# SECURITIES AND EXCHANGE COMMISSION

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URL: https://www.frixlaw.com/law-library/documents/agency%3Asec%3A3e5de1cdc3822cf9

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,

D.C. 20549

DIVISION OF
CORPORATION FINANCE

August 17, 2016

Response of the Office of Mergers and Acquisitions
Division of Corporation Finance

Scott Saks
Paul Hastings LLP
200 Park Avenue
New York, NY 10166
Re: Cash tender offer for Shares of AIXTRON SE
Dear Mr. Saks:
We are responding to your letter dated August 17, 2016, addressed to Ted Yu, Christina Chalk
and Daniel Duchovny, as supplemented by telephone conversations with the staff, with regard to your
request for exemptive and no-action relief. To avoid having to recite or summarize the facts set forth
in your letter, we attach the enclosed copy of your letter. Unless otherwise noted, capitalized terms
in this response letter have the same meaning as in your letter dated August 17, 2016.
Section I
On the basis of the representations and the facts presented in your letter, the Division of
Corporation Finance, acting for the Commission pursuant to delegated authority, by separate order is
granting the Bidder Entities an exemption from:
•

Exchange Act Section 14(d)(5) and Exchange Act Rule 14d-7 to terminate withdrawal
rights for Shares tendered during the Acceptance Period and Additional Acceptance
Period, under the circumstances described in your letter; and

•

Exchange Act Rules 14d-l l(c) and (e) to permit payment for Shares tendered during
the Additional Acceptance Period between four and twelve Banking Days after the
expiration of the Additional Acceptance Period or four to twelve Banking Days after
the satisfaction or waiver of the Regulatory Offer Conditions, whichever is later.

Scott Saks, Esq.
Paul Hastings LLP
August 17, 2016
Page2
Section II
Based on the representations in your August 17, 2016 letter, the staff of the Division of
Corporation Finance will not recommend enforcement action under Exchange Act Rules 14e-1 (b)
and (c). The no-action position under Rule 14e-1 (b) permits the Bidder Entities to extend the
Acceptance Period for a period of two calendar weeks in the event of a change that would otherwise
require an extension often U.S. business days, as required by German law. The no-action position
under Rule 14e-1 (c) allows the Bidder Entities to pay for tendered Shares four to twelve Banking
Days after the expiration of the Acceptance Period and Additional Acceptance Period, as applicable,
in accordance with the additional flexibility provided by BaFin for payment in this Offer. In
addition, if some or all Regulatory Offer Conditions are not satisfied by the end of the Acceptance
Period or Additional Acceptance Period, this relief allows for payment for tendered Shares within
four to twelve Banking Days after satisfaction or waiver of all Regulatory Offer Conditions. If any
Offer conditions other than Regulatory Offer Conditions are unsatisfied or waived at the expiration of
the Acceptance Period, or if any Regulatory Offer Conditions are not ultimately satisfied or waived,
the tendered Shares will be returned promptly.
In granting the exemptive and no-action relief described above, we note in particular:
•

The Bidder Entities' representations that the Offer qualifies for the Tier II
cross-border exemptions provided in Exchange Act Rule 14d-l(d);

•

Your representation that German law does not permit the Acceptance Period to
extend beyond ten weeks except in limited circumstances generally relating to a
competing bid or a change in the terms of the Offer within the last two weeks of
the Acceptance Period. BaFin cannot grant or permit an exception to this
10-week maximum offer period established by German law;

•

Although German law does not require withdrawal rights except in limited
circumstances, the Bidder Entities will provide withdrawal rights through the
expiration of the Acceptance Period in accordance with Exchange Act Section
14(d)(5) and Exchange Act Rule 14d-7, subject to the relief described above;

•

U.S. holders of Ordinary Shares (and all holders of ADSs who transfer their
securities into direct share form) may participate in the "as tendered" trading
market arranged in connection with this Offer as described in your letter;

•

German practice permits a single settlement for all Shares tendered in the Offer
after the expiration of the Additional Acceptance Period. However, the Bidder
Entities will pay for tendered Shares in two settlement periods here, to the extent
that all Offer conditions, including Regulatory Offer Conditions, are satisfied at
the expiration of the Acceptance Period;

Scott Saks, Esq.
Paul Hastings LLP
August 17, 2016
Page 3
•

The exemption from Exchange Act Section 14(d)(5) and Exchange Act Rule
14d-7 granted above suspends withdrawal rights for up to 30 calendar days from
the expiration of the Acceptance Period only if all Regulatory Offer Conditions
have not been satisfied or waived at the expiration of that period, plus a period
of up to twelve Banking Days to complete the payment process from the time
that all conditions are satisfied or waived; and

•

German law mandates an extension of exactly two calendar weeks in the event
of a material change in the terms of the Offer during the last two weeks of the
Acceptance Period, which cannot be varied.

The foregoing exemptive and no-action relief is based solely on the representations and the
facts presented in your letter dated August 17, 2016 and does not represent a legal conclusion with
respect to the applicability of the statutory or regulatory provisions of the federal securities laws.
The relief is strictly limited to the application of the rules listed above to this transaction. You should
discontinue this transaction pending further consultations with the staff if any of the facts or
representations set forth in your letter change. In addition, this position is subject to modification or
revocation if at any time the Commission or the Division of Corporation Finance determines that such
action is necessary or appropriate in furtherance of the purposes of the Exchange Act.
We also direct your attention to the anti-fraud and anti-manipulation provisions of the federal
securities laws, including Sections lO(b) and 14(e) of the Exchange Act and Rule lOb-5 thereunder.
Responsibility for compliance with these and any other applicable provisions of the federal securities
laws rests with the participants in this transaction. The Division of Corporation Finance expresses
no view with respect to any other questions that this transaction may raise, including, but not limited
to, the adequacy of the disclosure concerning, and the applicability of any other federal or state laws
to, this transaction.

Sincerely,

Ted Yu
Chief, Office of Mergers & Acquisitions
Division of Corporation Finance

Enclosure

UNITED STATES OF AMERICA
BEFORE THE
SECURITIES AND EXCHANGE COMMISSION
August 17, 2016

In the Matter of a Tender Offer for
Shares of AIXTRON SE

ORDER GRANTING EXEMPTION FROM
EXCHANGEACTRULE 14D-7, 14D-ll(c)AND
(E)ANDEXCHANGEACTSECTION 14(D)(5)

Grand Chip Investment GmbH submitted a letter dated August 17, 2016 requesting that the
Securities and Exchange Commission ("Commission") grant an exemption from Exchange Act
Rules 14d-7, 14d-1 l (c) and (e) and Exchange Act Section 14(d)(5) for the transaction described in
its letter ("Request").
Based on the representations and the facts presented in the Request, and subject to the terms
and conditions described in the letter from the Division of Corporation Finance dated August 17,
2016, it is ORDERED that the request for an exemption from Exchange Act Rules 14d-7, 14d-l 1(c)
and (e) and Exchange Act Section 14(d)(5) is hereby granted.
For the Commission, by the Division of Corporation Finance, pursuant to delegated
authority.

Brent J. Fields
Secretary

Action as set forth or recommended herein APPROVED
pursuant to authority delegated by the Commission under
Public Law 87-592.
For: Division of Corporation Finance

By :

/
i-- 0 I G

PAUL
HASTINGS
1 (212) 318-6311
scottsaks@paulhastings.com

August 17, 2016

Mr. Ted Yu
Chief, Office of Mergers and Acquisitions
Ms. Christina Chalk
Senior Special Counsel, Office of Mergers and Acquisitions
Mr. Daniel Duchovny
Special Counsel, Office of Mergers and Acquisitions
Division of Corporation Finance
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Dear Mr. Yu, Ms. Chalk and Mr. Duchovny:
Pursuant to our conversations with Ms. Christina Chalk and Mr. Daniel Duchovny of the staff (the "Staff')
of the U.S. Securities and Exchange Commission (the "Commission"), we are writing to you on behalf of
our clients, Grand Chip Investment GmbH, a German limited liability company (the "Offeror"), and the
other Bidder Entities (as defined below).
On May 23, 2016 (the "Announcement Date"), the Offeror, an indirect wholly-owned subsidiary of Fujian
Grand Chip Investment Fund LP ("FGC"), a limited partnership under the laws of the People's Republic of
China (the "PRC"), announced its intention to commence an all cash tender offer (the "Offer") for all
outstanding registered no-par value ordinary shares (the "Ordinary Shares"), including all Ordinary
Shares represented by American Depositary Shares (the "ADSs" and, together with the Ordinary Shares,
the "Shares"), of AIXTRON SE, a German stock corporation ("AIXTRON" and, together with its
consolidated subsidiaries, the "AIXTRON Group"). The Offer commenced on July 29, 2016 and is being
made in accordance with a Business Combination Agreement (the "BCA"), dated May 23, 2016, by and
among: (i) AIXTRON; (ii) AIXTRON China Ltd., a Chinese limited liability company and a wholly-owned
subsidiary of AIXTRON; (iii) Offeror; (iv) FGC; and (v) Mr. Zhendong Liu, FGC's general and managing
partner and majority owner ("Mr. Liu"). On August 11, 2016, AIXTRON's Management Board and
Supervisory Board, by way of a joint reasoned statement (the "AIXTRON Reasoned Statement") pursuant
to Section 27 (1) of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und
Obernahmegesetz, WpOG) (the "German Takeover Act"), held that the Offer is fair to and in the best
interest of AIXTRON and its stakeholders and recommended that AIXTRON's shareholders accept the
Offer.
As previously discussed with the Staff, we hereby request that the Staff grant exemptive relief to the
Bidder Entities under Section 14(d)(5) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and Rule 14d-7 and Rules 14d-11 (c) and (e) under the Exchange Act. We further
request the Staff to confirm that, based on the facts and circumstances described in this letter, it will not

Paul Hastings LLP I 200 Park Avenue I New York, NY 10166
t: + 1 .212.318.6000 I www.paulhastings.com

PAUL
HASTINGS

August 17, 2016
Page 2

recommend any enforcement action to the Commission with respect to Rules 14e-1 (b) or (c) under the
Exchange Act if the Bidder Entities conduct the Offer as described in this letter. 1
AIXTRON has represented to us that it is a "foreign private issuer" (as defined in Rule 3b-4(c)
promulgated under the Exchange Act). As described herein, we believe that U.S. holders hold less than
40% of the Ordinary Shares, including Ordinary Shares represented by ADSs, and that the Offer
therefore qualifies for Tier II exemptive relief pursuant to Rule 14d-1 (d) promulgated under the Exchange
2
Act.
We are U.S., German and international counsel to the Bidder Entities in connection with the Offer.
Certain lawyers from our Frankfurt office, who are members of German bar, have reviewed the
representations in this letter concerning German law and practice.

