Securities Exchange Act of 1934
Rules 13e-4(d)(1), 13e-4(e)(3), 13e-4(f)(1)(ii) and 14e-1(b)
June 12, 2015
Response of the Office of Mergers and Acquisitions
Division of Corporation Finance
Incoming letter dated June 12, 2015
Michael Zeidel, Esq.
Skadden, Arps, Meagher & Flom LLP
Four Times Square
New York, New York 10036-0522
Re: VWAP Pricing in Issuer Cash and Common Stock Exchange Offer by PHH Corporation
Dear Mr. Zeidel:
We are responding to your letter dated June 12, 2015 addressed to Michele M. Anderson and Mellissa Campbell Duru, as supplemented by telephone conversations with the staff, with regard to your request for no-action relief. To avoid having to recite or summarize the facts set forth in your letter, our response is attached to the enclosed copy of your letter. Unless otherwise noted, capitalized terms in this letter have the same meaning as in your letter.
On the basis of your representations and facts presented in your letter, the staff of the Division of Corporation Finance will not recommend that the Securities and Exchange Commission take enforcement action under Rules 13e-4(d)(1), 13e-4(f)(1)(ii) and 14e-1(b) under the 1934 Act if the Company conducts the Offer by using the Pricing Mechanism as described in your letter. In issuing this no-action position, we considered the following facts, among others:
- the Offer to Exchange discloses the Pricing Mechanism for determining the final Offer Consideration per $1,000 principal amount of Notes equal to the sum of the Daily Settlement Amounts for each trading day during the Observation Period, plus a fixed cash amount of $1,125.00 (together with any accrued and unpaid interest);
- the Pricing Mechanism is subject to a Daily VWAP floor of $21.00 and a Daily VWAP ceiling of $28.00;
- the Offer to Exchange includes an illustrative table showing calculations of the Offer Consideration;
- the Offer to Exchange discloses the fixed minimum consideration, payable in cash of $1,125.00 and a minimum and maximum number of shares of Common Stock that will be paid by the Company for each $1,000 principal amount of Notes tendered and purchased;
- the Pricing Mechanism and the minimum and maximum Offer Consideration will remain fixed throughout the duration of the Offer; and, if there is a change in the Pricing Mechanism or the minimum or maximum Offer Consideration, the Offer will remain open for at least 10 business days;
- the Offer will be automatically extended until midnight, New York City time, on the second trading day following the originally scheduled Expiration Date if the consideration payable equals the maximum Offer Consideration;
- the Common Stock used as the reference security in the Pricing Mechanism is listed on the New York Stock Exchange;
- the Company's belief that the value of the Notes is directly correlated to the trading price of the Common Stock;
- the Company has published and will publish the resulting Daily Settlement Amount and indicative share consideration (i.e., the indicative Exchange Ratio) per $1,000 principal amount of Notes on a webpage maintained for the Offer and has provided a toll-free number that holders of the Notes can use to obtain Offer Consideration-related information through to the Expiration Date of the Offer;
- the Company will publish the final Exchange Ratio on the Offer webpage and in a press release no later than 4:30 p.m., New York City time, on the Expiration Date of the Offer, and electronically file that information on an amended Schedule TO;
- the Company has made available forms of voluntary offering instructions and notice of withdrawal in its printed offering materials and on the Offer webpage, will permit tenders and withdrawals to be made until 11:59 p.m. on the Expiration Date, and has disclosed the procedures for making tenders and withdrawals in the offering materials;
- the Offer to Exchange includes disclosure informing beneficial holders of the Notes that they must make arrangements with their brokers or similar institutions for such brokers or similar institutions to fax a voluntary offering instruction or notice of withdrawal (as applicable) to the Depositary on such beneficial holders' behalf prior to 11:59 p.m., New York City time, on the Expiration Date; and
- the Offer to Exchange discloses that the Company is seeking to buy any and all of the Notes.
The foregoing no-action position is based solely on your representations and the facts presented in your letter dated June 12, 2015 as supplemented by telephone conversations with the staff. Any different facts or circumstances may require a different conclusion. This relief is strictly limited to the application of Rules 13e-4(d)(1), 13e-4(f)(1)(ii) and 14e-1(b) to the Company's use of the Pricing Mechanism. This response expresses the Division's position on enforcement action only and does not express any legal conclusion on the question presented. The Company should discontinue the Offer pending further consultations with the staff if any of the facts or representations set forth in your letter change.
We also direct your attention to the anti-fraud and anti-manipulation provisions of the federal securities laws, including Sections 9(a), 10(b) and 14(e) of the 1934 Act and Rules 10b-5, 13e-4(j) and 14e-3 thereunder. Responsibility for compliance with these and any other applicable provisions of the federal securities laws rests with the participants in the Offer. The Division of Corporation Finance expresses no view with respect to any other questions that the Offer may raise, including any questions relating to the adequacy of the disclosure regarding, and the applicability of any other federal or state laws to, the Pricing Mechanism or the Offer.
Michele M. Anderson
Chief, Office of Mergers and Acquisitions
Division of Corporation Finance
The Incoming Letter is in Acrobat format.