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EXHIBIT (a)(1)(A)
Offer to Purchase for
Cash
All Outstanding Shares of
Common Stock
of
Bankrate, Inc.
by
BEN Merger Sub, Inc.,
a wholly-owned subsidiary
of
BEN Holdings, Inc.
at
$28.50 Net per Share
THE OFFER (AS DEFINED HEREIN)
AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON AUGUST 24, 2009, UNLESS THE OFFER IS EXTENDED.
BANKRATE SHARES TENDERED PURSUANT TO THIS OFFER MAY BE
WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE OF THE
OFFER.
Pursuant to an Agreement and Plan of Merger, dated as of
July 22, 2009 (the Merger Agreement), by and
among BEN Holdings, Inc., a Delaware corporation
(Parent), BEN Merger Sub, Inc., a Florida
corporation and a wholly-owned subsidiary of Parent
(Purchaser), and Bankrate, Inc., a Florida
corporation (Bankrate), Purchaser is offering to
purchase all of the outstanding shares of common stock, par
value $0.01 per share, of Bankrate at a price of $28.50 per
share, net to the seller in cash, without interest, less any
applicable withholding taxes (the Offer Price), upon
the terms and subject to the conditions set forth in this offer
to purchase (the Offer to Purchase) and the letter
of transmittal enclosed with this Offer to Purchase (the
Letter of Transmittal), which, together with any
amendments or supplements, collectively constitute the
Offer described in this Offer to Purchase. The Offer
is being made pursuant to the Merger Agreement, pursuant to
which, following the purchase by Purchaser of Bankrate shares in
the Offer and the satisfaction or waiver of each of the
applicable conditions set forth in the Merger Agreement
including compliance with Florida law, Purchaser will be merged
with and into Bankrate (the Merger), with Bankrate
surviving the Merger as a wholly-owned subsidiary of Parent. It
is currently anticipated that all conditions to the Merger,
including all procedural requirements under Florida law, will be
met approximately 30 days following the closing of the
Offer. As a result of the Merger, each outstanding Bankrate
share (other than Bankrate shares owned by Parent, Purchaser,
Bankrate or any direct or indirect wholly-owned subsidiary of
Parent, Purchaser or Bankrate, or by any shareholder of Bankrate
who is entitled to and properly exercises appraisal rights under
Florida law or any Bankrate shares identified as rollover shares
pursuant to Non-Tender and Support Agreements between Parent,
Purchaser and certain shareholders of Bankrate (the
Support Agreements) will be converted into the right
to receive the Offer Price.
The Bankrate board of directors has unanimously:
(1) determined that the terms of the Offer, the Merger and
the other transactions contemplated by the Merger Agreement are
fair and advisable to and in the best interests of Bankrate and
Bankrates shareholders; (2) approved the Merger
Agreement and the transactions contemplated thereby, including
the Offer and the Merger, in all respects; (3) subject to
the terms and conditions of the Merger Agreement, recommended
that Bankrates shareholders accept the Offer, tender their
Bankrate shares to Purchaser pursuant to the Offer and, if
required, approve and adopt the Merger and the Merger Agreement;
and (4) approved the execution, delivery and
performance of the Merger Agreement by and on behalf of
Bankrate and the consummation of the transactions contemplated
thereby, including the Offer and the Merger. Accordingly,
Bankrates board of directors believes that the Offer and
the Merger are fair to all of Bankrates shareholders,
including unaffiliated shareholders, and unanimously recommends
that the shareholders of Bankrate accept the Offer and tender
their Bankrate shares to Purchaser in the Offer and, if
required, vote to approve the Merger and the Merger
Agreement.
The Offer is conditioned upon, among other things, there being
validly tendered in accordance with the terms of the Offer and
not withdrawn prior to 12:00 midnight, New York City time, on
August 24, 2009 (the Expiration Date (unless
Purchaser shall have extended the period during which the Offer
is open in accordance with the Merger Agreement, in which event
Expiration Date shall mean the latest time and date
at which the Offer, as so extended by Purchaser, shall expire)
at least a majority of the outstanding Bankrate shares, which is
the minimum number of Bankrate shares required to approve the
Merger Agreement, the Merger and the other transactions
contemplated by the Merger Agreement pursuant to the
organizational documents of Bankrate and the Florida Business
Corporation Act (the FBCA). The foregoing condition
is referred to as the Minimum Condition. The Minimum
Condition may be waived by Purchaser, at its sole option,
(i) if the number of Bankrate shares validly tendered and
not withdrawn shall be at least equal to the difference between
(x) a majority of the outstanding Bankrate shares, which is
the minimum number of Bankrate shares required to approve the
Merger Agreement, the Merger and the other transactions
contemplated by the Merger Agreement pursuant to the
organizational documents of Bankrate and the FBCA, less
(y) the number of Bankrate shares subject to Support
Agreements or (ii) with the prior written consent of
Bankrate. The Offer is also subject to other conditions
described in Section III. 12 (Conditions to the Offer) of
this Offer to Purchase.
IMPORTANT
If you desire to tender all or any portion of your Bankrate
shares to Purchaser in the Offer you should either
(i) complete and sign the Letter of Transmittal (or a
photocopy of it) for the Offer, which is enclosed with this
Offer to Purchase, in accordance with the instructions contained
in the Letter of Transmittal (having your signature on the
Letter of Transmittal guaranteed if required by
Instruction 1 to the Letter of Transmittal), mail or
deliver the Letter of Transmittal (or a photocopy of it) and any
other required documents to Computershare Trust Company, N.A.,
the depositary for the Offer (the Depositary), and
either deliver the certificates representing such Bankrate
shares (the Certificates) to the Depositary along
with the Letter of Transmittal (or a photocopy of it) or tender
such Bankrate shares by book-entry transfer by following the
procedures described in Section III. 3 (Procedures for
Tendering Bankrate Shares) of this Offer to Purchase, in each
case prior to the Expiration Date or (ii) request your
broker, dealer, bank, trust company or other nominee to effect
the transaction for you. If your Bankrate shares are registered
in the name of a broker, dealer, bank, trust company or other
nominee, then you must contact that institution in order to
tender such Bankrate shares to Purchaser in the Offer.
If you desire to tender Bankrate shares to Purchaser in the
Offer and your Certificates representing such Bankrate shares
are not immediately available, or you cannot comply in a timely
manner with the procedures for tendering Bankrate shares by
book-entry transfer, or you cannot deliver all required
documents to the Depositary prior to the Expiration Date, you
may tender such Bankrate shares to Purchaser in the Offer by
following the procedures for guaranteed delivery described in
Section III. 3 (Procedures for Tendering Bankrate Shares)
of this Offer to Purchase.
Questions regarding the Offer, and requests for assistance in
connection with the Offer, may be directed to Innisfree
M&A Incorporated, the information agent for the Offer
(the Information Agent) at the address and telephone
numbers listed below. Additional copies of this Offer to
Purchase, the Letter of Transmittal, the notice of guaranteed
delivery enclosed with this Offer to Purchase (the Notice
of Guaranteed Delivery) and other related materials may be
obtained from the Information Agent.
This Offer to Purchase and the related Letter of Transmittal
contain important information and you should read both carefully
and in their entirety before making a decision with respect to
the Offer.
This transaction has not been approved or disapproved by the
Securities and Exchange Commission (the SEC) or any
state securities commission nor has the SEC or any state
securities commission
passed upon the fairness or merits of such transaction or
upon the accuracy or adequacy of the information contained in
this document. Any representation to the contrary is
unlawful.
The
Information Agent for the Offer is:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Shareholders May Call Toll-Free:
(888) 750-5834
Banks and Brokers May Call Collect:
(212) 750-5833
TABLE OF
CONTENTS
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Page
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SUMMARY TERM SHEET
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1
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I. SPECIAL FACTORS
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10
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1. Background of the Offer
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10
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2. The Support Agreements
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16
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3. Position of Bankrate Regarding the Fairness of the
Offer and the Merger
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18
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4. Position of the Disinterested Directors Regarding
the Fairness of the Offer and the Merger
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19
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5. Position of the Support Executives as to Fairness
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20
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6. Purposes and Reasons of Support Executives
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20
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7. Purposes and Reasons of Parent, Purchaser and the
Apax VII Funds and the Other Apax Entities
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21
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8. Position of Parent, Purchaser, the Apax VII Funds
and the Other Apax Entities as to Fairness
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22
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9. Certain Effects of the Offer and the Merger
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23
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10. Purposes, Reasons and Plans for Bankrate After the
Merger
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25
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11. Interests of Bankrates Directors and Executive
Officers in the Offer and the Merger
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25
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12. Certain Relationships Between Parent or Purchaser and
Bankrate
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13. Security Ownership of Certain Beneficial Owners and
Management
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30
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14. The Merger Agreement
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30
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15. Appraisal Rights
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44
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16. Management Fees Following the Effective Time of the
Merger
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45
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II. INTRODUCTION
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47
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III. THE TENDER OFFER
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1. Terms of the Offer; Expiration Date
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2. Acceptance for Payment and Payment for Bankrate
Shares
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3. Procedures for Tendering Bankrate Shares
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51
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4. Withdrawal Rights
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53
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5. Material United States Federal Income Tax
Consequences of the Offer and the Merger
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54
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6. Price Range of Bankrate Shares; Dividends on
Bankrate Shares
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57
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7. Effects on the Company if the Offer is Not
Consummated
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58
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8. Possible Effects of the Offer on the Market for
the Bankrate Shares; Stock Exchange Listing(s); Registration
under the Exchange Act; Margin Regulations
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58
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9. Certain Information Concerning Bankrate
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59
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10. Certain Information Concerning Purchaser and Parent
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11. Source and Amount of Funds
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12. Conditions to the Offer
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13. Dividends and Distributions
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14. Certain Legal Matters; Regulatory Approvals
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66
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15. Fees and Expenses
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70
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16. Miscellaneous
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SCHEDULE A DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER,
PARENT AND CONTROLLING ENTITIES
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S-1
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Annex A Agreement and Plan of Merger
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A-1
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SUMMARY
TERM SHEET
We are BEN Merger Sub, Inc., a Florida corporation and a
wholly-owned subsidiary of BEN Holdings, Inc., and we are
offering to purchase all of the outstanding Bankrate, Inc.
(Bankrate) shares. The following are some of the
questions you, as a shareholder of Bankrate, may have about our
offer to purchase all of the outstanding Bankrate shares upon
the terms and conditions set forth in this offer to purchase
(the Offer to Purchase) and the letter of
transmittal enclosed with this Offer to Purchase (the
Letter of Transmittal) which, together with any
amendments or supplements collectively constitute the
Offer described in this Offer to Purchase and our
answers to those questions. This section entitled the Summary
Term Sheet (the Summary Term Sheet) provides
important and material information about our Offer that is
described in more detail elsewhere in this Offer to Purchase,
but this Summary Term Sheet may not include all of the
information about our Offer that is important to you. We urge
you to carefully read the remainder of this Offer to Purchase
and the Letter of Transmittal for our Offer. We have included
cross-references in this Summary Term Sheet to other sections of
this Offer to Purchase to direct you to the sections of this
Offer to Purchase in which a more complete description of the
topics covered in this Summary Term Sheet appear.
Who is
offering to buy my Bankrate shares?
Our name is BEN Merger Sub, Inc. (Purchaser). We are
a Florida corporation organized as a wholly-owned subsidiary of
BEN Holdings, Inc., a Delaware corporation (Parent),
for the sole purpose of making a tender offer for the
outstanding Bankrate shares and completing the process by which
Purchaser will be merged with and into Bankrate (the
Merger). Parent is a wholly-owned subsidiary of Ben
Holding S.à.r.l. (Ben Holding), which is
beneficially owned by Apax US VII, L.P. (Apax US VII
Fund), Apax Europe VII-A, L.P., Apax Europe VII-B, L.P.
and Apax Europe VII-1, L.P. (Apax Europe VII Funds,
and together with Apax US VII Fund, the Apax VII
Funds). Apax Partners, L.P. (i) is an advisor to Apax
US VII Fund under an investment advisory agreement with Apax US
VII Fund, (ii) is an advisor to Apax Europe VII Funds,
which is an advisor to Apax Partners Europe Managers Limited,
the discretionary investment manager to the Apax Europe VII
Funds, under separate investment advisory contracts, and
(iii) does not have the power to direct investments of any
of the Apax VII Funds (Apax Partners, L.P., in such
capacities described above, is referred to as Apax).
Apax US VII GP, L.P., a Cayman Islands exempted limited
partnership, Apax Europe VII GP L.P. Inc., a Guernsey
incorporated limited partnership, Apax US VII GP, Ltd., a
Cayman Islands exempted limited company, Apax Europe VII GP
Co. Limited, a Guernsey incorporated company and Apax Partners
Europe Managers Limited, a company constituted under English
company law (together with Ben Holding, collectively, the
Other Apax Entities), are general partners
and/or
controlling entities of the Apax VII Funds. See
Introduction and Section III. 10 (Certain Information
Concerning Purchaser and Parent) of this Offer to Purchase for
more information.
How many
Bankrate shares are you offering to purchase?
We are making an offer to purchase all of the outstanding
Bankrate shares. As of August 20, 2009, there were
(i) 19,223,794 Bankrate shares, including
262,499 shares of restricted common stock of Bankrate and
(ii) 2,540,555 options to purchase Bankrate shares,
issued and outstanding. The holders of all of the Bankrate
shares (other than Bankrate shares held by persons who entered
into Support Agreements, totaling 4,309,977 shares as of
such date), holders of the shares of restricted common stock
(other than Bankrate shares subject to Support Agreements) and
holders of Bankrate shares purchased upon exercise of options
(other than the options to purchase 1,547,500 shares which
are subject to the Support Agreements) will have the right to
tender their shares in the Offer. As of August 7, 2009, all
of the restricted common stock of Bankrate were subject to
Support Agreements. See Introduction and Section III. 1
(Terms of the Offer; Expiration Date) of this Offer to Purchase
for more information.
How much
are you offering to pay for my Bankrate shares, what is the form
of payment, and will I have to pay any fees or commissions if I
tender my Bankrate shares in your Offer?
We are offering to pay $28.50 per share, net to you, in cash,
without interest and less any applicable withholding taxes (the
Offer Price), for each Bankrate share that you own.
If you are the record owner of
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your Bankrate shares and you tender them in our Offer, you will
not have to pay any brokerage fees or similar expenses to do so.
If you own your Bankrate shares through a broker or other
nominee, and your broker tenders your Bankrate shares in our
Offer on your behalf, your broker or nominee may charge you a
fee for doing so. You should consult your broker or nominee to
determine whether it will charge you a fee for tendering your
Bankrate shares in our Offer. See Introduction and
Section III. 1 (Terms of the Offer; Expiration Date) of
this Offer to Purchase for more information.
Do you
have the financial resources to pay for all of the Bankrate
shares that you are offering to purchase?
Yes. We estimate that the total amount of funds necessary to
purchase all Bankrate shares in the Offer or the Merger and to
complete the related transactions, including the payment of fees
and expenses in connection with the Offer and the Merger, will
be approximately $612.0 million, which we expect will be
funded by equity
and/or debt
financing provided by the Apax VII Funds. Parent has received
commitments from the Apax VII Funds totaling
$570.8 million, and the Apax VII Funds have available to
them sufficient funds to honor those commitments. The difference
of approximately $41.2 million will be used to pay various
fees and expenses related to the Offer and the Merger and will
be funded from Bankrates cash on hand. Funding of the
financing is subject to the satisfaction of the conditions set
forth in the commitment letters pursuant to which the financing
will be provided. See Section I. 2 (The Support Agreements)
and Section III. 11 (Source and Amount of Funds) of this
Offer to Purchase for more information.
How long
do I have to tender my Bankrate shares in your Offer?
Unless we extend our Offer following completion of the initial
Offer as described below, you will have until
12:00 midnight, New York City time, on August 24,
2009, (the Expiration Date, unless Purchaser shall
have extended the period during which the Offer is open in
accordance with the Merger Agreement (as defined below), in
which event Expiration Date shall mean the latest
time and date at which the Offer, as so extended by Purchaser,
shall expire) to tender your Bankrate shares in our Offer. If
you cannot deliver everything that is required to tender your
Bankrate shares by that time, you may be able to use a
guaranteed delivery procedure to tender your Bankrate shares, as
described in Section III. 3 (Procedures for Tendering
Bankrate Shares) of this Offer to Purchase. As of the date of
this Offer to Purchase, we have no intention to extend the Offer.
Why are
you making the Offer?
The Offer is being made pursuant to the Agreement and Plan of
Merger, dated as of July 22, 2009 (the Merger
Agreement), pursuant to which, following the purchase by
Purchaser of Bankrate shares in the Offer and the satisfaction
or waiver of each of the applicable conditions set forth in the
Merger Agreement, Purchaser will be merged with and into
Bankrate, with Bankrate surviving the Merger as a wholly-owned
subsidiary of Parent. For Parent and Purchaser, the purpose of
the Offer and the Merger is to effectuate the transactions
contemplated by the Merger Agreement. For the Apax VII Funds and
the Other Apax Entities, the purpose of the Offer and the Merger
is to benefit from any future earnings and growth of Bankrate
after the Merger. See Section I. 6 (Purposes and Reasons of
Parent, Purchaser and the Apax VII Funds and the Other Apax
Entities).
What are
the most significant conditions to your Offer?
Under the terms of the Merger Agreement, we are not obligated to
purchase any Bankrate shares that are tendered in our Offer
unless, prior to the Expiration Date, there have been validly
tendered in accordance with the terms of the Offer and not
withdrawn prior to the Expiration Date at least a majority of
the outstanding Bankrate shares, which is the minimum number of
Bankrate shares required to approve the Merger Agreement, the
Merger and the other transactions contemplated by the Merger
Agreement pursuant to the organizational documents of Bankrate
and the Florida Business Corporation Act (the FBCA).
The foregoing condition is referred to as the Minimum
Condition. The Minimum Condition may be waived by
Purchaser, at its sole option, (i) if the number of
Bankrate shares validly tendered and not withdrawn shall be at
least equal to the
2
difference between (x) a majority of the outstanding
Bankrate shares, which is the minimum number of Bankrate shares
required to approve the Merger Agreement, the Merger and the
other transactions contemplated by the Merger Agreement pursuant
to the organizational documents of Bankrate and the FBCA, less
(y) the number of Bankrate shares subject to Non-Tender and
Support Agreements between Parent, Purchaser and certain
Shareholders of Bankrate (the Support Agreements) or
(ii) with the prior written consent of Bankrate. The Offer
is also subject to other conditions described in
Section III. 12 (Conditions to the Offer) of this Offer to
Purchase.
Our Offer is not subject to any financing contingencies, but it
is subject to a number of other conditions, including conditions
with respect to the expiration or termination of the waiting
period applicable to our acquisition of Bankrate shares in
connection with the Offer under the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the HSR
Act), the accuracy of Bankrates representations and
warranties set forth in the Merger Agreement subject to
materiality and material adverse effect qualifications,
Bankrates compliance in all material respects with its
covenants set forth in the Merger Agreement, Bankrates
board of directors not having withdrawn its recommendation with
respect to our Offer and the Merger, the absence of certain
legal impediments to our Offer or the Merger, the absence of any
material adverse effect with respect to Bankrate, and the
absence of certain legal proceedings involving a governmental
body related to our Offer or the Merger. See Section III.
12 (Conditions to the Offer) of this Offer to Purchase for more
information about these and other conditions to our Offer.
Purchaser has reserved the right to increase the amount of
consideration payable in the Offer and to waive any condition of
the Offer, except the Minimum Condition. However, Purchaser may
waive the Minimum Condition, at the sole option of Purchaser, if
the sum of the number of Bankrate shares validly tendered and
not withdrawn plus the number of Bankrate shares subject to the
Support Agreements is at least equal to a majority of the
outstanding Bankrate shares.
Under
what circumstances can or must you extend your Offer?
We are required to extend our Offer beyond its initial
Expiration Date:
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for any period required by any rule or regulation of the
Securities and Exchange Commission (the
SEC); and
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from time to time for one or more periods of up to 20 business
days each, the length of each such period to be determined by
Purchaser in its sole discretion, if at the scheduled Expiration
Date any of the conditions of the Offer shall not have been
satisfied or waived, until such time as such conditions are
satisfied or waived to the extent permitted by the Merger
Agreement, or the Merger Agreement is terminated in accordance
with its terms.
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In addition, we are permitted to (but not required to) extend
our Offer beyond its initial Expiration Date, for a period of no
more than 20 days in the aggregate, if at the scheduled
Expiration Date less than 80% of the number of Bankrate shares
then outstanding (including, for purposes of determining the 80%
threshold, the number of Bankrate shares held by persons subject
to the Support Agreements) have been validly tendered and not
withdrawn. See Section III. 1 (Terms of the Offer;
Expiration Date) of this Offer to Purchase for more information.
How will
I be notified if you extend your Offer?
If we extend our Offer, we will inform Computershare
Trust Company, N.A., the depositary of the Offer (the
Depositary) of that fact and will make a public
announcement of the extension not later than 9:00 a.m., New
York City time, on the next business day after the day on which
our Offer was previously scheduled to expire. See
Section III. 1 (Terms of the Offer; Expiration Date) of
this Offer to Purchase for more information.
How do I
tender my Bankrate shares in your Offer?
To tender all or any portion of your Bankrate shares in our
Offer, you must either deliver the Certificates representing
your tendered Bankrate shares, together with the Letter of
Transmittal (or a photocopy of it)
3
enclosed with this Offer to Purchase, properly completed and
duly executed, with any required signature guarantees, and any
other required documents, to the Depositary or tender your
Bankrate shares using the book-entry procedure described in
Section III. 3 (Procedures for Tendering Bankrate Shares),
prior to the expiration of our Offer.
If you hold your Bankrate shares in street name through a
broker, dealer, bank, trust company or other nominee and you
wish to tender all or any portion of your Bankrate shares in our
Offer, the broker, dealer, bank, trust company or other nominee
that holds your Bankrate shares must tender them on your behalf
through the Depositary.
If you cannot deliver the items that are required to be
delivered to the Depositary by the expiration of our Offer, you
may obtain additional time to do so by having a broker, bank or
other fiduciary that is a member of the Securities Transfer
Agents Medallion Program, the New York Stock Exchange
Medallion Guarantee Program or the Stock Exchange Medallion
Program (each, an Eligible Institution) guarantee
that the missing items will be received by the Depositary within
three Nasdaq Global Select Market trading days. You may use the
notice of guaranteed delivery enclosed with this Offer to
Purchase (the Notice of Guaranteed Delivery) for
this purpose. To tender Bankrate shares in this manner, however,
the Depositary must receive the missing items within such three
trading day period. See Section III. 3 (Procedures for
Tendering Bankrate Shares) of this Offer to Purchase for more
information.
Can I
withdraw Bankrate shares that I previously tendered in your
Offer? Until what time may I withdraw previously tendered
Bankrate shares?
Yes. You can withdraw some or all of the Bankrate shares that
you previously tendered in our Offer at any time prior to the
Expiration Date of our Offer. Further, if we have not accepted
your Bankrate shares for payment by September 26, 2009, you can
withdraw them at any time after September 26, 2009. Once we
accept your tendered Bankrate shares for payment upon the
expiration of our Offer, however, you will no longer be able to
withdraw them. See Section III. 1 (Terms of the Offer;
Expiration Date) and Section III. 4 (Withdrawal Rights) of
this Offer to Purchase for more information.
How do I
withdraw my previously tendered Bankrate shares?
To withdraw any Bankrate shares that you previously tendered in
our Offer, you (or, if your Bankrate shares are held in street
name, the broker, dealer, bank, trust company or other nominee
that holds your Bankrate shares) must deliver a written notice
of withdrawal (or a photocopy of one), with the required
information, to the Depositary, while you still have the right
to withdraw your Bankrate shares. See Section III. 1 (Terms
of the Offer; Expiration Date) and Section III. 4
(Withdrawal Rights) of this Offer to Purchase for more
information.
Has
Bankrates board of directors approved your
Offer?
Yes. Our Offer is being made pursuant to the Merger Agreement.
Bankrates board of directors has unanimously:
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determined that the terms of the Offer, the Merger Agreement and
the other transactions contemplated by the Merger Agreement, are
fair and advisable to and in the best interests of Bankrate and
Bankrates shareholders;
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approved the Merger Agreement and the transactions contemplated
thereby, including our Offer and the Merger, in all respects;
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subject to the terms and conditions of the Merger Agreement,
resolved to recommend that Bankrates shareholders accept
our Offer, tender their Bankrate shares to Purchaser pursuant to
our Offer and, if required, approve and adopt the Merger
Agreement and the Merger; and
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approved the execution, delivery and performance of the Merger
Agreement by and on behalf of Bankrate and the consummation of
the transactions contemplated thereby, including the Offer and
the Merger.
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Accordingly, Bankrates board of directors unanimously
recommends that you accept our Offer and tender your Bankrate
shares pursuant to our Offer and, if required, vote your
Bankrate shares in favor of the approval of the Merger and the
Merger Agreement in accordance with applicable Florida law.
The full text of the recommendation and the factors considered
by Bankrates board of directors in making the
determinations and the recommendation described above are
described in Bankrates Solicitation/Recommendation
Statement on
Schedule 14D-9
(the
Schedule 14D-9),
which will be filed with the SEC and is being mailed to the
shareholders of Bankrate together with this Offer to Purchase.
Have any
of Bankrates officers and directors agreed to support the
Merger?
Yes. Pursuant to the Support Agreements, certain executives and
directors of Bankrate have agreed, (i) prior to the time at
which Purchaser accepts for payment Bankrate shares pursuant to
the Offer (the Acceptance Time) until the
termination of the Merger Agreement, to vote for, and
(ii) after the Acceptance Time until the earlier of the
consummation of the Merger and the termination of the Merger
Agreement, to appoint Parent proxy and attorney-in-fact to vote
all of their securities subject to the Support Agreements for
the approval and adoption of the Merger Agreement and the
transactions contemplated thereby, and against other actions
which could reasonably be expected to impede, delay or adversely
affect the Offer or the Merger. See Section I. 2 (The
Support Agreements).
What are
your plans if you successfully complete your Offer but do not
acquire all of the outstanding Bankrate shares in your
Offer?
