Deutsche Borse has announced that it has lowered the LSE merger threshold required for acceptances under the Exchange Offer Acceptance Condition from 75 percent to 60 percent following its earler statement today.
Minimum Threshold Lowered to 60 Percent
Due to this offer amendment, the acceptance period of the Exchange Offer will be extended by two weeks and will now expire on 26 July 2016. The lowering of the minimum acceptance threshold is in line with the German securities acquisition and takeover act.
The decision reflects feedback from a number of institutional index funds that are only technically capable of tendering their Deutsche Börse shares after the minimum acceptance threshold has been reached and once the untendered shares are replaced by the tendered shares in the respective index. Index funds represent up to 15% of Deutsche Börse shares.
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We are confident that we will reach the 75 percent threshold in the course of the full tender process.
For the DAX as the most relevant index, the replacement takes place two trading days after 50 percent of the Deutsche Börse shares were tendered. For STOXX and MSCI the thresholds are 75% and above. As most institutional shareholders only tender their shares on the last day of the initial offer period, the 50 percent threshold will not be achieved prior to that day, hence the replacement will take place after the end of the initial offer period.
The reduction of the acceptance threshold to 60 percent addresses the technical issue, enabling index funds to tender their shares in the extended initial offer period.
Deutsche Borse CFO Gregor Pottmeyer commented: “With this step we respect the technical barrier of up to 15 percent of our shareholders namely Index Funds, which are not able to tender their shares prior to the replacement of the untendered shares by the tendered shares in the respective index. Deutsche Borse will adjust the index calculation for its blue chip index DAX two days after the 50 percent threshold is exceeded. This change in procedure is a purely technical one. We are confident that we will reach the 75 percent threshold in the course of the full tender process.”