October 11, 2005
Mr. Theodore A. Paradise, Esq.
Davis Polk & Wardwell
Izumi Garden Tower 33F
1 – 6 – 1 Roppongi
Minato-Ku, Tokyo 106-6033
Re: Offer by Profit Eagle Limited for the shares of Superdata Software Holdings Limited
File No. TP: 05-104
Dear Mr. Paradise:
This is in response to your letter dated October 7, 2005. A copy of that letter is attached with this response. By including a copy of your correspondence, we avoid having to repeat or summarize the facts you presented. The defined terms in this letter have the same meaning as in your letter, unless otherwise noted.
On the basis of your representations and the facts presented, but without necessarily concurring in your analysis the United States Securities and Exchange Commission (Commission) hereby grants an exemption from Rule 14e-5 under the Securities Exchange Act of 1934 (Exchange Act) to permit Profit Eagle Limited (Profit Eagle) to purchase or arrange to purchase Superdata Software Holdings Limited (Superdata) Shares pursuant to the Management Purchase Agreement and to permit purchases of Shares outside the Offer by any Prospective Purchaser, particularly in light of the following facts:
- The Offer is required to be conducted in accordance with the Hong Kong Code on Takeovers and Mergers (the Code), the rules and procedures established by the Hong Kong Securities and Futures Commission (the SFC), as well as the Rules Governing the Listing of Securities on the Growth Enterprises Market (the GEM) of the Stock Exchange of Hong Kong Limited (the GEM Listing Rules);
- Superdata, a limited liability company incorporated under the laws of the Cayman Islands, is a “foreign private issuer,” as defined in Rule 3b-4(c) under the Exchange Act;
- Any purchases of Ordinary Shares of Superdata by (i) Profit Eagle, a limited liability company incorporated in the Cayman Islands, (ii) persons acting in concert with Profit Eagle for purposes of the Offer, or (iii) any broker or other financial institution acting as its or their agent (collectively, the Prospective Purchasers), will be subject to the Code;
- Arrangements such as the Management Purchase Agreement are permitted under applicable Hong Kong law and under the Hong Kong takeover regime;
- It is common practice under Hong Kong law to exclude any shares held by persons who are deemed to be “acting in concert” with an acquiror from the offer and to treat acquisition of such shares separately from the offer. The shares purchased under the Management Purchase Agreement will not count towards the 90% threshold necessary to make the Offer unconditional;
- The Code requires that the price at which the Offer is made must be equal to or higher than the price paid under the Management Purchase Agreements; and
- No further consideration, direct or indirect, will be given under the Management Purchase Agreement beyond the price set in the Agreements.
The Commission grants this exemption from Rule 14e-5 under the Exchange Act to permit the Prospective Purchasers to purchase or arrange to purchase Shares otherwise than pursuant to the Offer, subject to the following conditions:
- No purchases or arrangements to purchase Target Shares, otherwise than pursuant to the Offer, shall be made in the United States;
- The Offer Document shall disclose prominently the possibility of, or the intention to make, purchases of Target Shares by the Prospective Purchasers (including any purchase under the Management Purchase Agreement) during the Offer;
- The Prospective Purchasers shall disclose in the United States information regarding purchases of Target Shares to the extent such information is made public in Hong Kong pursuant to the Code;
- The Prospective Purchasers shall comply with any applicable rules under Hong Kong law including the Code and the GEM Listing Rules;
- The Prospective Purchasers shall provide to the Division of Market Regulation (Division), upon request, a daily time-sequenced schedule of all purchases of Target Shares made by any of them during the Offer, on a transaction-by-transaction basis, including:
- size, broker (if any), time of execution, and price of purchase; and
- if not executed on the Hong Kong Stock Exchange, the exchange, quotation system, or other facility through which the purchase occurred;
- Upon the request of the Division, the Prospective Purchasers shall transmit the information as specified in paragraphs (5)(a) and (5)(b) above to the Division at its offices in Washington, D.C. within 30 days of its request;
- The Prospective Purchasers shall retain all documents and other information required to be maintained pursuant to this exemption for a period of not less than two years from the date of the termination of the Offer;
- Representatives of the Prospective Purchasers shall be made available (in person at the offices of the Division in Washington, D.C. or by telephone) to respond to inquiries of the Division relating to their records; and
- Except as otherwise exempted herein, the Prospective Purchasers shall comply with Rule 14e-5.
The foregoing exemption from Rule 14e-5 under the Exchange Act expressed above is based solely on your representations and the facts presented, and is strictly limited to the application of this rule to the proposed transactions. 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 or representations.
In addition, we direct your attention to the anti-fraud and anti-manipulation provisions of the federal securities laws, including Sections 10(b) and 14(e) of the Exchange Act and Rule 10b-5 thereunder. The participants in the Offer must comply with these and any other applicable provisions of the federal securities laws. The Division of Market Regulation expresses no view with respect to any other questions that the proposed transactions 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 transactions.
For the Commission, by the
Division of Market Regulation
pursuant to delegated authority,
James A. Brigagliano
Division of Market Regulation
The Incoming Letter is in Acrobat format.