If we accept Bankrate shares for payment pursuant to our Offer
and certain limited conditions to the Merger are satisfied
including compliance with Florida law, promptly following such
acceptance and compliance, we intend to merge with and into
Bankrate so that Bankrate will become a wholly-owned subsidiary
of Parent. It is currently anticipated that all conditions to
the Merger, including all procedural requirements under Florida
Law, will be met approximately 30 days following the closing of
the Offer. As a result of that Merger, all of the outstanding
Bankrate shares that are not tendered in our Offer, other than
Bankrate shares identified as rollover shares pursuant to the
terms of the Support Agreements, Bankrate shares that are owned
by Parent, Bankrate or us (or any wholly-owned subsidiary of
Parent, Bankrate or us) and any Bankrate shares that are owned
by any shareholder of Bankrate who is entitled to and properly
exercises appraisal rights under Florida law in respect of their
Bankrate shares, will be cancelled and converted into the right
to receive $28.50 per share in cash, without interest and less
any applicable withholding taxes.
Our obligation to merge with Bankrate following the acceptance
of Bankrate shares for payment pursuant to our Offer is
conditioned on (a) the approval and adoption, if required,
of the Merger Agreement by the requisite vote of Bankrates
shareholders, (b) Purchaser having purchased Bankrate
shares in the Offer, and (c) no court or governmental body
having enacted, issued or entered any restraining order,
preliminary or permanent injunction or similar order or legal
restraint or prohibition which remains in effect that enjoins or
otherwise prohibits consummation of the Merger. If we accept
Bankrate shares for payment pursuant to our Offer, we will hold
a sufficient number of Bankrate shares (when added to the number
of Bankrate shares held by persons subject to the Support
Agreements) to ensure any requisite adoption of the Merger
Agreement by Bankrate shareholders under Florida law to complete
the Merger. In addition, if we own at least 80% of the
outstanding Bankrate shares, including as a result of exercising
the Top-Up
Option (as defined and described below), which under the terms
and conditions of the Merger Agreement we may be required to do
as described below, we will not be required to obtain
shareholder approval to complete the Merger. See Section I. 13
(The Merger Agreement).
What is
the Top-Up
Option and when could it be exercised?
Bankrate has granted Purchaser the option (the
Top-Up
Option) to purchase, at a price per share equal to the
Offer Price payable in our Offer, a number of newly issued
Bankrate shares equal to the number of
5
Bankrate shares that, when added to the number of Bankrate
shares owned by Parent and Purchaser, and any wholly-owned
subsidiary of Parent or Purchaser, immediately prior to the time
of exercise of the
Top-Up
Option, constitutes 80% plus 1 share of the total Bankrate
shares that would be outstanding on a fully diluted basis
immediately after the issuance of Bankrate shares pursuant to
the Top-Up
Option. The purchase price per share for any Bankrate shares
purchased by Purchaser under the
Top-Up
Option would be equal to the price paid per share in the Offer.
The purchase price may be paid by means of a promissory note,
which we expect would be cancelled in connection with the
Merger. The
Top-Up
Option will be exercised by Purchaser or Parent immediately
after acceptance for payment by Purchaser of Bankrate shares
pursuant to the Offer, if following such time of acceptance,
Parent or Purchaser do not own at least 80% of the outstanding
Bankrate shares. The
Top-Up
Option is subject to the absence of legal impediments to the
exercise of the
Top-Up
Option, the sufficiency of authorized but unissued Bankrate
shares, and Purchaser having accepted for payment and paid for
all Bankrate shares tendered into the Offer and not validly
withdrawn. The
Top-Up
Option is intended to expedite the timing of the completion of
the Merger by permitting Purchaser to effect a
short-form merger pursuant to applicable Florida law
without a vote of Bankrates shareholders at a time when
the approval of the Merger at a meeting of Bankrates
shareholders would be assured in any case because of
Purchasers control of a majority of the Bankrate shares
following completion of the Offer. See Section I. 13
(The Merger Agreement) under the subheading Top-Up
Option.
What are
the effects of the Offer and the Merger on Bankrate?
The purchase of Bankrate shares pursuant to the Offer will
reduce the number of Bankrate shares that might otherwise trade
publicly and could adversely affect the liquidity and market
value of the remaining Bankrate shares held by the public.
The Bankrate shares are currently registered under the
Securities Exchange Act of 1934 (the Exchange Act),
but such registration may be terminated upon the application of
Bankrate to the SEC if the Bankrate shares are not listed on a
national securities exchange and there are fewer than 300 record
holders of the Bankrate shares. Parent and Purchaser do not
currently intend to take any action to terminate the
registration of Bankrates shares under the Exchange Act
prior to the Merger but such registration will be terminated
following completion of the Merger and may be terminated after
the Expiration Date of the Offer but before the completion of
the Merger. The termination of registration of the Bankrate
shares under the Exchange Act would substantially reduce the
information required to be furnished by Bankrate to holders of
Bankrate shares and to the SEC and would make certain provisions
of the Exchange Act, inapplicable to Bankrate. In addition, the
listing of Bankrates common stock on The Nasdaq Stock
Market will be terminated upon completion of the Merger and,
while Parent and Purchaser do not currently intend to take any
action to terminate the listing of Bankrates common stock
on The Nasdaq Stock Market prior to completion of the Merger,
The Nasdaq Stock Market could take action to terminate the
listing of Bankrates common stock if Bankrate ceases to
satisfy applicable listing requirements.
In addition, after completion of the Offer, Bankrate expects to
be eligible to elect controlled company status
pursuant to NASDAQ Rule 5615(c), which means that Bankrate
would be exempt from the requirement that Bankrates board
of directors be composed of a majority of independent
directors and the related rules covering the independence
of directors with respect to determining compensation for
Bankrates executive officers and nomination of directors
for election to Bankrates board of directors.
Immediately following the effective time of the Merger, the
entire equity in the surviving corporation will be held by
Parent and Parent will be beneficially owned by the Apax VII
Funds and by the Support Executives, as described in
Section I. 10 (Interests of Bankrates Directors and
Executive Officers in the Offer and the Merger), and,
accordingly, the Apax VII Funds and the Support Executives will
control Bankrate and, subject to future equity issuances to
management under the Parent Equity Plan as described in Section
I. 10 (Interests of Bankrates Directors and Executive
Officers in the Offer and the Merger), will be the sole
beneficiaries of Bankrates future earnings and growth and
will bear the risks of its ongoing operations. See
Section I. 8 (Certain Effects of the Offer and the Merger).
6
What are
your plans for Bankrate after the Merger?
Parent and Purchaser expect that, following consummation of the
Merger and the other transactions contemplated by the Merger
Agreement, the operations of Bankrate will be conducted
substantially as they currently are being conducted. Parent and
Purchaser do not have any current intentions, plans or proposals
to cause any other material changes in Bankrates business,
other than in connection with Bankrates current strategic
planning.
Nevertheless, Parent and the management
and/or the
board of directors of the surviving corporation may initiate a
review of the surviving corporation to determine what changes,
if any, would be desirable following the Offer and the Merger to
enhance the business and operations of the surviving corporation
and may cause the surviving corporation to engage in certain
extraordinary corporate transactions, such as reorganizations,
mergers or sales or purchases of assets, if the management
and/or board
of directors of the surviving corporation decides that such
transactions are in the best interest of the surviving
corporation upon such review. See Section I. 9 (Purposes,
Reasons and Plans for Bankrate after the Merger).
Do any of
the directors and officers of Bankrate have interests that
differ from the interests of other shareholders?
Yes. Under the Merger Agreement, except as otherwise agreed
between Bankrate and the executives party to the Support
Agreements, each option to acquire Bankrate shares that is
outstanding immediately prior to the Acceptance Time will
automatically vest, either upon completion of the Merger or upon
the Acceptance Time, as specified in the Merger Agreement, into
the right to receive an amount of cash, without interest, equal
to (i) $28.50 less the exercise price of the applicable
option, multiplied by (ii) the aggregate number of shares
into which such option was exercisable immediately prior to the
completion of the Merger or the Acceptance Time, as applicable.
Similarly, under the Merger Agreement, except as otherwise
agreed between Bankrate and the executives party to the Support
Agreements, each Bankrate restricted share will vest in full
and, subject to the ultimate vesting of the restricted shares,
the holder of the Bankrate shares (other than holders subject to
the Support Agreements, who have agreed not to tender into the
Offer) will have the right to tender his or her restricted
shares into the Offer. To the extent that any restricted shares
that vest upon completion of the Offer are not tendered, they
will be converted into the right to receive an amount in cash,
without interest, equal to $28.50 per share upon the effective
time of the Merger, except as otherwise agreed between Parent
and an individual holder of restricted shares that is a party to
a Support Agreement.
Pursuant to the Support Agreements, the executives party thereto
have agreed to make certain investments in Parent (or an
affiliate of Parent) prior to the effective time of the Merger.
The investment of each of these executives will be made in the
same Parent securities, and in the same relative proportions
between such securities, as will be held by the Apax VII Funds
and their affiliates.
In addition, Parent has agreed to certain elements of the
compensation packages of certain of Bankrates executive
officers following the consummation of the Merger, including an
increase in salary and an increase in target bonus amounts, each
effective October 1, 2009. Parent has also agreed to
maintain all exculpation, indemnification and advancement of
expenses provisions of Bankrate for acts or omissions of its
directors and officers and to maintain directors and
officers liability insurance on terms no less favorable
than Bankrates current policy, subject to certain
limitations, for a period of six years after the date on which
Purchaser designates that certain number of directors to the
Bankrate board of directors pursuant to the terms of the Merger
Agreement (the Board Appointment Date). See
Section I. 10 (Interests of Bankrates Directors and
Executive Officers in the Offer and the Merger).
If you
successfully complete your Offer, what will happen to
Bankrates board of directors?
If we accept Bankrate shares for payment pursuant to our Offer,
under the Merger Agreement we will become entitled to designate
at least a majority of the members of Bankrates board of
directors. In such case Bankrate has agreed to cause
Parents designees to be elected or appointed to
Bankrates board of directors in
7
such number as is proportionate to the aggregate share ownership
of Parent, Purchaser and shareholders subject to the Support
Agreements and has agreed to use its reasonable best efforts to
cause such appointments to occur on the same day as our
acceptance of Bankrate shares for payment pursuant to our Offer.
After the election or appointment of the directors designated by
Parent to Bankrates board of directors and prior to the
completion of the Merger, under the terms of the Merger
Agreement, the approval of a majority of the individuals who
were disinterested directors of Bankrate immediately prior to
such designations by Parent who remain on Bankrates board
of directors after such designations by Parent will be required
in order to (i) amend or terminate the Merger Agreement,
(ii) extend the time for performance of, or waive, any of
the obligations or other acts of Parent or Purchaser under the
Merger Agreement, (iii) waive any of Bankrates rights
under the Merger Agreement, or (iv) take any other action
adversely affecting the rights of shareholders of Bankrate
(other than Parent or Purchaser) to receive the Offer Price
(except as permitted by the terms of this Merger Agreement)
payable in our Offer. See Section I. 13 (The Merger
Agreement) of this Offer to Purchase for more information.
If I
decide not to tender my Bankrate shares in your Offer, how will
the completion of the Merger affect my Bankrate
shares?
If we accept Bankrate shares for payment pursuant to our Offer,
but you do not tender your Bankrate shares in our Offer, and the
Merger takes place, your Bankrate shares will be cancelled and
converted into the right to receive the same amount of cash that
you would have received had you tendered your Bankrate shares in
our Offer, without interest and less any applicable withholding
taxes.
If we accept Bankrate shares for payment pursuant to our Offer,
then until such time thereafter as we complete the Merger, the
number of shareholders of Bankrate and the number of Bankrate
shares that remain in the hands of the public may be so small
that there may no longer be an active public trading market (or,
possibly, any public trading market) for such Bankrate shares.
Also, Bankrate shares may no longer be eligible to be traded on
The Nasdaq Stock Market or any other securities exchange, and
Bankrate may cease making filings with the SEC or otherwise
cease being required to comply with the SECs rules
relating to publicly held companies. See Section III. 8
(Possible Effects of the Offer on the Market for the Bankrate
Shares; Stock Exchange Listing(s); Registration under the
Exchange Act; Margin Regulations) and Section I. 13 (The
Merger Agreement) of this Offer to Purchase for more information.
Are
appraisal rights available in either your Offer or the
Merger?
Appraisal rights are not available in connection with our Offer.
If you choose not to tender your Bankrate shares in our Offer,
however, and we accept Bankrate shares for payment pursuant to
our Offer, appraisal rights will be available to you in
connection with the Merger. If you choose to exercise your
appraisal rights in connection with the Merger, and you comply
with the applicable requirements of Florida law, you will be
entitled to receive the fair value of your shares, pursuant to
Sections 607.1301-607.1333
of the FBCA. This value may be more or less than the $28.50 per
share that we are offering to pay you for your Bankrate shares
in our Offer or that you would otherwise receive in the Merger.
See Section I. 9 (Purposes, Reasons and Plans for Bankrate
after the Merger), Section I. 13 (The Merger Agreement),
Section I. 14 (Appraisal Rights) and Section III. 14
(Certain Legal Matters; Regulatory Approvals) of this Offer to
Purchase for more information.
What are
the United States federal income tax consequences of having my
Bankrate shares accepted for payment in your Offer or receiving
cash in the Merger?
In general, if you are a United States holder (as defined in
Section III. 5 (Material United States Federal Income Tax
Consequences of the Offer and the Merger)), your exchange of
Bankrate shares for cash pursuant to the Offer or pursuant to
the Merger will be a taxable transaction for United States
federal income tax purposes. You should consult your tax advisor
about the tax consequences to you of exchanging your Bankrate
shares pursuant to the Offer or pursuant to the Merger in light
of your particular circumstances, including the consequences
under applicable United States federal estate, gift and other
non-income tax laws, and under any applicable state, local or
foreign income or other tax laws. See Section III. 5
(Material United States Federal Income Tax Consequences of the
Offer and the Merger) of this Offer to Purchase for more
information.
8
What is
the market value of my Bankrate shares?
On July 21, 2009, the last trading day before Parent and
Bankrate announced that they had entered into the Merger
Agreement, the closing price of Bankrate shares reported on The
Nasdaq Global Select Market was $24.62 per share; therefore, the
Offer Price of $28.50 per share represents a premium of 15.76%
over the closing price of Bankrate shares on the trading day
prior to the announcement of the Merger Agreement. On
July 27, 2009, the last trading day prior to the printing
of this Offer to Purchase, the last sale price of Bankrate
shares reported on The Nasdaq Global Select Market was $28.69
per share. We advise you to obtain a recent quotation for
Bankrate shares when deciding whether to tender your Bankrate
shares in our Offer. See Section III. 6 (Price Range of
Bankrate Shares; Dividends on Bankrate Shares) of this Offer to
Purchase for more information.
Whom can
I contact if I have questions about your Offer?
You should contact Innisfree M&A Incorporated, the
information agent for our Offer (the Information
Agent) at the address and telephone numbers listed below
if you have any questions about our Offer.
The
Information Agent for the Offer is:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Shareholders May Call Toll-Free:
(888) 750-5834
Banks and Brokers May Call Collect:
(212) 750-5833
9
I.
SPECIAL FACTORS
|
|
1.
|
Background
of the Offer
|
As part of its normal deliberations, the Bankrate board of
directors has periodically met with senior management of
Bankrate to discuss and review potential strategic directions
for Bankrate in light of Bankrates financial performance,
developments in the industry and the competitive landscape and
markets in which it operates. These meetings have also
addressed, from time to time, hypothetical acquisitions or
business combinations involving various other parties.
Beginning in June 2007, in response to unsolicited inbound
inquiries from strategic parties regarding a potential
investment in or acquisition of Bankrate, Bankrate conducted a
thorough review of potential strategic alternatives for
Bankrate, including a sale or strategic merger of Bankrate,
seeking additional debt or equity capital, acquisitions by
Bankrate, and continued operation as a standalone business. Over
the next several months, in order to evaluate these
alternatives, Bankrate and its financial advisors, including
Allen & Company (Allen), and legal advisor
Wachtell, Lipton, Rosen & Katz (Wachtell
Lipton), assessed the landscape of companies and parties
that would be potentially interested in a transaction with
Bankrate and contacted, through the financial advisors,
approximately 14 parties, comprised of both strategic buyers and
financial sponsors in order to gauge whether there was any
interest in a possible strategic transaction involving Bankrate.
These 14 firms were selected based on Bankrates judgment,
in consultation with Bankrates financial advisors, as to
the likelihood of their being interested in a possible strategic
transaction with Bankrate given their existing businesses or
investment philosophies, respectively. The list of potential
strategic buyers was based on their lines of business, strategic
direction and financial ability to do a transaction with
Bankrate. The potential financial sponsors were based upon those
(i) who expressed unsolicited interest to the Company in
acquiring them, (ii) who have made prior investments in
similar sectors to which Bankrate operates or (iii) who had
expressed interest in acquiring assets in the sector and had
adequate funds to consummate a transaction. Although several
confidentiality agreements were entered into and various
meetings took place, no transaction resulted from this process
and eventually Bankrate suspended the process to focus on
executing on its strategic plan. None of the strategic parties
expressed an interest in pursuing a transaction.
In mid-2008, again in response to unsolicited inbound inquiries
from financial sponsors regarding a potential investment in or
acquisition of Bankrate, the Bankrate board of directors
re-initiated its review of strategic alternatives, reengaging in
discussions with potential acquirers. The Bankrate board of
directors also re-engaged with Allen and Wachtell Lipton.
Four private equity firms, including Apax, expressed interest in
working with Bankrate, and engaged in meetings and discussions
with Bankrates management and advisors. Bankrates
focus was on those parties with serious interest and the ability
to deliver the greatest value to Bankrate shareholders. During
this time, Messrs. Evans and DiMaria began a dialogue with
Apax, discussing potential partnerships between the Apax VII
Funds and Bankrate regarding potential acquisitions, as well as
the possibility of the Apax VII Funds purchasing Bankrate.
Messrs. Evans and DiMaria, also engaged in similar
discussions with another financial sponsor, but the other party
did not ultimately present a proposal to Bankrate. On
July 17, 2008, Mr. Evans had a discussion with
Messrs. Truwit and Fernandes regarding Bankrates
business and finances. On July 24, 2008,
Messrs. DiMaria and Fernandes discussed the business and
finances of Bankrate, and in the week of August 4, 2008,
further discussions were held on these matters. On
August 22, 2008, representatives of Apax met with
Messrs. Evans and Morse at the offices of Apax in New York
City to discuss the business, strategy and financial results of
Bankrate. On September 22, 2008, Messrs. Evans and
DiMaria also visited Apaxs offices in London to provide an
overview of the business, strategy and financial results of
Bankrate. Despite earlier indications of interest, discussions
ceased after these meetings, largely due to the instability and
volatility in the financial markets at that time.
The Bankrate board of directors continued to discuss over the
ensuing months issues related to the strategic position of
Bankrate and the current market environment, developments among
financial institutions and how they impacted Bankrate, as well
as the ability of Bankrate to continually grow and compete
effectively in a challenging business environment, including
discussions regarding Bankrates access to capital and
ability to acquire desirable assets to enhance shareholder
value. During this period, Messrs. Morse, Evans and DiMaria
met occasionally and informally with various private equity
companies from time to time,
10
including Apax, to discuss the strategic outlook of Bankrate
Several of these discussions concerned the possibility of a
financial sponsor partnering with Bankrate to invest in or
acquire other companies or businesses. These discussions were
informational and exploratory in nature and did not give rise to
any specific proposals by any of such third parties.
At an April 29, 2009 meeting of the Bankrate board of
directors, senior management and the Bankrate board of directors
again reviewed the strategic position of Bankrate.
Mr. Evans informed the Bankrate board of directors that in
his judgment, Bankrate was at a critical juncture and that in
order to compete effectively in the marketplace and maintain its
market position, Bankrate needed to acquire strategic assets
over the coming months and years and, given Bankrates
size, its access to capital was limited. Further, given the
general scale and expected valuations of likely available
acquisition candidates, undertaking an acquisition using
Bankrates stock as consideration would likely result in
significant dilution to Bankrates shareholders. Management
and the Bankrate board of directors concluded that in light of
such constraints, it was advisable to again consider the level
of interest in Bankrate among possible strategic partners.
Following this meeting, Bankrate renewed discussions with Apax
and another financial sponsor, a large private equity firm of
internationally recognized reputation with experience in
Bankrates business sector, that had contacted Bankrate
(Party A) as the parties Allen and Bankrate believed
to be most likely to be seriously interested in and prepared to
complete, and capable of completing, a transaction
expeditiously. Bankrate made this judgment as to which parties
to engage with after consulting with Allen and considering the
history of engagement and interest levels of the various parties
with whom Bankrate discussed a potential transaction dating back
to 2007. Factors considered in making this judgment
included the prior inability to stimulate serious discussions
with potential strategic acquirers, the varying perceived levels
of interest among financial sponsors, and the judgment that Apax
and Party A would be very familiar with Bankrate as a result of
previous due diligence and discussions and therefore most likely
to be in a position to help Bankrate determine whether a
transaction would be available on reasonable terms without an
excessively lengthy timeframe or disruptive process with an
uncertain outcome.
In early June 2009, Messrs. Evans and DiMaria held sessions
with both Apax and Party A that included detailed discussions
regarding Bankrate, including operational and financial
information and projections, operating environment and industry
conditions. On June 5, 2009, Bankrate and Apax entered into
a confidentiality agreement, and on June 8, 2009, Bankrate
and Party A entered into a confidentiality agreement.
Bankrates management and advisors began collecting
documents for the creation of a data room for due diligence
purposes, and Apax began engaging in due diligence activities.
On June 16, 2009, the Bankrate board of directors received
a non-binding proposal from Apax to acquire all of
Bankrates outstanding shares for $30.00 per share in cash,
all of which would be funded with cash available to the Apax VII
Funds without need for third party debt financing. Apax
indicated that it would be prepared to proceed on the basis of
an approximately four-week due diligence period and that it
would require that Bankrate agree to deal with Apax exclusively
as a condition to commencing due diligence and the negotiation
of definitive documents.
The Bankrate board of directors met telephonically on
June 17, 2009, and received an update from Allen regarding
the negotiations with Apax, as well as Party A. During this
time, management and the Bankrate board of directors discussed
Bankrates financial performance for its second quarter and
the outlook for the remainder of 2009, including the likelihood
that its results for the second quarter of 2009 would be
substantially below analyst consensus estimates and the possible
reaction of Bankrates stock price to the announcement of
those results.
Over the next few days, Messrs. Morse, Evans and DiMaria
discussed with Allen whether it might be possible to obtain a
higher offer than $30.00 per share from Apax. Based on those
discussions, Allen engaged in several discussions with
Mr. Truwit about the possibility of a higher price,
discussing an indicative price of $33.00 per share. After
several discussions, Mr. Truwit informed Allen that in
order for Apax to even consider such a significant increase in
price, Apax would need to change the proposed transaction
structure to a more traditional leveraged buyout transaction
using significant debt financing. Based on discussions among
members of management, including Messrs. Morse, Evans and
DiMaria and Allen regarding Apaxs reaction, the status of
the leveraged loan markets and market experience with leveraged
buyout transactions involving third party debt financing, it was
determined that introducing leverage into the potential
transaction would create a high
11
and undesirable level of uncertainty as the cost of possibly
obtaining a higher price. Messrs. Morse and Evans and Allen
continued to engage with Mr. Truwit regarding price, due
diligence and other aspects of the potential transaction. During
the period from June 8, 2009 to June 22, 2009, Allen
also engaged in several discussions with Party A, including a
meeting on June 12, 2009 with Allen and Messrs. Evans
and DiMaria regarding Bankrates business and financial
results, its future growth drivers, and due diligence.
Ultimately, Party A did not make an offer and on
June 22, 2009 indicated that it would not be able to make
an offer to acquire Bankrate at a price level that would be
competitive with that of Apaxs proposal.
After continued discussions, on June 23, 2009,
Mr. Truwit verbally increased Apaxs offer to acquire
all of Bankrates outstanding shares for $30.50 per share
which would be fully funded with cash available to the Apax VII
Funds with no requirement for third party debt financing. At
this time, the Bankrate board of directors contacted Wachtell
Lipton to update Wachtell Lipton regarding the potential
transaction with Apax. As noted, it had become clear to senior
management of Bankrate during the time period negotiations with
Apax and Party A had taken place that Bankrates results
for the second quarter would be substantially below Wall Street
research analyst expectations. It had also become clear that
Bankrates outlook for the remainder of 2009 was highly
uncertain. Bankrate and its advisors thus believed that, given
the length of time interested parties had required to conduct
due diligence on Bankrate in the past and their general
experience, it was very important to be able to enter into a
definitive agreement promptly. Based on Apaxs willingness
to offer a price of $30.50 per share and its commitment to work
towards finishing its diligence and entering into definitive
agreements by July 20th, prior to the time Bankrate
expected to release its financial results for the second quarter
of 2009, and further considering the fact that the Bankrate
board of directors and its advisors believed that it was
unlikely any other party, either financial or strategic, could
reasonably be expected to complete due diligence and enter into
definitive agreements within a similar timeframe, Bankrate
agreed, subject to approval by the Bankrate board of directors,
to allow Apax to proceed with due diligence and to have a period
of exclusive negotiations until July 20, 2009. Arrangements
were discussed to facilitate continuing due diligence and access
to management for such diligence discussions between the parties.
At a special meeting of the Bankrate board of directors held on
June 30, 2009, the Bankrate board of directors reviewed
Apaxs proposal to acquire Bankrate for $30.50 per share in
cash. Allen discussed its analysis of the potential transaction,
including a review of the current trends in the capital markets,
online advertising market and the market for leveraged buyouts;
Bankrates stock price trading history and Wall Street
estimates of future Bankrate performance, including with respect
to the second quarter of 2009; the premium of Apaxs
proposed offer price to Bankrates then current stock
price, and the value of the proposal as compared to comparable
trading multiples, comparable transactions, and discounted cash
flow valuations. Additional information regarding the content of
Allens presentation is included in Item 5(a) of the
Schedule
14D-9Opinion
of Allen & Company LLC June 30
Presentation. The Bankrate board of directors reviewed
with Mr. Evans, Mr. DiMaria, Allen and Wachtell Lipton
various aspects of the potential transaction, including the
price, the request that certain officers and directors of
Bankrate retain equity in Bankrate following the proposed
transaction, and the timing of the transaction relative to the
upcoming earnings announcement. Wachtell Lipton discussed with
the Bankrate board of directors the directors legal duties
and responsibilities, and other related matters. Mr. Truwit
had communicated to Bankrate that Apax would likely request that
certain significant officer and director shareholders in
Bankrate retain an equity stake in the post-acquisition company.