Background Information
The AIXTRON Group
The AIXTRON Group's business activities include developing, producing and installing equipment for the
deposition of semiconductor and other complex materials, process engineering, consulting and training,
including on-going customer support and after-sales service. According to information provided by
AIXTRON, the AIXTRON Group is a leading provider of deposition equipment to the semiconductor
industry. The AIXTRON Group's technology solutions are used by a diverse range of customers
1

We believe that the relief requested in this letter is consistent with the relief granted by the Commission
in similar transactions. Bayer AG, SEC No-Action Letter, File No. 5-59757 (April 28, 2006) ("Bayer/").
See also Tender Offer by China National Chemical Corporation and CNAC Saturn (NL) B. V. for all
Publicly-held Shares and ADSs of Syngenta AG, SEC No-Action Letter (Mar. 21, 2016); Oak Leaf B. V.,
Acorn B. V. and Acorn Holdings B. V. Offer for all Ordinary Shares of D. E. Master Blenders 1753 N. V.,
SEC No-Action Letter (May 21, 2013); Cash Tender Offer by International Business Machines
Corporation for Ordinary Shares and ADSs of /LOG S.A., SEC No-Action Letter (Oct. 9, 2008); Axel
Springer AG Offer for ProSiebenSat.1 Media AG, SEC No-Action Letter (Sept. 12, 2005) ("Axel
Springer"); Offer by BCP Crystal Acquisition GmbH & Co., et al for Celanese AG, SEC No-Action Letter,
File No. 5-57467 (Feb. 3, 2004); The Royal Bank of Scotland Group Pie Offer for Shares and ADSs of
National Westminster Bank Pie, SEC No-Action Letter, File No. 5-55229 (Dec. 30, 1999) ("Royaf'); and
Vodafone Airtouch Pie Offer for Mannesmann Aktiengesellschaft, SEC No-Action Letter, File No. TP 0029 (Dec. 22, 1999). We also believe that the relief requested in this letter is consistent with the
Commission's guidance set forth in the Commission's releases. See Commission Guidance and
Revisions to the Cross-Border Tender Offer, Exchange Offer, Rights Offerings and Business Combination
Rules and Beneficial Ownership Reporting Rules for Certain Foreign Institutions, Release Nos. 33-8957,
34-58597 (Sep. 19, 2008) (the "2008 Cross-Border Release"); Cross-Border Tender and Exchange
Offers, Business Combinations and Rights Offerings, Exchange Act Release Nos. 33-7759, 34-42054,
39-2378, International Series Release No. 1208 (Oct. 22, 1999) (the "1999 Cross-Border Release" and,
together with the 2008 Cross-Border Release, the "Cross-Border Releases").
2

We are unable to conclude that U.S. holders do not hold more than 10% of the Ordinary Shares, and
therefore, we are unable to conclude that the Offer qualifies for Tier I exemptive relief pursuant to Rule
14d-1 (c) under the Exchange Act.

PAUL
HASTINGS

August 17, 2016
Page 3

worldwide to build advanced components for electronic and optoelectronic applications based on
compound, silicon, or organic semiconductor materials. Such components are used in displays,
signaling, lighting, fiber optic communication systems, wireless and mobile telephony applications, optical
and electronic storage devices and computing, as well as a range of other applications.
Based on information contained in AIXTRON's Annual Report on Form 20-F for the fiscal year ended
December 31, 2015, filed with the Commission on February 23, 2016 (the "AIXTRON Form 20-F"), during
the fiscal year ended December 31, 2015, the AIXTRON Group generated total revenues of
approximately EUR 197.8 million and had a net loss of approximately EUR 29.2 million. According to
AIXTRON's Report on Form 6-K filed with the Commission at 15:36 on August 11, 2016 (the "AIXTRON
August 11th Form 6-K"), during the first half of 2016, AIXTRON generated total revenues of
approximately EUR 55.5 million and had a net loss of approximately EUR 26.6 million. According to the
AIXTRON August 11th Form 6-K, as of June 30, 2016, AIXTRON had a total of 724 employees.
The Ordinary Shares and ADSs
According to its public filings, including the AIXTRON Form 20-F, AIXTRON's ADSs and Ordinary Shares
are registered under Section 12(b) of the Exchange Act. The principal trading market for the Ordinary
Shares is the Frankfurt Stock Exchange (the "FSE") where the Ordinary Shares trade under the symbol
"AIXA." In addition, the Ordinary Shares are traded on the regulated unofficial market of the stock
3
exchanges in Berlin, Dusseldorf, Hamburg, Munich and Stuttgart. The Ordinary Shares are, among
other things, included in the TecDAX share index. ADSs issued under AIXTRON's sponsored American
Depositary Receipt program with The Bank of New York Mellon ("BNY Mellon"), each evidencing one
Ordinary Share, are listed on The NASDAQ Global Select Market ("NASDAQ") and trade under the
symbol "AIXG." AIXTRON is subject to the listed company rules of the NASDAQ and the informational
reporting requirements of the Exchange Act, in each case that are applicable to foreign private issuers.
All of AIXTRON's Ordinary Shares are registered shares and are freely transferable through the
Clearstream Banking AG booking system (the "Clearstream System").
Based on information contained in the AIXTRON Form 20-F, as of December 31, 2015, (i) there were
112,720,355 Ordinary Shares issued, of which 1, 138,572 Ordinary Shares were held as treasury shares;
(ii) BNY Mellon, in its capacity as AIXTRON's depositary bank, held 4, 158,984 Ordinary Shares,
represented by 4,158,984 ADSs, or 3.7% of AIXTRON's outstanding Ordinary Shares; (iii) AIXTRON had
137 registered ADS holders; and (iv) AIXTRON had an estimated 4, 131 beneficial holders of ADSs.
According to the AIXTRON Form 20-F, as of February 10, 2016, AIXTRON had 51,772 shareholders
registered in its share register of Ordinary Shares. Based on information in the Reasoned Statement, as
of August 11, 2016, there were 112,737,030 Ordinary Shares issued, and AIXTRON held 1, 138,572
treasury shares as of June 30, 2016.

3

The Ordinary Shares are not traded on any U.S. securities exchange. Based on information reported in
the over-the-counter trading system obtained by the Offerer's financial advisor, with respect to the twelve
months preceding the Announcement Date, the Ordinary Shares traded very little in the United States
and in very thin volumes (fewer than 30 days, with periods of up to 12 weeks where no trades occurred).
On days that there was trading in the United States, on average fewer than 300 Ordinary Shares traded
on each such day.

PAUL
HASTINGS

August 17, 2016
Page4

The Bidder Entities
The Bidder Entities consist of the following entities:
•

The Offerer - a limited liability company that was organized under the laws of Germany for
purposes of the Offer. The Offerer has not conducted any operations other than in connection
with the Offer.

•

Grand Chip Investment S.a r.I. ("Intermediate Holding Company") - a limited liability company that
was organized under the laws of Luxembourg for purposes of the Offer and owns all of the shares
of the Offerer. Intermediate Holding Company has not conducted any operations other than in
connection with the Offer and holding all of the shares of the Offerer.

•

FGC - a limited partnership under the laws of the PRC that directly owns all of the shares of
Intermediate Holding Company and indirectly, through Intermediate Holding Company, all of the
shares of the Offerer.

FGC has two partners, a general partner and a limited partner. The general partner, Mr. Liu, has agreed
to make a capital contribution of CNY 1,020 million (approximately EUR 139.6 million) and has an equity
interest of 51 % in FGC. The limited partner, Xiamen Bohao Investment Co., Limited (the "Limited
Partner"), has agreed to make a capital contribution of CNY 980 million (approximately EUR 134.1 million)
and has an equity interest of 49% in FGC. As of May 31, 2016, approximately EUR 257.6 million of the
capital commitments of Mr. Liu and the Limited Partner had been received by FGC. Mr. Liu, as the
general partner, has been appointed the managing partner of FGC pursuant to FGC's limited partnership
agreement. As managing partner, Mr. Liu has the sole and exclusive right to conduct the affairs of FGC,
including, without limitation, its investment and other business; the management, maintenance and
disposal of its assets; the execution of agreements on its behalf; and the hiring other professionals,
advisors and consultants to provide it services. Matters with respect to the fundamental issues of FGC
also need the approval of the Limited Partner, such as the admission or withdrawal of the partners, the
conversion of limited partner to general partner or general partner to limited partner and amending the
limited partnership agreement.
Mr. Zhendong Liu (the General Partner of FGC)
Mr. Liu is a Chinese citizen. In addition to being the general and managing partner of FGC, Mr. Liu is
also the sole managing director of the Offerer and the class A manager of Intermediate Holding
Company. Mr. Liu is an investor with over 15 years of investment expertise, particularly in mining. Mr.
Liu holds shares in several listed and unlisted mining companies in the PRC and other countries. An
overview of the companies controlled by Mr. Liu (other than the Offerer, Intermediate Holding Company
and FGC) is attached as Exhibit A hereto.
Xiamen Bohao Investment Co., Limited (the Limited Partner of FGC)
The Limited Partner is a limited liability company under the laws of the PRC. The shareholders of the
Limited Partner are (i) Xiamen Jinyuan Industry Development Co., Limited ("LP Devco"), which is
indirectly owned by Xiamen Municipal Bureau of Finance subordinated to Xiamen Municipal Government,
the PRC, and (ii) Xiamen Youhong Trade Co., Limited ("LP Tradeco"), which is 55% owned by Mr.

PAUL
HASTINGS

August 17, 2016
Page 5

Zhongyao Wang and 45% owned by Mr. Wanming Huang. LP Devco owns 97.56% of the Limited
Partner and LP Tradeco owns the remaining 2.44%; however, pursuant to the Limited Partner's articles of
association, LP Tradeco is entitled to exercise all of the voting rights of LP Devco and is entitled to
nominate, elect and/or appoint the Executive Director, Supervisor and Manager of the Limited Partner.
LP Devco is, however, required to approve capital increases or deductions, mergers, divisions,
dissolutions, liquidations, changes to the form of the Limited Partner, and changes to the articles of
association of the Limited Partner.

