August 19, 2005
VIA EDGAR & HAND DELIVERY
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Abby Adams, Esq.
Office of Mergers and Acquisitions
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549-0303
RE: BEI Technologies, Inc.
Schedule TO filed August 3, 2005 by Schneider
Electric SA and Beacon Purchaser Corporation
Schedule TO, Amendment No. 1 filed August 12, 2005
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Dear Ms. Adams:
On behalf of Schneider Electric SA, a societe anonyme
organized under the laws of the Republic of France ("Parent"), and Beacon
Purchaser Corporation, a Delaware corporation and an indirect wholly owned
subsidiary of Parent ("Purchaser"), we have electronically transmitted under
separate cover Amendment No. 3 to the Tender Offer Statement on Schedule TO-T
(File No. 005-52411), filed with the Securities and Exchange Commission (the
"Commission") on August 3, 2005 (the "Schedule TO"). The changes reflected in
Amendment No. 3 to the Schedule TO include those made in response to the
comments of the Staff of the Commission (the "Staff") set forth in the Staff's
comment letter, dated August 15, 2005.
Set forth below are Parent and Purchaser's responses to the
comments raised in your letter. To facilitate the Staff's review, we have
provided Parent's and Purchaser's responses in ordinary type beneath the
corresponding Staff comment, which appears in bold type.
Withdrawal Rights, page 15
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1. Revise this section to clarify that security holders have the
withdrawal rights afforded to them by Exchange Act Section 14(d)(5).
Please identify the date this withdrawal right is available.
Response:
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Purchaser has revised the disclosure in the section entitled
"Withdrawal Rights" in response to the Staff's comment. The
applicable date is October 1, 2005.
Certain Federal Income Tax Consequences, page 16
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2. Revise this subsection and its title to clarify that you describe all
material federal tax consequences of the transaction. In this regard,
you should eliminate the statement that the discussion relates to
"certain" tax consequences and that the summary is for "general
information only." Also revise the summary term sheet accordingly.
Response:
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Purchaser has revised the name of and the disclosures in the Section
previously entitled "Certain Federal Income Tax Consequences" in
response to the Staff's comment. Purchaser has made corresponding
revisions to all cross references to this Section.
3. In this section, you "urge" stockholders to consult their own tax
advisors. Because stockholders may rely on the disclosure that
appears in your filing, including disclosure relating to tax
consequences, eliminate this language as it may suggest otherwise. If
you wish to alert security holders that their tax consequences may
differ based on their particular situation, then please revise the
disclosure to clarify this fact.
Response:
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Purchaser has deleted the paragraph that includes the word "urge" in
response to the Staff's comment.
Certain Projected Financial Data of the Company, page 18
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4. Revise to disclose all assumptions underlying the projections
provided to the bidders by BEI.
Response:
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Purchaser has revised the disclosure in the section entitled "Certain
Information Concerning the Company--Certain Projected Financial Data
of the Company" in response to the Staff's comment. Purchaser has
included what we understand to be the material assumptions underlying
the projections provided. Parent and Purchaser recognize and note
that there are also other, less important assumptions but do not
believe that these are being requested since they would not, in the
view of Parent and Purchaser, be material to stockholders.
5. We note the disclaimers on page 19 regarding the projections. If the
projections are no longer valid and should not be relied upon, please
revise the document to clarify this fact. Also revise this page to
clarify your duty to revise the document if a material change occurs
in the information previously disseminated.
Response:
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Parent and Purchaser note that the projections included in the Offer
to Purchase were prepared by the Company, were not prepared with a
view to public disclosure and are included in the Offer to Purchase
only because such information was provided to Parent in connection
with its evaluation of a business combination transaction with the
Company and its determination to proceed with a transaction at the
Offer Price. Parent and Purchaser also note that the projections were
prepared to reflect the Company's performance on a standalone basis
and that, in light of the transaction (including costs incurred in
connection therewith), such projections may not reflect the
performance of the Company on a standalone basis if the transaction
is not ultimately completed. Parent and Purchaser acknowledge that if
they become aware that the projections, or the material assumptions
underlying them, are no longer valid, Purchaser and Parent may be
required under federal securities laws to revise the Offer to
Purchase to inform stockholders of such change. Parent and Purchaser
note, however, that such a determination to revise or update the
Offer to Purchase will necessarily be based on whether they become
aware of relevant developments, as well as on a number of other
factors, including the long term nature and inherent subjectivity of
the projections.
Financial Information, page 19
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6. Please revise to clarify which of BEI's financial information you
incorporate by reference. All information incorporated by reference
into this document must be included as an exhibit to the Schedule TO.
Furthermore, information may be incorporated only to the extent
permitted by the Schedule. See General Instruction F of Schedule TO.
Please revise the Schedule and the disclosure document accordingly.
Response:
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Purchaser has revised the disclosure in the section entitled "Certain
Information Concerning the Company--Available Information" in
response to the Staff's comment and included the referenced documents
as exhibits to the Schedule. Parent and Purchaser believe that
incorporation by reference of the applicable information is permitted
by the Schedule. Instruction F states that information contained in
exhibits to the statement may be incorporated by reference unless it
would render the answer misleading, incomplete, unclear or confusing.
In the revised disclosure, Purchaser has specifically enumerated the
financial information to be incorporated and has included the
relevant documents as exhibits. We note that we previously made clear
in the Offer to Purchase under the section entitled "Certain
Information Concerning the Company--Available Information" where the
relevant documents are made available to stockholders. Parent and
Purchaser believe the disclosure, as it pertains specifically to the
referenced financial information, is now clear and complete.
Available Information, page 19
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7. Please note that the SEC maintains public reference facilities in
Washington, DC only.
