If the 80% Minimum Condition is satisfied at the Initial Expiration Date or any extension thereof, as further described below, then (I) on the terms and subject to the conditions of the Offer, Merger Sub will accept for payment and pay for all of the Shares validly tendered in the Offer and (II) as promptly as practicable on the terms and subject to the conditions contained in the Merger Agreement, Target will convene a special meeting of the Shareholders duly called and held in accordance with the Amended and Restated Certificate of Formation of Target, as amended February 11, 2015, and the Texas Business Organizations Code, as amended (the “TBOC”), at which Target Shareholders will be asked to approve the merger of Merger Sub with and into Target, with Target surviving such merger (such merger, the “Merger”), in accordance with the TBOC.
The Offer will terminate on the Initial Expiration Date if, on such date, there have not been validly tendered a number of Shares, that, together with the Shares then owned by the Parent Related Entities, represent at least 65% of the Shares then outstanding (the “65% Threshold”).
If the 80% Minimum Condition is not satisfied on the Initial Expiration Date, but the 65% Threshold is met, then Merger Sub shall provide for up to two successive 10 business day extensions of the Offer in an effort to reach the 80% Minimum Condition (each, a “65% Threshold Extension”).
If, after two 65% Threshold Extensions have occurred, the 80% Minimum Condition has not been met, then the Offer will expire unless Merger Sub and Target mutually agree that Merger Sub may accept for purchase Shares tendered in the Offer even though the 80% Minimum Condition has not been satisfied. If Merger Sub accepts for purchase Shares representing less than the 80% Minimum Condition, Merger Sub and Target may also mutually agree to proceed with holding the Target Shareholder Meeting and seeking the Target Shareholder Approval to consummate the Merger.
Under the applicable provisions of the Merger Agreement, if the Merger is consummated, the Shareholders of Target that do not validly tender their Shares in the Offer will, if they do not otherwise properly demand appraisal rights under the TBOC, receive the same cash consideration, without interest and less any required withholding of taxes, for their Shares as was payable in the Offer. If Merger Sub completes the Merger, the surviving corporation in the Merger will be a subsidiary of Parent and its affiliates, and the Shares will no longer be publicly traded. If Merger Sub does not complete the Merger, then the Shareholders of Target not tendering in the Offer will become minority Shareholders in a company over which Parent and its affiliates have significant influence.
The Board of Directors of the Target (the “Target Board”) has unanimously (I) determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are advisable and in the best interests of, the Target and its Shareholders, (II) approved, declared advisable and adopted the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, (III) resolved that the Merger Agreement and the Merger will be governed by and effected under the TBOC and (IV) recommended that the Target’s Shareholders (other than Parent and its subsidiaries) accept the Offer and tender their Shares to Merger Sub and, if applicable, approve the Merger. If the Offer is not closed, then the Merger will not be consummated. Also, if the Offer is closed for Shares representing less than the 80% Minimum Condition, then the decision of whether to seek approval of the Merger will be determined by mutual agreement of Merger Sub and Target.
On or promptly following the date of the Offer to Purchase, the Target will file its Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 (the “Schedule 14D-9”) with the United States Securities and Exchange Commission (the “SEC”) and disseminate the Schedule 14D-9 to holders of Shares, in connection with the Offer to Purchase. The Offer to Purchase will contain a more detailed description of the terms of the Offer and the Schedule 14D-9 will include a more complete description of the Target Board’s reasons for authorizing and approving the Merger Agreement and the transactions contemplated thereby and therefore Shareholders are encouraged to review the Offer to Purchase and the Schedule 14D-9 carefully and in their entirety.
The Offer is conditioned upon, among other things there being validly tendered in accordance with the terms of the Offer and not validly withdrawn, immediately prior to the expiration of the Offer, a number of Shares that, together with the Shares then owned by certain Parent related entities represents in the aggregate at least eighty percent (80%) of the Shares then outstanding (the “80% Minimum Condition”). The Offer, the Merger and the