Qualification for Tier II Relief
AIXTRON, the subject company of the Offer, is a foreign private issuer as defined in Rule 3b-4(c) under
the Exchange Act. Therefore, the Offer will be eligible for the Tier II relief if U.S. holders do not hold more
than 40% of the Ordinary Shares sought in the Offer, as calculated on the basis specified in Instruction 2
to paragraphs (c) and (d) of Rule 14d-1 under the Exchange Act.
The Offeror hired Orient Capital Ltd. ("Orient Capital") to conduct an analysis of U.S. holders in
accordance with the Instructions to paragraphs (c) and (d) to Rule 14d-1 under the Exchange Act as of
June 3, 2016, a date less than 30 days after the Announcement Date of May 23, 2016. According to
AIXTRON's share register as of June 3, 2016 (the "Share Register"), there were 112,720,355 Ordinary
Shares issued, including 59,647 treasury shares and 4, 110,903 Ordinary Shares represented by ADSs.
Accordingly, as of June 3, 2016, there were 112,660,708 Ordinary Shares issued and outstanding.
Based on the "AIXTRON SE US Beneficial Ownership Study," dated June 17, 2016 provided by Orient
Capital (the "Ownership Study"), as of June 3, 2016, 23,935,350 Ordinary Shares (approximately 21.25%
of the total issued and outstanding Ordinary Shares), including 3,845,077 Ordinary Shares represented
by ADSs, were held by persons who are resident in the United States. According to the Ownership
Study, these 23,935,350 Ordinary Shares were held by 244 U.S. beneficial owners.
Orient Capital used the following sources of information in conducting the Ownership Study:
•

the Share Register;

•

AIXTRON's American depositary receipt OTC list as of June 3, 2016 (the "ADR OTC List"); and

•

AIXTRON's signed Letter of Authority (the "LOA") referencing Section 67(4) of the German
Corporation Act (Aktiengesetz AktG) authorizing Orient Capital to investigate beneficial
ownership interest in its Ordinary Shares.

Using the Share Register as the main source to identify U.S. beneficial owners, initial disclosure requests
containing the LOA were issued via email to 169 nominees and custodians on the Share Register and
ADR OTC List. These notices requested details specifying the identity, domicile and shareholdings of
underlying owners as of June 3, 2016.
Seventy-seven disclosure requests were sent to nominees and sub-custodians on the Share Register and
a further 92 to OTC participants. Orient Capital did not contact beneficial holders directly and only
contacted nominees, OTC participants and sub-custodians.

PAUL
HASTINGS

August 17, 2016
Page 6

All requests required the recipients to respond with shareholding information as of June 3, 2016. In the
cases where responses were not received following the first disclosure request issued, a second request
was issued a few days after the initial request. For entities believed to hold shares on behalf of U.S.
residents, several emails and telephone follow-ups were required to elicit a response.
Responses received were fully analyzed and audited to ensure that all U.S. beneficial owners were
identified, regardless of size of holding. The findings were then reviewed by an Orient Capital Analysis
Manager.
In cases where no response was received by June 17, 2016 and Orient Capital was unable to obtain
information about customer accounts of nominee or custodial holders after reasonable inquiry and good
faith effort, in accordance with Instruction iv. to the Instructions to paragraphs (c) and (d) of Rule 14d-1
under the Exchange Act, Orient Capital presumed such accounts are held in the principal place of
business of such nominee or custodial holder.
Of the 23,935,350 Ordinary Shares identified by Orient Capital as held by U.S. beneficial owners as of
June 3, 2016, 3,845,077 Ordinary Shares were held by 101 U.S.-domiciled beneficial owners through
ADSs. Of these Ordinary Shares represented by ADSs:
•

1,402,997 were identified as being held on behalf of retail investors by 24 brokers (none of these
brokers provided a breakdown of underlying beneficial owners);

•

1, 512, 115 were identified as being held on behalf of 76 beneficial owners that were identified as
institutional in nature; and

•

929,965 shares were unidentified but were allocated to U.S. Institutional for the purposes of the
Ownership Study.

Of the Ordinary Shares listed on the Share Register, 20,090,273 Ordinary Shares were identified as
being held by U.S. resident beneficiaries, of which 29,751 were held by at least 28 retail shareholders and
20,060,522 shares were held by institutional beneficial owners.
The following breakdown of U.S. Institutional versus U.S. Retail Investors that held Ordinary Shares
and/or ADSs, as of June 3, 2016 was provided by Orient Capital:

Investor Type
U.S. Institutional
U.S. Retail
Total
*Difference due to rounding

Number of Shares Held
22,502,602
1,432,748
23,935,350

Percent of Issued and
Outstanding
19.97%
1.27%
21.25%*

PAUL
HASTINGS

August 17, 2016
Page 7

The Offer
Structure
The Offer is being made to the holders of all of the issued and outstanding Ordinary Shares, including
Ordinary Shares represented by ADSs, at a cash price of EUR 6.00 per Ordinary Share, including each
Ordinary Share represented by an ADS tendered in the Offer (the "Offer Price"). BNY Mellon, acting as
ADS Tender Agent (the "ADS Tender Agent"), will convert the Offer Price received for the Ordinary
Shares that represent ADSs tendered in the Offer into U.S. Dollars by sale or in any other manner it may
determine and will pay holders of ADSs in U.S. Dollars. All holders of Ordinary Shares, including U.S.
holders of Ordinary Shares, tendered in the Offer will be paid the Offer Price in Euros. The Offer has
been structured as a single offer made concurrently in Germany and the United States. The Offer has
also been structured to comply with the German Takeover Act and the rules and regulations promulgated
thereunder and, except to the extent permitted pursuant to the relief requested herein, Sections 14(d) and
14(e) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent legally
possible, given these different regulatory schemes, the Bidder Entities intend to conduct the Offer in a
manner that ensures equality of opportunity for, and treatment of, all holders of Shares and that complies
with generally applicable requirements in both Germany and the United States.
Commencement
The tender offer materials have been provided or made available to the holders of Ordinary Shares and
holders of ADSs and were prepared in accordance with the requirements of both the German Takeover
Act and, except as described herein, Sections 14(d) and 14(e) of the Exchange Act and the rules and
regulations promulgated thereunder, and are available in either the German language (the "German Offer
Materials") or the English language (the "U.S. Offer Materials" and, together with the German Offer
Materials, the "Offer Materials"), based on shareholders' requests. The German Offer Materials and the
U.S. Offer Materials are substantively identical.
The Offer was commenced in Germany by publication of the German Offer Materials on the Internet on
July 29, 2016 and announcement that the German Offer Materials can be picked up free of charge at a
specified location and will be mailed to investors free of charge upon request. The Offer was commenced
in the United States by publication of a summary advertisement in The New York Times (U.S. Edition) on
July 29, 2016, including a statement that the Offeror will mail the U.S. Offer Materials to holders of
Ordinary Shares and ADSs upon request, in accordance with Rule 14d-4(a)(2) under the Exchange Act.
In addition, the Offeror has mailed the U.S. Offer Materials to all holders of ADSs.
The initial offering period is to remain open for ten weeks (and in any event at least 20 business days
from the publication of a summary advertisement as described above) (such period, as it may be
extended, the "Acceptance Period") and, if certain conditions are met, to be followed by a two-week
subsequent offering period (the "Additional Acceptance Period").
Conditions to the Offer
Completion of the Offer is subject to the following conditions, which are described in the Offer Materials:

PAUL
HASTINGS

August 17, 2016
Page 8

1.

Regulatory Approvals. By February 28, 2017 (the "Termination Date"), the following must have
occurred:
a.

the German Federal Ministry of Economics and Energy (Bundesministerium far
Wirtschaft und Energie - "BMWi") shall have issued a clearance certificate
( Unbedenklichkeitsbescheinigung) pursuant to the provisions of the German Foreign
Trade Act (Auf3enwirtschaftsgesetz - "AWG") and German Foreign Trade Ordinance
(Auf3enwirtschaftsverordnung- "AVW"), or the period during which BMWi may prohibit
the acquisition of all Ordinary Shares, including all Ordinary Shares represented by ADS,
at the Offer Price, in cash (the "Transaction"), or issue orders in relation to the
Transaction under AWG and AVW has expired without any such action being taken; and

b.

with respect to the Transaction, CFIUS Approval shall have been obtained. "CFIUS
Approval" means (a) a written notification issued by the Committee on Foreign
Investment in the United States ("CFIUS") that it has concluded its review (or, if
applicable, investigation) pursuant to the Exon-Florio Amendment to the Defense
Production Act of 1950, 50 U.S.C app. § 2170, as amended ("Exon-Florio"), and
determined (1) that the Transaction is not a "covered transaction" pursuant to Exon-Florio
or (2) that there are no unresolved national security concerns with respect to the
Transaction, or (b) if CFIUS has sent a report to the President of the United States
requesting the President of the United States' decision with respect to the Transaction,
either (1) the period under Exon-Florio during which the President of the United States
may announce his decision to take action to suspend or prohibit the Transaction has
expired without any such action being announced or taken, or (2) the President of the
United States has announced a decision not to take any action to suspend or prohibit the
Transaction; and

c.

with respect to the Transaction, the notification of project filing shall have been issued by
the National Development and Reform Commission of the PRC or its competent local
counterparts ("NDRC") by electronic, hardcopy certificate or other means to confirm the
completion of the outbound investment filing process with NDRC; and

d.

with respect to the Transaction, certificates evidencing the completion of the overseas
investment foreign exchange registration and foreign exchange conversion and
remittance shall have been issued by a qualified bank approved by the State
Administration of Foreign Exchange of the PRC or its competent local counterparts
("SAFE") by electronic, hardcopy certificate or other means to confirm the completion of
the SAFE proceedings necessary for outbound investment; 4

(each Offer Condition pursuant to clauses a. through d. above, a "Regulatory Offer Condition" and
collectively the "Regulatory Offer Conditions"), it being understood that (a) each Regulatory Offer
Condition in clauses a. and b. shall only be fulfilled if there are no regulatory conditions,
requirements, administrative rulings, orders or measures contained in the respective approval,
4

With respect to the approvals required by the NDRC and SAFE, none of the Bidder Entities nor any of
their respective affiliates has the ability to control the timing of those approvals. In addition, the Bidder
Entities have been seeking to obtain such approvals as soon as practicable.

