Securities Exchange Act of 1934
Rules 13e-4, 14e-1(b) and (c) and Rule 14e-5
February 29, 2008
Danielle D. Do
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153-0119
Responses of the Office of Mergers and Acquisitions
Division of Corporation Finance,
Office of Trading Practices
Division of Trading and Markets and the
Office of Chief Counsel
Division of Trading and Markets
Reuters Group PLC and Thomson Reuters PLC
TP No. 08-34
Dear Ms. Do:
This responds to your letter dated February 29, 2008, as supplemented by conversations with the staff. We attach a copy of your letter to avoid having to repeat or summarize the facts you presented there. The defined terms used here have the same meaning as in your letter, unless otherwise noted.
A. Division of Corporation Finance
Based on your opinion of counsel that the Dealing Facility does not constitute an "issuer tender offer" subject to Rule 13e-4, the facts presented and representations made in your correspondence and in conversations with the staff, the Division of Corporation Finance, without necessarily concurring with the analysis and conclusions set forth in your letter, will not recommend that the Commission take enforcement action against Reuters Group PLC or Thomson-Reuters PLC if the Dealing Facility is conducted without compliance with Section 13(e) of the Exchange Act, or Rules 13e-4 and 14e-1(b) and (c) thereunder. Furthermore, due to the need for Eligible Holders to have a minimum time period during which to consider the terms of the Dealing Facility, we have required that you limit the scope of your no-action relief request under Rule 14e-1.
The Division of Corporation Finance particularly notes that:
- the Dealing Facility is only open to Reuters security holders who are registered holders of 2,500 or fewer Reuters Shares or 416 or fewer Reuters ADSs and who are not executive officers, directors or other affiliates of Reuters, and the maximum number of shares allowed to be sold through the Dealing Facility will represent approximately 1.1% of the outstanding T-R PLC Shares and approximately 0.27% of the total combined T-R PLC Shares and T-R Corp Shares expected to be outstanding upon the effectiveness of the Reuters Scheme;
- the sale of T-R PLC Shares into the open market through the Dealing Facility by Eligible Holders will be made in compliance with Regulation S;
- the Dealing Facility does not constitute a tender offer or any other form of regulated transaction in the United Kingdom, Reuters's home country, or any other non-U.S. jurisdiction in which the Dealing Facility will be available, and it is anticipated that the majority of Eligible Holders will be residents of jurisdictions outside the United States (approximately only 13% of Eligible Holders will be U.S. residents, based upon the most recent information);
- none of Reuters, T-R PLC, Thomson and their affiliates will purchase any T-R PLC Securities while sales are being executed under the Dealing Facility and T-R PLC will otherwise receive no proceeds from sales under the Dealing Facility;
- Reuters, T-R PLC, Thomson, Equiniti Financial Services Limited, the Registrar, the ADS Depositary, the Call Center Operator, the U.S.Broker and the U.K.Broker will not communicate with Eligible Holders about the Dealing Facility and will not solicit Eligible Holders to participate in the Dealing Facility or give them advice about whether or not to participate;
- no special selling efforts or selling methods will be employed in connection with the Dealing Facility;
- no commissions or any other sales incentives will be offered or paid to employees of T-R PLC or any of their affiliates in connection with the Dealing Facility;
- none of Reuters, T-R PLC, Thomson, Equiniti Financial Services Limited, the Registrar or the ADS Registrar will enter into any arrangement with the U.S.Broker or the U.K.Broker with respect to purchases of T-R PLC Shares sold pursuant to the Dealing Facility;
- Eligible Holders will receive a detailed description of the Dealing Facility that will contain all of the information regarding the terms of the Dealing Facility as would be required if T-R PLC were filing a Schedule TO;
- neither the Dealing Facility Materials nor any of the Transaction Documents will solicit participation in, or make recommendations with respect to, the Dealing Facility;
- Dealing Facility Materials will indicate that no Eligible Holder will be obligated to sell its T-R PLC Shares and the Dealing Facility Materials will present information about the availability and procedures of the Dealing Facility in a neutral manner;
- T-R PLC will make available Reuters's most recent Annual Report on Form 20-F and any Reports of a Foreign Private Issuer on Form 6-K filed since the date of its most recent Annual Report on Form 20-F promptly following a request for such documents by an Eligible Holder;
