Mail Stop 3628
September 7, 2005
VIA FACSIMILE: (303) 573-8133
Brad H. Hamilton, Esq.
Jones & Keller, P.C.
1625 Broadway, Suite 1600
Denver, Colorado 80202
(303) 573-1600
Re: Tipperary Corporation
Schedule 14A - File No. 001-07796 filed August 12, 2005
Schedule 13E-3/A - File No. 005-12904 filed August 16, 2005
Dear Mr. Hamilton:
We have reviewed your filing and have the following
comments. Where indicated, we think you should revise your documents
in response to these comments. If you disagree, we will consider
your explanation as to why our comment is inapplicable or a revision
is unnecessary. Please be as detailed as necessary in your
explanation. In some of our comments, we may ask you to provide us
with supplemental information so we may better understand your
disclosure. After reviewing this information, we may or may not
raise additional comments.
Please understand that the purpose of our review process is
to assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of our review. Feel free to call us at the telephone numbers listed
at the end of this letter.
Schedule 13E-3
General
1. We note, from your notice of special meeting, that an admission
ticket, which is required for entry into the special meeting, will
be attached to the proxy cards. If shareholders plan to attend the
special meeting, they must keep the admission ticket and bring it
to the special meeting. Please tell us if this admission ticket
requirement is consistent with Texas law.
2. Assuming that the admission ticket requirement is consistent
with Texas Law, please consider making the statement that a security
holder must retain the ticket for admission to the special
meeting, in prominent type on the proxy card itself. We believe that
this is an important consideration for shareholders, as they may change
a proxy vote by voting at the meeting, despite the proxy submission.
Summary Term Sheet, page 1
3. Please revise the summary term sheet to include a summary of
each filing person`s fairness determination and also revise the
summary term sheet and question and answer section to eliminate any
repetition.
Fairness of the Merger; Recommendation of the Special Committee,
page 21
4. Item 1014(a) of Regulation M-A requires a filing person on the
Schedule 13E-3 to state a belief as to the fairness of the
proposed transaction to "unaffiliated security holders." Your
disclosure throughout your document states that the special committee,
the board, and SIH determined that the reverse stock split was fair to
the "minority shareholders," which is a different concept. Please
revise throughout the disclosure materials to provide the finding
as to non-affiliates as a distinct group, as required by Item 1014(a).
5. Please state whether or not the transaction is structured so
that approval of at least a majority of unaffiliated security holders
is required. See Item 1014(c) of Regulation M-A. We note your
statement, on page 10, that in order for the merger to be
approved, holders of at least two-thirds of the outstanding shares
of the Tipperary common stock must vote for the merger, but this is
a different concept than that articulated by the Rule.
6. Each filing person should discuss in reasonable detail the
material factors upon which the belief of fairness of the Rule
13e-3 transaction as to the unaffiliated security holders is based
and, to the extent practicable, the weight assigned to each factor.
The discussion must include an analysis of the extent, if any, to
which the filing person`s beliefs are based on the factors described
in Instruction 2 of Item 1014 of Regulation M-A, and paragraphs (c),
(d) and (e) of this section and Item 1015 of Regulation M-A. To the
extent any of the factors listed there were not considered in the
context of this transaction, the explanation of why may be
important for a shareholder seeking to understand the board`s analysis
of this transaction. We note that it appears that neither filing
person considered net book value, going concern value, or liquidation
value. Please expand to address these factors as to each filing person
and the requisite fairness determination
7. It appears that only the company and SIH have provided fairness
determinations. Please revise your disclosure to provide the
fairness determination of each filing person.
Role of Financial Advisor to the Special Committee and Fairness
Opinion, page 25
8. Clarify whether the fairness finding of Houlihan Lokey
addressed the fairness of the price to unaffiliated security holders.
If not, explain here or where appropriate in the disclosure document,
how the board analyzed the fairness finding of Houlihan Lokey,
addressed to minority shareholders generally, to arrive at a finding
of fairness as to the unaffiliated security holders.
9. Clarify whether the fairness finding of Houlihan Lokey
addressed the fairness of the entirety of the Rule 13e-3 going
private transaction to unaffiliated security holders. If not,
explain here or where appropriate in the disclosure document, how
the board analyzed the fairness finding of Houlihan Lokey, limited
solely, from a financial point of view, to the cash consideration
payable in the contemplated merger, to arrive at a finding of fairness
as to the unaffiliated security holders as a distinct and separate
group. As SIH also considered Houlihan Lokey`s fairness opinion in
making SIH`s determination that the Rule 13e-3 going private transaction
is fair to minority shareholders, please revise the "position of SIH as
to the merger" section on page 33 to include the same information as
to how SIH analyzed the fairness finding of Houlihan Lokey with its
limitations.