In view of the possibility that this could be considered a
possible interest in a potential transaction that would differ
from the interests of shareholders generally, the Bankrate board
of directors determined that, if Bankrate were to proceed with
the transaction, it, and any treatment of director-shareholders
that was different than the treatment of shareholders generally
in a transaction, should be separately approved by the
disinterested members of the Bankrate board of directors,
Messrs. William C. Martin, Randall E. Poliner and Richard
J. Pinola (the Disinterested Directors), in
particular pursuant to Section 607.0901 of the FBCA, which
directors should have access to separate financial advice in
order to support their separate consideration of the
transaction. Section 607.0901 is further described below in
III.14 Certain Legal Matters; Regulatory Approvals.
The Bankrate board of directors did not place any limitations on
the role of the Disinterested Directors or their ability to
retain independent advisors, but did not consider giving, and
did not give, the Disinterested Directors primary responsibility
for negotiating the transaction or other special powers as there
was no requirement to do so under Section 607.0901 or other
provisions of the FBCA. The Disinterested
12
Directors had informal discussions following this time, and met
separately and formally on July 22, 2009. The Bankrate
board of directors determined that continuing discussions with
Apax would be in the best interests of Bankrate and its
shareholders, and authorized Allen and Wachtell Lipton to
continue discussions and negotiations with Apax concerning the
transaction. The Bankrate board of directors also authorized
Bankrate to enter into the exclusivity agreement with Apax with
regard to exclusive negotiations until July 20, 2009, and
such agreement was executed the same day.
During the end of June and the first two weeks of July, Apax,
with the assistance of its counsel, Kirkland & Ellis
LLP, continued with its diligence efforts, and began discussions
with management regarding the terms on which the substantial
shareholders on the Bankrate board of directors would purchase
an equity interest in the post-acquisition company as well as
incentive compensation and employment arrangements with respect
to members of management. Messrs. Stahl and Truwit met with
Messrs. Evans and Morse on July 6, 2009 and
July 12, 2009 to discuss these matters, including the
amount of equity of the post-acquisition company to be
purchased, the size and allocation of the new equity plan, and
the key terms of employment of each of Messrs. Morse,
OBlock, Evans, DiMaria, Hoogterp, Horowitz, Ricciardelli,
Ross and Zanca.
During the second week of July, Wachtell Lipton and
Kirkland & Ellis LLP commenced discussion of a draft
Merger Agreement. During that time and over the following week,
the parties negotiated the terms of the Merger Agreement and
related documentation and Apax and Messrs. Morse and Evans
further discussed with Apax the terms of the shareholder
investments by Messrs. Morse, OBlock, Evans, DiMaria,
Hoogterp, Horowitz, Ricciardelli, Ross and Zanca and management
employment arrangements with Messrs. Evans, DiMaria, Hoogterp,
Horowitz, Ricciardelli, Ross and Zanca. Bankrate also consulted
with Gunster, Yoakley & Stewart, P.A., Bankrates
regular outside Florida counsel, regarding due diligence and
disclosure schedule issues. In the course of negotiating the
Merger Agreement, Bankrate and its advisors identified several
concerns with the terms of the Merger Agreement proposed by
Apax. These issues included Apaxs unwillingness to
condition the completion of the Offer on there being a majority
of the Bankrate shares tendered in the Offer (exclusive of
Bankrate shares subject to Support Agreements), the fact that
Apax desired the right of Parent to terminate the transaction
for any reason in return for paying a fee that was well below
the aggregate merger consideration, the fact that the newly
formed entities party to the Merger Agreement did not have any
significant assets with which they could satisfy a judgment if
there were a breach of the Merger Agreement and that Apax
proposed to cap the buyers damages for breach of the
contract to a level well below the aggregate merger
consideration, and the fact that Apax proposed that Bankrate
would not have the right to ask a court to require the buyer to
specifically perform Parents and Purchasers
obligations under the Merger Agreement, among other issues.
During this time, the parties continued to engage actively in
due diligence and to discuss various business operation issues.
Also during this time, the Disinterested Directors identified
several potential financial advisors, each of which were
familiar with Bankrate because they provided analyst coverage on
Bankrate, but had no direct business relationship with Bankrate.
From these candidates, the Disinterested Directors sought to
select a financial advisor that, in the judgment of the
Disinterested Directors, would be both diligent and fully
committed to the Disinterested Directors and the unaffiliated
shareholders of Bankrate. On July 17, 2009, following
discussion among the Disinterested Directors, the Disinterested
Directors selected, and Bankrate retained on behalf of the
Disinterested Directors, Needham & Company, LLC
(Needham) to advise the Disinterested Directors in
connection with their separate consideration, and possible
approval, of the Merger and related matters. Needham &
Company has a small limited partnership interest in a fund
managed by affiliates of Antares Capital Corporation, of which
Mr. Poliner is the President, but such fund has no direct
or indirect equity interest in Bankrate. On July 19,
Messrs. Evans, DiMaria, Hoogterp, Horowitz, Ricciardelli,
Ross and Zanca retained Dewey & LeBeouf LLP
(Dewey) to represent them in connection with the
negotiation of shareholder investments and employment
arrangements.
By July 20, 2009, the drafts of the definitive transaction
documents reflected a proposal from Apax along the following
lines: an offer price of $30.50 per share in cash; a minimum
condition to completing the tender offer requiring the tender of
a majority of the Bankrate shares outstanding, which could be
waived by Purchaser if a number of Bankrate shares were tendered
which, in addition to the Bankrate shares subject to Support
Agreements, would constitute a majority of Bankrate shares
outstanding, or with the consent of Bankrate; the ability for
Purchaser to acquire enough shares directly from Bankrate to
complete a short-form
13
merger to acquire all remaining outstanding shares in accordance
with the FBCA in the event that the Minimum Condition was met,
and the requirement that Purchaser do so in the event the number
of shares validly tendered and not withdrawn plus the number of
shares subject to the Support Agreements represented at least
70% of outstanding shares; an obligation on the part of Parent
and Purchaser to commence the Offer within 10 business days of
the Merger Agreement; a commitment letter from the Apax VII
Funds to Parent and a limited guarantee (the Limited
Guarantee) from Parent, but not the Apax VII Funds, to
provide sufficient funds to pay for all obligations of Parent
and Purchaser under the Merger Agreement which would be subject
to maximum aggregate liability for the Apax VII Funds of
$150.0 million; and the ability for Parent to terminate the
Merger Agreement at any time on payment of a termination fee of
$100.0 million. The terms of the Support Executives
purchases of interests in the post-acquisition company
(including the amount of such purchases and the rights of the
Support Executives as minority shareholders) and of their
incentive compensation and employment arrangements (including
the terms of the Parent Equity Plan and base pay increases)
remained unresolved and subject to negotiation between Apax, the
Support Executives, and their respective counsel.
Late in the afternoon of July 20, 2009, Messrs. Stahl
and Truwit contacted Mr. Evans to inform him that
Apaxs investment committee was unprepared to proceed at
the previously agreed $30.50 per share price and that Apax was
revising its proposal to $28.50 per share. Messrs. Stahl
and Truwit stated that the reduction was due to, among other
things, the declining outlook for Bankrates business and
financial results through the end of 2009 and the expectation
that Bankrates cash balances at the closing of a
transaction would be less than Apax had originally estimated.
That evening, the Bankrate board of directors convened its
previously scheduled special meeting to discuss the revised
proposal. In consultation with Allen and Wachtell Lipton, the
Bankrate board of directors considered the course of dealings
with Apax, their disappointment and concerns regarding Apax in
light of the last-minute decrease in the offer price, and the
various other options, and the relative merit or downside of
each, available to Bankrate, including, among other things,
terminating discussions with Apax, approaching other prospective
buyers, both strategic and financial, or re-engaging with
parties with whom Bankrate had discussions in the past, and
responding to Apax with an improved price or other
terms, and discussed the best course for maximizing
shareholder value under the circumstances. In particular, the
Bankrate board of directors reviewed with Allen the likelihood
that other prospective buyers would be interested in an
acquisition of Bankrate and, where applicable, the history of
Bankrates engagement with such prospective buyers,
including Party A. The Bankrate board of directors also
discussed the market and competitive environment, including
among other things recent and projected future financial
results, the timing of Bankrates upcoming announcement of
second quarter results, the likely market reaction to that
announcement, the likely impact on Bankrates stock price
and the likely duration of that effect given market conditions,
and Bankrates ability to pursue its plan and make
strategic acquisitions as an independent company, especially if
Bankrates stock price were to decline following the
announcement of weak second quarter results. Messrs. Evans
and DiMaria expressed significant concern about the ability to
forecast the timing of an economic recovery and the return of a
more normal credit environment, and that a lengthy recovery
period would substantially impair Bankrates ability to
pursue strategic options in the near- to mid-term, with a
possible long-term impact on Bankrates competitive
standing.
Following extensive discussion, the Bankrate board of directors
determined that given the absence of alternatives that, in the
Bankrate board of directorss judgment, would be viable,
timely and superior to the Apax proposal, and that the
likelihood of Apax raising its offer price was low, Bankrate
would be willing to proceed with a transaction at Apaxs
offer of $28.50 per share, but only on the condition that Apax
amend various aspects of the draft definitive documentation that
Bankrate believed created undesirable uncertainty that the
transaction, once announced, would actually be completed and
that Bankrate would have satisfactory recourse against Parent in
the event of a dispute regarding completion of the transaction.
In particular, the Board sought to improve proposed provisions
that did not permit the Company to specifically enforce
Parents and Purchasers obligations under the Merger
Agreement, or to specifically enforce the equity commitment from
the Apax VII Funds to Parent; limited, in the event of a
breach, the aggregate liability of Parent and Purchaser for
monetary damages to $150 million, a number well below the
value of the transaction; permitted Parent to terminate the
Merger Agreement at any time and for any or no reason on payment
of a termination fee of $100 million; permitted Purchaser
not to exercise the
Top-Up
Option unless a 70 percent threshold was
14
achieved; and permitted Parent and Purchaser up to
10 business days after signing of the Merger Agreement to
prepare required tender offer documentation before commencing
the Offer. The Bankrate board of directors also instructed
management and its advisors that if Apax did not agree to these
terms by noon the following day (July 21, 2009), Bankrate
should immediately reach out other potential acquirors, even
though, in the Bankrate board of directorss judgment, it
was unlikely that any such party would be able to enter into a
definitive transaction before Bankrates upcoming earnings
announcement.
Late that evening, Messrs. Stahl and Truwit substantively
accepted Bankrates proposal to significantly adjust the
terms of the definitive documents, and Wachtell Lipton and
Kirkland & Ellis LLP prepared definitive documents
reflecting the agreement. The final terms included, among other
things: an offer price of $28.50 per share in cash; a minimum
condition to completing the tender offer requiring the tender of
a majority of the Shares outstanding, which could be waived by
Merger Sub if a number of Shares were tendered which, in
addition to the Shares subject to Support Agreements, would
constitute a majority of Shares outstanding, or with the consent
of the Company (which consent the Company does not intend and
undertakes not to give; an obligation of Parent or Purchaser to
exercise the
Top-Up
Option upon completion of the Offer and elimination of the 70%
tender requirement; an obligation of Purchaser to commence the
Offer on an accelerated timeframe, and no later than
July 28, 2009; the explicit right of Bankrate to seek
specific performance of Parent and Purchasers obligations
under the Merger Agreement, including the obligation to complete
the Offer and the Merger; recourse to Parent, in the event of a
breach, equal to the full acquisition price of
$570.8 million, with the loss to Bankrate shareholders
expressly included in measuring the damages in the event of
breach; the ability to cause the Apax VII Funds to provide to
Parent up to the full acquisition price of $570.8 million;
and increasing the fee required for Parent to terminate the
Merger Agreement to the full acquisition price of
$570.8 million. The following day, Mr. Morse requested
that, in addition to these terms, Apax increase its offer to
$29.50 per share. Messrs. Stahl and Truwit of Apax
responded that Apax could not offer more than $28.50 per share.
During the period that Wachtell Lipton and Kirkland &
Ellis LLP were revising the transaction documents, Dewey, which
had ceased work the prior evening following the reduction in the
proposed Offer Price, since it was not clear that the
transaction would proceed, resumed work on July 21, 2009
after it became clear that Apax had accepted the revised terms
and reengaged with Apaxs counsel and had several
additional discussions throughout the day of July 21, 2009
regarding certain details of the terms of the purchase of an
equity interest in the post-acquisition company (such as the
amount each executive was committing to invest, as reflected in
the Support Agreements), as well as certain terms of the
incentive compensation and employment arrangements (such as
certain base pay increases to become effective in
October 1, 2009).
On the morning of July 22, 2009, the Bankrate board of
directors met to consider the proposed Apax transaction. Also in
attendance were representatives of Wachtell Lipton, Allen,
Needham and Mr. DiMaria. Messrs. Morse and Evans
reviewed with the Bankrate board of directors recent events
related to Apax and the proposed transaction. They reported that
Apax, pointing to various trends in Bankrates business and
the operating environment, had not been willing to increase its
offer beyond the $28.50 per share. Messrs. Morse and Evans
also discussed with the Bankrate board of directors their views
on the status and competitive position of Bankrate, and each
advised the Bankrate board of directors that he supported the
proposed transaction. A detailed discussion of the proposed
transaction ensued. The discussion included background on
Bankrate, its operating environment and its financial
performance; trends in the use of Bankrates website and
the products and services being offered by Bankrates
banking, insurance and other financial partners; the recent
disruption in financial markets and the economic recession and
the impact this was having on Bankrate; the need to imminently
announce second quarter results and those results relative to
market expectations, the likely impact on Bankrates stock
price trading range upon announcement of such a significant
miss and the prospects of that range recovering over
time; Bankrates prospects for the remainder of the fiscal
year and beyond; and the issues with pursuing strategic
acquisitions necessary to grow Bankrates business given
the amount of cash available to Bankrate, the likelihood of
being able to raise significantly more capital and the likely
terms of such capital and the ability to use Bankrates
stock as acquisition currency, particularly at the trading
levels that could be obtained after announcement of second
quarter results.
15
Allen reviewed its financial analysis regarding the proposed
transaction and rendered to the Bankrate board of directors its
oral opinion (subsequently confirmed in writing and incorporated
by reference hereto) to the effect that, as of such date and
based upon and subject to the qualifications, limitations and
assumptions set forth therein, the price of $28.50 per share in
cash to be received by Bankrates shareholders, other than
shareholders subject to Support Agreements, is fair, from a
financial point of view, to Bankrates shareholders.
Representatives of Wachtell Lipton reviewed in detail the terms
of the proposed transaction with the Bankrate board of
directors, including the terms on which certain members of the
Bankrate board of directors would invest in the equity of the
post-acquisition company as required by Apax and the incentive
compensation and employment terms envisioned by Apax for key
members of management, and discussed the legal duties and
standards applicable to the decisions and actions being
considered by the Bankrate board of directors.
The Bankrate board of directors meeting then adjourned to
permit a separate meeting of only Messrs. Martin, Pinola
and Poliner, as the three members of the Bankrate board of
directors not entering into Support Agreements (the
Disinterested Directors). Representatives of Wachtell Lipton and
Needham were in attendance. Representatives of Wachtell Lipton
discussed applicable Florida law, including the provision under
Section 607.0901 of the FBCA that permits a transaction with
affiliated shareholders to be approved by disinterested
directors. The significance of Section 607.0901 of the FBCA
is discussed in further detail in III.14 Certain
Legal Matters; Regulatory Approvals. Needham reviewed with the
Disinterested Directors its financial analysis regarding the
proposed transactions and rendered its oral opinion
(subsequently confirmed in writing and incorporated by reference
hereto) to the effect that, as of such date and based upon and
subject to the factors, procedures, assumptions, qualifications
and limitations set forth in the opinion, the $28.50 per share
in cash to be received by the holders of shares (other than
shareholders subject to Support Agreements) is fair, from a
financial point of view, to such holders. After discussion
regarding the terms of the transaction and the proposed
arrangements between Parent, on the one hand, and certain
members of Bankrates management and Messrs. Morse and
OBlock, on the other hand, the Disinterested Directors
unanimously approved and voted in favor of the approval the
Merger Agreement and the transactions contemplated by the Merger
Agreement, including the Offer and the Merger, and approve the
arrangements whereby these individuals would invest in the
equity of the post-acquisition company and the proposed
employment arrangements with senior management.
The full Bankrate board of directors then reconvened and the
Disinterested Directors reported on their separate meeting and
their conclusions. After additional discussion, the members of
the Bankrate board of directors unanimously resolved to approve
the Merger Agreement and the transactions contemplated by the
Merger Agreement, including the Offer and the Merger.
Following the Bankrate board of directors meeting, the parties
and their respective counsel finalized, and the parties
executed, the definitive transaction documents. Bankrate and
Apax then issued a joint press release announcing the
transaction.
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2.
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The
Support Agreements
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The following summary of certain provisions of the Support
Agreements is qualified in its entirety by reference to the
Support Agreements themselves, which are incorporated herein by
reference and copies of which have been filed with the SEC as
exhibits to the Tender Offer Statement on Schedule TO (the
Schedule TO). Shareholders and other interested
parties should read the Support Agreements in their entirety for
a more complete description of the provisions summarized below.
Prior to the execution of, but in connection with, the Merger
Agreement and the transactions contemplated thereby,
Messrs. Morse (including with respect to Mr. Morse
only, Mr. Morses wife and various remainder and
annuity trusts for the benefit of Mr. Morse or various
family members), OBlock, Evans, DiMaria, Hoogterp,
Horowitz, Ricciardelli, Ross and Zanca (each a Support
Executive and collectively, the Support
Executives) each entered into a Support Agreement.
The Support Agreements provide that each of the Support
Executives will not, directly or indirectly, tender his
respective Bankrate shares (including the restricted shares) and
Bankrate shares subject to options beneficially owned, held or
controlled by such Support Executive (Support Executive
Securities) into the Offer, or enter into any agreement,
transaction or arrangement that results in his respective
Support Executive Securities being
16
tendered into the Offer. Each of the Support Executives also
authorized Bankrate or its counsel to notify Bankrates
transfer agent that there is a stop transfer order with respect
to each of their respective Support Executive Securities. Each
of the Support Executives additionally agreed not to cash-out
any of his respective options or restricted Bankrate shares
other than in accordance with the terms and conditions of
definitive documents relating to the treatment of his Support
Executive Securities, consistent with indicative terms agreed to
in the relevant Support Agreement. The Support Agreements also
prohibit the Support Executives, solely in their capacity as
shareholders, from soliciting alternative transactions or
entering into discussions concerning, or providing confidential
information in connection with, any alternative transaction.
Each Support Executive has agreed to invest an amount in the
same securities of Parent (or an affiliate of Parent), and in
the same relative proportions between such securities, as the
Apax VII Funds at the effective time of the Merger. Mr. Evans
has committed to invest $4,500,00, Mr. DiMaria has committed to
invest $125,000, Mr. Hoogterp has committed to invest $125,000,
Mr. Horowitz has committed to invest $125,000, Mr. Ricciardelli
has committed to invest $35,000, Mr. Ross has committed to
invest $100,00 and Mr. Zanca has committed to invest $125,000,
which represents approximately 25%, 5%, 13%, 6%, 5%, 6%, and 5%,
respectively, of the gross proceeds each such person expects to
receive in respect of his equity holdings in Bankrate in the
Merger. Each of Messrs. Morse and OBlock committed to
invest between 30% and 50% (the percentage to be determined in
the discretion of each of Messrs. Morse and OBlock
before the Acceptance Time) of the after-tax value of his equity
holdings in Bankrate (representing an investment amount of
approximately $29.7 million to $50.5 million for
Mr. Morse and approximately $2.5 million to
$4.2 million for Mr. OBlock). Messrs. Morse
and OBlock have since decided to invest $38.0 million
and $3.2 million, respectively. The percentage of Parent
securities each Support Executive will hold subsequent to the
Merger is approximately 6.9% for Mr. Morse, approximately 0.6%
for Mr. OBlock, approximately 0.8% for Mr. Evans,
approximately 0.02% for each of Messrs. DiMaria, Hoogterp,
Horowitz, Ross and Zanca, and approximately 0.01% for
Mr. Ricciardelli (which percentages do not reflect any
Parent equity that may be granted to them pursuant to the Parent
Equity Plan described below).
Pursuant to the Support Agreements, each of the Support
Executives agreed, among other things, (A) from and after
July 22, 2009 until the earlier of (x) the Acceptance
Time and (y) the termination of the Merger Agreement
pursuant to and in compliance with the terms therein, to vote or
deliver a written consent, and (B) from and after the
Acceptance Time until the earlier of (a) the consummation
of the Merger and (b) the termination of the Merger
Agreement pursuant to and in compliance with the terms therein,
appoints Parent proxy and attorney-in-fact to vote, all Support
Executive Securities that he beneficially owns or controls,
without regard to any change in the recommendation of
Bankrates board of directors, (1) for approval and
adoption of the Merger Agreement and the transactions
contemplated by the Merger Agreement, (2) against any
alternative proposal to the Merger Agreement, without regard to
the terms of such alternative proposal, or any other
transaction, proposal, agreement or action made in opposition to
adoption of the Merger Agreement or in competition or
inconsistent with the Merger and the other transactions
contemplated by the Merger Agreement, (3) against any other
action, agreement or transaction, that is intended, that could
reasonably be expected, or the effect of which could reasonably
be expected, to materially impede, interfere with, delay,
postpone, discourage or adversely affect the Offer, the Merger
or any of the other transactions contemplated by the Merger
Agreement or the Support Agreements or the performance of his
obligations under the Support Agreement, including, without
limitation: (i) any extraordinary corporate transaction,
such as a merger, consolidation or other business combination
involving Bankrate or its subsidiaries (other than the
transactions at hand); (ii) a sale, lease or transfer of a
material amount of assets of Bankrate or any of its subsidiaries
or a reorganization, recapitalization or liquidation of Bankrate
or any of its subsidiaries; (iii) an election of new
members to the board of directors of Bankrate, other than
nominees to the board of directors of Bankrate who are serving
as directors of Bankrate on the date of the Support Agreements
or as otherwise provided in the Merger Agreement; (iv) any
material change in the present capitalization or dividend policy
of Bankrate or any amendment or other change to Bankrates
articles of incorporation or bylaws, except if approved in
writing by Parent; or (v) any other material change in
Bankrates corporate structure or business, except if
approved in writing by Parent, (4) against any action,
proposal, transaction or agreement that would reasonably be
expected to result in a breach in any respect of any covenant,
representation or warranty or any other obligation or agreement
of Bankrate contained in the Merger Agreement, or of the Support
Executive
17
contained in the Support Agreement, and (5) in favor of any
other matter necessary to the consummation of the transactions
contemplated by the Merger Agreement.
During the term of each Support Agreement, except as otherwise
provided therein, the Support Executives agreed not to, directly
or indirectly:
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sell, transfer, assign, tender in any tender or exchange offer,
pledge, encumber, hypothecate or similarly dispose of (by
merger, by testamentary disposition, by operation of law or
otherwise), either voluntarily or involuntarily, or to enter
into any contract, option or other arrangement or understanding
with respect to the sale, transfer, assignment, pledge, lien,
hypothecation or similar disposition of (by merger, by
testamentary disposition, by operation of law or otherwise), any
Support Executive Securities, except in connection with cashless
exercises or similar transactions (including, in respect of tax
withholding) pursuant to the exercise of options to acquire
Bankrate shares or settlement of other awards or obligations
outstanding;
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grant any proxy, power-of-attorney or other authorization or
consent with respect to any of his Support Executive Securities;
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deposit any of his Support Executive Securities into a voting
trust, or enter into a voting agreement or arrangement with
respect to any of such Support Executive Securities; or
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take any other action that would in any way restrict, limit or
interfere with the performance of his obligations under the
Support Agreements or the transactions contemplated thereby.
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The Support Executives shall, upon request of Purchaser or
Parent, execute and deliver any additional documents and take
such further actions as may reasonably be deemed by Purchaser or
Parent to be necessary or desirable to carry out the provisions
of the Support Agreements.
The Support Agreements, and all rights and obligations of
Purchaser, Parent and the Support Executives will terminate upon
the earlier to occur of (A) the closing of the Merger,
which shall be no later than the second business day after the
satisfaction or waiver of the covenants and agreements contained
in Article VI of the Merger Agreement and (B) the date
of termination of the Merger Agreement in accordance with its
terms.
In addition, each of the Support Executives committed to invest
an agreed amount in the same securities of Parent (or an
affiliate of Parent), and in the same proportions of such
securities, as the Apax VII Funds at the effective time of the
Merger, in accordance with terms and conditions described in the
Support Agreements. See Section I. 10 (Interests of
Bankrates Directors and Executive Officers in the Offer
and the Merger) for more information regarding the commitments
of the Support Executives to invest in Parent (including the
restricted shares).
As of the date of this Offer to Purchase and based on
information provided by the shareholders subject to the Support
Agreements, the Bankrate shares owned by the shareholders
subject to the Support Agreements represent approximately 24% of
Bankrates outstanding common shares, or 28% assuming the
exercise by the Support Executives of all of their in the
money options to acquire Bankrate shares.
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3.
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Position
of Bankrate Regarding the Fairness of the Offer and the
Merger
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The full text of the recommendations, and reasons supporting
them, of the Bankrate board of directors, and the full text of
the written opinion of Allen, which describes the assumptions
made and qualifications and limitations on the review
undertaken, are included in Bankrates
Schedule 14D-9
which is being mailed to Bankrate shareholders together with
this Offer to Purchase. Holders of Bankrate shares are urged to
read the
Schedule 14D-9,
including the full text of the written opinion of Allen,
carefully and in its entirety.
