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U.S. Securities and Exchange Commission

Securities Exchange Act of 1934
Rule 14e-1(a)

Exemptive Letter: Offer by SoFFin for Ordinary Shares and ADRs of Hypo Real Estate Holding AG

April 15, 2009

Via Facsimile (+49 69 27308 58543) and U.S. Mail

Mark Strauch, Esq.
Freshfields Bruckhaus Deringer LLP
Bockenheimer Anlage 44
60322 Frankfurt am Maim


Cash Tender Offer by SoFFin for Ordinary Shares and ADRs of Hypo Real Estate Holding AG

Dear Mr. Strauch:

We are responding to your letter dated April 15, 2009 to Michele Anderson, Daniel Duchovny and Christina Chalk, as supplemented by conversations with the staff. We attach a copy of your letter to avoid having to repeat or summarize the facts you present there. Defined terms we use here have the same meaning as in your letter of April 15, 2009, unless otherwise noted.

On the basis of your representations and the facts presented in your letter, the United States Securities and Exchange Commission hereby grants an exemption from Rule 14e-1(a) under the Exchange Act. The exemption from Rule 14e-1(a) is granted to permit the German Government, acting through the Stabilization Fund, to limit the period during which the Tender Offer will remain open to 11 U.S. business days. This relief is appropriate under the unique facts relating to the Tender Offer and will not be routinely granted. In particular, we note the following facts represented by you on behalf of the German Government:

  • Hypo Real Estate is a foreign private issuer as defined in Exchange Act Rule 3b-4(c) and does not have a class of equity securities registered under Section 12 of the Exchange Act;
  • Hypo Real Estate is the largest mortgage lender in the German market and has recently experienced extreme financial distress due to the worldwide financial crisis, necessitating intervention by the German Federal Bank to stabilize the company, including the establishment of an emergency liquidity facility by the German Government;
  • Due to the size and nature of Hypo Real Estate's business, it is a bank of "systemic relevance" to the entire German financial system and its continued instability may negatively impact the entire German financial system if stabilization is not achieved in a timely manner. The German Government believes that further capital infusions and a comprehensive restructuring of the business of Hypo Real Estate is necessary to achieve this result;
  • On April 9, 2009, German law was amended specifically to facilitate this transaction by the Stabilization Fund. This legislation, among other measures, shortened the normal German minimum tender offer period of four weeks established in the German Takeover Act due to the market and other risks associated with a longer offer period under the facts present here;
  • The 11-U.S. business day offering period is necessitated by the deadline established in the Amendment for the completion of the nationalization of Hypo Real Estate before the authority granted to the Stabilization Fund expires;
  • After the Tender Offer, the German Government, acting through the Stabilization Fund, intends to acquire all remaining Ordinary Shares of Hypo Real Estate. If, via the Tender Offer, the Stabilization Fund does not reach the threshold necessary to conduct a squeeze out under German corporate law, then the Amendment provides it with extraordinary authority to expropriate the remaining Ordinary Shares at a price that may be less than the purchase price in the Tender Offer, and payment in an expropriation proceeding would be made much later than payment in the Tender Offer;
  • Because the offer consideration will include the offer price and the Voluntary Improvement 1, security holders who tender their shares in the Tender Offer are assured of receiving an additional amount equal to the excess of the price paid in the expropriation over the offer price, if any;
  • The German Government wishes to extend the Tender Offer to U.S. holders of Ordinary Shares, but it is likely that U.S. holders would be excluded from the Tender Offer if the requested relief is not granted;
  • If the requested relief is granted, U.S. holders of Ordinary Shares will be able to participate in the Tender Offer in the same manner and on the same terms as their German counterparts;
  • The authority granted to the Stabilization Fund under the Stabilization Act and the Amendment is available only for a limited period of time; and,
  • Except for the relief requested, the Tender Offer will be conducted in accordance with the requirements of Section 14(e) of the Exchange Act and the rules and regulations promulgated thereunder.

The foregoing exemption is based solely on the representations and the facts presented in your letter dated April 15, 2009, as supplemented by telephone conversations with the Commission staff. The relief provided above is strictly limited to the application of the rule listed above to this transaction. You should discontinue this transaction pending further consultations with the staff if there is a change in any of the facts or representations set forth in your letter.

In addition, your attention is directed to the anti-fraud and anti-manipulation provisions of the federal securities laws, including Section 10(b) and Section 14(e) of the Securities Exchange Act of 1934, and Rule 10b-5 under the Exchange Act. Responsibility for compliance with these and any other applicable provisions of the federal securities laws must rest with the participants in this transaction. The Division of Corporation Finance expresses no view with respect to any other questions 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.


For the Commission,
by the Division of Corporation Finance,
pursuant to delegated authority,

Michele M. Anderson
Chief, Office of Mergers and Acquisitions
Division of Corporation Finance

Incoming Letters:

The Incoming Letters are in Acrobat format.


Modified: 04/27/2009