- Eligible Holders may deliver Dealing Facility Instruction Forms to the Registrar or the ADS Depositary, as appropriate, during a period of 20 business days, as would be required for an issuer tender offer by Rule 13e-4(f) and for tender offers by Rule 14e-1(a);
- sales of T-R PLC Shares through the Dealing Facility will be made at market prices (which will be averaged to calculate the U.S.Average Sale Price and the Non-U.S.Average Sale Price), and any pressure that Eligible Holders may feel to participate in the Dealing Facility may be lessened due to the requirement for the Court to approve the fairness of the acquisition to Reuters Securityholders;
- no Eligible Holder on whose behalf T-R PLC Shares are sold will receive preferential treatment under the Dealing Facility because the per share consideration paid to each Eligible Holder who sells shares through the Dealing Facility and is a U.S. resident will be the same U.S.Average Sale Price, and the per share consideration paid to each Eligible Holder who sells shares through the Dealing Facility and is not a U.S. resident will be the same Non-U.S.Average Sale Price;
- Eligible Holders may revoke sale orders at least through the Expiration Date and until the Revocation Deadline; and
- the Dealing Facility will not be contingent upon the participation of any fixed number of Eligible Holders or the sale of any fixed number of T-R PLC Shares.
B. Division of Trading and Markets
The Office of Chief Counsel of the Division of Trading and Markets has asked us to advise you that, without necessarily agreeing with the analysis and conclusions set forth in your letter, it will not recommend enforcement action to the Commission under Section 15(a) of the Exchange Act if Reuters, T-R PLC, the Registrar, Equiniti Financial Services Limited, the U.K.Broker, the Call Center Operator, and Deutsche Bank Trust Company Americas conduct the activities described in your letter without registering as broker-dealers in accordance with Section 15(b) of the Exchange Act.
You represent that Deutsche Bank Trust Company Americas is a bank within the meaning of Section 3(a)(6) of the Exchange Act and entitled to rely on the exemption from the definition of "broker" provided in Section 3(a)(4) of the Exchange Act and Regulation R, Rule 781 (17 C.F.R. 247.781).1 Accordingly, the Division of Trading and Markets takes no position on the application of the broker-dealer registration requirements of Section 15(a) of the Exchange Act as applied to Citibank.
The Office of Trading Practices and Processing will not recommend that the Commission take enforcement action pursuant to Rule 14e-5 under the Exchange Act in the event that the U.S. Broker, the U.K. Broker, Equiniti Financial Services Limited, acting on behalf of the Registrar, or the ADS Depositary (or their respective affiliates) make open market purchases of T-R PLC Securities outside of the Dealing Facility while the Dealing Facility is in effect.
Furthermore, you have not asked for relief from, and we do not address, Regulation M with respect to purchases of T-R PLC Shares or T-R PLC ADSs by T-R PLC or any other party while the Dealing Facility is in effect.
These no-action positions expressed are based solely on the facts presented and representations made in your letter attached, including the opinion of counsel contained there, and are strictly limited to the application of the rules cited to the Dealing Facility, as described in your correspondence. Such transactions should be discontinued, pending presentation of the facts for our consideration, in the event that any material change occurs with respect to any of those facts and representations.
In addition, your attention is directed to the anti-fraud and anti-manipulation provisions of the federal securities laws, including Sections 9(a), 10(b) and 14(e) of the Exchange Act and Rule 10b-5 thereunder. Responsibility for compliance with these and any other applicable provisions of the federal securities laws must rest with the participants in the transactions. The Divisions of Corporation Finance and Trading and Markets express no view with respect to any other questions that the proposed transaction may raise, including, but not limited to, the adequacy of disclosure concerning, and the applicability of any other federal or state laws to, the proposed transaction. This response expresses the positions of the Divisions of Corporation Finance and Trading and Markets on enforcement action only and does not express any legal conclusions on the questions presented. Different facts or conditions might require another result.
For the Division of Corporation Finance,
Mauri L. Osheroff
For the Division of Trading and Markets,
Office of Trading Practices
Josephine J. Tao
The Incoming Letter is in Acrobat format.