As further disclosed in Background of the
Offer above, the Bankrate board of directors considered at
various times other alternatives, including approaching other
potential acquirors and continuing to execute the Bankrate
business plan as a standalone entity. Approaches to other
acquirors either failed to result in any proposal or were
determined by the board of directors to be unlikely to succeed,
and the board of directors rejected the alternative of
continuing as a standalone entity because it would not achieve
the purposes of the Offer and the Merger and for the reasons
described in Bankrates
Schedule 14D-9.
18
As discussed above, Bankrates board of directors
considered at various times other alternatives, including
approaching other potential acquirors and continuing to execute
Bankrates business plan as a standalone entity.
Approaches to other potential acquirors (other than Apax and
Party A) were considered several times, including in April
2009 and on June 23, 2009. After consultation with Allen,
Bankrate determined that approaching such parties was unlikely
to generate serious offers given the lack of interest of
strategic parties and the levels of interest and engagement
history of financial sponsors in the past, and therefore did not
justify the disruption and business risks that would result from
such a process, or the risk of sharing confidential and
sensitive information with such parties. As time went by and the
outlook for Bankrate continued to deteriorate, it also became
less likely that a third party would be able to present an offer
superior to Apaxs and enter into definitive agreements
before the upcoming announcement of Bankrates
second-quarter earnings, which were expected to reflect further
deterioration in Bankrates results of operations. In
addition, Bankrates approach to Party A failed to result
in any firm offer or proposal.
On July 20, 2009, after Apaxs reduction of the Offer
Price, the Bankrate board of directors revisited whether it
would be possible to approach other potential acquirors,
including Party A. While the considerations described above
continued to make it unlikely that any such approach would be
successful, the Bankrate board of directors made the judgment,
after consultation with Allen, that if Apax did not immediately
improve its offer as described above in
Background of the Offer, Bankrate should
nonetheless begin discussions with other potential acquirors.
Later that evening, Apax substantively accepted Bankrates
proposal.
In addition, on several occasions, financial sponsors approached
representatives of Bankrate regarding the possibility of
partnering with Bankrate to invest in or acquire other companies
or businesses. These discussions were generally informal and
exploratory, and did not result in any specific proposal or
transaction. On numerous instances, the Bankrate board of
directors also considered the alternative of Bankrate continuing
as a standalone entity and executing on its existing business
plan, but ultimately rejected this alternative for the reasons
described in Item 4(d) Reasons for the
Recommendation, of Bankrates
Schedule 14D-9.
The Bankrate board of directors has unanimously:
(1) determined that the terms of the Offer, the Merger and
the other transactions contemplated by the Merger Agreement are
fair and advisable to and in the best interests of Bankrate and
Bankrates shareholders; (2) approved the Merger
Agreement and the transactions contemplated thereby including
the Offer and the Merger, in all respects; (3) subject to
the terms and conditions of the Merger Agreement, recommended
that Bankrates shareholders accept the Offer, tender their
Bankrate shares to Purchaser pursuant to the Offer and, if
required, approve and adopt the Merger and the Merger Agreement;
and (4) approved the execution, delivery and performance of
the Merger Agreement by and on behalf of Bankrate and the
consummation of the transactions contemplated thereby, including
the Offer and the Merger. Accordingly, Bankrates board of
directors believes that the Offer and the Merger are fair to all
of Bankrates shareholders, including unaffiliated
shareholders, and unanimously recommends that the shareholders
of Bankrate accept the Offer and tender their Bankrate shares to
Purchaser in the Offer and, if required, vote to approve the
Merger and the Merger Agreement.
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4.
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Position
of the Disinterested Directors Regarding the Fairness of the
Offer and the Merger
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Because Section 607.0901 of the Florida Business
Corporation Act permits a transaction with affiliated
shareholders to be approved by Disinterested Directors, and
because the interests of certain directors and executive
officers of Bankrate under the Support Agreements could arguably
cause the Offer and Merger to be considered a transaction with
affiliated shareholders, the Disinterested Directors of the
Bankrate board of directors that are not subject to Support
Agreements separately considered the Offer, the Merger, the
Merger Agreement and the transactions contemplated thereby. The
significance of Section 607.0901 of the FBCA including the
requirements, among other things, that if such transactions had
not been approved by the Disinterested Directors and such
transactions were deemed a transaction with affiliated
shareholders they would have required a two-thirds majority vote
of the shareholders is discussed in further detail in
III.14 Certain Legal Matters; Regulatory Approvals.
The Disinterested Directors separately received an opinion of
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Needham as to the fairness of the Offer Price to the
shareholders of Bankrate (other than shareholders subject to
Support Agreements). The full text of the written opinion of
Needham, which describes the assumptions made and qualifications
and limitations on the review undertaken, are included in
Bankrates
Schedule 14D-9
which is being mailed to Bankrate shareholders together with
this Offer to Purchase. The Disinterested Directors had the
authority to, and considered, retaining separate legal counsel,
but concluded that this was not necessary in view of the role of
the Disinterested Directors under Florida law, which involved
them understanding and considering the transaction and the
varying interests of the executives and the other directors in
the transaction, and independently determining whether to
approve the transaction. The Disinterested Directors engaged in
separate deliberations with Needham and Wachtell Lipton, and
considered each of the factors and alternatives described in
Item 4(c), Alternatives Considered by the Board and
the Support Executives and Item 4(d),Reasons
for the Recommendation, of Bankrates
Schedule 14D-9.
Holders of Bankrate shares are urged to read the
Schedule 14D-9,
including Item 4(c), Alternatives Considered by the
Board and the Support Executives and Item 4(d),
Reasons for the Recommendation and the full text of
the written opinion of Needham, carefully and in its entirety.
These Disinterested Directors of the Bankrate board of directors
have unanimously approved and voted in favor of the Bankrate
board of directors approval of the Offer, the Merger, the
Merger Agreement and the transactions contemplated thereby.
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5.
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Position
of the Support Executives as to Fairness
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Messrs. Morse, OBlock, Evans, DiMaria, Hoogterp,
Horowitz, Ricciardelli, Ross and Zanca (the Support
Executives) believe that the terms of the Offer, the
Merger and the other transactions contemplated by the Merger
Agreement are fair and advisable to and in the best interests of
the Company and all of its shareholders, including the
unaffiliated shareholders.
The Support Executives based their determination that the terms
of the Offer, the Merger and the other transactions contemplated
by the Merger Agreement are fair to all shareholders, including
the unaffiliated shareholders, upon the same factors considered
by the Bankrate board of directors, with the exception of the
analyses conducted by Allen and Needham & Company, with
respect to the fairness of the merger to such unaffiliated
shareholders as set forth in the
Schedule 14D-9,
and made such determination following consideration of the same
alternatives considered by the Bankrate board of directors and
adopted the boards analysis of such factors, excluding the
boards analysis of the analyses presented by Allen and
Needham & Company, as their own (see Item 4(b)
Background of the Transaction, Item 4(c)
Alternatives Considered by the Board and the Support
Executives and Item 4(d), Reasons for the
Recommendation of the
Schedule 14D-9,
which are incorporated herein by reference). The Support
Executives did not consider the analyses conducted by Allen and
Needham & Company because those analyses were
addressed to Bankrates board of directors and the
Disinterested Directors, respectively, and not to the Support
Executives. With regard to the analyses of Bankrate as a going
concern conducted by Allen and Needham & Company, the
Support Executives did not undertake any formal consideration of
the value of Bankrate as a going concern but instead relied upon
their own views as to the state of the business and the
viability of Bankrate as a going concern. The Support Executives
have agreements or arrangements that may provide them with
interests that may differ from, or be in addition to, those of
shareholders (and unaffiliated shareholders) generally. These
interests are described in the Offer to Purchase under
SPECIAL FACTORS Section I. 10
(Interests of Bankrates Directors and Executive
Officers in the Offer and the Merger) and are
incorporated herein by reference.
This discussion of the information and factors considered by the
Support Executives includes the material positive and negative
factors considered by the Support Executives, but is not
intended to be exhaustive and may not include all of the factors
considered by the Support Executives. The Support Executives did
not undertake to make any specific determination as to whether
any particular factor, or any aspect of any particular factor,
was favorable or unfavorable to its ultimate determination, and
did not quantify or assign any relative or specific weights to
the various factors that it considered in reaching its
determination that the Tender Offer, the Merger, the Merger
Agreement and the other transactions contemplated by the Merger
Agreement are fair and advisable to and in the best interests of
Bankrate and its shareholders including the unaffiliated share
holders.
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6.
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Purposes
and Reasons of Support Executives
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For the Support Executives, the purpose of the Offer, the Merger
and the other transactions contemplated by the Merger Agreement
is to enable all the shareholders of the Company, including the
Support Executives and the unaffiliated shareholders, to benefit
from a transaction that represented the most certain and best
prospect for maximizing shareholder value and that is fair and
advisable to and in the best interests of the Company and all of
its shareholders. The Support Executives believe that the Offer
Price to be paid pursuant to the Tender Offer and the Merger,
which represents an 18.2% premium to the average 10-day trading
price as of immediately prior to the signing of the Merger
Agreement and provides a fixed, immediate cash value to
shareholders, represents fair and attractive consideration for
shareholders. Further information on the position of the Support
Executives as to the fairness of the Tender Offer and the Merger
and their reasons for this conclusion and for participating in
the transaction are set forth above under SPECIAL
FACTORS Section I. 5 (Position of the
Support Executives as to Fairness). The Support Executives
were prepared to tender the full amount of their own shares for
the Offer Price, but given that Parent requested that the
Support Executives continue to remain employees of the Company
and retain a certain amount of equity interest in the Company,
the Support Executives were willing to reinvest a portion of the
proceeds received in the Merger in order to ensure that the
transaction would succeed and that all of the shareholders of
the Company, including the unaffiliated shareholders, would be
able to receive the benefits of the Offer, the Merger and the
other transactions contemplated by the Merger Agreement.
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7.
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Purposes
and Reasons of Parent, Purchaser, the Apax VII Funds and the
Other Apax Entities
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As described above, the Offer and the Merger constitute a
going-private transaction, and any exercise by
Purchaser of the
Top-Up
Option may be considered a step in a going-private
transaction. If the Merger is completed, Bankrate will become a
subsidiary of Parent. For Parent and Purchaser, the purpose of
the Offer and the Merger is to effectuate the transactions
contemplated by the Merger Agreement. For the Apax VII Funds and
the Other Apax Entities, the purpose of the Offer and the Merger
is to benefit from any future earnings and growth of Bankrate
after the Merger.
The Apax VII Funds and the Other Apax Entities believe that
Bankrate will benefit from operating as a privately held entity.
As a privately held entity, Bankrate will have the flexibility
to focus on continuing improvements to its business, including
pursuing strategic transactions and acquisitions, without the
constraints and distractions caused by the public equity
markets valuation of Bankrate and the focus on the
quarter-to-quarter performance often emphasized by the public
markets. Management will benefit from eliminating certain duties
required in managing a publicly traded company, enabling them to
devote more of their time and energy to core business
operations. As a private company, Bankrate will also have the
ability to build capital, organically grow and make acquisitions
through access to the private financial markets. Moreover, the
Apax VII Funds and the Other Apax Entities believe that
Bankrates future business prospects can be improved
through their active participation in the strategic direction
and operations of Bankrate. For these reasons the Apax VII
Funds and the Other Apax Entities did not consider alternative
means to accomplish the purposes described. Although the Apax
VII Funds and the Other Apax Entities believe that there will be
significant opportunities associated with their investment in
Bankrate, they realize that there are also substantial risks
(including the risks and uncertainties relating to
Bankrates prospects).
The continued investment in Bankrate by certain directors and
executive officers of Bankrate has been a key investment
consideration for Apax from the beginning of its negotiations
with Bankrate. Apax believes that having a meaningful amount
invested by directors and senior executives after the Merger is
an important method of retaining key managers of the business
and of providing incentives for them. Prior to making its
indication of interest in June of 2009, Apax advised
Messrs. Morse and Evans that it would require a material
reinvestment by certain members of senior management. Apax
selected senior management members for rollover commitments who
they believed would have the most impact on Bankrates
operations going forward, and focused on Mr. Evans,
Bankrates Chief Executive Officer, as the most critical
person in that regard. Mr. Evans assisted Apax in
identifying the other members of management that were key to the
operations of Bankrate, and Apax requested that those management
members roll over a portion of their Bankrate shares pursuant to
the Merger Agreement and enter into Support Agreements.
Mr. Morse was requested to make a
21
rollover commitment and enter into a Support Agreement due to
his significant ownership of Bankrate shares and experience with
Bankrate, and Mr. OBlock was selected for a rollover
commitment and to enter into a Support Agreement based on the
recommendation of Mr. Morse, given his background and experience
with Bankrate. The exact amounts and terms of the reinvestment
have been the subject of several discussions between Apax and
each of Messrs. Morse and Evans and then subsequent
conversations between Mr. Evans and each of
Messrs. OBlock, DiMaria, Hoogterp, Horowitz,
Ricciardelli, Ross and Zanca. Such conversations began at the
same time as the negotiations regarding the Merger Agreement and
have continued since the filing of the Offer. Ongoing
discussions between Apax and the directors and senior executives
concern the amount of Mr. Morses and
Mr. OBlockss reinvestment and the tax treatment
of the reinvestment, as well as the form of awards to be made
under the Parent Equity Plan. See Section I. 11 (Interests
of Bankrates Directors and Executive Officers in the Offer
and the Merger Management Arrangements with
Parent Parent Equity Plan).
The purpose of any exercise by Purchaser of the
Top-Up
Option following completion of the Offer would be to acquire an
additional number of Bankrate shares sufficient to permit
Purchaser to effect a short-form merger in accordance with the
Florida law and to thereby acquire the remaining outstanding
ownership interests in Bankrate without requiring a vote of the
shareholders of Bankrate.
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8.
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Position
of Parent, Purchaser, the Apax VII Funds and the Other Apax
Entities as to Fairness
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Under the rules governing going-private
transactions, Parent, Purchaser, the Apax VII Funds and the
Other Apax Entities are required to express their beliefs as to
the fairness of the Offer and the Merger to Bankrates
unaffiliated shareholders. Parent, Purchaser, the Apax VII Funds
and the Other Apax Entities are making the statements included
in this section solely for the purposes of complying with the
requirements, to the extent so required, of
Rule 13e-3
and related rules under the Exchange Act. The views of Parent,
Purchaser, the Apax VII Funds and the Other Apax Entities should
not be construed as a recommendation to any shareholder
regarding whether to tender their Bankrate shares into the Offer
or to how that shareholder should vote on the approval of the
Merger and the Merger Agreement if a vote of Bankrates
shareholders is held.
Parent, Purchaser and the Apax VII Funds and the Other Apax
Entities attempted to negotiate the terms of a transaction that
would be most favorable to them, and not to the shareholders of
Bankrate and, accordingly, did not negotiate the Merger
Agreement with a goal of obtaining terms that were fair to such
shareholders.
None of Parent, Purchaser, the Apax VII Funds or the Other Apax
Entities believes that it has or had any fiduciary duty to
Bankrate or its shareholders, including with respect to the
Offer and the Merger and their terms. None of Parent, Purchaser,
the Apax VII Funds or the Other Apax Entities participated in
the deliberation process of Bankrates board of directors
and none of them participated in the conclusions of
Bankrates board of directors that the Offer and the Merger
were fair to Bankrates shareholders, nor did they
undertake any independent evaluation of the fairness of the
Offer or the Merger or engage a financial advisor for these
purposes. None of Parent, Purchaser, the Apax VII Funds or the
Other Apax Entities received advice from Bankrates legal
or financial advisor as to the substantive and procedural
fairness of the proposed Offer or the proposed Merger. However,
Parent, Purchaser, the Apax VII Funds and the Other Apax
Entities believe that the Offer and the Merger are substantively
and procedurally fair to the unaffiliated shareholders based
upon the following factors:
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the factors considered by, and the findings of, Bankrates
board of directors with respect to the substantive fairness of
the Offer and the Merger to Bankrates shareholders, as
described in the Schedule 14D-9 under Item 4.
The Solicitation or Recommendation Reasons for the
Recommendation, and the discussion set forth in
Schedule 14D-9 under Item 5. Persons/Assets Retained,
Employed, Compensated or Used Opinion of Allen
& Company, LLC and Opinion of
Needham & Company, LLC, which sections are
incorporated herein by reference and the presentation materials
filed as exhibits to the Schedule 14D-9 filed by Bankrate with
the SEC in connection with the
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Offer, which findings and related analyses, as set forth in this
Offer to Purchase, Parent, Purchaser and the Apax VII Funds
adopt;
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the factors considered by, and the findings of, Bankrates
board of directors with respect to the procedural fairness of
the Offer and the Merger to such unaffiliated shareholders as
set forth in this Offer to Purchase, as described in the
Schedule 14D-9 under Item 4. The Solicitation or
Recommendation Background of the
Transaction Reasons for the Recommendation,
which sections are incorporated herein by reference and which
findings and related analyses, as set forth in the
Schedule 14D-9,
Parent, Purchaser and the Apax VII Funds adopt;
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the fact that (i) Bankrates board of directors
received an opinion from their financial advisor, Allen, and
(ii) the disinterested members of Bankrates board of
directors received an opinion from their financial advisor
Needham & Company, that, based upon and subject to the
assumptions, qualifications and limitations set forth in their
respective written opinions described, as of July 22, 2009,
the consideration of $28.50 per share, payable net in cash to
the holders of Bankrate shares pursuant to the Offer and the
Merger, was fair from a financial point of view to such holders
(other than holders of Bankrate shares subject to Support
Agreements), as described in the respective written opinions of
Allen and Needham & Company (see Item 5.
Persons/Assets Retained, Employed, Compensated or
Used Opinion of Allen & Company, LLC and
Opinion of Needham & Company, LLC
in the
Schedule 14D-9);
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the fact that Parent, Purchaser and the Apax VII Funds did not
participate in or have any influence on the deliberative process
of, or the conclusions reached by, Bankrates board of
directors or the negotiating positions of Bankrates board
of directors; and
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the Offer and the Merger will provide consideration to
Bankrates shareholders (other than those who have entered
into Support Agreements) entirely in cash, which provides
certainty of value.
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Parent, Purchaser and the Apax VII Funds noted that
Bankrates board of directors did not consider the net book
value or liquidation value of Bankrate or any firm offers made
for Bankrate during the last two years, for the reasons
described in the
Schedule 14D-9
under Item 4. The Solicitation or
Recommendation Reason for the Recommendation,
and, accordingly, Parent, Purchaser and the Apax VII Funds did
not consider these factors.
In addition, under a potential interpretation of the
applicability of
Rule 13e-3
under the Exchange Act, exercises by certain Support Executives
of their existing options to purchase Bankrate shares, any
exercise by Parent or Purchaser of the
Top-Up
Option and any open market purchases effected by Parent or
Purchaser following completion of the Offer could be deemed to
be steps in a going-private transaction.
If such exercises by certain Support Executives of their
existing options to purchase Bankrate shares, any such exercise
by Parent or Purchaser of the
Top-Up
Option and any such open market purchases effected by Parent or
Purchaser following completion of the Offer were deemed to be
steps in a going-private transaction, Parent,
Purchaser and the Apax VII Funds believe that these exercises
and purchases would be substantively and procedurally fair to
Bankrates unaffiliated shareholders based upon the factors
described in Sections I. 3 (Position of Bankrate Regarding
the Fairness of the Offer and the Merger) and I. 4 (Position of
the Disinterested Directors Regarding the Fairness of the Offer
and the Merger) because the purpose of the
Top-Up
Option is to deliver such Bankrate shareholders the Offer Price
more quickly than would be possible if a vote of Bankrate
shareholders were required, and is only exercisable in a
situation where Parent and Purchaser would already have
sufficient voting power to approve the Merger at any meeting of
Bankrate shareholders without the approval of any other
shareholder of Bankrate.
The foregoing discussion of the information and factors
considered and given weight by Parent, Purchaser, the Apax VII
Funds and the Other Apax Entities in connection with the
fairness of the Offer and the Merger and, if applicable, any
exercise by certain Support Executives of their options to
purchase Bankrate shares, any exercise by Parent or Purchaser of
the Top-Up
Option contemplated by the Merger Agreement and any open market
purchases effected by Parent or Purchaser following completion
of the Offer, is not intended to be exhaustive but includes all
material factors considered by Parent, Purchaser, the Apax VII
Funds and the
23
Other Apax Entities. Parent, Purchaser, the Apax VII Funds and
the Other Apax Entities did not find it practicable to, and did
not, quantify or otherwise attach relative weights to the
foregoing factors in reaching their position as to the fairness
of these transactions. Parent, Purchaser, the Apax VII Funds and
the Other Apax Entities find that these factors provide a
reasonable basis for their position that these transactions are
fair to Bankrates unaffiliated shareholders.
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9.
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Certain
Effects of the Offer and the Merger
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The purchase of Bankrate shares pursuant to the Offer will
reduce the number of Bankrate shares that might otherwise trade
publicly and could adversely affect the liquidity and market
value of the remaining Bankrate shares held by the public.
The Bankrate shares are currently registered under the Exchange
Act. Such registration may be terminated upon the application of
Bankrate to the SEC if the Bankrate shares are not listed on a
national securities exchange and there are fewer than 300 record
holders of the Bankrate shares. Parent and Purchaser do not
currently intend to take any action to terminate the
registration of Bankrates shares under the Exchange Act
prior to the Merger but such registration will be terminated
following completion of the Merger and may be terminated after
the Expiration Date of the Offer but before the completion of
the Merger. The termination of registration of the Bankrate
shares under the Exchange Act would substantially reduce the
information required to be furnished by Bankrate to holders of
Bankrate shares and to the SEC and would make certain provisions
of the Exchange Act, such as the reporting requirements of
Section 13 of the Exchange Act, the short-swing profit
recovery provisions of Section 16(b) of the Exchange Act,
the requirement to furnish a proxy statement in connection with
shareholders meetings pursuant to Section 14(a) of
the Exchange Act, and the requirements of
Rule 13e-3
under the Exchange Act with respect to going-private
transactions, no longer applicable to Bankrate. In addition,
affiliates of Bankrate and persons holding
restricted securities of Bankrate may be deprived of
the ability to dispose of such securities under Rule 144
under the Securities Act of 1933, as amended (the
Securities Act). If registration of the Bankrate
shares under the Exchange Act were terminated, the Bankrate
shares would no longer be margin securities or be
eligible for listing on The Nasdaq Stock Market.
After completion of the Offer, Bankrate expects to be eligible
to elect controlled company status pursuant to
NASDAQ Rule 5615(c), which means that Bankrate would be
exempt from the requirement that Bankrates board of
directors be composed of a majority of independent
directors and the related rules covering the independence
of directors with respect to determining compensation for
Bankrates executive officers and nomination of directors
for election to Bankrates board of directors. The
controlled company exemption does not modify the independence
requirements for Bankrates audit committee. We expect
Bankrate to elect controlled company status
following completion of the Offer. In addition, the listing of
Bankrates common stock on The Nasdaq Stock Market will be
terminated upon completion of the Merger. Parent and Purchaser
do not currently intend to take any action to terminate the
listing of Bankrates common stock on The Nasdaq Stock
Market prior to completion of the Merger, but The Nasdaq Stock
Market could take action to terminate the listing of
Bankrates common stock if Bankrate ceases to satisfy
applicable listing requirements.
At the effective time of the Merger, unless otherwise agreed
between a holder and Purchaser and Parent pursuant to the terms
of the Support Agreements or as provided below, for each share
of Bankrates shares issued and outstanding immediately
prior to the effective time of the Merger not tendered into the
Offer (other than shares owned by Parent, Purchaser, Bankrate or
any direct or indirect wholly-owned subsidiary of Parent,
Purchaser or Bankrate, or by any shareholder of Bankrate who is
entitled to and properly exercises appraisal rights under
Florida law or any shares subject to Support Agreements) will be
converted into the right to receive $28.50 in cash, without
interest and less any applicable withholding taxes. Except as
otherwise agreed by Parent and Purchaser and a holder of options
to acquire Bankrates shares or of unvested restricted
shares
24
pursuant to the terms of the Support Agreements, or as otherwise
provided in the Merger Agreement, to the extent applicable,
outstanding options and unvested restricted shares will be
treated as follows:
Treatment
of Options and Restricted Shares
Each outstanding option to acquire Bankrate shares, whether or
not then exercisable, that is outstanding immediately prior to
the Acceptance Time, other than options held by persons who
entered into Support Agreements (whose options shall be treated
in the manner described in Section I. 10 (Interests of
Bankrates Directors and Executive Officers in the Offer
and the Merger)) will be converted into the right to receive,
payable by the surviving corporation or Parent, as applicable,
as soon as reasonably practicable after the Acceptance Time (and
in any event, within 10 business days), a payment in cash equal
to the product of (i) the excess, if any, of (x) the
Offer Price over (y) the exercise price per share subject
to such option, multiplied by (ii) the number of Bankrate
shares for which such option has not previously been exercised,
provided that if the exercise price per share of any such option
to purchase Bankrate shares is equal to or greater than the
Offer Price, such option will be cancelled without any cash
payment. At the Acceptance Time, each outstanding share of
restricted stock (other than Bankrate shares subject to Support
Agreements) will vest in full and, subject to the ultimate
vesting of such restricted stock, its holder will have the right
to tender (or to direct Bankrate to tender on his or her behalf)
such restricted stock (net of shares withheld to satisfy
employment and income tax obligations) into the Offer. To the
extent any restricted stock is not so tendered, upon the
effective time of the Merger, it shall be converted into the
right to receive the Offer Price unless otherwise agreed between
Parent and the persons who entered into a Support Agreement.
Immediately following the effective time of the Merger, the
entire equity in the surviving corporation will be held by
Parent and Parent will be beneficially owned, by the Apax VII
Funds and by the Support Executives, as described below under
Section I. 10 (Interests of Bankrates Directors
and Executive Officers in the Offer and the Merger). Immediately
following completion of the Merger, the Apax VII Funds and the
Support Executives will be the sole beneficiaries of
Bankrates future earnings and growth, if any, and will be
entitled to vote on corporate matters affecting the surviving
corporation following the Merger. Similarly, the Apax VII Funds
and the Support Executives will also bear the risks of ongoing
operations, including the risks of any decrease in
Bankrates value after the Merger.
