Dodd Frank Act Definition of “Municipal Advisor”
A “municipal advisor” is a person (including a firm or an associated person) (but not including a municipal entity or an employee of a municipal entity) who (1) provides “advice” to “municipal entities” or “obligated persons” on the “issuance of municipal securities” or “municipal financial products,” or (2) undertakes a “solicitation of a municipal entity.”
In an attempt to prevent future liquidity issues similar to those that occurred during the financial crisis of 2008, the Federal Reserve System—together with the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation—has proposed a minimum liquidity requirement on large and international banks with over $250 billion in assets or $10 billion or more in on-balance sheet foreign exposure. Pursuant to this requirement, the banks must hold high quality liquid assets (HQLAs) that are easily convertible into cash. Each bank shall be obligated to maintain a liquidity coverage ratio of 1-to-1 on the day with the highest projected net cash outflows during each 30-day stress period. In other words, the bank is required to hold enough HQLAs to cover its projected cash outflows minus its projected cash inflows on the most expensive day within the 30-day period. Additionally, a modified (light) version of the US LCR Proposal shall apply to specific domestic non-banking financial companies that hold assets in excess of $50 billion but less than $250 billion.
On November 7, Salix Pharmaceuticals Ltd., a leading manufacturer of gastrointestinal disorder drugs and devices announced its proposed acquisition of Santarus Inc., a specialty biopharmaceutical company. The all cash acquisition of common stock was offered at $2.6 billion at $32 dollars per stock. According to a press release obtained from the Santarus website, the $32.00 per share price represents an approximately 36% premium over Santarus’ November 6, 2013 closing price of $23.53 per share and an approximately 39% premium over Santarus’ average closing stock price for the prior 30-day trading period. The proposed transaction has been unanimously approved by both the Boards of Directors of Salix and Santarus, and it is expected that the transaction will close in the first quarter of 2014.
On November 4th, 2013, BlackBerry announced that it would forgo its plan to sell its business. Instead, the company has decided to replace its CEO Thorsten Heins and obtain a $1 billion cash injection from private placement of convertible debentures. The news was followed by another plunge of BlackBerry’s share price – it dropped 16.4% to a price of $6.49, well below the buyout price of $9 a share offered by Fairfax earlier this year. Has the former phone giant lost yet another battle?
On Tuesday, the Commodity Futures Trading Commission approved, by a 3-1 vote, a proposed rule on positions limits in commodities derivatives. The proposed rule reflects changes to an earlier rule on positions limits that was invalidated in 2012 by a Federal district court in the District of Columbia.
In its new report titled “Rising Tide of Global Shareholder Activism,” the Financial Strategy and Solutions Group of Citi observes that shareholder activism has spread to companies in all sectors, of all sizes and across all geographic regions.
As the report suggests, activist hedge funds have accumulated their funds and, in order to put this financial firepower to work, are exporting their activism abroad. On the so-called “supply side” of the phenomenon, shareholder interventions are increasingly encouraged by the presence of undervalued targets with conservative financial strategies and a lack of top-line growth, dispersed share ownership, and reforms that enhance shareholder rights.
GlaxoSmithKline’s (GSK) investigation serves as a cautionary tale to American companies, particularly health-focused companies, interested in operating in China. GSK’s pharmaceutical sales plummeted sixty percent in the third quarter due to a Chinese anti-corruption investigation. In July 2013, the Chinese government accused the pharmaceutical giant of funneling approximately $500 million to government officials, medical associations, hospitals, and doctors in order to boost sales of their products. China has arrested several GSK officials and will likely require the company to pay a fine above $2 billion. The investigation is part of China’s efforts to curb business corruption and clean up its health industry, which is undergoing a massive expansion.
Most sellers know that preparing for a sale requires certain homework, such as cleaning up business and corporate records, and considering key employee retention arrangements. Another important way to prepare for a sale is to be ready to negotiate deal structure.
On October 17 and 18, 2013, BCLBE and Crowell & Moring LLP co-sponsored a two-day seminar entitled “Managing Tax Audits and Appeals.” The seminar was held at Le Meridien hotel in San Francisco, and featured Crowell & Moring attorneys as well as three esteemed guest speakers.
Regulators have recently clarified two important aspects of the prospectus regime that applies across the European Economic Area pursuant to the Prospectus Directive (Directive 2003/71/EC as amended by Directive 2010/73/EU). The Prospectus Directive provides the overarching European regulatory framework for the publication of prospectuses in connection with debt and equity securities being offered to the public or admitted to trading on regulated markets in the EEA.