The following is the 10 day rule for filing of 13G statement of beneficial ownership:
17 C.F.R. § 240.13d-1
CODE OF FEDERAL REGULATIONS
TITLE 17--COMMODITY AND SECURITIES EXCHANGES
CHAPTER II--SECURITIES AND EXCHANGE COMMISSION
PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 1934 SUBPART A--RULES AND REGULATIONS UNDER THE SECURITIES EXCHANGE ACT OF 1934
REGULATION 13D
Current through September 1, 1998; 63 FR 46596
§ 240.13d-1 Filing of Schedules 13D and 13G.
(a) Any person who, after acquiring directly or indirectly the beneficial ownership of any equity security of a class which is specified in paragraph (i) of this section, is directly or indirectly the beneficial owner of more than five percent of the class shall, within 10 days after the acquisition, file with the Commission, a statement containing the information required by Schedule 13D (§ 240.13d-101).
The above is quite important. Persons looking for an acquisition of ASND, COMS, CS, XYLN, etc., in the very near future should take heed:
1. If LU wants to announce an acquisition on 10/21 (its earnings date and also Networld/Interop), it will already own 4.999% of the target company (or companies) by 10/9.
2. LU would then commence buying as much as it can get of the target companies, such buying to start within 10 days of 10/21. That is, on Monday, 10/12. LU would not go over 5% before 10/12 because that would require a 13G filing before 10/21. (And that would spoil the impact of making an announcement with LU earnings or at Networld/Interop).
3. To get as many shares as possible with the lowest price spike, I would expect the buying to occur during all 8 market days. (Notice that the timing works very well, if LU had to start buying on a Friday, for an announcement 2 Mondays later, it would only get 6 market days).
4. LU wants to go as much over 5% ownership as possible -- given cash on hand -- because that, of course, greatly reduces the cost of the acquisition. I don't think LU will buy ASND but, for example, say LU were to offer 1 share of LU for 1 share of ASND (i.e., about $60/share or a deal worth about $12B). It makes sense to get some of that ASND stock at $40/share if possible, even if it does require the use of cash.
5. If there is to be no announcement on the 21st, then there will of course be no acquisition-related buying in the 10 days preceding the 21st (except to the extent that LU does not already own 4.999% of some target identified by it.)
6. Bottom line: Look for unusual volume and pricing strength in potential targets between now and the 21st. This all means nothing if there are no acquisition-related announcements at Networld/Interop or at LU's earnings release. But if there were to be an announcement at that time, there would be this activity beforehand.
Gary Korn |