10. We note the disclaimer that "Houlihan Lokey`s Opinions address
solely the fairness from a financial point of view, of the cash
consideration payable in the contemplated merger and under the
prior offers by SIH and Company A to the minority shareholders and
do not address any other terms or agreements related to the merger."
Please identify the entirety of the other terms or agreements related
to the merger that the opinions of Houlihan Lokey do not address. We
note that Houlihan Lokey disclaims responsibility to opine as to the
"overall fairness of the merger."
11. The fifth bullet point on page 27 refers to "projections
prepared by . . . management with respect to Tipperary and TOGA " and
used in Houlihan Lokey`s analysis. These and all other projections and
financial forecasts provided to the fairness advisor should be
disclosed in the offer materials.
Recommendation of the Merger by the Tipperary Board of Directors,
page 32
12. Please state the reason for undertaking the transaction at
this time. See Item 1013(c) of Regulation M-A. We note the recent
consummation of the interest purchase and merger agreements.
Financing for the Merger, page 43
13. State the total amount of funds to be used in the transaction.
Please see Item 1007 of Regulation M-A.
Effects of the Merger, page 43
14. The disclosure required by Items 7, 8, and 9 must be included
in the front of the disclosure document. Please see Rule 13e-
3(e)(1)(ii). Please move this section accordingly. In addition,
revise this disclosure to address the effects of the transaction
from the standpoint of the company, its affiliates, and unaffiliated
security holders. Please see Item 1013 and Instruction 2 to Item
1013 of Regulation M-A.
Selected Consolidated Financial Data, page 60
15. Please revise your disclosure to identify the financial
statements incorporated by reference by page, paragraph, caption
or otherwise. Please see Item 1010(a) of Regulation M-A and
Instruction 3 to Item 13 of Schedule 13E-3.
16. We note that you have incorporated by reference the Company`s
annual report on Form 10-K for the year ended December 31, 2004
and Form 10-Q for the period ended March 31, 2005. Where you
incorporate by reference financial statements found in other documents
filed with the SEC, we require you to include in the document
disseminated to investors the summary financial statements required
by Item 1010(c) of Regulation M-A. See Instruction 1 to Item 13 of
Schedule 13 and Q&A 7 in Section I.H of the Division of Corporation
Finance`s Manual of Publicly Available Telephone Interpretations
(July 2001) (for guidance on a nearly identical instruction in the
context of a tender offer). It does not appear that income per common
share and net income per common share, as required by Item 1010(c)(2)
and (3) of Regulation M-A, respectively, are included. Please revise
to include the complete summary financial statements, as required by
Item 1010(c) of Regulation M-A in the Schedule 14A filed in connection
with this going private transaction.
Where You Can Obtain Additional Information, page 71
17. Please change the SEC address to 100 F Street, N.E.,
Washington, D.C. 20549.
18. Schedule 13E-3 does not expressly permit "forward"
incorporation by reference to documents filed after the date of the
information statement. To the extent you seek to incorporate by
reference such future filings, you must amend the Schedule 13E-3 to
specifically incorporate each. Please revise the disclosure to the
contrary in this section.
Proxy Card
19. Tell us what "other transactions", the third subparagraph
within the first item of your proxy, would be contemplated by
approving and adopting the merger agreement and the merger. Your
proxy card should identify clearly the matters intended to be acted
upon. Please see Rule 14a-4 of the Proxy Rules.
Closing Comment
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be certain that they have provided all information investors require
for an informed decision. Since the filing persons 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 each filing person acknowledging
that:
* that filing person is responsible for the adequacy and accuracy
of the disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with respect to the filing; and
* that filing person 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.
As appropriate, please amend your filings in response to
these comments. You may wish to provide us with black-lined copies
of the amended filings to expedite our review. Please furnish a cover
letter with your amended filing that keys your responses to our
comments and provides any requested supplemental information and
file such letter on EDGAR. Detailed cover letters greatly facilitate
our review. Please understand that we may have additional comments
after reviewing your amended filings and responses to our comments.
If you have any questions please contact me at (202) 551-3257
or by facsimile at (202) 772-9203.
Very truly yours,
Celeste M. Murphy
Special Counsel
Office of Mergers and Acquisitions