the following information and such additional information as the division by rule prescribes:
The identity and background of all persons on whose behalf the acquisition of any equity security of the target company has been or is to be effected.
The source and amount of funds or other consideration used or to be used in acquiring any equity security, including a statement describing any securities which are being offered in exchange for the equity securities of the target company, and if any part of the acquisition price is or will be represented by borrowed funds or other consideration, a description of the transaction and the names of the parties thereto.
If the purpose of the acquisition is to gain control of the target company, a statement of any plans or proposals which such person has, upon gaining control, to liquidate the target company, to sell its assets, to effect its merger or consolidation, to change the location of its principal executive office or of a material portion of its business activities, to change its management or policies of employment, to materially alter its relationship with suppliers or customers or the communities in which it operates, or to make any other major change in its business, corporate structure, management or personnel and other material information that would affect the shareholders' evaluation of the acquisition.
The number of shares or units of any equity security of the target company of which each such person and each associate of such person and each person included as an offeror is the beneficial owner or which each such person has a right to acquire, directly or indirectly, together with the name and address of each such person.
Material information as to any contracts, arrangements or understandings with any person with respect to any equity security of the target company, including transfers of any equity security, joint ventures, loan or option arrangements, puts and calls, guarantees of loan, guarantees against loss, guarantees of profits, division of losses or profits, or the giving or withholding of proxies, naming the persons with whom such contracts, arrangements or understandings have been entered into.
If the target company is an issuer the acquisition of whose equity securities is subject to the requirements of s. 13 (d) of the securities exchange act of 1934, any person may file with the commissioner a signed copy of the statement prescribed therein in lieu of the statement prescribed in sub. (1)
Any person may file with the division, in lieu of the statement prescribed in sub. (1)
and unless otherwise ordered by the division, a statement containing the person's name and address, the number of shares or units of any equity security of the target company which are beneficially owned directly or indirectly by the person and each of the person's associates, the date of their acquisition and such other information as the division may by rule prescribe, if the person certifies that such securities were acquired by the person in the ordinary course of the person's business and not for the purpose or having the effect of changing or influencing the control of the issuer nor in connection with or as a participant in any transaction having such purpose or effect, and that the person does not intend to make a take-over offer involving the target company.
If any material change occurs in the facts set forth in the statement, the person filing the statement shall, within 10 days thereafter, file with the division an amendment describing the change, in accordance with rules adopted by the division.
Each person required to file any statement or amendment thereto with the division under this section shall send a signed copy of such statement or amendment by certified mail to the target company at its principal office not later than the date of filing.
No person required to file any ownership statement under this section, who is delinquent in the filing of such statement, may file a registration statement relating to a proposed take-over offer for a period of 60 days after the date of filing of the ownership statement, except as may be permitted by order of the division.
Registration of take-over offers. 552.05(1)
It is unlawful for any person to make a take-over offer involving a target company in this state, or to acquire any equity securities of a target company pursuant to the offer, unless the offer is effective under this chapter or is exempted by rule or order of the division. The division may by an exemption order, with or without petition of the offeror, permit a take-over offer to be made without prior registration under this chapter if the offeror's purchase of any securities tendered incident to the offer is conditioned upon subsequent registration under this chapter. The division may hold a hearing under sub. (4)
with respect to the registration of a take-over offer which is subject to an exemption order. Before a take-over offer becomes effective under this chapter, the offeror shall file with the division a registration statement containing the information prescribed in sub. (2)
, and send a copy of the registration statement by certified mail to the target company at its principal office and publicly disclose the material terms of the proposed offer, not later than the date of filing of the registration statement.
The registration statement shall be filed on forms prescribed by the division, and shall be accompanied by a consent by the offeror to service of process specified in s. 551.65 (1)
and the filing fee specified in s. 552.15 (1)
, and shall contain the following information and such additional information as the commissioner [division] by rule prescribes:
NOTE: The correct term is shown in brackets.
All of the information specified in s. 552.03 (1)
, any part of which may be incorporated by reference to the extent that it was previously filed.
Three copies of the proposed take-over offer, including all material terms thereof, in the form proposed to be published or sent or delivered to security holders of the target company.