PAUL
HASTINGS

August 17, 2016
Page 9

notification or certificate which would constitute a Regulatory MAE 5 and (b) the Regulatory Offer
Conditions pursuant to clauses c. and d. above shall only be fulfilled if at the point in time when
the last notification or certificate pursuant to clauses c. and d. has been issued the respective
other notification or certificate pursuant to clauses c. and d. and the enterprise overseas
investment certificate, which has been issued with respect to the Transaction by the Department
of Commerce of Fujian Province, PRC, on May 12, 2016, are still in full force and effect.
2.

Minimum Acceptance Threshold. At the time of the expiration of the Acceptance Period, the
aggregate number of Ordinary Shares (including the Ordinary Shares represented by ADSs) for
which the Offer has been validly accepted without the acceptance having been validly withdrawn
amounts to a total of at least 67,632 ,213 Ordinary Shares (including the Ordinary Shares
represented by ADSs) (the "Minimum Acceptance Threshold"). This corresponds to an
acceptance quota of at least 60 per cent of the 112,720,355 Ordinary Shares (including the
Ordinary Shares represented by ADSs) issued on the Announcement Date.

3.

No material adverse change in the closing quotations of DAX and TecDAX. On the trading day
prior to the expiration of the Acceptance Period:
a.

the closing quotation of the DAX, as determined by Deutsche Btirse AG , or a successor
thereof, and as published on its internet website http://www.deutsche-boerse.com, shall
be at or above 6,941.21, and

b.

the closing quotation of the TecDAX, as determined by Deutsche Btirse AG , or a
successor thereof, and as published on its internet website http://www.deutscheboerse.com, shall be at or above 1, 167.37.

As compared to the closing quotations of the respective indices on May 20, 2016, which was the
last trading day prior to the Announcement Date, a closing quotation of either index below the
above figures would mean a decline of the respective index of more than 30 per cent.
4. No Proscribed Transactions. Prior to or by the time of expiration of the Acceptance Period, other
than to settle the issued and outstanding stock options which existed on the Announcement Date
if and to the extent they are exercised ("Permitted Capital Increase"), no capital increase in
AIXTRON shall have occurred . In particular, except for any Permitted Capital Increase, the Offer
condition pursuant to this provision shall not be fulfilled in case AIXTRON issues any new shares
by way of a regular capital increase or by using authorized capital , or increase its share capital
based on issued contingent capital.
5

A "Regulatorv MAE" means any regulatory condition , requirement, administrative ruling, order or
measure made or rendered by any competent authority that would, individually or in the aggregate,
according to an Expert Opinion of the Independent Expert (each as to be defined in the U.S. Offer
Materials) to be delivered no later than 9:00 a.m. local time New York one U.S. Working Day (as defined
below) after receipt of the respective approval, notification or certificate by the Bidder or an Additional
Control Acquiror (as to be defined in the U.S. Offer Materials), result in a reduction of the consolidated
sales of AIXTRON of 27 .5 per cent or more compared to AIXTRON's forecast for the fiscal year 2016
current as of the Announcement Date. As defined in the Offer Materials, a "U.S. Working Day" refers to
every day except for Saturdays, Sundays and U.S. federal public holidays.

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HASTINGS

August 17, 2016
Page 10

Under Section 16 (1) 1 of the German Takeover Act, the Acceptance Period cannot exceed 10 weeks,
subject to only two limited exceptions in the case of (a) a change of the terms of the Offer within two
weeks prior to the expiration of the Acceptance Period, in which case the offering period will be extended
by law by two weeks pursuant to Section 21 (5) of the German Takeover Act, or (b) a competing offer
being made within the Acceptance Period with an offering period that expires after expiration of the
Acceptance Period, in which case the Acceptance Period will be prolonged by law until the expiration of
the initial offering period of the competing offer pursuant to Section 22 (2) of the German Takeover Act.
Further, BaFin cannot grant or permit an Acceptance Period that exceeds the maximum 10-week period.
Accordingly, German law contemplates, and in some cases may require, that the Acceptance Period
expire prior to satisfaction of all conditions precedent to the Offer. In that circumstance, German law
would permit the Offeror to delay payment for tendered Ordinary Shares until satisfaction of the
Regulatory Offer Conditions, at which point payment for the Ordinary Shares tendered in the Offer would
6
7
be made promptly, but no earlier than four Banking Days and no later than twelve Banking Days ,
following (i) expiration of the Acceptance Period or the Additional Acceptance Period, as applicable, and
(ii) satisfaction of the Regulatory Offer Conditions. 8 If all required Regulatory Offer Conditions are not
satisfied or waived by the Termination Date, the Offer will be terminated and the Offeror will promptly
return all previously tendered Ordinary Shares (including Ordinary Shares represented by ADSs). As
discussed below, it is possible that the Regulatory Offer Conditions will not have been satisfied at the end
of the Acceptance Period or the end of the Additional Acceptance Period.
Tender Mechanics for Ordinary Shares
Holders of Ordinary Shares in book-entry form within the Clearstream System (including such holders in
the United States) can accept the Offer by delivering a declaration of acceptance to the custodian credit
institution or financial services institution (a "Custodian Institution") that holds their Ordinary Shares. The
Custodian Institutions that hold the Ordinary Shares for which acceptances of the Offer have been
received will effect book-entry transfers in order to hold the tendered Ordinary Shares under a separate
designated securities identification number for tendered Ordinary Shares within the Clearstream System
until the expiration of the Offer.

6

As defined in the Offer Materials, a "Banking Day" is a day on which the banks in (i) Frankfurt am Main,
Germany and (ii) New York City, United States, are open for general business with retail customers.
7
Normal practice in Germany is for payment to be made four to eight German banking days following
expiration of the Acceptance Period or the Additional Acceptance Period, as applicable. However, the
German Federal Financial Supervisory Authority (Bundesanstalt fOr Finanzdienstleistungsaufsicht,
"BaFin") has permitted longer periods of up to twelve Banking Days after publication of the results of the
offer (which usually occurs three German banking days after the expiration of the acceptance period)
where circumstances warranted a longer period. With respect to the Offer and assuming the Regulatory
Offer Conditions are satisfied prior to the expiration of the Acceptance Period, the Offeror has requested,
and BaFin has allowed, settlement of the Offer to take place four to twelve Banking Days following
expiration of the Acceptance Period or the Additional Acceptance Period, as the case may be, because
extra time is expected to be required for settlement in the event the financing guarantees are drawn on by
the Bidder.
8
As a technical matter, under German law, the Offeror does not "accept" tendered Shares for payment.
Instead, the contract of purchase and sale created when a holder of Ordinary Shares, including Ordinary
Shares represented by ADSs, tenders its Shares becomes binding, and the Offeror becomes obligated to
pay for such Shares, when the last of the conditions to the Offer is satisfied.

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HASTINGS

August 17, 2016
Page 11

Tender Mechanics for U.S. Holders of Ordinary Shares represented by ADSs
The Offeror will appoint BNY Mellon to act as ADS tender agent to receive tenders of Ordinary Shares
represented by ADSs pursuant to the Offer. BNY Mellon is also the depositary bank that administers
AIXTRON's ADS program. In this regard, it is currently expected that the ADS Tender Agent will, among
other things: (i) designate a book-entry account at OTC for the purpose of acceptances of the Offer in
respect of Ordinary Shares represented by ADSs tendered by book-entry delivery; (ii) instruct its German
custodian to effect book-entry transfers of the underlying Ordinary Shares under a separate designated
securities identification number for tendered Ordinary Shares within the Clearstream System; (iii) examine
the documents required to be delivered to effect a valid acceptance of the Offer; (iv) answer procedural
questions from holders of ADSs with respect to the Offer; (v) upon the request of the Offeror, from time to
time, report the number of ADSs for which valid acceptances have been received and not withdrawn and
the number of ADSs which have been so withdrawn; and (vi) perform any other related record-keeping
tasks associated with the acceptances of the Offer by holders of ADSs. Holders of ADSs are required to
deliver the appropriate documentation, which is specified in the U.S. Offer Materials, to the ADS Tender
Agent in order to validly accept the Offer, and any irregularities in acceptances of the Offer by holders of
ADSs may only be waived with the consent of the Offeror.
"As Tendered" Trading Market
It is common market practice in German offers for tendered shares to trade on an "as tendered" basis on
the FSE. Ordinary Shares that are tendered into the Offer, but have not yet been accepted ("Tendered
Ordinary Shares") were admitted to stock market trading on the regulated market (Regu/ierter Markt) of
the FSE as of August 3, 2016, the third trading day of the FSE following the commencement of the
Acceptance Period on July 29, 2016. Trading in the Tendered Ordinary Shares on the regulated market
of the FSE is expected to end no later than (i) after regular stock exchange trading hours on the last
trading day of the FSE within the Additional Acceptance Period or (ii) unless determined otherwise by the
FSE, after regular stock exchange trading hours on the day of the satisfaction of all conditions to the Offer
(to the extent they have not been validly waived) is published, whichever is the later date. No stock
market trading of Ordinary Shares tendered in the Additional Acceptance Period is planned during the
Additional Acceptance Period. However, if all the conditions to the Offer have not been satisfied or validly
waived by the end of the Additional Acceptance Period, beginning on approximately the fifth trading day
after the Additional Acceptance Period, Ordinary Shares tendered during the Additional Acceptance
period will be able to trade in the "as tendered" market along with the Ordinary Shares tendered during
the Acceptance Period.
It is not feasible for holders of ADSs (and the Ordinary Shares represented thereby) to have the ability to
trade ADSs or the underlying Ordinary Shares on an "as tendered" basis because all tendered ADSs will
9
be blocked until the Offer is settled or terminated. Direct holders of Ordinary Shares in the United
9

With respect to ADSs, we understand:
•

There is no market practice or process for any as tendered trading market in the United States. In
fact, while it may be technically possible to establish an as tendered trading line for trading of
tendered ADSs, standard U.S. market convention and practice call for the blocking of tendered
securities to, in part, prevent their change of ownership after tendering, and that introducing a
contrary process, without assurance of proper controls being in place and tested, creates risk of

