June 20, 2005
By Facsimile and U.S. Mail
Terri Reyering Abare, Esq.
Vorys, Sater, Seymour and Pease LLP
Suite 2000, Atrium Two
221 East Fourth Street
Cincinnati, Ohio 45202
Re: FFD Financial Corporation
Schedule 13E-3
Preliminary Proxy Statement on Schedule 14A
Filed May 24, 2005
Dear Ms. Abare:
We have the following comments on the above-referenced
filing:
Preliminary Proxy Statement on Schedule 14A
1. We note the manner in which you intend to count share ownership
for purposes of conducting the reverse split differs from the
manner
of determining whether the company has fewer than 300 shareholders
of
record for purposes of Rule 13e-3(a)(3)(ii)(A). Confirm, if true,
that you will count the number of record holders for Rule 13e-
3(a)(3)(ii)(A) purposes in the manner required by Rule 12g5-1.
2. Throughout this document you disclose that the percentage of
shares beneficially held by affiliated security holders will be
"approximately the same as it was prior to the Stock Splits" (page
5). As the beneficial ownership of each security holder who is
not
cashed out in the reverse split will increase by at least 6%, it
appears you should revise the document throughout to reflect this
increase.
3. Tell us why you have not unbundled the reverse and forward
splits.
In doing so, tell us whether shareholder approval is required for
each of the reverse and forward splits under applicable state law.
Cautionary Notice Regarding Forward-Looking Statements, page 7
4. You state that you have no duty to update forward looking
statements. Revise to clarify your duty to update this document
to
reflect a material change in information previously disclosed, as
required by Rule 13e-3(d)(2) and (e)(2).
Special Factors, page 9
Effects on Continuing Holders, page 12
5. Revise to inform security holders what financial or other
information you plan to disseminate to security holders after the
reverse split under other applicable federal law, state law and
voluntarily, if applicable.
Effects on FFD, page 13
6. Revise this section to clarify when termination of registration
and the accompanying requirements cease in relation to your filing
of
a Form 15. See Exchange Act Rule 12g-4.
Fairness of the Stock Splits, page 16
7. Item 1014(a) of Regulation M-A requires that each filing person
make a fairness determination with respect to the unaffiliated
security holders. In addition, because the transaction will have
different effects on different groups of unaffiliated security
holders, you must provide the filing person`s fairness
determination
with respect to each group of security holders. See Q&A No. 19 of
Exchange Act Release No. 17719 (April 13, 1981). Revise the
disclosure throughout the document to clarify that a fairness
determination has been made with respect to each group of
unaffiliated security holders, rather than with respect to
"affiliated and unaffiliated shareholders, including Cashed Out
Holders and Continuing Holders" as stated on page 16 and elsewhere
in
the document.
8. Generally, the factors outlined in Instruction 2 to Item 1014
are
considered relevant in assessing the fairness of the consideration
to
be received in a going private transaction. To the extent any of
the
listed factors was not deemed relevant in the context of this
transaction, or was given little weight, this in itself may be an
important part of the decision-making process that should be
explained for shareholders. In this regard, please revise the
document to address historical market prices and the prior stock
purchases disclosed in response to Item 1002(f) of Regulation M-A
and
Item 2 of Schedule 13E-3. See Instructions 2(ii) and (vi) of Item
1014 of Regulation M-A and Q&A No. 20 in Exchange Act Release No.
17719 (April 13, 1981).
9. Please provide additional support for the board`s beliefs that
"liquidation value would be less than the current trading price of
FFD shares" and "trading price generally reflected the value of
FFD
shares on a going concern basis."
Background of the Stock Splits, page 21
10. On page 22 you state that, at the October 19, 2004 board
meeting,
"the board revisited the question of whether [the company was]
realizing the benefits generally associated with being a public
company and decided to fully investigate taking FFD private."
Revise
to clarify when the board first considered going-private, and who
first suggested this possibility.
11. In addition, with a view toward disclosure, provide more
detailed
information of the stock purchases disclosed on page 41, including
the date of each purchase, the number of shares purchased and the
price paid per share. We note that the company began considering
a
going private transaction at least as early as October 19, 2004;
however, it appears that the company continued purchasing shares
after that date. Provide us with a written analysis for why these
transactions did not constitute the first steps in the going
private
transaction. See Rule 13e-3(a)(3) and Q&A No. 4 of Exchange Act
Release No. 17719.
12. Revise to clarify how the board determined to offer $19.00 per
share in the transaction. Did the board suggest this number? If
so,
clarify the process the board undertook to choose the
consideration.
If the financial advisor suggested the number, revise to disclose
this fact. See Item 1015(b)(5) of Regulation M-A.
Opinion of Keller & Company, page 30
13. Revise to clarify the method of selection of the financial
advisor as required by Item 1015(b)(3) of Regulation M-A.
14. The concluding paragraph of the financial advisor`s opinion,
included as Exhibit A, states that it is the financial advisor`s
"opinion, as of the date hereof, that the price per share of
$19.00
for FFD stock used in the Split of FFD is fair, from a financial
point of view." It is unclear with respect to what entity or
group
of security holders the financial advisor has provided its
opinion,
i.e., fair to whom? Please clarify.
15. Each presentation, discussion, or report held with or
presented
by an outside party that is materially related to the Rule 13e-3
transaction, whether oral or written, is a separate report that
requires a reasonably detailed description meeting the
requirements
of Item 1015 of Regulation M-A. This requirement applies to both
preliminary and final reports. Revise to summarize any and all
presentations made by Keller & Company during your evaluation of
the
transaction, or confirm to us that you have done so. For
instance,
it is unclear whether Keller & Company made a presentation at the
May
10 meeting suggesting the appropriate consideration to be paid in
the
transaction, in addition to the presentation of its opinion that
the
$19.00 per share consideration is fair. In addition, please file
any
written materials, such as board books distributed by the
financial
advisor, as exhibits to the Schedule 13E-3 pursuant to Item 9 of
Schedule 13E-3 and Item 1016(c) of Regulation M-A.
Closing Comments
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require.
Since the company and its management are in possession of all
facts
relating to a company`s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that
* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
* * *
Please respond to these comments by promptly amending the
filing and submitting a response letter filed via EDGAR under the
label "CORRESP." If you do not agree with a comment, please tell
us
why in your response. Please note that Rule 14a-6(h) requires you
to
filed revised preliminary proxy materials that are marked to show
changes. Direct any questions to me at (202) 551-3262. You may
also
contact me by facsimile at (202) 772-9203.
Sincerely,
Abby Adams
Special Counsel
Office of Mergers and Acquisitions
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Terri Reyering Abare, Esq.
June 20, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0303
DIVISION OF
CORPORATION FINANCE