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10.
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Purposes,
Reasons and Plans for Bankrate after the Merger
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Parent and Purchaser expect that, upon consummation of the
Merger (with the exception of the transactions contemplated in
connection with the Merger as described in this Offer to
Purchase), the operations of Bankrate will be conducted
substantially as they currently are being conducted. Parent and
Purchaser do not have any current intentions, plans or proposals
to cause Purchaser to engage in any of the following, other than
in connection with Bankrates current strategic planning:
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an extraordinary corporate transaction following consummation of
the Offer and the Merger involving Bankrates corporate
structure, business or management, such as a merger,
reorganization or liquidation,
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the relocation of any material operations or sale or transfer of
a material amount of assets, or
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any other material changes in Bankrates business.
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Nevertheless, following consummation of the Offer and the
Merger, Parent and the management
and/or the
board of directors of the surviving corporation may initiate a
review of the surviving corporation and its assets, corporate
and capital structure, capitalization, operations, business,
properties and personnel to determine what changes, if any,
would be desirable following the Offer and the Merger to enhance
the business and operations of the surviving corporation and may
cause the surviving corporation to engage in the types of
transactions set forth above if the management
and/or board
of directors of the surviving corporation decides that such
transactions are in the best interest of the surviving
corporation upon such review. Parent, Purchaser, the Apax VII
Funds and the surviving corporation expressly reserve the right
to make any changes they deem appropriate in light of such
evaluation and review or in light of future developments.
25
Purchaser reserves the right to purchase, following the
consummation or termination of the Offer, additional Bankrate
shares in the open market, in privately negotiated transactions,
in another tender offer or exchange offer or otherwise. In
addition, in the event that the Merger is not consummated for
any reason, Purchaser will evaluate its other alternatives. Such
alternatives could include proposing a merger on terms other
than those described above, purchasing or selling additional
Bankrate shares in the open market, in privately negotiated
transactions, in another tender offer or exchange offer or
otherwise, or taking no further action to acquire additional
Bankrate shares. Any additional purchases of Bankrate shares
could be at a price greater or less than the price to be paid
for Bankrate shares in the Offer and could be for cash or other
consideration. Alternatively, Purchaser or any of its affiliates
may sell or otherwise dispose of any or all Bankrate shares
acquired in the Offer or otherwise. Each such transaction may be
effected on terms and at prices then determined by Purchaser or
the applicable affiliate, which may vary from the terms and
price in the Offer.
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11.
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Interests
of Bankrates Directors and Executive Officers in the Offer
and the Merger
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In considering the recommendation of Bankrates board of
directors to tender Bankrate shares in the Offer, shareholders
should be aware that Bankrates executive officers and
directors have agreements or arrangements that may provide them
with interests that may differ from, or be in addition to, those
of shareholders generally. Bankrates board of directors
was aware of these agreements and arrangements during its
deliberations of the merits of the Merger Agreement and in
determining to make the recommendation set forth in the
Schedule 14D-9.
Director
and Officer Indemnification and Insurance
All present rights of directors and officers of Bankrate to
exculpation, indemnification and advancement of expenses for
acts or omissions occurring at or prior to the effective time of
the Merger in connection with such person serving as a director
or officer, whether asserted or claimed at or after the
effective time of the Merger will continue after the Merger.
Parent and the surviving corporation will maintain all
exculpation, indemnification and advancement of expenses
provisions of Bankrate that exist immediately prior to the
effective time of the Merger, and will not for a period of six
years after the Merger amend, repeal, or modify these provisions
in any manner that would adversely affect the rights of any
individuals who were current or former directors, officers or
employees of Bankrate at the effective time of the Merger.
From and after the Board Appointment Date, Parent and the
surviving corporation will, to the fullest extent permitted
under law, indemnify and advance funds to each current and
former director or officer of Bankrate for any action arising
out of, relating to or in connection with any act or omission
occurring or alleged to have occurred before or after the Board
Appointment Date in connection with such person serving as a
director or officer.
For six years following the Board Appointment Date, Parent will
maintain or substitute directors and officers
liability insurance on terms no less favorable than those under
Bankrates current policy, subject to a maximum limit on
annual premiums equal to 250% of the last annual premium paid by
Bankrate prior to the date of the Merger Agreement with respect
to matters arising on or before the Board Appointment Date. In
lieu of the foregoing, Bankrate may purchase a six-year prepaid
tail policy prior to the Board Appointment Date
providing benefits substantially equivalent to those provided
under Bankrates current policy with respect to matters
arising on or before the Board Appointment Date.
Effect
of the Offer and the Merger Agreement on Stock Options and
Restricted Shares Granted under Bankrates Stock Incentive
Plans and Stock held by Directors and Executive
Officers
As set forth below, executive officers and non-employee
directors who are party to a Support Agreement have committed to
invest certain amounts into Parent. It is expected that these
investments will be satisfied either (1) with amounts that
would otherwise be payable with respect to their Bankrate equity
holdings described below or (2) by the surrender of certain
of their Bankrate equity holdings for Parent securities before
the effective time of the Merger.
26
Options
The Merger Agreement provides that, except as may otherwise be
agreed between Parent and an individual option holder who is
party to a Support Agreement, each outstanding option to acquire
Bankrates shares granted under Bankrates equity
compensation plans, including those held by Bankrates
executive officers and non-employee directors, that is
outstanding immediately prior to the Acceptance Time will
automatically fully vest (if not already vested) and will, with
respect to the Support Executives, each of whom has entered into
a Support Agreement, upon the completion of the Merger, and with
respect to Bankrates other executive officers and
directors, upon the Acceptance Time, convert into the right to
receive an amount in cash, without interest, equal to
(i) $28.50 less the exercise price of the applicable
option, multiplied by (ii) the aggregate number of Bankrate
shares into which the applicable option was exercisable
immediately prior to the completion of the Merger or the
Acceptance Time, as applicable. Bankrate or the surviving
corporation will pay the holders of Bankrate options the cash
payments (less required withholding taxes) in respect of their
options within ten business days following the Acceptance Time.
If the exercise price of any option is equal to or greater than
$28.50, it will be cancelled without any cash payment being made
to the holder of such option. As of the date hereof,
Messrs. Evans, DiMaria, Hoogterp, Horowitz, Ross,
Ricciardelli, Zanca, DeFranco, Morse, OBlock, Martin,
Pinola and Poliner hold 880,000, 130,000, 25,000, 45,000,
150,000, 40,000, 107,500, 12,500, 85,000, 85,000, 62,500, 30,000
and 85,000 options to purchase Bankrate shares,
respectively. Based on their Bankrate options held as of the
date hereof, and assuming the Offer was completed on
August 26, 2009, upon completion of the Offer the number of
unvested options to purchase Bankrate shares held by each of
Messrs. Evans, DiMaria, Hoogterp, Horowitz, Ross,
Ricciardelli, Zanca, DeFranco, Morse, OBlock, Martin,
Pinola and Poliner that would vest upon completion of the Offer
are 0, 25,000, 0, 1,563, 48,751, 13,542, 1,563, 1,563, 10,000,
10,000, 10,000, 10,000 and 10,000, respectively. These unvested
options each have an exercise price greater than $28.50 and
would be cancelled without any cash payment upon completion of
the Offer. Based on their Bankrate options held as of the date
hereof, upon completion of the Offer and completion of the
Merger, Messrs. Evans, DiMaria, Hoogterp, Horowitz, Ross,
Ricciardelli, Zanca, DeFranco, Morse, OBlock, Martin,
Pinola and Poliner would receive a cash payment in an amount
equal to $17,201,200, $0, $256,000, $591,500, $0, $0,
$1,937,050, $0, $1,007,900, $1,007,900, $420,425, $0 and
$1,007,900, respectively, with respect to all of their Bankrate
options, less any applicable withholding taxes.
Restricted
Shares
The Merger Agreement also provides that, as may otherwise be
agreed between Parent and an individual holder of restricted
shares, all Bankrate restricted shares outstanding immediately
prior to the Acceptance Time will vest in full and, subject to
the ultimate vesting of the restricted shares, the holder of the
Bankrate shares (other than holders subject to the Support
Agreements) will have the right to tender (or direct Bankrate to
tender) his or her restricted shares into the Offer (net of any
Bankrate shares withheld to satisfy employment and income tax
obligations). Parent has not reached any agreement respecting
restricted shares with directors or executive officers of
Bankrate other than the Support Executives. To the extent that
any restricted shares that vest upon completion of the Offer are
not tendered, they will be converted into the right to receive
an amount in cash, without interest, equal to $28.50 per share
upon the effective time of the Merger, except as otherwise
agreed between Parent and an individual holder of restricted
shares that is a party to a Support Agreement. Each of the
Support Executives have agreed not to tender any of their
Bankrate shares into the Offer, which with respect to the
executive officers includes any Bankrate restricted shares.
Based on their Bankrate restricted shares held as of the date
hereof and assuming the Offer was completed on August 26,
2009, upon completion of the Offer, the number of Bankrate
restricted shares held by each of Messrs. Evans, DiMaria,
Hoogterp, Horowitz, Ross, Ricciardelli, Zanca and DeFranco that
would vest immediately prior to completion of the Offer are
34,166, 82,500, 17,000, 47,500, 47,500, 16,833, 17,000 and 0,
respectively, and Messrs. Evans, DiMaria, Hoogterp,
Horowitz, Ross, Ricciardelli, Zanca and DeFranco would receive a
cash payment, as of completion of the Offer or the Merger, as
applicable, in an amount equal to $973,731, $2,351,250,
$484,500, $1,353,750, $1,353,750, $479,740.50, $484,500 and $0,
respectively, with respect to their restricted shares, less any
applicable withholding taxes. Bankrates non-employee
directors do not hold any Bankrate restricted shares.
27
Shares
Bankrates directors and executive officers also
beneficially own Bankrate shares. With the exception of the
Support Executives (who have separately agreed not to tender
their Bankrate shares), these individuals may tender their
Bankrate shares for acceptance in the Offer. Any Bankrate shares
not tendered in the Offer would be exchanged for cash upon the
closing of the Merger. Based on their Bankrate shares held as of
the date hereof and assuming the Offer was completed on
August 26, 2009, and assuming that, solely for purposes of
this calculation, the executive officers and directors who are
not Support Executives do not tender any of their Bankrate
shares into the Offer, upon completion of the Offer, the number
of Bankrate shares beneficially owned by each of
Messrs. Evans, DiMaria, Hoogterp, Horowitz, Ross,
Ricciardelli, Zanca, DeFranco Morse, OBlock, Martin,
Pinola and Poliner (which, in all cases, does not include any
restricted shares that will vest immediately prior to completion
of the Offer) are 0, 11,210, 7,332, 6,258, 6,685, 7,135, 8,226,
0, 3,954,335, 307,074, 8,350, 5,000 and 300,456, respectively
and the cash payment each such officer or director would receive
upon the Merger in exchange for such Bankrate shares is $0,
$319,485, $208,962, $178,353, $252,425, $190,523, $234,441, $0,
$112,698,548, $8,751,609, $237,975, $142,500 and $8,562,996,
respectively.
Support
Executives Investment in Parent
Each of Messrs. Morse, OBlock, Evans, DiMaria,
Hoogterp, Horowitz, Ricciardelli, Ross and Zanca has entered
into a Support Agreement with Parent and Purchaser pursuant to
which they have each agreed (i) not to tender any of their
Bankrate shares into the Offer, (ii) to support the Merger
and the other transactions contemplated by the Merger Agreement
and (iii) to make certain investments in Parent (or an
affiliate of Parent) prior to the effective time of the Merger.
Each Support Agreement was approved as an employment
compensation, severance or other employee benefit
arrangement by Bankrates Compensation Committee
(which is comprised solely of independent directors for purposes
of the requirements of Rule 14d-10 of the Exchange Act)
pursuant to the non-exclusive safe harbor provided by Rule
14d-10(a)(2) of the Exchange Act. The investment of each of
those individuals will be invested in the same Parent
securities, and in the same relative proportions between such
securities, as will be held by the Apax VII Funds and their
affiliates. To the extent that the Apax VII Funds and their
affiliates determine that it is reasonably feasible, and after
taking into account the previous sentence, the Apax VII Funds
and Parent will cooperate with these shareholders to achieve a
tax-free rollover of their committed equity investment. Mr.
Evans has committed to invest $4,500,000, Mr. DiMaria has
committed to invest $125,000, Mr. Hoogterp has committed to
invest $125,000, Mr. Horowitz has committed to invest $125,000,
Mr. Ricciardelli has committed to invest $35,000, Mr. Ross has
committed to invest $100,000 and Mr. Zanca has committed to
invest $125,000 which represents approximately 25%, 5%, 13%, 6%,
5%, 6%, and 5%, respectively, of the gross proceeds each such
person expects to receive in respect of his equity holdings in
Bankrate in the Merger. Each of Messrs. Morse and OBlock
committed to invest between 30% and 50% (the percentage to be
determined in the discretion of each of Messrs. Morse and
OBlock before the Acceptance Time) of the after-tax value
of his equity holdings in Bankrate (representing an investment
amount of approximately $29.7 million to $50.5 million
for Mr. Morse and approximately $2.5 million to
$4.2 million for Mr. OBlock). Messrs. Morse and
OBlock have since decided to invest $38.0 million and
$3.2 million, respectively. The percentage of Parent
securities each Support Executive will hold subsequent to the
Merger is approximately 6.9% for Mr. Morse, approximately 0.6%
for Mr. OBlock, approximately 0.8% for Mr. Evans,
approximately 0.02% for each of Messrs. DiMaria, Hoogterp,
Horowitz, Ross and Zanca and approximately 0.01% for Mr.
Ricciardelli (which percentages do not reflect any Parent equity
that may be granted to them pursuant to the Parent Equity Plan
described below).
Management
Arrangements with Parent
Parent has agreed on certain elements of the compensation
arrangements that will be provided by Parent and the surviving
corporation following the completion of the Merger to certain
executive officers.
Standard
Terms of Employment
Parent has agreed that the existing employment agreements of
Messrs. Evans, DiMaria, Hoogterp, Horowitz, Ross and Zanca,
including their severance rights, commitments and restrictive
covenants thereunder,
28
which are described in Existing Employment Agreements with
Bankrate below, will remain in place following completion
of the Offer, provided that, to the extent applicable, each
executive will execute an amendment to their employment
agreement providing that the Merger will not give them
good reason to terminate (if applicable), nor itself
constitute a breach of their employment agreement. Parent has
also committed to increase effective October 1, 2009 (i)
the annual base salaries for Messrs. DiMaria, Hoogterp,
Horowitz, Ricciardelli, Ross and Zanca by $25,000, $25,000,
$50,000, $50,000, $50,000 and $10,000, respectively and (ii) the
target bonuses for these same executives by $50,000, $10,000,
$50,000, $25,000, $50,000 and $0, respectively.
Parent
Equity Plan
Parent has committed to adopt an equity compensation plan (the
Parent Equity Plan) that will provide an incentive
pool to management (the Management Pool), the amount
of which is set forth below:
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Amount of
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Return on Total Investment
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Management Pool
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1.0X
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$ 0
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1.5X
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$ 20 million
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2.0X
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$ 40 million
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2.5X
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$ 60 million
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3.0X
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$ 80 million
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3.5X
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$100 million
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4.0X
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$120 million
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In the event the return on total investment is between two of
the figures above or is in excess of 4.0X, the amount of the
Management Pool will be proportionately adjusted. The manner of
determining the return on total investment that will be used to
calculate the value of the Management Pool, as well as the form
of the awards to be made to management under the Parent Equity
Plan, has not yet been agreed upon by management and Apax and
will be the subject of future negotiations. Furthermore, Parent
and management are still considering the feasibility of a
structure for the Parent Equity Plan that will provide these
economic rights to management in a form that is eligible for
capital gains treatment.
Parent has committed to grant awards representing approximately
80% of the Management Pool at or about completion of the Merger,
and will grant awards representing approximately 20% of the
Management Pool thereafter. The portion of the Management Pool
that will be granted to the executives and other employees will
be determined by Mr. Evans and Parents board of
directors. Under the Parent Equity Plan, prior to an exit event,
Parent will allocate incentive awards having a value equal to
the remaining unallocated value of the Management Pool, if any.
It is currently expected that Mr. Evans will receive
approximately 35% of the initial allocation of the Management
Pool that will be awarded at or about the completion of the
Merger. Allocations of the Management Pool to other executives
of the surviving corporation have not yet been
determined, and the chief executive officer of the
surviving corporation will recommend the allocation of awards
for approval by Parents board of directors.
Awards granted pursuant to the Parent Equity Plan will generally
vest to the extent that
agreed-upon
investors in Parent achieve an 8% internal rate of return on
their investment as of an exit event. If this return threshold
is not satisfied on the exit event, the awards will be forfeited
upon the exit event. Upon a grantees termination of
employment before an exit event, outstanding awards that are not
contingently vested will be forfeited. Up to 75% of
a grantees awards will contingently vest if
certain agreed upon annual earnings before interest, taxes,
depreciation and amortization targets are achieved while the
grantee is employed. These contingently vested awards will be
forfeited if the grantees employment is terminated for
cause, if the grantee terminates his or her employment without
good reason or if the
agreed-upon
investors in Parent do not achieve the 8% internal rate of
return on their investment described above. Contingently vested
awards that are not forfeited upon a termination of employment
may be repurchased with an interest bearing note that will be
payable only if the return threshold is satisfied.
29
Each current executive officer who is granted awards under the
new Parent Equity Plan will be subject to certain restrictive
covenants, including non-competition, non-solicitation and
non-interference covenants that will apply during employment and
for the twelve months thereafter (and for a period to be
determined in the case of Mr. Ricciardelli).
Shareholders
Agreement
Each of the Support Executives has agreed to enter into a
shareholders agreement with Parent which will govern the
parties rights and obligations with respect to capital
stock of Parent following completion of the Merger. Among other
rights and obligations, the shareholders agreement will provide
the executives with rights, under certain circumstances, to
participate in sales, purchases and registrations of Parent
shares and will provide Parent with the right to require the
executive to participate in certain sales and to repurchase the
executives options (or Parent shares acquired upon
exercise of a previously vested option) upon termination of the
executives employment.
Positions
with the Surviving Corporation
It is anticipated that the current management of Bankrate will
hold substantially similar positions with the surviving
corporation and its subsidiaries after completion of the Merger.
Existing
Employment Agreements with Bankrate
Each of Bankrates executive officers, other than
Mr. Ricciardelli, is party to an employment agreement with
Bankrate. Under the terms of the employment agreements, the
executive officers are entitled to certain severance payments in
the event they incur a termination of employment by Bankrate
without cause or, in the case of Mr. Evans if
he resigns for good reason and, in the case of
Mr. Ross if he resigns as a result of Bankrates
breach of certain provisions of his employment agreement (each,
a Qualifying Termination). Severance payments are
subject to the executive officers execution and
non-revocation of a release of claims against Bankrate. In the
event of a Qualifying Termination, each executive officer is
entitled to receive (1) within fifteen days of his date of
termination, a lump sum cash amount equal to the sum of his
unpaid base salary through the date of termination and any
accrued bonus through the date of termination and (2) a
separation payment equal to one years base salary at the
then-current rate, payable in three equal installments as
follows: (x) one-third is payable on the later of (i)
fifteen days following the date of termination and (ii) the
date after the executive officers right to revoke his
release expires, (y) one-third is payable on the six-month
anniversary of the date of termination and (z) one-third is
payable on the one-year anniversary of the date of termination.
Assuming that the Offer is completed on August 26, 2009 and
the executive officer experiences a Qualifying Termination
immediately thereafter, the amount of cash severance that will
be payable to each of Messrs. Evans, DiMaria, Hoogterp,
Horowitz, Ross, Zanca and DeFranco, respectively, is
approximately $450,000, $350,000, $250,000, $300,000, $300,000,
$240,000 and $210,000.
Each executive is subject to an ongoing confidentiality
obligation, and non-competition and non-recruit covenants, while
employed by Bankrate and for one year thereafter (six months for
Mr. Hoogterp).
Bankrates
Unwritten Severance Policy
Mr. Ricciardelli is eligible for severance under
Bankrates standard, unwritten severance policy. Pursuant
to this severance policy, employees whose employment is
terminated as a result of a position elimination or a
termination of employment by Bankrate without cause
are, subject to their entry into a severance agreement and
general release, eligible for severance in an amount of two
weeks of pay, plus one week of pay (rounded up for partial
years) for each year of service with Bankrate. Assuming that the
Offer is completed on August 26, 2009 and
Mr. Ricciardellis employment is terminated in a
manner entitling him to severance under Bankrates
severance policy, based on his years of service with Bankrate as
of the date of termination, Mr. Ricciardelli would be
eligible for cash severance payments of approximately $24,038.
30
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12.
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Certain
Relationships Between Parent or Purchaser and Bankrate
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There are no relationships between Parent and Purchaser or any
of their respective affiliates, on the one hand, and Bankrate or
any of its affiliates, on the other hand, that would require
disclosure under the rules and regulations of the SEC applicable
to this Offer to Purchase other than in respect of the Merger
Agreement and those arrangements described in Sections I. 1
(Background of the Offer), Section I. 4 (Position of the
Disinterested Directors Regarding the Fairness of the Offer and
the Merger) and Section I. 13 (The Merger Agreement).
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13.
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Security
Ownership of Certain Beneficial Owners and Management
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The information contained in Annex A to the
Schedule 14D-9
under the heading Security Ownership of Certain Beneficial
Owners and Management is incorporated herein by reference.
The following summary of certain provisions of the Merger
Agreement is qualified by reference to the Merger Agreement
itself, which is attached hereto as Annex A and incorporated
herein by reference. Shareholders and other interested parties
should read the Merger Agreement for a more complete description
of the provisions summarized below.
The
Offer
The Merger Agreement provides that Purchaser will commence the
Offer by 5:30 p.m. eastern daylight savings time on
July 28, 2009, and that, subject to the satisfaction of the
Minimum Condition and the other conditions that are described in
Section III. 12 (Conditions to the Offer), Parent will
cause Purchaser to accept for payment, and Purchaser will accept
for payment, all Bankrate shares validly tendered and not
withdrawn promptly following the Expiration Date. The initial
expiration date of the Offer will be the 20th business day
after the start of the Offer.
Purchaser has reserved the right to increase the amount of
consideration payable in the Offer and to waive any condition of
the Offer, except the Minimum Condition. However, Purchaser may
waive the Minimum Condition, at the sole option of Purchaser, if
the sum of the number of Bankrate shares validly tendered and
not withdrawn plus the number of Bankrate shares subject to the
Support Agreements is at least equal to the minimum number of
Bankrate shares required to approve the Merger.
Purchaser has also agreed that, without the prior written
consent of Bankrate, it will not:
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decrease the amount of consideration payable in the Offer;
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change the form of consideration payable in the Offer;
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decrease the number of Bankrate shares sought to be purchased in
the Offer;
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impose additional conditions to the Offer; or
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reduce the time period during which the Offer shall remain open.
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Extensions
of the Offer
Purchaser has agreed that it will extend the Offer (A) for
one or more periods of up to 20 business days each, if at the
scheduled Expiration Date of the Offer any of the conditions of
the Offer has not been satisfied or waived, and (B) for any
period required by any rule, regulation, interpretation or
position of the SEC or its staff applicable to the Offer.
Purchaser, however, has no obligation to extend the Offer beyond
April 22, 2010.
Purchaser may extend the Offer (but not beyond April 22,
2010) for a period of no more than 20 days in the
aggregate, if at the scheduled Expiration Date of the Offer less
than 80% of the number of Bankrate shares then outstanding have
been validly tendered and not withdrawn (including for purposes
of determining the 80% threshold the Bankrate shares held by
persons subject to Support Agreements).
31
The Merger Agreement obligates Purchaser, subject to applicable
securities laws and the satisfaction of the conditions of the
Offer, to accept for payment and pay for all Bankrate shares
validly tendered and not withdrawn pursuant to the Offer
promptly following the acceptance of such Bankrate shares for
payment.
Recommendation
Bankrate has represented in the Merger Agreement that the
Bankrate board of directors has at a meeting duly called and
held unanimously (i) determined it is fair and advisable
for Parent to acquire Bankrate on the terms and subject to the
conditions in the Merger Agreement, (ii) approved the
Merger Agreement and the consummation of the transactions
contemplated by the Merger Agreement, including the Offer and
the Merger, in all respects, and (iii) resolved to
recommend that the Bankrate shareholders accept the Offer,
tender their Bankrate shares into the Offer and to the extent
required, recommend that Bankrates shareholders approve
and adopt the Merger Agreement and the Merger. Additionally,
Bankrates board of directors unanimously adopted a
resolution rendering the limitations on business combinations
contained in the FBCA inapplicable to the Offer, the Merger
Agreement and the other transactions contemplated by the Merger
Agreement and electing that the Offer and the Merger not be
subject to any fair price, moratorium or
takeover laws that may purport to be applicable to the Merger
Agreement or any of the transactions contemplated by the Merger
Agreement.
Bankrates
Board of Directors
On the Board Appointment Date, Purchaser is entitled to
designate a number of directors, rounded up to the next whole
number constituting at least a majority of the directors, to the
board of directors of Bankrate that is equal to the total number
of directors on Bankrates board of directors (giving
effect to the increase described in this sentence) multiplied by
the percentage that the Bankrate shares so purchased plus the
number of shares subject to the Support Agreements bears to the
total number of Bankrate shares then outstanding. After
Purchaser accepts for payment any Bankrate shares validly
tendered in the Offer, Bankrate has also agreed to cause
Purchasers designees to constitute a majority of each
committee of the Bankrate board of directors.
Bankrate will use reasonable efforts to ensure that the Bankrate
board of directors will have at least three of its members as of
July 22, 2009 who qualify as independent directors for
purposes of the continued listing requirements of The Nasdaq
Global Select Market and SEC rules and regulations (the
Continuing Directors) shall remain members of the
board of directors until the effective time of the Merger. If
the number of Continuing Directors is reduced below three prior
to the effective time of the Merger, the remaining independent
incumbent directors will be entitled to designate persons to
fill such vacancies.