Response:
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Purchaser has revised the disclosure in the section entitled "Certain
Information Concerning the Company--Available Information" in
response to the Staff's comment.
Conditions to the Offer, page 50
8. We note that the bidders may waive certain conditions to the offer.
It appears that several of these conditions are material to the
offer. Please note that if you waive a material condition, there must
be five business days remaining in the offer from the time you
disseminate notice of the material change. Please confirm your
understanding.
Response:
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Parent and Purchaser understand and acknowledge that if a material
condition is waived, there must be five business days remaining in
the Offer from the time they disseminate notice of the material
change. The fourth paragraph on page 10 of the Offer to Purchase
under the section entitled "Terms of the Offer" sets forth this
requirement.
9. A tender offer may be conditioned on a variety of events and
circumstances, provided that they are not within the direct or
indirect control of the bidder, and are drafted with sufficient
specificity to allow for objective verification that the conditions
have been satisfied. We are unable to locate disclosure regarding the
covenants referenced in the conditions section. Please revise the
document to clarify this condition to the offer.
Response:
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Purchaser has revised the disclosure in the section entitled "Certain
Conditions to the Offer" in response to the Staff's comment. Under
the Merger Agreement, Parent, Purchaser and the Company have agreed
that certain obligations and limitations will apply in connection
with the satisfaction of particular conditions. The disclosure in the
sections entitled "--Certain Regulatory Obligations" and "--CT
Contracts," in conjunction with that in Section 10 of the Offer to
Purchase, is intended to provide additional background and more fully
explain the obligations of the parties in connection with the
applicable conditions. The disclosure under "--Certain Regulatory
Obligations" addresses the obligations of Parent and Purchaser with
respect to the satisfaction of conditions relating to governmental
consents and approvals, including conditions (2), (3), (4), (5) and
(6), specified on page 50 of the Offer to Purchase. These covenants
are also described under "--Filings; Regulatory Approvals and
Arrangements" on page 33 of the Offer to Purchase. The disclosure
under "--CT Contracts" addresses an agreement of the parties with
respect to the operation of the condition set forth in clause (d) on
page 51 of the Offer to Purchase. This agreement is also described on
page 40 of the Offer to Purchase.
10. We note that you have reserved the right to waive conditions to the
offer "at any time and from time to time." Defining the conditions as
a continuing right that may be waived at any time suggests that
conditions to the offer may be waived after expiration of the offer.
Please be advised that all conditions of the offer, other than those
dependent upon the receipt of necessary government approvals, must be
satisfied or waived before the expiration of the offer. Please revise
the disclosure accordingly.
Response:
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Purchaser has revised the disclosure in the section entitled
"Conditions to the Offer--General" in response to the Staff's
comment.
Pending Litigation, page 56
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11. Please provide us supplemental copies of the complaint, answer, and
any material filings in the litigation discussed here. See the
Instruction to Item 1011(a)(5) of Regulation M-A.
Response:
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Parent and Purchaser understand from the Company that, since the
Schedule TO was filed on August 3, 2005 (which included the complaint
in the discussed litigation), there are no such additional documents,
or any other documents relating to a "major development," or that
would otherwise be required to be filed under the Instruction to Item
1011(a)(5) of Regulation M-A, in connection with the litigation
discussed in the section entitled "Certain Legal Matters; Regulatory
Approval--Pending Litigation." Parent and Purchaser note that an
update pertaining to the referenced litigation matter has been
provided in Schedule TO, Amendment No. 2, filed August 17, 2005.
Exhibits
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12. We note the pricing supplements filed with the first amended Schedule
TO; however, it does not appear that the bidders have provided all
loan documents required to be filed by Item 1016 of Regulation M-A.
Please revise or advise.
Response:
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Parent and Purchaser advise that they have filed, as part of the
Schedule TO filed on August 3, 2005 and the first amended Schedule
TO, what they believe to be all loan agreements referred to in
response to Item 1007(d) of Regulation M-A. As indicated on page 21
of the Offer to Purchase, the filed pricing supplements contain the
terms of the tranches issued pursuant to the Programme, while the
Agency Agreement and the Deed of Covenant, as previously filed, are
the material agreements covering the Programme. Form documentation
with respect to the notes issued pursuant to each tranche, including
temporary and permanent global notes and/or notes issued in exchange
for interests in a global note, are included as schedules to the
Agency Agreement, as previously filed. As indicated on such
schedules, the terms and form of issued notes are supplemented or
varied in accordance with the provisions of the relevant pricing
supplement for the applicable tranche. Parent and Purchaser do not
believe that the general Programme offering circular is a "loan
agreement" for the purposes of the Item 1016 requirement.
Exhibit (a)(1)(B) - Letter of Transmittal
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13. Please refer to page 11. Because Schedule TO requires you to describe
the federal tax consequences of the transaction, it is unclear why
you have provided the disclaimer related to Circular 230. Please
eliminate this disclaimer or advise.
Response:
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Purchaser has deleted the reference to Treasury Department Circular
230 in response to the Staff's comment.
Closing Comments
In response to the Staff's request, Parent and Purchaser acknowledge
that:
o Parent and Purchaser are responsible for the adequacy and
accuracy of the disclosure in the filings;
o 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
o Parent and Purchaser 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.
To discuss this letter, or if you have any questions or require any further
information with respect to Amendment No. 3 to the Schedule TO or any other
matters relating to this filing, please call the undersigned at (212)
735-2524.
Very truly yours,
/s/ Randall H. Doud
Randall H. Doud
cc: Pedro Salazar, Esq. (Schneider Electric SA)
Howie Japlon, Esq. (Beacon Purchaser Corporation)