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HASTINGS

August 17, 2016
Page 12

States, however, who tender such shares in Germany would have the ability to trade Ordinary Shares on
an "as tendered" basis. Similarly, holders of ADSs have the right, pursuant to the terms of the ADSs to
withdraw the underlying Ordinary Shares and tender such Ordinary Shares in Germany.
Extension of the Offer
Under Section 21 (5) of the German Takeover Act, a change to the terms of the Offer (e.g., an increase of
the offer consideration, offer of additional consideration, reduction of the Minimum Acceptance Threshold,
and waiver of conditions to the Offer) occurring during the last two weeks of the Acceptance Period would
require that the Acceptance Period remain open for an additional period of two calendar weeks from the
end of the Acceptance Period (as opposed to the U.S. requirement that the Offer remain open for at least
ten business days from the announcement of certain material changes). If such a material change occurs
and the Acceptance Period is extended, commencement of the subsequent offering period will be
delayed accordingly.
Settlement
Section 23 (1) No.2 of the German Takeover Act requires the announcement of exact and final results of
an offer following the expiration of the Acceptance Period, and, with respect to the Minimum Acceptance
Threshold, the determination of such final results dictates whether the offer is successful or not. Under
German practice and taking into account U.S. guaranteed delivery procedures, this determination cannot
be made until the fourth Banking Day following the expiration of the Acceptance Period. This is because
(i) Ordinary Shares may be traded and tendered on the last day of the Acceptance Period, and the bookentry transfer of such Ordinary Shares into the appropriate securities identification number for tendered
Ordinary Shares within the Clearstream System can only be effected at or following settlement of the
trade, which typically occurs on T +2 and (ii) because of U.S. guaranteed delivery procedures, the ADS
Tender Agent will not be able to know the exact number of Ordinary Shares underlying ADSs to tender
into the Offer until the end of the third business day following the expiration of the Offer. The German
Takeover Act provides that the Offeror must then prepare and publish the final, official results of the Offer
on the internet and in the German Federal Gazette, which takes up to another two German banking days,
depending on the applicable newspaper's publication deadlines. Settlement for shares tendered typically
occurs within one to three German banking days thereafter.

confusion among investors as well as significant issues as to the ADS Tender Agent's ability to
proof and control tendered securities.
•

In order to allow for orderly and prompt processing of withdrawal rights, it will not cancel the
ADSs in exchange for underlying Ordinary Shares until the expiration of the Offer.

•

Because the vast majority of tenders of ADSs will be made through the OTC system, which
records the identity of the tendering party, the ADS Tender Agent must treat the OTC system as a
single tendering party, thereby making it impossible for the ADS Tender Agent to match
payments with DTC's original tender records if the identity of the tendering party were to change
as a result of "as tendered" trading.

PAUL
HASTINGS

August 17, 2016
Page 13

Additional Acceptance Period
Section 16 (2) of the German Takeover Act requires that, if prior to the expiration of the Acceptance
Period, the conditions to the Offer (other than the Regulatory Offer Conditions) are satisfied or waived,
the Offeror must provide a two-week Additional Acceptance Period during which holders may tender their
Shares for the same consideration offered in the Acceptance Period. The Additional Acceptance Period
may begin only after the Offeror publishes the number of Ordinary Shares tendered during the
Acceptance Period indicating that the Minimum Acceptance Threshold has been satisfied. Therefore, the
Additional Acceptance Period typically may not begin until the day after the fourth or fifth German banking
day following the expiration of the Acceptance Period.
German practice provides for a single settlement for all shares tendered during the Additional Acceptance
Period, which, as with the Acceptance Period, typically occurs four to eight German banking days
following the expiration of the Additional Acceptance Period. This is due to the logistical requirements of
the tender procedures described above. Unlike the practice in the United States, where a bidder is
required by Rule 14d-11 (e) to "immediately accept. .. and promptly pay ... for all securities as they are
tendered during the subsequent offering period," the Offeror's financial advisors have advised us that they
are not aware of any instance in German practice in which daily or periodic settlement has been made
during an Additional Acceptance Period.
Withdrawal Rights
Although the German Takeover Act does not require a bidder to provide shareholders with withdrawal
rights except in certain limited circumstances involving a competing offer or an amendment to the terms of
a tender offer, the Offeror has extended withdrawal rights through the Acceptance Period to all holders of
Ordinary Shares and ADSs, in accordance with Section 14(d)(5) and Rule 14d-7, subject to the relief
requested herein.

Discussion and Requests for Exemptive Relief
Section 14(d)(5) and Rule 14d-7: Post-Expiration Conditions, Withdrawal Rights and Payment of
the Offer Price
Section 14(d)(5) of the Exchange Act provides that the securities tendered in a tender offer may be
withdrawn at any time after 60 days from the date of the original offer. Rule 14d-7 requires that "any
person who has deposited securities pursuant to a tender offer has the right to withdraw any such
securities during the period such offer request or invitation remains open."
Subject to certain exceptions relating to receipt of regulatory consents, we understand that the Staff has
taken the position that a tender offer must become unconditional not later than its expiration date and that
all conditions to the offer must be satisfied or waived and the offer must be declared wholly unconditional
before a bidder can terminate the withdrawal rights of tendering security holders. We also understand the
Staff's position that an offer that remains subject to a post-expiration condition might be deemed to
"remain open" and therefore that security holders could be entitled to withdrawal rights under Section
14(d)(5) of the Exchange Act. See, e.g., Manual of Publicly Available Telephone Interpretations, Third
Supplement, II. Cross-Border Release, A. Tier II, Question I, Exchange Act Release No. 33-7759 (July
2001).

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HASTINGS

August 17, 2016
Page 14

As described above, the Acceptance Period may not exceed 10 weeks under German law, subject to
certain limited exceptions. The Bidder Entities have determined to provide a full 10-week acceptance
period to provide the maximum opportunity for all of the Regulatory Offer Conditions to be satisfied prior
to the expiration of the Acceptance Period and the Additional Acceptance Period. However, it is possible
that the Regulatory Offer Conditions may not be satisfied prior to the expiration of Acceptance Period and
the Additional Acceptance Period. For example, the CFIUS filing with respect to the Transaction was
accepted by CFIUS on July 19, 2016. Accordingly, CFIUS clearance may not be obtained prior to
approximately October 3, 2016, assuming the review moves into a 45-day investigation phase.
Moreover, it is sometimes the case in the course of a CFIUS review that the parties determine to withdraw
and resubmit the notice, in order to restart the statutory review deadlines. If this occurs with respect to
the Transaction, CFIUS clearance could be deferred until sometime after October 7, 2016. In addition,
we have been advised that NDRC approval is not currently expected to be received prior to the end of
November 2016, and the SAFE approval may not be obtained until early 2017. The Offer launched on
July 29, 2016, which, barring any unforeseen extensions, will result in an October 7, 2016 expiration date
for the Acceptance Period. Accordingly, it very well may be that all the Regulatory Offer Conditions are
not satisfied at the expiration of the Acceptance Period and the Additional Acceptance Period. In these
circumstances, German law would permit the Offeror to delay payment for tendered Shares until all the
Regulatory Offer Conditions are satisfied, at which point payment for Ordinary Shares, including those
represented by ADSs, tendered in the Offer would be made promptly, but no earlier than four Banking
Days and no later than twelve Banking Days, following expiration of the Acceptance Period or the
Additional Acceptance Period, as applicable, and satisfaction of the Regulatory Offer Conditions.
For the reasons discussed below, we believe that the application of Section 14(d)(5) of the Exchange Act
and Rule 14d-7 in the context of the Offer will result in significant risk to the Bidder Entities that they
would not otherwise be required to take under German law and cause substantial harm to the Offer rather
than providing meaningful protection to holders of Shares.
The equal treatment principle under the German Takeover Act does not, and BaFin has confirmed that it
will not, allow the Offeror to extend withdrawal rights to U.S. holders of Ordinary Shares and ADSs, during
the period following the expiration of the Acceptance Period if such withdrawal rights are not also made
available to all holders of Ordinary Shares. We also believe that, to the extent there is a delay between
the expiration of the Acceptance Period and the satisfaction of all required Regulatory Offer Conditions,
BaFin will not permit the Offeror to condition its obligation to purchase Shares in the Offer on the
satisfaction of the Minimum Acceptance Threshold at the time the Regulatory Offer Conditions are
satisfied. Further, we believe that, under German "equal treatment" principles, BaFin will not allow the
Offeror to exclude holders of ADSs or U.S. holders of Ordinary Shares from participating in the Offer.
As a result, if the Offeror is required to extend withdrawal rights to holders of Ordinary Shares and ADSs,
in the United States pursuant to Section 14(d)(5) and Rule 14d-7 during the period between the expiration
of the Acceptance Period and satisfaction of all the Regulatory Offer Conditions, it will be required to
extend withdrawal rights to all holders of Ordinary Shares and ADSs. In that case, it is possible that
holders of a sufficient number of Shares could withdraw their Shares after the expiration of the
Acceptance Period so that the Minimum Acceptance Threshold would no longer be satisfied at the time of
satisfaction of the Regulatory Offer Conditions.
The primary purpose of the Minimum Acceptance Threshold is to assure that the Bidder Entities acquire a
sufficient number of Ordinary Shares so that the Offeror will be able to obtain a majority of the Ordinary

