Hanson Trust PLC v. SCM Corporation
United States Court of Appeals for the Second Circuit
774 F.2d 47 (1985)
Hanson Trust PLC (defendant) registered a tender offer for SCM Corporation (plaintiff), but SCM's board negotiated a competing, higher-priced purchase of the target shares by Merrill Lynch, prompting Hanson to withdraw its tender offer. Hanson then privately negotiated the purchase of shares from five sophisticated SCM shareholders. SCM sued to block this private purchase, arguing it was effectively still a tender offer requiring registration; the district court agreed, and Hanson appealed.
Whether a solicitation for the sale of stock will be considered a tender offer if there is a substantial risk that solicitees will lack sufficient information to make an investing decision absent compliance with tender-offer rules.