Following the election or appointment of Purchasers
designees and prior to the effective time of the Merger, any
termination of the Merger Agreement by Bankrate, any extension
by Bankrate of the time for the performance of any of the
obligations or other acts of Parent or Purchaser or waiver of
any of Bankrates rights under the Merger Agreement, any
amendment of the Merger Agreement or other action adversely
affecting the rights of shareholders of Bankrate (other than
Parent or Purchaser) to receive the Offer Price will require the
concurrence of a majority of the Continuing Directors that are
on the Bankrate board of directors.
Top-Up
Option
Pursuant to the Merger Agreement, Bankrate granted to Purchaser
an irrevocable
Top-Up
Option to purchase additional Bankrate shares, at a price per
share equal to the Offer Price that, when added to the number of
Bankrate shares owned by Parent, Purchaser and any of their
wholly-owned subsidiaries immediately prior to the time of such
exercise, will constitute at least one share more than 80% of
the Bankrate shares then outstanding (after giving effect to the
Top-Up
Option). The
Top-Up
Option is intended to expedite the timing of the completion of
the Merger by permitting the Merger to occur pursuant to
Floridas short-form merger statute at a time when the
approval of the Merger at a meeting of Bankrates
shareholders would be assured because of Purchasers
ownership of a majority of the Bankrate shares following
completion of the Offer. Purchaser agreed to exercise the
Top-Up
Option if Purchaser does not own at least 80% of the
32
outstanding Bankrate shares immediately after it accepts for
purchase all of the shares validly tendered and not withdrawn.
If, following the Offer, Parent, Purchaser and any other
subsidiary of Parent collectively at least own 80% of the
outstanding Bankrate shares, Parent, Purchaser and Bankrate
shall take all necessary and appropriate action to consummate
the Merger as a short-form merger promptly without a meeting of
shareholders of Bankrate in accordance with
Section 607-1104
of the FBCA.
The
Merger
The Merger Agreement provides that, following completion of the
Offer and subject to the terms and conditions of the Merger
Agreement, and in accordance with the FBCA (described in further
detail in Section III. 14 Certain Legal Matters; Regulatory
ApprovalsFlorida Short-Form Merger Statute), at the
effective time of the Merger:
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Purchaser will be merged with and into Bankrate and, as a result
of the Merger, the separate corporate existence of Purchaser
will cease;
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Bankrate will be the surviving corporation in the Merger, will
cease to be a publicly traded company and will become a
wholly-owned subsidiary of Parent; and
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all of the rights, privileges, powers, franchises, properties
and assets of Bankrate and Purchaser will vest in the surviving
corporation and continue unaffected by the Merger.
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Articles
of Incorporation; Bylaws; Directors and Officers of the
Surviving Corporation
At the effective time of the Merger, Bankrates articles of
incorporation will be the articles of incorporation of the
surviving corporation. The by-laws of Purchaser will be the
by-laws of the surviving corporation. The directors of Purchaser
will become the directors of the surviving corporation and the
officers of Bankrate will remain the officers of the surviving
corporation.
The obligations of Parent and Purchaser, on the one hand, and
Bankrate, on the other hand, to complete the Merger are subject
to the satisfaction of the following conditions:
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the Merger Agreement having been approved and adopted, if
required, by the requisite vote of the shareholders of Bankrate;
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the consummation of the Merger will not then be restrained,
enjoined or prohibited by any order of any governmental entity
which remains in effect that enjoins or otherwise prohibits
consummation of the Merger; and
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Purchaser having purchased Bankrate shares pursuant to the Offer.
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Merger
Consideration
At the effective time of the Merger, each Bankrate share issued
and outstanding immediately prior to the effective time of the
Merger, other than Bankrate shares owned by Parent or Purchaser
immediately prior to the effective time of the Merger, any
dissenting shares or any Bankrate shares identified as rollover
shares pursuant to the terms of the Support Agreements, will
automatically be converted into the right to receive the Offer
Price in cash, without interest and less any applicable
withholding taxes. All shares converted in to the right to
receive the Offer Price shall be cancelled and cease to exist.
Payment
for Bankrate Shares
Before the Merger, Parent will designate a bank or trust company
approved in advance by Bankrate to make payment of the merger
consideration. Promptly after the effective time of the Merger,
Parent shall cause to be deposited, in trust with the paying
agent, the funds appropriate to pay the Offer Price to the
shareholders.
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As soon as reasonably practicable after the effective time of
the Merger and in no event later than two business days
following the effective time of the Merger, the paying agent
will send to each holder of Bankrate shares a Letter of
Transmittal and instructions advising the shareholders how to
surrender stock certificates in exchange for the Offer Price.
The paying agent will pay the Offer Price to the shareholders
upon receipt of (1) surrendered certificates representing
the Bankrate shares and (2) a signed Letter of Transmittal
and any other items specified by the Letter of Transmittal.
Interest will not be paid or accrue in respect of the Offer
Price. The surviving corporation will reduce the amount of any
Offer Price paid to the shareholders by any applicable
withholding taxes.
If any cash deposited with the paying agent is not claimed
within 180 days following the effective time of the Merger,
such cash will be returned to the surviving corporation upon
demand, subject to any applicable unclaimed property laws. Any
unclaimed amounts remaining immediately prior to when such
amounts would escheat to or become property of any governmental
authority will be returned to the surviving corporation free and
clear of any prior claims or interest thereto.
The transmittal instructions will include instructions if the
shareholder has lost the Certificate or if it has been stolen or
destroyed. The shareholder will have to provide an affidavit to
that fact and, if required by the paying agent or surviving
corporation, post a bond in an amount that the surviving
corporation or the paying agent reasonably directs as indemnity
against any claim that may be made against it in respect of the
Certificate.
Treatment
of Options and Restricted Stock Units
When Purchaser accepts Bankrate shares for payment in the Offer,
each option to purchase Bankrate shares outstanding as of such
date (other than options held by persons who have entered into
Support Agreements and have been agreed by such persons to be
treated differently) will vest in full and be converted into the
right to receive, payable by the surviving corporation or
Bankrate, as applicable, as soon as reasonably practicable after
the Acceptance Time (and in any event, within ten business
days), a payment in cash equal to the product of (x) the
difference, if any, of the Offer Price less the exercise price
per Share subject to such option, multiplied by (y) the
number of Bankrate shares for which such option has not
previously been exercised, provided that if the exercise price
per Share of any such option to purchase Bankrate shares is
equal to or greater than the Offer Price, such option will be
cancelled without any cash payment.
At the Acceptance Time, in accordance with the Merger Agreement,
each outstanding, unexercised restricted common stock award
(other than Bankrate shares subject to Support Agreements) will
vest in full and, subject to the ultimate vesting of such
restricted common stock, its holder will have the right to
tender (or to direct Bankrate to tender on his or her behalf)
such restricted common stock (net of shares withheld to satisfy
employment and income tax obligations) into the Offer. To the
extent any such restricted stock is not so tendered, upon the
effective time of the Merger, they shall be converted into the
right to receive the Offer Price.
Representations
and Warranties
The Merger Agreement contains representations and warranties
made by Bankrate to Parent and Purchaser and representations and
warranties made by Parent and Purchaser to Bankrate. The
assertions embodied in those representations and warranties were
made solely for purposes of the Merger Agreement and qualified
by information in confidential disclosure schedules provided by
Bankrate to Parent in connection with signing the Merger
Agreement. Moreover, some of those representations and
warranties may not be accurate or complete as of any particular
date because they are subject to a contractual standard of
materiality or material adverse effect different from that
generally applicable to public disclosures to shareholders or
used for the purpose of allocating risk between the parties to
the Merger Agreement rather than establishing matters of fact.
For the foregoing reasons, you should not rely on the
representations and warranties contained in the Merger Agreement
as statements of factual information.
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In the Merger Agreement, Bankrate has made customary
representations and warranties to Parent and Purchaser with
respect to, among other things:
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corporate matters related to Bankrate and its subsidiaries, such
as organization, qualification, power and authority;
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its capitalization;
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its subsidiaries;
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required consents and approvals, and no violations of
agreements, governance documents or laws;
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public SEC filings, financial statements, internal control and
compliance with the Sarbanes-Oxley Act of 2002;
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the documents relating to the Offer,
Schedule 14D-9
and the proxy statement to be filed by Bankrate in connection
with the Merger Agreement;
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the absence of undisclosed liabilities;
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compliance with laws and permits;
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employee benefit matters;
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affiliate transactions;
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the absence of certain changes or events;
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absence of litigation;
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tax matters;
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labor matters;
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intellectual property;
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real and personal property;
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the vote required for the adoption of the Merger Agreement and
the approval of the Merger and the transactions contemplated by
the Merger Agreement;
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material contracts;
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finders and brokers fees and expenses;
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opinions of financial advisors with respect to the fairness of
the Offer Price; and
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the inapplicability of state takeover statutes or regulations to
the Offer or the Merger.
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Some of the representations and warranties in the Merger
Agreement made by Bankrate are qualified as to
materiality or Company Material Adverse
Effect. For purposes of the Merger Agreement, a
Company Material Adverse Effect means any fact,
circumstance, event, change, effect or occurrence that,
individually or in the aggregate with all other facts,
circumstances, events, changes, effects, or occurrences, has or
is reasonably expected to have a material adverse effect on or
with respect to the business, results of operation or financial
condition of Bankrate and its subsidiaries taken as a whole or
that prevents or materially delays or materially impairs the
ability of Bankrate to consummate the Merger. The definition of
Company Material Adverse Effect excludes facts,
circumstances, events, changes, effects or occurrences in or
affecting:
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economic conditions generally or the financial or securities
markets in the United States or elsewhere in the world; or
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the industries in which Bankrate or its subsidiaries operate
generally or in any specific jurisdiction or geographical area
in the United States or elsewhere in the world; and
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facts, circumstances, events, changes, effects or occurrences
resulting from or arising out of:
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the announcement or the existence of, or compliance with, or
taking any action required or permitted by, this Merger
Agreement or the transactions contemplated hereby;
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any taking of any action at the request of Parent or Purchaser;
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any litigation arising from allegations of a breach of fiduciary
duty or other violation of applicable law relating to this
Merger Agreement or the transactions contemplated hereby;
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any adoption, implementation, promulgation, repeal,
modification, reinterpretation or proposal of any rule,
regulation, ordinance, order, protocol or any other applicable
law of or by any national, regional, state or local governmental
entity in the United States or elsewhere in the world;
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any changes in the United States generally accepted accounting
principles or accounting standards or interpretations thereof;
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any weather-related or other force majeure event or outbreak or
escalation of hostilities or acts of war or terrorism; or
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any changes in the share price or trading volume of the shares
of Bankrate, in Bankrates credit rating or in any
analysts recommendations with respect to Bankrate, or the
failure of Bankrate to meet projections or forecasts (including
any analysts projections) (but not excluding any
underlying causes thereof unless otherwise excluded pursuant to
another item on this list).
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In the Merger Agreement, Parent and Purchaser have made
customary representations and warranties to Bankrate with
respect to, among other things:
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corporate matters, such as organization, qualification, power
and authority;
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required consents and approvals, and no violations of
agreements, governance documents or laws;
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information furnished for the documents relating to the Offer,
Schedule 14D-9
and the proxy statement to be filed by Bankrate in connection
with the Merger Agreement;
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sufficiency of funds to complete the Offer and Merger;
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ownership of Purchaser by Parent;
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finders and brokers fees;
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absence of ownership by Parent or Purchaser of shares of
Bankrate;
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absence of certain arrangements;
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absence of litigation; and
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access to information regarding Bankrate.
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None of the representations and warranties contained in the
Merger Agreement survives the consummation of the Merger
Conduct
of Business of Bankrate
From the date of the Merger Agreement and until the Board
Appointment Date, Bankrate has agreed that it will, and will
cause its subsidiaries to:
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conduct their operations in all material respects in the
ordinary course consistent with past practice; and
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use commercially reasonable best efforts to maintain and
preserve intact their business organizations and relationships
and to retain services of key officers and employees, in all
material respects.
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In addition, during that same period except as expressly
permitted by the terms of the Merger Agreement, Bankrate will
not, and will not permit its subsidiaries to, take certain
actions with respect to the following, subject to specified
thresholds and exceptions:
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changes to the terms of its capital stock;
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dividends, distributions or redemptions of stock;
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issuances of additional shares of capital stock, any securities
convertible into, or any rights, warrants or options to acquire,
any such shares of capital stock;
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purchase or sale of assets;
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making capital expenditures;
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incur indebtedness for borrowed money;
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increases in salaries or bonuses, announce new incentive awards,
adopt compensation or benefit plans or accelerate options;
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compromises, settlements or agreements to settle any pending or
threatened suit or claim;
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changes or waivers of any provision of Bankrates articles
of incorporation or its by-laws;
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changes in financial accounting principles;
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granting any lien on any of its assets;
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entering into any new line of business;
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material tax elections changes to annual tax accounting periods
changes to tax accounting methods, settlements of, or extensions
or waivers of the applicable statute of limitations for any tax
claim; or
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any action intended to result in any of the conditions of the
Offer not being satisfied or intended to prevent, delay or
impair the ability of Bankrate to consummate the Merger;
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No
Solicitation
From the date of the Merger Agreement until the Board
Appointment Date, Bankrate agreed that it will not and will
cause its subsidiaries and their respective officers, directors,
employees, agents, advisors, affiliates and other
representatives, whom we refer to collectively as
representatives, not to, directly or indirectly:
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initiate, solicit, propose, encourage or knowingly facilitate
(including by providing information) any inquiries, proposals or
offers with respect to an Alternative Proposal (as defined
below) or offer that would reasonably be expected to lead to an
Alternative Proposal;
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engage, continue or participate in any negotiations concerning,
provide information in connection with, or have any discussions
relating to or that is reasonably likely to lead to, an actual
or proposed Alternative Proposal;
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grant any waiver, amendment or release under any standstill or
confidentiality agreement or fair price,
moratorium, business combination,
control share acquisition or other form of
anti-takeover statute or regulation or facilitate any attempt by
any person to make an Alternative Proposal; or
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approve or enter into any letter of intent, agreement in
principle, merger agreement, acquisition agreement, option
agreement or other similar agreement relating to any Alternative
Proposal.
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Bankrate has agreed to (and to cause its subsidiaries to)
immediately cease any solicitations, discussions or negotiations
with any person that has made or indicated an intention to make
an Alternative Proposal that exists as of July 22, 2009.
Notwithstanding the restrictions described above, at any time
before the earlier of the acceptance of Bankrate shares for
payment in the Offer or the shareholders approval of the
Merger, Bankrate may furnish
37
non-public information with respect to Bankrate and its
subsidiaries to any third party that has submitted an
unsolicited Alternative Proposal, and participate in discussions
or negotiations regarding the Alternative Proposal, if:
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such Alternative Proposal did not arise from any knowing or
intentional breach by Bankrate of its obligations under the no
solicitation provisions of the Merger Agreement and Bankrate
shall have complied with the terms and conditions of the no
solicitation covenant;
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Bankrates board of directors determines in good faith,
after consultation with Bankrates financial advisor and
outside legal counsel, that the Alternative Proposal
constitutes, or is reasonably expected to lead to, a Superior
Proposal (as defined below);
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after consultation with its outside legal counsel,
Bankrates board of directors determines in good faith that
the failure to take such action would be inconsistent with its
fiduciary duties to Bankrates shareholders under
applicable law; and
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any information furnished to the third party making the
Alternative Proposal is covered by a confidentiality agreement
containing standstill provisions substantively identical to and
otherwise no less favorable to Bankrate in the aggregate than
the terms of the confidentiality agreement between Apax and
Bankrate.
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Bankrate is also required to deliver to Parent a copy of any
information delivered to the third party if the information has
not previously been furnished to Parent.
In addition, Bankrate has agreed that, promptly, and in any
event within 48 hours, Bankrate will notify Parent orally
and, subsequently, in writing of (i) any Alternative
Proposal, (ii) any request for non-public information
relating to Bankrate or its subsidiaries, and (iii) any
inquiry or request for discussion or negotiation regarding an
Alternative Proposal. Such notification will include the
identity of the third party making the Alternative Proposal and
the material terms and conditions of any such Alternative
Proposal or inquiries or requests. Bankrate has agreed to
provide Parent with copies of any written requests, proposals,
offers or agreements. Bankrate is required to keep Parent
informed on a reasonably current basis of the status and items
of the Alternative Proposal and status of such discussions and
negotiations.
Bankrates
Board of Directors Recommendation
Subject to the provisions described below, Bankrates board
of directors agreed to recommend that the holders of the
Bankrate shares accept the Offer, tender their Bankrate shares
to Purchaser in the Offer and, if required, approve and adopt
the Merger Agreement and the Merger. This is referred to as the
Recommendation. Bankrates board of directors
also agreed to include the Recommendation in the
Schedule 14D-9
and to permit Parent to include the Recommendation in this Offer
to Purchase and documents related to the Offer. The Merger
Agreement provides that Bankrates board of directors will
not effect an Adverse Recommendation Change (as
defined below) except as described below.
The board of directors of Bankrate has agreed not to
(i) withhold, withdraw, qualify or modify the
Recommendation in a manner adverse to Parent or Purchaser, or
publicly propose to do so, (ii) adopt, approve or recommend
any Alternative Proposal, (iii) subject to the requirements
of
Rule 14d-9
or
Rule 14e-2(a)
under the Exchange Act, fail to publicly recommend against any
Alternative Proposal or fail to publicly reaffirm the
Recommendation, in each case, within two business days after
Parents request (provided that Parent may not make such a
request more than twice), (iv) subject to the requirements
of
Rule 14d-9
or
Rule 14e-2(a)
under the Exchange Act, fail to recommend against any
Alternative Proposal subject to Regulation 14D under the
Exchange Act in a
Schedule 14D-9
within ten business days after the commencement of such
Alternative Proposal, (iv) fail to include the
Recommendation in the documents related to the Offer,
(v) enter into any letter of intent, memorandum of
understanding or similar document or contract relating to any
Alternative Proposal, or (vi) take any other action or make
any other public statement that is inconsistent with the
Recommendation (any action described in clauses (i) through
(vi), an Adverse Recommendation Change).
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However, subject to the termination provisions of the Merger
Agreement, including the payment of, if Parent terminates
following an Adverse Recommendation Change by Bankrates
board of directors, the Termination Fee (as defined below), the
Bankrate board of directors may make an Adverse Recommendation
Change prior to the earlier of the completion of the Offer or
the approval (if any) of the Merger by shareholders of Bankrate,
if the Bankrate board of directors determines in good faith
after consultation with its outside legal and financial advisors
that failure to do so would be inconsistent with the Bankrate
board of directors exercise of their fiduciary duties.
The Merger Agreement does not prohibit Bankrate or its board of
directors from (i) taking and disclosing to its
shareholders a position contemplated by
Rule 14d-9
or
Rule 14e-2(a)
under the Exchange Act or making any required disclosure to
Bankrates shareholders if, in the good faith judgment of
the board, after consultation with its outside counsel, it is
required to do so under applicable law, provided that, any such
disclosure (other than a stop-look-and-listen
communication or similar communication contemplated by
Rule 14d-9(f)
under the Exchange Act) will be deemed an Adverse Recommendation
Change unless the Bankrate board of directors expressly publicly
reaffirms its Recommendation within two business days of such
disclosure, or (ii) making any
stop-look-and-listen communication or similar
communication of the type contemplated by
Rule 14d-9(f)
under the Exchange Act.
Bankrate has agreed that the Bankrate board of directors
approval for purposes of causing any takeover statute to be
inapplicable to the transactions contemplated by the Merger
Agreement will be irrevocable and an Adverse Recommendation
Change will not change such approval.
For purposes of this Offer to Purchase and the Merger Agreement:
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Alternative Proposal means any inquiry,
proposal or offer from any person for (i) an acquisition of
Bankrate (or any subsidiary or subsidiaries of Bankrate whose
business constitutes 20% or more of the net revenues, net income
or assets of Bankrate and its subsidiaries, taken as a whole),
(ii) the acquisition in any manner, directly or indirectly,
of over 20% of the equity securities (by vote or value) or
consolidated total assets of Bankrate and its subsidiaries or
(iii) the acquisition (whether by merger, consolidation,
equity investment, share exchange, joint venture or otherwise)
by any third party, directly or indirectly, of any entity that
holds assets representing, directly or indirectly, 20% or more
of the net revenues, net income or assets of Bankrate and its
subsidiaries, taken as a whole, (iv) any tender offer or
exchange offer, as such terms are defined under the Exchange
Act, that, if consummated, would result in any third party
beneficially owning 20% or more of the outstanding Bankrate
shares and any other voting securities of Bankrate, or
(v) any combination of the foregoing.
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Superior Proposal means any bona fide written
Alternative Proposal on terms which the board of directors of
Bankrate determines in good faith, after consultation with
Bankrates outside legal counsel and financial advisors, to
be more favorable from a financial point of view to the holders
of Bankrate shares than the transactions provided for in the
Merger Agreement (after taking into account the expected timing
and risk of consummation), taking into account, among other
things, all the terms, conditions, impact and all legal,
financing and regulatory aspects, shareholder litigation, break
up fee and expense reimbursement provisions and other events or
circumstances beyond the control of the party invoking the
condition of such proposal (in each case taking into account any
revisions to the Merger Agreement made or proposed in writing by
Parent prior to the time of determination); provided that for
purposes of the definition of Superior Proposal, the
references to 20% in the definition of Alternative
Proposal shall be deemed to be references to 50%.
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Efforts
to Close the Transaction
In the Merger Agreement, each of Bankrate, Parent and Purchaser
agreed to use its reasonable best efforts to take all actions
necessary, proper or advisable under applicable law to
consummate the Offer, the Merger and the other transactions
contemplated by the Merger Agreement, including preparing and
filing as promptly as practicable all documentation to effect
all necessary filings, notices, petitions and other documents
necessary to consummate the Offer, the Merger and other
transactions contemplated by the Merger Agreement.
39
Takeover
Statute
If any fair price, moratorium,
business combination, control share
acquisition or other form of anti-takeover statute or
regulation becomes applicable to the Offer, the Merger, the
Top-Up
Option or the other transactions contemplated by the Merger
Agreement, each of Bankrate and Parent and the members of their
respective boards of directors shall grant such approvals and
take such actions as are reasonably necessary to eliminate if
possible, and otherwise to minimize, the effects of such statute
or regulation on the Offer, the Merger and the other
transactions contemplated thereby.
Indemnification
and Insurance
Parent and Purchaser agreed that all rights to exculpation,
indemnification and advancement of expenses for acts or
omissions occurring at or prior to the effective time of the
Merger, whether asserted or claimed prior to, at or after the
effective time of the Merger, now existing in favor of the
current or former directors, officers or employees of Bankrate
as provided in their respective certificates of incorporation or
bylaws or other organizational documents or in any agreement
will survive the Offer or the Merger and will continue in full
force and effect and will not be, for a period of six years from
the date of closing of the Merger Agreement, modified in any
manner that would adversely affect the rights thereunder of any
individuals who at the effective time of the Merger were current
or former directors, officers or employees of Bankrate.
In addition, Parent agreed to indemnify and hold harmless each
current and former director or officer of Bankrate or any of its
subsidiaries against any costs and expenses, losses, claims,
damages or actions arising out any action or omission in
connection with such directors or officers service
to Bankrate or any of its subsidiaries.
For a period of six years after the Board Appointment Date,
Parent shall either cause to be maintained in effect the current
or substitute policies of officers and directors
liability insurance maintained by Bankrate and its subsidiaries;
provided that Parent shall not be required to expend annually in
excess of 250% of the annual premium currently paid by Bankrate
under the current policies, but in such case shall purchase as
much coverage as reasonably practicable for such amount.
Alternatively, Bankrate shall be entitled to purchase, prior to
the Board Appointment Date, a tail policy on terms
and conditions providing substantially equivalent benefits as
the current policies of directors and officers
liability insurance and fiduciary liability insurance maintained
by Bankrate with respect to matters arising on or before the
Board Appointment Date, covering without limitation the
transactions contemplated by the Merger Agreement.
Shareholder
Litigation
Bankrate will control and will give Parent the opportunity to
participate in the defense of any litigation brought against
Bankrate by its shareholders relating to the transactions
contemplated by the Merger Agreement. Bankrate may not
compromise or settle any such litigation without the prior
written consent of Parent.
Other
Covenants
The Merger Agreement contains other covenants, including,
covenants relating to calling the shareholders meeting to
approve the Merger, public announcement, notice, access and
confidentiality.