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HASTINGS

August 17, 2016
Page 15

Shares represented at AIXTRON's General Meeting. This is particularly true in light of the fact that the
Bidder Entities do not currently intend on purchasing Ordinary Shares outside of the Offer.
Following the consummation of the Offer, if the Offerer obtained sufficient number of Ordinary Shares in
the Offer, the Offerer may consider entering into a domination agreement (a "Domination Agreement")
with AIXTRON under German law, with the Offerer as the dominating company and AIXTRON as the
dominated company. Since the Minimum Acceptance Threshold is set at 60% of the total number of
Ordinary Shares issued on the Announcement Date, however, there can be no assurance that the Offerer
will be able to enter into a Domination Agreement with AIXTRON if it were to so elect. In addition, the
Offerer has stated in the Offer Materials that it does not plan to enter into a Domination Agreement with
AIXTRON.
The purpose of a Domination Agreement would be to allow the Offerer to give instructions to and direct
the management of AIXTRON (which would otherwise be prohibited under the German stock corporation
law) and to integrate AIXTRON into the fiscal structure of the Bidder Entities. In connection with the
consummation of a Domination Agreement, the Offerer would be required to make a mandatory offer (the
"Mandatory Offer") to acquire all of the remaining Ordinary Shares, including Ordinary Shares
represented by ADSs, at an adequate price. The adequate price could be equal to the Offer Price, but it
could also be higher or lower.
In addition, as disclosed in the Offer Materials, if the Offerer's shareholding of Ordinary Shares, upon
completion of the Offer or at any given time in the future, reaches or exceeds the threshold of 90% of
AIXTRON's share capital, the Offerer may consider, in connection with a merger of AIXTRON into the
Offerer, to demand the exclusion of the holders of Ordinary Shares other than the Offerer in exchange for
an appropriate cash compensation in accordance with German law. The amount of the cash
compensation would be determined by reference to the circumstances existing at the time the general
meeting of AIXTRON adopted the relevant resolution. The appropriateness of the amount of the cash
compensation can be reviewed in a judicial appraisal procedure. The amount of the appropriate cash
compensation could be equal to the Offer consideration, but it could also be higher or lower.
As also disclosed in the Offer Materials, if the Offerer's shareholding of the Ordinary Shares, upon
completion of the Offer, reaches or exceeds the threshold of 95% of AIXTRON's share capital, the Offerer
may consider submitting an application pursuant to Section 39a of the German Takeover Act within three
months following the expiration of the Acceptance Period demanding the transfer of the remaining
Ordinary Shares in exchange for appropriate compensation by court order (i.e., a squeeze-out under the
German Takeover Act). The consideration offered and paid under the Offer would be considered to
constitute appropriate compensation for such purposes if, as a result of the Offer, the Offerer has
acquired Ordinary Shares corresponding to at least 90% of AIXTRON's share capital at which the Offer
was directed. If the Offerer is entitled to submit an application under Section 39a of the German Takeover
Act, AIXTRON shareholders who did not accept the Offer would still be entitled to accept the Offer within
a period of three months from the expiration of the Acceptance Period.
Finally, as disclosed in the Offer Materials, if the Offerer's shareholding of Ordinary Shares, upon
completion of the Offer or at any given time in the future, reaches or exceeds the threshold of 95% of
AIXTRON's share capital, the Offerer may consider to demand transfer of the Ordinary Shares from the
outside holders of Ordinary Shares in exchange for an appropriate cash compensation in accordance with
sections 327a et. seq. of the German Stock Corporation Act. The amount of the cash compensation

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HASTINGS

August 17, 2016
Page 16

would be determined by reference to the circumstances existing at the time the general meeting of
AIXTRON adopted the relevant resolution. The appropriateness of the amount of the cash compensation
can be reviewed in a judicial appraisal procedure. The amount of the appropriate cash compensation
could be equal to the Offer Consideration, but it could also be higher or lower.
In light of the increasingly aggressive and sophisticated trading tactics by hedge funds in Europe and the
United States relating to merger arbitrage, the benefits of requiring the Offeror to provide withdrawal
rights in this circumstance do not outweigh the significant risk that the Offeror would be contractually
required to purchase Ordinary Shares in the Offer even though the Minimum Acceptance Threshold is no
longer satisfied. If a sufficient number of shares were to be withdrawn , the Offeror would not be able to
obtain a majority of the Ordinary Shares represented at AIXTRON's General Meeting and it would reduce
the likelihood the Offeror would obtain sufficient Ordinary Shares to enable it to enter into a Domination
Agreement or consummate a merger or squeeze-out if it chose to do so, thereby depriving the Offeror of
the economic benefits of the Offer (for which it has paid a significant control premium).
The application of withdrawal rights following the expiration of the Acceptance Period might actually
increase the likelihood that AIXTRON shareholders would be treated disproportionately. Specifically,
under German law, Offerer would be permitted, after one year, to make open market purchases of a
sufficient number of additional Ordinary Shares to obtain a majority of the Ordinary Shares represented at
AIXTRON's General Meeting , enter into a Domination Agreement or consummate a merger or squeezeout without offering any higher price paid in such purchases to shareholders who tendered in the initial
offer.
In addition, because the price to be paid in any Mandatory Offer, if the Offeror obtained sufficient Ordinary
Shares in the Offer and was able, and elected , to enter into a Domination Agreement, would typically be
set as the higher of a statutorily determined price and the average trading price for the Ordinary Shares
for the three months prior to the announcement to enter into any such Domination Agreement, the
availability of withdrawal rights could be used to engage in complex trading strategies that might drive-up
the average trading price and, therefore, the price to be paid in the Mandatory Offer (which is not required
to be paid to shareholders who tendered in the initial offer). These issues are only further complicated by
the presence of dual markets for the Ordinary Shares (the "as tendered" market and the market for
untendered shares).
Accordingly, we believe that not enforcing withdrawal rights after the expiration of the Acceptance Period
will better ensure that all holders ultimately receive the same consideration for the sale of their Shares.
In light of the fact that the Offeror and AIXTRON are German companies, the Bidder Entities are non-U.S.
entities, the primary trading market for the Ordinary Shares is the FSE, and that the Offer is primarily
subject to the German Takeover Act, we respectfully request exemptive relief from the provisions of
Section 14(d)(5) and Rule 14d-7 to permit the Bidder Entities to terminate withdrawal rights at the
expiration of the Acceptance Period as follows:
(i)

with respect to Ordinary Shares, including Ordinary Shares represented by ADSs, tendered
during the Acceptance Period:
a.

if all conditions to the Offer have been satisfied or waived prior to the expiration of the
Acceptance Period , during a period of no more than twelve Banking Days after expiration

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August 17, 2016
Page 17

of the Acceptance Period to permit the determination of whether the Minimum
Acceptance Threshold has been met and for the payment for such tendered Ordinary
Shares in accordance with the procedural requirements of German law and as permitted
by BaFin as discussed in footnote 7 above; or
b.

(ii)

if all conditions to the Offer, other than the Regulatory Offer Conditions, have been
satisfied or waived prior to the expiration of the Acceptance Period, until the earlier of:
i.

the satisfaction or waiver of the Regulatory Offer Conditions and a period of no
more than twelve Banking Days to permit the payment for such tendered
Ordinary Shares in accordance with the procedural requirements of German law
and as permitted by BaFin as discussed in footnote 7 above; and

ii.

30 calendar days from the date of the expiration of the Acceptance Period plus
twelve Banking Days to permit the payment for such tendered Ordinary Shares in
accordance with the procedural requirements of German law and as permitted by
BaFin as discussed in footnote 7 above (the "Maximum Withdrawal Suspension
Period");

with respect to Ordinary Shares, including Ordinary Shares represented by ADSs, tendered
during the Additional Acceptance Period:
a.

if all conditions to the Offer have been satisfied or waived prior to the expiration of the
Additional Acceptance Period, during a period of no more than twelve Banking Days after
expiration of the Additional Acceptance Period to permit the payment for such tendered
Ordinary Shares in accordance with the procedural requirements of German law and as
permitted by BaFin as discussed in footnote 7 above; or

b.

if all conditions to the Offer, other than the Regulatory Offer Conditions, have been
satisfied or waived prior to the expiration of the Acceptance Period, until the earlier of:

i. the satisfaction or waiver of the Regulatory Offer Conditions and a period of no
more than twelve Banking Days to permit the payment for tendered Ordinary
Shares in accordance with the procedural requirements of German law and as
permitted by BaFin as discussed in footnote 7 above; and
ii.
(iii)

the Maximum Withdrawal Suspension Period;

with respect to Ordinary Shares, including Ordinary Shares represented by ADSs, tendered
during either the Acceptance Period or Additional Acceptance Period that are not accepted
for payment within the Maximum Withdrawal Suspension Period, during a period of no more
than twelve Banking Days after the satisfaction or waiver of the Regulatory Offer Conditions
to permit the payment for tendered Ordinary Shares in accordance with the procedural
requirements of German law and as permitted by BaFin as discussed in footnote 7 above.

To the extent the conditions to the Offer fail or the Offer is otherwise terminated, the Bidder Entities will
promptly return all tendered Ordinary Shares, including Ordinary Shares represented by ADSs.

PAUL
HASTINGS

August 17, 2016
Page 18

Notwithstanding the foregoing , if it appears that the Regulatory Offer Conditions will not be satisfied or
waived prior to the expiration of 30 calendar days from the date of the expiration of the Acceptance
Period, we respectfully request that the Staff consider a request for further relief based on the facts and
circumstances in existence at such time.
The requested relief is consistent with the relief granted in Bayer AG, SEC No-Action Letter, File No. 559757 (April 28, 2006) ("Bayer/") and The Royal Bank of Scotland Group Pie Offer for Shares and ADSs
of National Westminster Bank Pie, SEC No-Action Letter, File No. 5-55229 (Dec. 30, 1999) ("Royal
BanJ<'). We believe that the Bayer I and Royal Bank letters illustrate that, in appropriate circumstances,
such as those presented in this case , there is precedent for the requested relief. Specifically, as was the
case in Bayer I and Royal Bank, regulatory approval may not be obtained prior to expiration of the
Acceptance Period. 10
In addition, as with Bayer I and Royal Bank, requiring withdrawal rights in our case would make it highly
unlikely that the Offer can "succeed," i.e. , that the Offeror can be certain that if it commits to purchase the
Ordinary Shares, it will acquire enough Ordinary Shares to obtain a majority of the Ordinary Shares
represented at AIXTRON 's General Meeting and to obtain the greatest number of Ordinary Shares
possible to enable it to enter into a Domination Agreement or consummate a merger or squeeze-out if it
chose to do so, without the risk of withdrawal of Shares after the initial satisfaction of the Minimum
Acceptance Threshold . See also, Oak Leaf B. V., Acorn B. V. and Acorn Holdings B. V. Offer for all
Ordinary Shares of D.E. Master Blenders 1753 N. V., SEC No-Action Letter (May 21 , 2013); Exchange
Offer by Barclays PLC for all Outstanding Shares and ADSs of ABN AMRO Holding N. V., SEC No-Action
Letter (Aug. 7, 2007).
In Bayer I, the Staff provided exemptive relief to Bayer AG and one of its wholly owned subsidiaries (the
"Bayer Offeror" and , together with Bayer AG , the "Bayer Entities") from Section 14(d)(5) of the Exchange
Act and Rule 14d-7 to permit the Bayer Entities to terminate withdrawal rights at the expiration of the
acceptance period, if all conditions to the Bayer offer, other than the minimum tender condition and
certain regulatory approvals, had been satisfied or waived, until the earlier of (i) the receipt or waiver of
the regulatory approvals, the determination of whether the minimum tender condition had been met and a
period of no more than eight German banking days after the receipt or waiver of the regulatory approvals
to permit the payment for tendered shares in accordance with the procedural requirements of German law
and practice or (ii) 21 calendar days from the date of the expiration of the acceptance period. The
exemptive relief from Section 14(d)(5) of the Exchange Act and Rule 14d-7 thereunder also permitted the
Bayer Entities, once all the conditions to the offer, including the receipt or waiver of the regulatory
approvals, had been satisfied or waived , to terminate withdrawal rights during a period of no more than
eight German banking days to permit the payment for tendered shares in accordance with the procedural
requirements of German law and practice.

10

The ADSs represent only a very small percentage of the outstanding Ordinary Shares. The Ordinary
Shares are not traded on any U.S. securities exchange. Based on information reported in the over-thecounter trading system obtained by the Offeror's financial advisor, with respect to the twelve months
preceding the Announcement Date, the Ordinary Shares traded very little in the United States and in very
thin volumes (fewer than 30 days, with periods of up to 12 weeks where no trades occurred). On days
that there was trading in the United States, on average fewer than 300 Ordinary Shares traded on each
such day.

PAUL
HASTINGS

August 17, 2016
Page 19

In Axel Springer AG Offer for ProSiebenSat. 1 Media AG, SEC No-Action Letter (Sept. 12, 2005) ("Axel
Springer"), the Staff confirmed that it would not recommend enforcement action under Rule 14e-1 (c) if the
bidder did not pay for tendered shares pending receipt of required regulatory approvals following
expiration of the initial offering period. Since the bidder in Axel Springer had entered into a binding
agreement to acquire a majority of the target stock and the offer was not subject to any minimum tender
condition, the bidder was able to extend withdrawal rights to tendering shareholders during this period. In
the current case, however, like in Bayer I, it is necessary to have the Offeror be able to delay payment for
the Shares without providing withdrawal rights for the same purposes as such relief from Rule 14e-1 (c)
was required in Bayer I and Axel Springer- to enable the acquisition of control of the subject company.
See also, RhOne-Poulenc S.A. Exchange Offer for Hoechst AG, SEC No-Action Letter, File No. TP 99205 (Dec. 20, 1999); and In the Matter of Central and South West Corporation, and Houston Industries
Inc. Offer to Purchase the Ordinary Shares and American Depositary Shares of Norweb Pie, Exchange
Act Release No. 34-36285, International Series Release No. 861 (Sept. 27, 1995).
We recognize that not requiring withdrawal rights after the expiration of the Acceptance Period could have
adverse effects on tendering holders. Specifically, if a competing bidder were to make a higher offer after
the expiration of the Acceptance Period, holders who tendered their Shares would not be able to tender
into the higher offer. However, the Offeror announced the Offer on May 23, 2016. Accordingly, by the
expiration of the 10-week Acceptance Period (and no less than 19 weeks from the Announcement Date),
any party interested in considering a bid for AIXTRON will have had more than the maximum 10-week
initial offering period allowed under German law to make an offer for the Shares.
In addition, we acknowledge that in some situations involving acquisitions of German companies, nontendering holders of ordinary shares have been able to extract additional consideration from the bidder in
the Mandatory Offer that follows the consummation of a Domination Agreement or through appraisal
proceedings under German law. The procedures for any Mandatory Offer, merger or potential
squeeze-out is described in the Offer Materials. At this time, the Offeror has no intention of paying any
additional consideration and we acknowledge that, depending on the facts and circumstances, additional
relief may be required under Rule 14d-10 if they desired to do so.
We also recognize that holders of ADSs who tender into the Offer would not be able to trade in the
as-tendered market and might not have liquidity for a period through as late as the Termination Date, if
withdrawal rights are not provided after the expiration of the Acceptance Period. However, this is a factor
that is fully disclosed in the Offer Materials and one that holders can evaluate when determining whether
or not to tender in the Offer and, if so, when to tender. Furthermore, U.S.-resident holders of Ordinary
Shares will have the ability to tender through their Custodian Institution, in which case they would be able
to trade their Ordinary Shares on the as-tendered market. Similarly, holders of ADSs have the ability to
withdraw the Ordinary Shares underlying their ADSs and tender directly into the Offer as described in the
Offer Materials.
Due to the German tender procedures described above, the Offeror will not know for approximately four
German banking days following the expiration of the Acceptance Period whether the Minimum
Acceptance Threshold has been satisfied and, therefore, whether it will pay for tendered Ordinary Shares,
including those represented by ADSs. The Offeror is bound by the results of that determination and,
except with respect to the satisfaction of the Regulatory Offer Conditions as discussed above, has no
opportunity to rely on the failure of any other condition during the period the Offeror is determining
whether the Minimum Acceptance Threshold has been satisfied. Permitting withdrawals during the period
while the results of the Offer are being determined could render satisfaction of the Minimum Acceptance

PAUL
HASTINGS

August 17, 2016
Page 20

Threshold illusory. Accordingly, we respectfully request exemptive relief from the provisions of Section
14(d)(5) and Rule 14d-7 noted above.
We believe this requested relief is contemplated by or consistent with the exemptive relief granted in
connection with other tender offers similarly structured. See, e.g., Oak Leaf B. V., Acorn B. V. and Acorn
Holdings B. V. Offer for all Ordinary Shares of D.E. Master Blenders 1753 N. V., SEC No-Action Letter
(May 21, 2013); Echo Pharma Acquisition Limited Offer for all Ordinary Shares of Etan Corporation, pie,
SEC No-Action Letter (May 1, 2013); Bayer I; Gas Natural SDG, S.A. 's Exchange Offer for Endesa, S.A.,
SEC No-Action Letter, File No. TP 06-38 (Mar. 2, 2006); Offer by BCP Crystal Acquisition GmbH & Co., et
al for Celanese AG, SEC No-Action Letter, File No. 5-57467 (Feb. 3, 2004); and Offer by SanofiSynthe/abo for Ordinary Shares and ADSs of Aventis, SEC No-Action Letter, File No. TP 04-30 (June 10,
2004).
Rule 14e-1 (c) and Rules 14d-11 (c) and (e): Payment of Offer Price and Subsequent Offering
Period
Rule 14e-1 (c) promulgated under the Exchange Act prohibits a person making a tender offer from failing
to pay the consideration offered or to return the securities deposited by or on behalf of security holders
promptly after the termination or withdrawal of such offer. Rule 14d-11 provides that a bidder in a tender
offer may elect to provide a subsequent offering period if, among other things, the bidder immediately
accepts and promptly pays for all securities tendered during the initial offering period and the bidder
immediately accepts and promptly pays for all securities as they are tendered during the subsequent
offering period.
As permitted by BaFin and except as described below, payment for Ordinary Shares tendered during the
Acceptance Period will be made approximately four to twelve Banking Days following expiration of the
Acceptance Period and payment for Ordinary Shares tendered during the Additional Acceptance Period
will be made approximately four to twelve Banking Days following expiration of the Additional Acceptance
Period. As discussed above, it is possible that some of the Regulatory Offer Conditions will not be
satisfied until after the expiration of the Acceptance Period and the Additional Acceptance Period, which
would result in the delay in the payment for Shares as follows:
(i)

with respect to Ordinary Shares tendered during the Acceptance Period, payment would be
made promptly, but no earlier than four Banking Days and no later than twelve Banking Days
following the later of (a) expiration of the Acceptance Period and (b) satisfaction of the
Regulatory Offer Conditions;

(ii)

with respect to Ordinary Shares tendered during the Additional Acceptance Period, payment
would be made promptly, but no earlier than four Banking Days and no later than twelve
Banking Days following the later of (a) expiration of the Additional Acceptance Period and (b)
satisfaction of the Regulatory Offer Conditions.

If at the end of the Acceptance Period it is determined that any Offer conditions, other than satisfaction of
the Regulatory Offer Conditions as discussed above, have not been satisfied or waived by the Offerer,
and the Offer is therefore terminated without the payment by the Offerer for any Ordinary Shares,
including Ordinary Shares represented by ADS, all tendered Ordinary Shares, including Ordinary Shares
represented by ADS, would be promptly returned.

PAUL
HASTINGS

August 17, 2016
Page 21

Given these facts, we are requesting relief on two levels.
First, we request that the Staff confirm that (i) in the event that the conditions to the Offer are satisfied or
waived at the time of the expiration of the Acceptance Period, it will not recommend enforcement action
under Rule 14e-1 (c) if the Ordinary Shares tendered during the Acceptance Period are not paid for until
four to twelve Banking Days after the expiration of the Acceptance Period (or that such Ordinary Shares
are promptly returned) and (ii) in the event that the Regulatory Offer Conditions are not satisfied or
waived at the time of the expiration of the Acceptance Period, it will not recommend enforcement action
under Rule 14e-1 (c) to permit the Offerer to wait until the expiration of the four to twelve Banking Days
period after the satisfaction or waiver of the Regulatory Offer Conditions to pay for any Ordinary Shares
tendered during the Acceptance Period, provided that the Offerer would promptly return such Ordinary
Shares in the event that the Regulatory Offer Conditions are not ultimately satisfied or waived.
In accordance with German practice, payment for Ordinary Shares, including Ordinary Shares
represented by ADSs, tendered during the Additional Acceptance Period will, except as described below,
be made approximately four to twelve Banking Days after the expiration of the two-week Additional
Acceptance Period described above. In the event that the Regulatory Offer Conditions are not satisfied
or waived at the time of the expiration of the Additional Acceptance Period, the Offerer will pay for
Ordinary Shares tendered during the Additional Acceptance Period within four to twelve Banking Days
after the satisfaction or waiver of the Regulatory Offer Conditions; provided that the Offerer would
promptly return any such Ordinary Shares in the event the Regulatory Offer Conditions are not satisfied
or waived.
Second, we are also requesting exemptive relief from Rule 14d-11 (c) and (e) to permit the payment for, or
return of, Ordinary Shares, including Ordinary Shares represented by ADSs, tendered during the Offer in
the manner described above, and further requesting that the Staff confirm that it will not recommend
enforcement action to the Commission under Rule 14e-1 (c) to permit payment for, or return of, Ordinary
Shares in the manner described above. 11
In Bayer I, the Staff granted no-action relief under Rule 14e-1 (c) on facts similar to those present in the
Offer to allow shares tendered during the acceptance period or the additional acceptance period to be
paid no later than eight German banking days after the expiration of the acceptance period or additional
acceptance period, respectively. In addition, the no-action position taken by the Staff in Bayer I pursuant
to Rule 14e-1 (c) allowed the Bayer Entities to pay for any shares tendered in the offer within eight
German banking days after the receipt or waiver of the regulatory approvals if the regulatory approvals
had not been received or waived by the expiration of the acceptance period. See also, Axel Springer (the
Staff confirmed that it would not recommend enforcement action under Rule 14e-1 (c) if the bidder did not
pay for tendered shares pending receipt of required regulatory approvals following expiration of the initial
offering period); Exchange Offer by Rhone-Poulenc S.A. for Ordinary Shares and ADSs of Hoechst AG,
SEC No-Action Letter, File No. TP 99-205 (Dec. 20, 1999); Royal Bank; and In the Matter of Central and
South West Corporation, and Houston Industries Inc. Offer to Purchase the Ordinary Shares and
11