Termination
of the Merger Agreement
The Merger Agreement may be terminated at any time prior to the
effective time of the Merger, whether before or after any
approval of the Merger by the shareholders of Bankrate:
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by mutual written consent of Parent and Bankrate;
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by either Parent or Bankrate:
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if the Offer is not consummated by April 22, 2010, provided
that this right is not available to a party if such partys
failure to fulfill any of its obligations under the Merger
Agreement proximately caused the Offer not to have been
consummated on or before said date; or
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if an order, decree or injunction has been issued permanently
restraining, enjoining or otherwise prohibiting the consummation
of the Offer or the Merger and such order, decree or injunction
becomes final and non-appealable;
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at any time prior to the consummation of the Offer, if Parent or
Purchaser will have (i) breached or failed to perform in
any material respect any of its covenants and obligations under
the Merger Agreement, or (ii) breached any representations
or warranties, which breach would result in a delay in the
consummation of the Offer and is either incurable or not cured
by the party in breach within the earlier of 30 days or the
April 22, 2010;
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In order to enter into a transaction that is a Superior
Proposal, but only if:
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the Bankrate board of directors has received a Superior Proposal
that is not withdrawn;
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the Bankrate board of directors has determined in good faith,
after consultation with its independent financial advisor and
outside legal counsel, that failure to terminate the Merger
Agreement in order to enter into a Superior Proposal would be
inconsistent with the directors fiduciary duties;
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Bankrate will have complied with its non-solicitation
obligations under the Merger Agreement;
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Bankrate has given Parent at least three business days
advance written notice of a Superior Proposal, including the
identity of the person making such Superior Proposal and the
most current written agreement relating to such Superior
Proposal, and of any subsequent changes to the Superior Proposal;
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following good faith negotiations with Parent of terms and
conditions of the Merger Agreement during such three
business-day
period and after taking into account any revised proposal made
by Parent, the board of directors shall have determined in good
faith that such revised proposal is not at least as favorable
from a financial point of view to the shareholders as such
Superior Proposal; and
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Bankrate will have paid a termination fee of $30.0 million
(the Termination Fee); or
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if Purchaser will have (i) failed to commence the Offer by
5:30 p.m. Eastern Daylight Savings time on July 28,
2009, (ii) terminated or made any change to the Offer in
material violation of the terms of the Merger Agreement or
(iii) failed to accept for payment and pay for Bankrate
shares validly tendered and not withdrawn in the Offer;
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at any time prior to the consummation of the Offer, if Bankrate
will have breached any of its representations and warranties
under the Merger Agreement such that the condition of the Offer
that the representations and warranties will be true and correct
(except where a failure to be so true and correct would not have
a material adverse effect) would be incapable of being satisfied
by the earlier of 30 days following receipt by Bankrate of
written notice of such breach or April 22, 2010;
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Bankrate will have breached any of its covenants or agreements
under the Merger Agreement that remains uncured, or is incapable
of being cured, within 20 business days following written notice
from Parent and Purchaser such that the condition of the Offer
that no breach of a covenant in any material respect has
occurred and is continuing would not be satisfied or would be
incapable of being satisfied by the earlier of 30 days
following receipt by Bankrate of written notice of such breach
or the April 22, 2010;
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if Bankrate gives Parent notice that it will terminate the
Merger Agreement in connection with entering into a transaction
that is a Superior Proposal;
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if Bankrates board of directors has made an Adverse
Recommendation Change or Bankrate has breached in any material
respect its non-solicitation obligations;
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if the Minimum Condition will not have been satisfied, but all
other conditions of the Offer will have been satisfied, as of
any Expiration Date of the Offer subsequent to the later of the
120th business day following the commencement of the Offer
and the 30th business day following SECs conclusion
of its review of the Schedule TO, the Transaction Statement
on
Schedule 13E-3
(Schedule 13E-3), and
Schedule 14D-9
(in the good faith belief of Parent); or
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if Parent pays the Parent Termination Fee (as defined below) by
wire transfer to Bankrate.
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Effect
of Termination
If the Merger Agreement is terminated in accordance with its
terms, the Merger Agreement will become null and void and,
subject to certain exceptions described below and in the Merger
Agreement, there will be no liability on the part of Parent,
Purchaser or Bankrate. No party is relieved of any liability for
willful breach of the Merger Agreement, provided that no party
is liable for punitive damages, subject to the limitation on
aggregate liability of Parent and Purchaser of
$570.8 million.
Bankrate has agreed to pay Parent the Termination Fee, if:
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(A) a bona fide Alternative Proposal is made known to
Bankrate, the board of directors, or senior management of
Bankrate, or has been made directly to the shareholders of
Bankrate or any person has publicly announced a bona fide
intention (not subsequently withdrawn) to make an Alternative
Proposal and following any such event the Merger Agreement is
terminated (i) by Bankrate or Parent if the Offer is not
consummated by the April 22, 2010, or (ii) by Parent
if (x) Bankrate has breached any of its covenants or
agreements under the Merger Agreement such that the condition to
the Offer regarding compliance with covenants is incapable of
being satisfied or (y) the Minimum Condition will not have
been satisfied within the time limits described above and
(B) Bankrate enters into a letter of intent, agreement in
principle, acquisition agreement or other definitive agreement
with respect to an Alternative Proposal, or consummates an
Alternative Proposal, within 12 months of the date the
Merger Agreement is terminated (provided that for purposes of
this section, the references to 20% in the
definition of Alternative Proposal shall be deemed to be
references to 50%);
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the Merger Agreement is terminated by Bankrate in order to enter
into a transaction that is a Superior Proposal; or
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the Merger Agreement is terminated by Parent because
(A) Bankrate gives Parent notice that it will terminate the
Merger Agreement in connection with entering into a transaction
that is a Superior Proposal or (B) Bankrates board of
directors has made an Adverse Recommendation Change or
(C) Bankrate has breached in any material respect its no
solicitation obligations.
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If Bankrate is obligated to pay the Termination Fee under the
scenario in the first bullet point above, any amounts Bankrate
previously paid to Parent as expense reimbursement will be
credited toward the Termination Fee amount payable by Bankrate.
Parent may terminate the Merger Agreement at any time prior to
the effective time of the Merger upon the payment to Bankrate of
a termination fee of $570.8 million (the Parent
Termination Fee). Bankrates right to receive the
Parent Termination Fee from Parent will be the sole and
exclusive remedy against Parent and any affiliates of Parent
and, upon payment of the Parent Termination Fee, neither Parent
nor any affiliates of Parent will have any liability or
obligation to Bankrate relating to or arising out of the Merger
Agreement or other agreements or transactions contemplated by
the Merger Agreement.
Bankrate agreed to pay
out-of-pocket
costs and expenses in an amount of up to $3.0 million
actually incurred by Parent in connection with the Merger
Agreement if Parent terminates the Merger Agreement because the
Minimum Condition will not have been satisfied within the time
limits described above.
Specific
Performance
Bankrates sole remedy for a breach by Parent or Purchaser
is to seek specific performance of the Merger Agreement and
Parent and Purchasers obligations thereunder, including
the obligation to complete the Offer
42
and the Merger. However, if a court decides not to award
specific performance, then Bankrate can seek monetary damages
with the loss to Bankrate shareholders expressly included in
measuring damages. The extent of monetary damages is limited by
the $570.8 million cap in the Second Commitment Letter (as
defined and described below). Bankrate will not be entitled to
enforce any award for monetary damages unless Purchaser fails to
consummate the Offer and Merger within two weeks following such
award.
Limitations
of Liability
The maximum aggregate liability of Parent (including the Parent
Termination Fee) for damages or otherwise is limited to
$570.8 million. Bankrate can cause the Apax VII Funds to
provide funds, pro rata based on each funds participation
and subject to the maximum set forth in the second commitment
letter between Bankrate, Parent and the Apax VII Funds (the
Second Commitment Letter), up to such aggregate
limit to Parent to the extent provided in the Second Commitment
Letter, subject to the terms of the Second Commitment Letter and
the Limited Guarantee. In addition, the rights of Bankrate
pursuant to the Second Commitment Letter and the Limited
Guarantee are the sole and exclusive remedy of Bankrate and its
affiliates against Parent and Parents affiliates in
respect of monetary liabilities or obligations arising under the
Merger Agreement. You will find a description of the Second
Commitment Letter and the Limited Guarantee below and in
Section III. 11 (Source and Amount of Funds).
Fees
and Expenses
Except for the expense reimbursement provisions described under
Effect of Termination above for Parents
benefit, costs and expenses incurred by the parties will be paid
by the party incurring such costs and expenses, except expenses
incurred in connection with printing, filing and mailing the
Bankrates proxy statement and fees relating to HSR Act or
other regulatory filing will be borne one-half by Bankrate and
one-half by Parent.
Amendment
The Merger Agreement may be amended by Bankrate, Parent and
Purchaser at any time before or after any approval of the Merger
Agreement by Bankrates shareholders but, after any such
approval, no amendment will be made that by law requires further
approval by the Bankrate shareholders without obtaining such
further approval.
Governing
Law
The Merger Agreement shall be governed by Delaware law except
matters relating to fiduciary duties of the Bankrate board of
directors and internal corporate affairs of Bankrate shall be
governed by Florida law.
Commitment
Letters and Limited Guarantee
Parent has received a commitment letter from the Apax VII Funds,
pursuant to which the Apax VII Funds have agreed to purchase
equity
and/or debt
securities of Parent in an aggregate amount of up to
$570.8 million in cash, solely for the purpose of funding
Purchasers payment of the Offer Price for Bankrate shares
tendered in the Offer and, if the Offer is completed, for
Bankrate shares acquired in the Merger. The Apax VII Funds and
the Other Apax Entities will contribute to Parent at the
Acceptance Time an amount sufficient to fund the Offer Price for
the Bankrate shares validly tendered and not properly withdrawn
pursuant to the Offer, subject to (1) the satisfaction or
waiver by Parent of the conditions to Parents and
Purchasers obligations to consummate the Offer described
in the Merger Agreement, and (2) the contemporaneous
acceptance for payment by Purchaser of Bankrate shares validly
tendered and not properly withdrawn pursuant to the Offer. The
Apax VII Funds will contribute to Parent up to the remainder of
their commitment pursuant to this commitment letter at the
effective time of the Merger, subject to the satisfaction or
waiver by Parent of the conditions to Parents and
Purchasers obligations to effect the Merger described in
the Merger Agreement. The Apax VII Funds obligation to
fund the commitment terminates at the earliest of
(1) termination of the
43
Merger Agreement according to its terms, (2) the effective
time of the Merger, (3) payment of the Parent Termination
Fee and (4) funding of the foregoing commitment.
Bankrate and Parent are direct parties to and can enforce a
Second Commitment Letter pursuant to which the Apax VII Funds
have agreed to purchase equity
and/or debt
securities of Parent in an aggregate amount of up to
$570.8 million in cash, solely for the purpose of allowing
Parent to satisfying claims arising out of a breach of
Parents obligations under the Limited Guarantee described
below. The Apax VII Funds obligation to fund the
commitment under this Second Commitment Letter is subject to all
of the terms and conditions of the Limited Guarantee (described
below) and an assertion in writing by Bankrate of a breach by
Parent or Purchaser of their respective obligations under the
Merger Agreement. The Apax VII Funds obligation to fund
the commitment terminates at the earliest of (1) a
termination of the Merger Agreement according to its terms
(other than termination due to (a) a pending injunction,
(b) a failure to consummate the Offer by April 22,
2010, (c) a breach by Parent or Purchaser of their
representations and warranties or covenants under the Merger
Agreement, (d) a failure by Purchaser to commence the Offer
by 5:30 p.m. Eastern Daylight Savings time on July 28,
2009 or (e) a failure by Purchaser to accept for payment
and pay for the Bankrate shares tendered in the Offer, in which
case, the commitment expires 120 days following a valid
termination of the Merger Agreement, provided that the
commitment will not terminate as to any claim for which notice
has been given to Parent prior to the end of such
120-day
period), (2) the effective time of the Merger, (3) the
payment of the Parent Termination Fee, and (4) funding of
the commitment.
The liability of the Apax VII Funds entering into both
commitment letters described above is several, not joint and
several, based upon the following percentages: Apax US VII, L.P.
(7.000%), Apax Europe VII-1, L.P. (1.515%), Apax Europe VII-A,
L.P. (32.272%) and Apax Europe VII-B, L.P. (59.213%).
Parent and Bankrate entered into a Limited Guarantee pursuant to
which Parent has agreed to irrevocably guarantee, in an amount
up to $570.8 million, (1) the Parent Termination Fee,
(2) Parents obligations to pay damages to Bankrate
under the Merger Agreement, and (3) Parents or
Purchasers obligations to perform specifically the terms
and provisions of the Merger Agreement, in each case, solely to
the extent such Parent Termination Fee, damages, or specific
performance, as the case may be, are found in a final judicial
determination (or a settlement tantamount thereto) to be due and
payable or to be required, as applicable, pursuant to the terms
and conditions of the Merger Agreement. The Limited Guarantee
will remain in force and effect until the earliest of (1) a
termination of the Merger Agreement according to its terms
(other than a termination due to (a) a pending injunction,
(b) a failure to consummate the Offer by April 22,
2010, (c) a breach by Parent or Purchaser of their
representations and warranties or covenants under the Merger
Agreement, (d) a failure by Purchaser to commence the Offer
by 5:30 p.m. Eastern Daylight Savings time on July 28,
2009 or (e) a failure by Purchaser to accept for payment
and pay for the Bankrate shares tendered in the Offer, in which
case, the Limited Guarantee expires 120 days following a
valid termination of the Merger Agreement, provided that the
Limited Guarantee will not terminate as to any claim for which
notice has been given to Parent prior to the end of such
120-day
period), (2) the effective time of the Merger, and
(3) the payment of the Parent Termination Fee. However, if
Bankrate brings certain legal claims (x) relating to the
validity, enforceability or legality of certain provisions of
the Limited Guarantee, (y) for liability of Parent or
Purchaser under the Merger Agreement or the equity commitment
letter, other than liability under the Limited Guarantee, or
(z) in a jurisdiction other than Delaware, then the
obligations of Parent under the Limited Guarantee terminate.
The maximum aggregate liability of the Apax VII Funds, Parent,
Purchaser and their affiliates to Bankrate under the Limited
Guarantee, the Merger Agreement and the Second Commitment Letter
is limited to $570.8 million.
No appraisal rights are available with respect to Bankrate
shares tendered and accepted for purchase in the Offer. However,
if the Merger is consummated, shareholders who do not tender
their Bankrate shares in the Offer will have certain rights
under Section 607.1302 of the FBCA to demand appraisal of,
and to receive payment in cash of the fair value of, their
Bankrate shares. Such appraisal rights, if the statutory
procedures
44
are met, could lead to a judicial determination of the fair
value of the Bankrate shares, as of the effective time of the
Merger, required to be paid in cash to such dissenting holders
for their Bankrate shares. In addition, such dissenting
shareholders would be entitled to receive payment of interest
from the date of consummation of the Merger through the date of
the payment of the judgment on the amount determined to be the
fair value of their Bankrate shares. Such determination could be
based upon considerations other than, or in addition to, the
market value of the Bankrate shares, including, among other
things, asset values, investment value and earning capacity.
Therefore, the value so determined in any appraisal proceeding
could be the same as, or more or less than, the Offer Price.
If any holder of Bankrate shares who demands appraisal under
Florida law fails to perfect, or effectively withdraws or loses
his rights to appraisal as provided under Florida law, each
Bankrate share of such shareholder will be converted into the
right to receive the Offer Price. A shareholder may withdraw
his, her or its demand for appraisal by delivering to Bankrate a
written withdrawal of his, her or its demand for appraisal and
acceptance of the Merger.
The foregoing discussion is not a complete statement of law
pertaining to appraisal rights under Florida law and is
qualified in its entirety by reference to Florida law. Further
details regarding appraisal rights are set forth as an exhibit
to the Schedule TO.
If you sell your Bankrate shares in the Offer, you will not be
entitled to exercise appraisal rights with respect to your
Bankrate shares but, rather, will receive the Offer Price for
each of your Bankrate shares.
FAILURE TO FOLLOW THE STEPS REQUIRED BY SECTIONS 607.1301
THROUGH 607.1333 OF THE FBCA FOR PERFECTING APPRAISAL RIGHTS MAY
RESULT IN THE LOSS OF ANY SUCH RIGHTS.
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16.
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Management
Fees following the Effective Time of the Merger
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In connection with the closing of the Merger, Apax and Apax
Europe VII GP Co. Ltd. will enter into Material Event
Advisory Agreements. Under those agreements, those
affiliates will be entitled to receive from Parent or Bankrate
(1) at the effective time of the Merger an arrangement fee
in an amount equal to 3% of the total capital invested by the
Apax VII Funds, (2) an advisory fee in an amount equal to
0.3% per annum of the total capital invested by the Apax VII
Funds in Parent, (3) an additional arrangement fee in
connection with any exit transaction in an amount equal to 3% of
the value of the Apax VII Funds investment in Bankrate at
exit, and (4) in connection with any future
recapitalization or borrowing to finance an add-on acquisition,
a fee equal to 1% of the money raised. In return, Apax and Apax
Europe VII GP Co. Ltd. will provide certain financial
advisory services and advice to Parent and the surviving
corporation during the term of the agreements. Apax acted as an
investment advisor to the Apax VII Funds in connection with
the negotiation of the Merger Agreement, however, Apax does not
have the power to direct the investments of any of the
Apax VII Funds, therefore Apax is not being named as a
person filing the Schedule TO with the SEC.
45
FORWARD
LOOKING STATEMENTS
Information both included and incorporated by reference in this
Offer to Purchase may contain forward looking
statements. These forward looking statements include,
among others, statements about Bankrate, Parent, Purchaser, Ben
Holding S.à.r.l, and the Apax VII Funds beliefs,
plans, objectives, goals, expectations, estimates and intentions
that are subject to significant risks and uncertainties and are
subject to change based on various factors, many of which are
beyond our control.
The words may, could,
should, would, believe,
anticipate, estimate,
expect, intend, plan,
target, goal, and similar expressions
are intended to identify forward-looking statements. All
forward-looking statements, by their nature, are subject to
risks and uncertainties. Parent, Purchaser, Ben Holding
S.à.r.l, and the Apax VII Funds ability to achieve
their objectives could be adversely affected by, among others:
(1) macroeconomic condition and general industry conditions
such as the competitive environment; (2) regulatory and
litigation matters and risks; (3) legislative developments;
(4) changes in tax and other laws and the effect of changes
in general economic conditions; (5) the risk that a
condition to closing of the transaction may not be satisfied;
and (6) other risks to consummation of the transaction,
including the risk that the transaction will not be consummated
within the expected time period. In addition to the preceding
risks, Bankrates ability to achieve its objectives could
be adversely affected by the factors discussed in its Annual
Report on
Form 10-K
for the year ended December 31, 2008, and its Quarterly
Report on
Form 10-Q
for the quarter ended June 30, 2009, as amended, filed with
the SEC.
46
II. INTRODUCTION
Purchaser hereby offers to purchase all of the outstanding
Bankrate shares at the Offer Price upon the terms and subject to
the conditions set forth in this Offer. As of August 20,
2009, there were (i) 19,223,794 Bankrate shares, including
262,499 shares of restricted common stock of Bankrate and
(ii) 2,540,555 options to purchase Bankrate shares
issued and outstanding. The holders of all of the Bankrate
shares (other than Bankrate shares held by persons who entered
into Support Agreements, totaling 4,310,467 shares as of such
date), holders of the shares of restricted common stock (other
than Bankrate shares subject to Support Agreements) and holders
of Bankrate shares purchased upon exercise of options (other
than the options to purchase 1,547,500 shares which are
subject to the Support Agreements) will have the right to tender
their shares in the Offer. As of August 7, 2009, all of the
restricted common stock of Bankrate were subject to Support
Agreements.
Tendering Bankrate shareholders whose Bankrate shares are
registered in their own names and who tender their Bankrate
shares directly to the Depositary for the Offer, will not be
obligated to pay brokerage fees or commissions in connection
with the Offer or, except as set forth in Instruction 6 to
the Letter of Transmittal for the Offer, transfer taxes on the
sale of the Bankrate shares in the Offer. A shareholder of
Bankrate who holds Bankrate shares through a broker, dealer,
bank, trust company or other nominee should consult with such
institution to determine whether it will charge any service fees
for tendering such shareholders Bankrate shares to
Purchaser in the Offer.
Purchaser will pay all fees and expenses of the Depositary and
the Information Agent, incurred in connection with the Offer.
See Section III. 15 (Fees and Expenses) of this Offer to
Purchase for more information.
The Offer is being made pursuant to the Merger Agreement,
pursuant to which, following the purchase by Purchaser of
Bankrate shares in the Offer and the satisfaction or waiver of
certain conditions including compliance with Florida law, the
Merger will occur with Bankrate surviving the Merger as a
wholly-owned subsidiary of Parent. It is currently anticipated
that all conditions to the Merger, including all procedural
requirements under Florida law, will be met approximately
30 days following the closing of the Offer. As a result of
the Merger, each outstanding Bankrate share, other than Bankrate
shares that are identified as rollover shares pursuant to the
terms of the Support Agreements, Bankrate shares owned by
Parent, Purchaser, Bankrate or any wholly-owned subsidiary of
Bankrate, or by any shareholder of Bankrate who is entitled to
and properly exercises appraisal rights under Florida law, will
be converted into the right to receive the Offer Price, without
interest thereon. See Section I. 13 (The Merger Agreement)
of this Offer to Purchase for more information.
The Bankrate board of directors has unanimously:
(1) determined that the terms of the Offer, the Merger and
the other transactions contemplated by the Merger Agreement, are
fair and advisable to and in the best interests of Bankrate and
Bankrates shareholders; (2) approved the Merger
Agreement and the transactions contemplated thereby, including
the Offer and the Merger, in all respects; (3) subject to
the terms and conditions of the Merger Agreement, recommended
that Bankrates shareholders accept the Offer, tender their
Bankrate shares to Purchaser pursuant to the Offer and, if
required, approve and adopt the Merger and the Merger Agreement;
and (4) approved the execution, delivery and performance of
the Merger Agreement by and on behalf of Bankrate and the
consummation of the transactions contemplated thereby, including
the Offer and the Merger. Accordingly, Bankrates board of
directors believes that the Offer and the Merger are fair to all
of Bankrates shareholders, including unaffiliated
shareholders, and unanimously recommends that the shareholders
of Bankrate accept the Offer and tender their Bankrate shares to
Purchaser in the Offer and, if required, vote to approve the
Merger and the Merger Agreement.
The factors considered by Bankrates board of directors in
making the determinations and the recommendation described above
and other matters relied upon by Bankrates board of
directors, including the written opinions of its financial
advisors as to the fairness, each as of July 22, 2009, from
a financial point of view, of the Offer Price to holders of
Bankrate shares, are described in Bankrates
Schedule 14D-9,
which will be filed with the SEC and is being mailed to the
shareholders of Bankrate together with this Offer to Purchase.
Shareholders of Bankrate are urged to, and should, carefully
read Bankrates
Schedule 14D-9.
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The Offer is conditioned upon, among other things, the
Minimum Condition. The Minimum Condition may be waived by
Purchaser, at its sole option, (i) if the number of
Bankrate shares validly tendered and not withdrawn shall be at
least equal to the difference between (x) a majority of the
outstanding Bankrate shares, which is the minimum number of
Bankrate shares required to approve the Merger Agreement, the
Merger and the other transactions contemplated by the Merger
Agreement pursuant to the organizational documents of Bankrate
and the FBCA, less (y) the number of Bankrate shares
subject to Support Agreements or (ii) with the prior
written consent of Bankrate. The Offer is also subject to other
conditions described in Section III. 12 (Conditions to the
Offer) of this Offer to Purchase.
Completion of the Merger is also subject to the satisfaction of
certain conditions, including (i) the purchase of Bankrate
shares by Purchaser in the Offer and (ii) the approval and
adoption of the Merger Agreement, if required, by the requisite
vote of the shareholders of Bankrate. If Purchaser accepts
Bankrate shares for payment pursuant to the Offer, Purchaser
will have sufficient voting power alone or with the irrevocable
proxies granted to it under the Support Agreement to adopt the
Merger Agreement without the vote in favor of the adoption of
the Merger Agreement by any other holder of Bankrate shares. In
addition, if Purchaser, Parent and any subsidiary of Parent
collectively own 80% or more of the outstanding Bankrate shares,
including as a result of exercising the
Top-Up
Option, which under the terms and conditions of the Merger
Agreement we may be required to do as described below, under
applicable law, Purchaser and Parent will be able to complete
the Merger without a vote on the adoption of the Merger
Agreement by the holders of Bankrate shares. In such event,
under the terms of the Merger Agreement, Parent, Purchaser and
Bankrate have agreed to take all necessary and appropriate
action to cause the Merger to be effected promptly without a
meeting of shareholders of Bankrate. See Section I. 13
(The Merger Agreement) of this Offer to Purchase for more
information. In addition, certain Bankrate directors and members
of Bankrates management have entered into Support
Agreements pursuant to which each such person has agreed to vote
for approval of the Merger Agreement. See Section I. 2 (The
Support Agreements) for more information.
Bankrate has informed Purchaser that, as of August 20,
2009, there were 19,223,794 Bankrate shares issued and
outstanding (including the restricted shares). Based upon the
foregoing, the Minimum Condition will be satisfied if 9,611,898
Bankrate shares are validly tendered and not withdrawn prior to
the Expiration Date of the Offer. The directors and executive
officers who have entered into Support Agreements currently hold
4,572,476 Bankrate shares (including restricted shares),
constituting approximately 24% of Bankrates outstanding
common stock (included restricted shares), or approximately 28%
assuming such directors and executive officers exercise all of
their in the money options to acquire shares of
Bankrate common stock. Under the Support Agreements, these
4,572,476 Bankrate shares may not be tendered in the Offer and
will not count towards the 9,611,898 Bankrate shares required to
meet the minimum condition; however, Purchaser may waive the
Minimum Condition, at its sole option, if the sum of the number
of Bankrate shares validly tendered and not withdrawn plus the
number of Bankrate shares subject to the Support Agreements is
at least equal to 9,611,898.
See Section III. 5 (Material United States Federal Income
Tax Consequences of the Offer and the Merger) of this Offer to
Purchase for a summary of the material United States federal
income tax consequences of the exchange of Bankrate shares for
cash in the Offer or pursuant to the Merger.
If, between the date of the Merger Agreement and the effective
time of the Merger, any change in the outstanding Bankrate
shares, or securities convertible or exchangeable into or
exercisable for Bankrate shares, shall occur as a result of any
reclassification, recapitalization, stock split (including a
reverse stock split) or subdivision or combination, exchange or
readjustment of Bankrate shares, or any stock dividend or stock
distribution with a record date during such period (excluding,
in each case, normal quarterly cash dividends), merger or other
similar transaction, the Offer Price shall be equitably adjusted
to reflect such change.
This Offer to Purchase and the Letter of Transmittal for the
Offer contain important information about the Offer and should
be read carefully and in their entirety before any decision is
made with respect to the Offer.
48
III. THE
TENDER OFFER
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1.
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Terms of
the Offer; Expiration Date
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Upon the terms and subject to the conditions of the Offer
(including, if the Offer is extended or amended, the terms and
conditions of such extension or amendment) and the Merger
Agreement, Purchaser shall accept for payment and pay for
Bankrate shares validly tendered and not validly withdrawn
pursuant to the Offer promptly after the Expiration Date in
accordance with the procedures set forth in Section III. 4
(Withdrawal Rights). If the conditions to the Offer are
satisfied or waived, Purchaser will purchase all Bankrate shares
validly tendered and not validly withdrawn as described above.