Without the relief requested in this paragraph, the Bidder Entities will not be able to comply with the
procedural requirements of German law as permitted by BaFin as discussed in footnote 7 above with
respect to payment for tendered Shares. Accordingly, our request for the relief described in this
paragraph is not related to whether the Staff grants the relief requested under "Section 14(d)(5) and Rule
14d-7: Post-Expiration Conditions, Withdrawal Rights and Payment of the Offer Price" above.

PAUL
HASTINGS

August 17, 2016
Page 22

American Depositary Shares of Norweb Pfc, Exchange Act Release No. 34-36285, International Series
Release No. 861 (Sept. 27, 1995).
In Bayer I, on facts similar to those present in the Offer, the Staff also granted exemptive relief under:
(i)

Rule 14d-11 (c) to permit the Bayer Entities (a) to pay for shares tendered during the
acceptance period no later than eight German banking days after the expiration of the
acceptance period and (b) to the extent that the regulatory conditions of the Bayer offer had
not been satisfied during the acceptance period (or previously waived), the Bayer Entities
were permitted to pay for shares tendered during the acceptance period after the expiration
of the four to eight German banking day period after the satisfaction of such regulatory
conditions; provided that the Bayer Entities returned any such shares without undue delay in
the event such regulatory conditions were not satisfied; and

(ii)

Rule 14d-11 (e) to permit the Bayer Entities (a) to pay for shares tendered during the
additional acceptance period no later than eight German banking days after the expiration of
such acceptance period and (b) to the extent that the regulatory conditions of the Bayer offer
had not been satisfied during the Bayer additional acceptance period (or previously waived),
the Bayer Entities were permitted to pay for shares tendered during the additional acceptance
period after the expiration of the four to eight German banking day period after the
satisfaction of such regulatory conditions; provided that the Bayer Entities returned any such
shares without undue delay in the event such regulatory conditions were not satisfied.

In addition, the Commission has generally looked to the clearance and payment practices as well as the
securities laws of the subject company's home country in determining whether the consideration in a
tender offer was paid promptly. We believe the relief requested is contemplated by or consistent with
Bayer/, Axel Springer and other exemptive relieve granted by the Staff and with the Cross-Border
Releases. See, Offer by BCP Crystal Acquisition GmbH & Co., et al for Celanese AG, SEC No-Action
Letter, File No. 5-57467 (Feb. 3, 2004); Rhone-Poulenc S.A., SEC No-Action Letter, File No. TP 93...,89
(July 8, 1993); Exchange Offer by Rhone-Poulenc S.A. for Ordinary Shares and ADSs of Hoechst AG,
SEC No-Action Letter, File No. TP 99-205 (Dec. 20, 1999); Offer by Sanofi-Synthe/abo for Ordinary
Shares and ADSs of Aventis, SEC No-Action Letter, File No. TP 04-30 (June 10, 2004); and Roya/ Bank.
Rule 14e-1(b): Extension of the Offer Upon Certain Changes
Rule 14e-1 (b) under the Exchange Act prohibits an offerer from increasing or decreasing the percentage
of the class of securities being sought or the consideration offered or the dealer's soliciting fee to be given
in a tender offer unless the tender offer remains open for at least ten U.S. business days from the date
that notice of such change is first published or sent or given to security holders. Rule 14d-4( d)(2)(ii)
under the Exchange Act requires that, in certain registered exchange tender offers, in the event an offerer
changes the offer price or makes a similarly significant change to the terms of the offer, the offerer must
extend the tender offer by ten U.S. business days and disseminate the material change to the target

PAUL
HASTINGS

August 17, 2016
Page 23

shareholders. In Release No. 33-7760, the Commission stated that it believed these time periods
represent general guidelines that should be applied uniformly to all tender offers. 12
Under German law, a similar material change occurring during the last two weeks of the Acceptance
Period would requ ire that the Acceptance Period remain open for an additional two calendar weeks from
the end of the Acceptance Period. The applicable German law requires an extension of exactly two
weeks . In the event that such a change were to occur during the last few days of the Acceptance Period,
and the resulting two-week extension occurred over a period that included U.S. federal holidays,
Rule 14e-1 (b) and compliance with the Commission's position regarding the applicability of
Rule 14d-4(d)(2)(ii) would require a longer extension than that permitted by German law. Accordingly, we
hereby request that the Staff confirm that it will not recommend enforcement action under Rule 14e-1 (b) if
in such circumstances the Offerer keeps the Acceptance Period open for an additional period of two
calendar weeks in accordance with German law.
In a similar situations, the Commission has found it appropriate to grant such relief. See, e.g., Bayer I;
Offer by BCP Crystal Acquisition GmbH & Co., et al for Celanese AG, SEC No-Action Letter, File No. 557467 (Feb. 3, 2004).
Requested Relief
Based on the foregoing, we respectfully request that the Staff grant exemptive relief to the Bidder Entities
from the provisions of Section 14(d)(5) of the Exchange Act and the provisions of Rule 14d-7 and
Rules 14d-11 (c) and (e) under the Exchange Act, and confirm that it will not recommend any enforcement
action against any of the Bidder Entities under Rules 14e-1 (b), or (c) under the Exchange Act if the Offer
is conducted as described in this letter.
We believe the relief requested herein is consistent with that granted by the Commission in similar
situations in the past and also believe that the relief requested in this letter is consistent with the
Commission's guidance set forth in the Cross-Border Releases.

* * *

12

Regulation of Takeovers and Security Holder Communications, Release No. 33-7760 (October 22 ,

1999).

PAUL
HASTINGS

August 17, 2016
Page 24

If you have any questions or comments relating to this request, or it would facilitate your response in any
way, please do not hesitate to contact the undersigned at (212) 318-6311 or my colleague, Keith Pisani,
at (212) 318-6053.

Scott R. Saks
of PAUL HASTINGS LLP

cc:

Keith Pisani
Paul Hastings LLP, New York
Vivian Lam
Paul Hastings LLP, Hong Kong
Regina Engelstaedter
Paul Hastings LLP, Germany
Karl Baiz
Paul Hastings LLP, Germany

Exhibit A

Xiamen Xiwang Development Co., Limited
Xiamen Xiwang Development Co. , Limited is a limited liability company under the laws of PRC, registered
with the Market Supervision Administration of Xiamen Municipality under the number
913502000583676653. The registered address of Xiamen Xiwang Development Co., Limited is at 588,
Unit 604B, Yuntong Centre, No. 95 Xiangyunyi Road, Xiamen Area District, China (Fujian) Pilot Free
Trade Zone, Fujian, China. Its business address is at Room 804, 348 Jiahe Road, Huli District, Xiamen,
China.
Xiamen Zhuiri Investment LP
Xiamen Zhuiri Investment LP is a limited partnership under the laws of PRC, registered with the Market
Supervision Administration of Xiamen Municipality under the number 913502033030794142 . The
registered address of Xiamen Zhuiri Investment LP is at Room 602, Block B, No. 533 Xianyue Road ,
Siming District, Xiamen, China. Its business address is at Room 6B602 , 533 Xianyue Road, Siming
District, Xiamen, China.
Xiamen Longwusheng Investment LP
Xiamen Longwusheng Investment LP is a limited partnership under the laws of PRC, registered with the
Market Supervision Administration of Siming District, Xiamen Municipality under the number
913502033031522639. The registered address of Xiamen Longwusheng Investment LP is at Room 602 ,
Block B, No. 533 Xianyue Road , Siming District, Xiamen, China. Its business address is at Room 303,
452 Xianyue Road, Siming District, Xiamen , China.
General Energy International Holdings Limited
General Energy International Holdings Limited is a limited company under the laws of the British Virgin
Islands, registered with the register of corporate affairs of the British Virgin Islands under the number
1820884. The registered address of General Energy International Holdings Limited is at NovaSage
Chambers, P.O. Box 4389, Road Town , Tortola, British Virgin Islands. General Energy International
Holdings Limited was established as a special purpose investment company to hold a shareholding in
Rand Mining Ltd. , an Australian listed company which explores for and produces gold through its
exploration projects in Western Australia.
Xiamen Jiaxin Investment Development Co., Limited
Xiamen Jiaxin Investment Development Co. , Limited is a limited liability company under the laws of PRC,
registered with the Market Supervision Administration of Xiamen Municipality under the number
91350200MA3464YQ91. The registered address of Xiamen Jiaxin Investment Development Co., Limited
is at Room 605, Unit 2N5, Yungtong Centre, No. 95 Xiangyunyi Road , Xiamen Area District, China
(Fujian) Pilot Free Trade Zone, Fujian , China. Its business address is at Taiwan village, 939 Xianyue
Road , Siming District, Xiamen , China.
LEGAL_US_E # 121969806.25

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Asec%3A3e5de1cdc3822cf9. Public record. Not legal advice.