The obligation of Purchaser to accept for payment, and pay for
all Bankrate shares tendered pursuant to the Offer shall be
subject to the Minimum Condition as well as the other conditions
described in Section III. 12 (Conditions to the
Offer). The Purchaser may terminate the Offer without purchasing
any Bankrate shares if certain events described in
Section III. 12 (Conditions to the Offer) occur.
The Minimum Condition may be waived by Purchaser, at its sole
option, (i) if the number of Bankrate shares validly
tendered and not withdrawn shall be at least equal to the
difference between (x) a majority of the outstanding
Bankrate shares, which is the minimum number of Bankrate shares
required to approve the Merger Agreement, the Merger and the
other transactions contemplated by the Merger Agreement pursuant
to the organizational documents of Bankrate and the FBCA, less
(y) the number of Bankrate shares subject to Support
Agreements or (ii) with the prior written consent of
Bankrate.
Unless the Merger Agreement is terminated in accordance with its
terms, if at any scheduled Expiration Date, any of the
conditions of the Offer shall not have been satisfied or earlier
waived by Purchaser (or Parent on its behalf), Purchaser may, in
its sole discretion, extend the Offer and the Expiration Date
for one or more periods of up to 20 business days each, the
length of each such period to be determined by Purchaser in its
sole discretion. In no event will Purchaser be required to, or
will Parent be required to cause Purchaser to, extend the Offer
or the Expiration Date beyond April 22, 2010. There can be
no assurance that Purchaser will exercise its rights to extend
the Offer.
If Purchaser is delayed in its payment for the Bankrate shares
or is unable to pay for Bankrate shares pursuant to the Offer
for any reason, then, without prejudice to Purchasers
rights under the Offer, the Depositary may retain tendered
Bankrate shares on behalf of Purchaser, and such Bankrate shares
may not be withdrawn except to the extent tendering shareholders
are entitled to withdrawal rights as described in
Section III. 4 (Withdrawal Rights). However, the ability of
Purchaser to delay the payment for Bankrate shares which
Purchaser has accepted for payment is limited by
Rule 14e-1
promulgated under the Exchange Act, which requires that a bidder
pay the consideration offered or return the securities deposited
by, or on behalf of, holders of securities promptly after the
termination or withdrawal of the Offer.
The Purchaser will accept for payment and pay for all Bankrate
shares validly tendered and not validly withdrawn pursuant to
the Offer if all of the conditions to the Offer are satisfied or
waived on the Expiration Date. Any extension, delay,
termination, waiver or amendment of the Offer will be followed
as promptly as practicable by public announcement thereof, and
such announcement in the case of an extension will be made no
later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date.
Without limiting the manner in which Purchaser may choose to
make any public announcement, subject to applicable law
(including
Rules 14d-4(d)
and 14e-1(d)
promulgated under the Exchange Act, which require that material
changes be promptly disseminated to holders of Bankrate shares
in a manner reasonably designed to inform such holders of such
change), Purchaser shall have no obligation to publish,
advertise or otherwise communicate any such public announcement
other than by issuing a press release.
If Purchaser makes a material change in the terms of the Offer,
or if it waives a material condition to the Offer, Purchaser
will extend the Offer and disseminate additional tender offer
materials to the extent required by
Rules 14d-4(d),
14d-6(c) and
14e-1
promulgated under the Exchange Act. The minimum period during
which an Offer must remain open following material changes in
the terms of the Offer, other than a change in
49
price or a change in the percentage of securities sought or a
change in any dealers soliciting fee, will depend upon the
facts and circumstances, including the materiality of the
changes. A minimum ten business day period from the date of such
change is generally required to allow for adequate dissemination
of new information to shareholders in connection with a change
in price or, subject to certain limitations, a change in the
percentage of securities sought or a change in any dealers
soliciting fee. For purposes of the Offer, a business
day means any day other than a Saturday, Sunday or a
federal holiday, and consists of the time period from
12:01 a.m. through 12:00 midnight, Eastern Daylight Savings
time. The requirement to extend the Offer will not apply to the
extent that the number of business days remaining between the
occurrence of the change and the then-scheduled Expiration Date
equals or exceeds the minimum extension period that would be
required because of such amendment.
If, on or before the Expiration Date, Purchaser increases the
consideration being paid for Bankrate shares accepted for
payment pursuant to the Offer, such increased consideration will
be paid to all shareholders whose Bankrate shares are purchased
in the Offer, whether or not such Bankrate shares were tendered
before the announcement of the increase in consideration.
The Purchaser reserves the right to transfer or assign to one or
more of Parent or Parents direct or indirect subsidiaries,
in whole or from time to time in part, the right to purchase all
or any portion of the Bankrate shares tendered into the Offer,
but any such transfer or assignment will not relieve Purchaser
(or Parent) of its obligations under the Offer or prejudice the
rights of tendering shareholders to receive payment for Bankrate
shares validly tendered and accepted for payment pursuant to the
Offer.
Bankrate has provided Purchaser with its shareholder and option
holder lists and security position listings for the purpose of
disseminating the Offer to holders of Bankrate shares. This
Offer to Purchase, the related Letter of Transmittal and other
relevant materials will be mailed to record holders of Bankrate
shares, and will be furnished to brokers, dealers, commercial
banks, trust companies and similar persons whose names, or the
names of whose nominees, appear on the shareholder lists, or, if
applicable, who are listed as participants in a clearing
agencys security position listing. The
Schedule 14D-9
will also be included in the package of materials.
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2.
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Acceptance
for Payment and Payment for Bankrate Shares
|
Upon the terms and subject to the conditions of the Offer
(including, if the Offer is extended or amended, the terms and
conditions of any such extension or amendment), Purchaser will
accept for payment, and will pay for, all Bankrate shares
validly tendered prior to the Expiration Date and not properly
withdrawn, promptly after the Expiration Date. Subject to
applicable rules of the SEC, Purchaser expressly reserves the
right to delay acceptance for payment of, or payment for,
Bankrate shares in order to comply in whole or in part with any
other applicable law. If Purchaser desires to delay payment for
Bankrate shares accepted for payment pursuant to the Offer, and
such delay would otherwise be in contravention of
Rule 14e-1
of the Exchange Act, Purchaser will extend the Offer. In all
cases, payment for Bankrate shares tendered and accepted for
payment pursuant to the Offer will be made only after timely
receipt by the Depositary of (i) the Certificates
evidencing such Bankrate shares or timely confirmation of a
book-entry transfer of such Bankrate shares (a Book-Entry
Confirmation) into the Depositarys account at the
depository trust company (DTC) pursuant to the
procedures set forth in Section III. 3 (Procedures for
Tendering Bankrate Shares), (ii) the Letter of Transmittal
(or a facsimile thereof), properly completed and duly executed,
with any required signature guarantees or, in the case of a
book-entry transfer, an Agents Message in lieu
of the Letter of Transmittal and (iii) any other documents
required by the Letter of Transmittal. An Agents
Message is a message, transmitted by electronic means to,
and received by, the Depositary and forming a part of a
Book-Entry Confirmation which states that DTC has received an
express acknowledgment from the participant in DTC tendering the
Bankrate shares which are the subject of such Book-Entry
Confirmation, that such participant has received and agrees to
be bound by the terms of the Letter of Transmittal and that
Purchaser may enforce such agreement against such participant.
50
For purposes of the Offer, Purchaser will be deemed to have
accepted for payment, and thereby purchased, Bankrate shares
validly tendered and not validly withdrawn as, if and when
Purchaser gives oral or written notice to the Depositary, as
agent for the tendering shareholders, of Purchasers
acceptance for payment of such Bankrate shares pursuant to the
Offer. Upon the terms and subject to the conditions of the
Offer, payment for Bankrate shares accepted for payment pursuant
to the Offer will be made by deposit of the purchase price
therefor with the Depositary, which will act as agent for
tendering shareholders for the purpose of receiving payments
from Purchaser and transmitting such payments to tendering
shareholders whose Bankrate shares have been accepted for
payment.
If any tendered Bankrate shares are not accepted for payment for
any reason pursuant to the terms and conditions of the Offer, or
if Certificates are submitted evidencing more Bankrate shares
than are tendered, Certificates evidencing unpurchased Bankrate
shares will be returned, without expense to the tendering
shareholder (or, in the case of Bankrate shares tendered by
book-entry transfer into the Depositarys account at DTC
pursuant to the procedure set forth in Section III. 3
(Procedures for Tendering Bankrate Shares), such Bankrate shares
will be credited to an account maintained at DTC), as promptly
as practicable following the expiration or termination of the
Offer.
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3.
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Procedures
for Tendering Bankrate Shares
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Except as set forth below, in order for Bankrate shares to be
validly tendered pursuant to the Offer, the Letter of
Transmittal (or a facsimile thereof), properly completed and
duly executed, together with any required signature guarantees
(or, in the case of a book-entry transfer, an Agents
Message in lieu of the Letter of Transmittal) and any other
documents required by the Letter of Transmittal, must be
received by the Depositary at one of its addresses set forth on
the back cover of this Offer to Purchase and either (i) the
Certificates evidencing tendered Bankrate shares must be
received by the Depositary at such address or such Bankrate
shares must be tendered pursuant to the procedure for book-entry
transfer described below and a Book-Entry Confirmation must be
received by the Depositary (including an Agents Message if
the tendering shareholder has not delivered a Letter of
Transmittal), in each case on or prior to the Expiration Date or
(ii) the tendering shareholder must comply with the
guaranteed delivery procedures described below. No alternative,
conditional or contingent tenders will be accepted.
Book-Entry
Transfer
The Depositary will establish accounts with respect to the
Bankrate shares at DTC for purposes of the Offer within two
business days after the date of this Offer to Purchase. Any
financial institution that is a participant in DTCs system
may make a book-entry delivery of Bankrate shares by causing DTC
to transfer such Bankrate shares into the Depositarys
account in accordance with DTCs procedures for such
transfer. However, although delivery of Bankrate shares may be
effected through book-entry transfer at DTC, either the Letter
of Transmittal (or a facsimile thereof), properly completed and
duly executed, together with any required signature guarantees,
or an Agents Message in lieu of the Letter of Transmittal,
and any other required documents, must, in any case, be received
by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase prior to the Expiration Date, or
the tendering shareholder must comply with the guaranteed
delivery procedures described below. Delivery of documents to
DTC does not constitute delivery to the Depositary.
Signature
Guarantees
Signatures on all Letters of Transmittal must be guaranteed by a
firm which is a member of an Eligible Institution, except in
cases where Bankrate shares are tendered (i) by a
registered holder of Bankrate shares who has not completed
either the box entitled Special Payment Instructions
or the box entitled Special Delivery Instructions on
the Letter of Transmittal or (ii) for the account of an
Eligible Institution. If a Certificate is registered in the name
of a person other than the signatory of the Letter of
Transmittal (or a facsimile thereof), or if payment is to be
made, or a Certificate not accepted for payment or not tendered
is to
51
be returned, to a person other than the registered holder(s),
then the Certificate must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear on the Certificate,
with the signature(s) on such Certificate or stock powers
guaranteed by an Eligible Institution. If the Letter of
Transmittal or stock powers are signed or any Certificate is
endorsed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in
a fiduciary or representative capacity, such persons should so
indicate when signing and, unless waived by Purchaser, proper
evidence satisfactory to Purchaser of their authority to so act
must be submitted. See Instructions 1 and 5 of the Letter
of Transmittal.
Guaranteed
Delivery
If a shareholder desires to tender Bankrate shares pursuant to
the Offer and the Certificates evidencing such
shareholders Bankrate shares are not immediately available
or such shareholder cannot deliver the Certificates and all
other required documents to the Depositary prior to the
Expiration Date, or such shareholder cannot complete the
procedure for delivery by book-entry transfer on a timely basis,
such Bankrate shares may nevertheless be tendered, provided that
all the following conditions are satisfied:
(i) such tender is made by or through an Eligible
Institution;
(ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form provided by
Purchaser, is received prior to the Expiration Date by the
Depositary as provided below; and
(iii) the Certificates (or a Book-Entry Confirmation)
evidencing all tendered Bankrate shares, in proper form for
transfer, in each case together with the Letter of Transmittal
(or a facsimile thereof), properly completed and duly executed,
with any required signature guarantees (or, in connection with a
book-entry transfer, an Agents Message), and any other
documents required by the Letter of Transmittal are received by
the Depositary within three Nasdaq Global Select Market trading
days after the date of execution of such Notice of Guaranteed
Delivery. A trading day is any day on which The
Nasdaq Global Select Market is open for business.
The Notice of Guaranteed Delivery may be delivered by mail or
transmitted by telegram or facsimile transmission to the
Depositary and must include a guarantee by an Eligible
Institution in the form set forth in the form of Notice of
Guaranteed Delivery made available by Purchaser.
In all cases, payment for Bankrate shares tendered and accepted
for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of the Certificates evidencing such
Bankrate shares, or a Book-Entry Confirmation of the delivery of
such Bankrate shares, and the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with
any required signature guarantees, and any other documents
required by the Letter of Transmittal, or an Agents
Message in the case of a book-entry transfer.
The method of delivery of Certificates and all other required
documents, including delivery through DTC, is at the option and
risk of the tendering shareholder, and the delivery will be
deemed made only when actually received by the Depositary. If
delivery is by mail, registered mail with return receipt
requested, properly insured, is recommended. In all cases,
sufficient time should be allowed to ensure timely delivery.
Determination
of Validity
All questions as to the validity, form, eligibility (including
time of receipt) and acceptance for payment of any tender of
Bankrate shares will be determined by Purchaser in its sole
discretion. Purchaser reserves the absolute right to reject any
and all tenders determined by them not to be in proper form or
the acceptance for payment of which may, in the opinion of their
counsel, be unlawful. Purchaser reserves the absolute right to
waive any condition of the Offer (other than those conditions
for which the waiver or modification is limited as described
above in Section III. 1 (Terms of the Offer; Expiration
Date) and Purchaser reserves the absolute right to waive any
defect or irregularity in the tender of any particular Bankrate
shares or any particular
52
shareholder, whether or not similar defects or irregularities
are waived in the case of other shareholders, and
Purchasers interpretations of the terms and conditions of
the Offer will be final and binding on all persons. No tender of
Bankrate shares will be deemed to have been validly made until
all defects and irregularities have been cured or waived to the
satisfaction of Purchaser. None of Purchaser, the Depositary,
the Information Agent or any other person will be under any duty
to give notification of any defects or irregularities in
tenders, or any waiver thereof, or incur any liability for
failure to give any such notification.
Other
Requirements
By executing the Letter of Transmittal as set forth above, a
tendering shareholder irrevocably appoints designees of
Purchaser as such shareholders proxies, each with full
power of substitution, in the manner set forth in the Letter of
Transmittal, to the full extent of such shareholders
rights with respect to the Bankrate shares tendered by such
shareholder and accepted for payment by Purchaser (and with
respect to any and all other Bankrate shares or other securities
issued or issuable in respect of such Bankrate shares on or
after the date of this Offer to Purchase). All such proxies
shall be considered coupled with an interest in the tendered
Bankrate shares. Such appointment will be effective when, and
only to the extent that, Purchaser accepts such Bankrate shares
for payment. Upon such acceptance for payment, all prior proxies
given by such shareholder with respect to such Bankrate shares
(and such other Bankrate shares and securities) will be revoked
without further action, and no subsequent proxies may be given
nor any subsequent written consent executed by such shareholder
(and, if given or executed, will not be deemed to be effective)
with respect thereto. The designees of Purchaser will, with
respect to the Bankrate shares for which the appointment is
effective, be empowered to exercise all voting and other rights
of such shareholder as they in their sole discretion may deem
proper at any annual or special meeting of Bankrates
shareholders or any adjournment or postponement thereof, by
written consent in lieu of any such meeting or otherwise. The
Purchaser reserves the right to require that, in order for
Bankrate shares to be deemed validly tendered, immediately upon
Purchasers payment for such Bankrate shares, Purchaser
must be able to exercise full voting rights with respect to such
Bankrate shares.
The acceptance for payment by Purchaser of Bankrate shares
pursuant to any of the procedures described above will
constitute a binding agreement between the tendering shareholder
and Purchaser upon the terms and subject to the conditions of
the Offer.
Tenders of the Bankrate shares made pursuant to the Offer are
irrevocable except that such Bankrate shares may be withdrawn at
any time prior to the initial Expiration Date and, unless
theretofore accepted for payment by Purchaser pursuant to the
Offer, may also be withdrawn at any time after
September 26, 2009. If Purchaser extends the Offer, is
delayed in its acceptance for payment of Bankrate shares or is
unable to accept Bankrate shares for payment pursuant to the
Offer for any reason, then, without prejudice to
Purchasers rights under the Offer or Bankrates
rights under the Merger Agreement, the Depositary may,
nevertheless, on behalf of Purchaser, retain tendered Bankrate
shares, and such Bankrate shares may not be withdrawn except to
the extent that tendering shareholders are entitled to
withdrawal rights as described in this section. Any such delay
will be accompanied by an extension of the Offer to the extent
required by law.
For a withdrawal to be effective, a written, or facsimile
transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover
page of this Offer to Purchase. Any such notice of withdrawal
must specify the name of the person who tendered the Bankrate
shares to be withdrawn, the number of Bankrate shares to be
withdrawn and the name of the registered holder of such Bankrate
shares, if different from that of the person who tendered such
Bankrate shares. If Certificates evidencing Bankrate shares to
be withdrawn have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such
Certificates, the serial numbers shown on such Certificates must
be submitted to the Depositary and the signature(s) on the
notice of withdrawal must be guaranteed by an Eligible
Institution, unless such Bankrate shares have been tendered for
the account of an Eligible Institution. If Bankrate shares have
been tendered pursuant to the procedure for book-entry transfer
as set forth in Section III. 3 (Procedures for Tendering
Bankrate Shares), any notice of withdrawal must specify the name
and number of
53
the account at DTC to be credited with the withdrawn Bankrate
shares and must otherwise comply with DTCs procedures.
Withdrawals of tenders of Bankrate shares may not be rescinded,
and Bankrate shares properly withdrawn will thereafter be deemed
not validly tendered for purposes of the Offer. However,
withdrawn Bankrate shares may be retendered by again following
the procedures described in Section III. 3 (Procedures for
Tendering Bankrate Shares), at any time prior to the Expiration
Date or during a subsequent offering period if one is provided.
All questions as to the form and validity (including time of
receipt) of any notice of withdrawal will be determined by
Parent or Purchaser, in their sole discretion, whose
determination will be final and binding. None of Parent,
Purchaser, the Depositary, the Information Agent or any other
person will be under a duty to give notification of any defects
or irregularities in any notice of withdrawal or incur any
liability for failure to give any such notification.
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5.
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Material
United States Federal Income Tax Consequences of the Offer and
the Merger
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The following is a summary of the material United States federal
income tax consequences to beneficial holders of Bankrate shares
upon the tender of Bankrate shares for cash pursuant to the
Offer and the exchange of Bankrate shares for cash pursuant to
the Merger. This summary is general in nature and does not
discuss all aspects of United States federal income taxation
that may be relevant to you in light of your particular
circumstances. In addition, this summary does not describe any
tax consequences arising under the laws of any local, state or
foreign jurisdiction and does not consider any aspects of United
States federal tax law other than income taxation. This summary
deals only with Bankrate shares held as capital assets within
the meaning of section 1221 of the United States
Internal Revenue Code of 1986, as amended (the Code)
(generally property held for investment), and does not address
tax considerations applicable to any holder of Bankrate shares
that may be subject to special treatment under the United States
federal income tax laws, including:
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a bank or other financial institution;
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a tax-exempt organization;
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a retirement plan or other tax-deferred account;
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a partnership, an S corporation or other pass-through
entity (or an investor in a partnership, S corporation or
other pass-through entity);
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an insurance company;
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a mutual fund;
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a real estate investment trust;
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a dealer or broker in stocks and securities, or currencies;
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a trader in securities that elects mark-to-market treatment;
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a holder of Bankrate shares subject to the alternative minimum
tax provisions of the Code;
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a holder of Bankrate shares that received the Bankrate shares
through the exercise of an employee stock option, through a tax
qualified retirement plan or otherwise as compensation;
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a person that has a functional currency other than the United
States dollar;
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a person that holds the Bankrate shares as part of a hedge,
straddle, constructive sale, conversion or other integrated
transaction;
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a United States expatriate; or
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54
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any holder of Bankrate shares that entered into a Support
Agreement as part of the transactions described in this Offer to
Purchase.
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If a partnership (including any entity or arrangement treated as
a partnership for United States federal income tax purposes)
holds Bankrate shares, the tax treatment of a holder that is a
partner in the partnership generally will depend upon the status
of the partner and the activities of the partner and the
partnership. Such holders should consult their own tax advisors
regarding the tax consequences of exchanging the Bankrate shares
pursuant to the Offer or pursuant to the Merger.
This summary is based on the Code, the regulations promulgated
under the Code, and rulings and judicial decisions, all as in
effect as of the date of this Offer to Purchase, and all of
which are subject to change or differing interpretations at any
time, with possible retroactive effect. We have not sought, and
do not intend to seek, any ruling from the United States
Internal Revenue Service (the IRS) with respect to
the statements made and the conclusions reached in the following
summary, and no assurance can be given that the IRS will agree
with the views expressed herein, or that a court will not
sustain any challenge by the IRS in the event of litigation.
The discussion set out below is intended only as a summary of
the material United States federal income tax consequences to a
holder of Bankrate shares. We urge you to consult your own tax
advisor with respect to the specific tax consequences to you in
connection with the Offer and the Merger in light of your own
particular circumstances, including federal estate, gift and
other non-income tax consequences, and tax consequences under
state, local or foreign tax laws.
United
States Holders
For purposes of this discussion, the term United States
holder means a beneficial owner of Bankrate shares that
is, for United States federal income tax purposes:
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a citizen or resident of the United States;
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a corporation (or any other entity or arrangement treated as a
corporation for United States federal income tax purposes),
organized in or under the laws of the United States or any state
thereof or the District of Columbia;
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an estate, the income of which is subject to United States
federal income taxation, regardless of its source; or
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a trust if (i) a court within the United States is able to
exercise primary supervision over the administration of the
trust, and (ii) one or more United States persons have the
authority to control all substantial decisions of the trust.
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Payments
with Respect to Bankrate Shares
The exchange of Bankrate shares for cash pursuant to the Offer
or pursuant to the Merger will be a taxable transaction for
United States federal income tax purposes, and a United States
holder who receives cash for Bankrate shares pursuant to the
Offer or pursuant to the Merger will recognize gain or loss, if
any, equal to the difference between the amount of cash received
and the holders adjusted tax basis in the Bankrate shares.
Gain or loss will be determined separately for each block of
Bankrate shares (i.e., Bankrate shares acquired at the same cost
in a single transaction). Such gain or loss will be capital gain
or loss, and will be long-term capital gain or loss if such
United States holders holding period for the Bankrate
shares is more than one year at the time of the exchange of such
holders Bankrate shares for cash. Long-term capital gain
recognized by an individual holder generally is subject to tax
at a lower rate than short-term capital gain or ordinary income.
There are limitations on the deductibility of capital losses.
55
Backup
Withholding Tax
Proceeds from the exchange of Bankrate shares pursuant to the
Offer or pursuant to the Merger generally will be subject to
backup withholding tax at the applicable rate (currently 28%)
unless the applicable United States holder or other payee
provides a valid taxpayer identification number and complies
with certain certification procedures or otherwise establishes
an exemption from backup withholding tax. Any amounts withheld
under the backup withholding tax rules from a payment to a
United States holder will be allowed as a credit against that
holders United States federal income tax liability and may
entitle the holder to a refund, provided that the required
information is timely furnished to the IRS. Each United States
holder should complete and sign the substitute
form W-9,
which will be included with the Letter of Transmittal to be
returned to the Depositary, to provide the information and
certification necessary to avoid backup withholding, unless an
exemption applies and is established in a manner satisfactory to
the Depositary.
Non-United
States Holders
The following is a summary of certain United States federal
income tax consequences that will apply to you if you are a
Non-United
States holder of Bankrate shares. The term
Non-United
States holder means a beneficial owner, other than a
partnership, of a Bankrate share that is:
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a nonresidential alien individual;
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a foreign corporation; or
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a foreign estate or trust.
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The following discussion applies only to
Non-United
States holders, and assumes that no item of income, gain,
deduction or loss derived by the
Non-United
States holder in respect of Bankrate shares at any time is
effectively connected with the conduct of a United States trade
or business. Special rules, not discussed herein, may apply to
certain
Non-United
States holders, such as:
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certain former citizens or residents of the United States;
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controlled foreign corporations;
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passive foreign investment companies;
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corporations that accumulate earnings to avoid United States
federal income tax;
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investors in pass-through entities that are subject to special
treatment under the Code; and
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Non-United
States holders that are engaged in the conduct of a United
States trade or business.
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Payments
with Respect to Bankrate Shares
Payments made to a
Non-United
States holder with respect to Bankrate shares exchanged for cash
in the Offer or pursuant to the Merger generally will be exempt
from United States federal income tax. However, if the
Non-United
States holder is an individual who was present in the United
States for 183 days or more in the taxable year and certain
other conditions are met, such holder will be subject to tax at
a flat rate of 30% (or such lower rate as may be specified under
an applicable income tax treaty) on the gain from the exchange
of the Bankrate shares, net of applicable United States losses
from sales or exchanges of other capital assets recognized by
the holder during the year.
Backup
Withholding Tax
A Non-United
States holder may be subject to backup withholding tax with
respect to the proceeds from disposition Bankrate shares
pursuant to this Offer to Purchase or pursuant to the Merger,
unless, generally, the
Non-United
States holder certifies under penalties of perjury on an
appropriate IRS
form W-8
that the
56
Non-United States
holder is not a United States person, or the
Non-United
States holder otherwise establishes an exemption in a manner
satisfactory to the Depositary.
Any amounts withheld under the backup withholding tax rules will
be allowed as a refund or a credit against the
Non-United
States holders United States federal income tax liability,
provided the required information is furnished to the IRS.
The foregoing summary does not discuss all aspects of United
States federal income taxation that may be relevant to
particular holders Bankrate shares. Holders of Bankrate shares
should consult their own tax advisors as to the particular tax
consequences to them of tendering their Bankrate shares for cash
pursuant to this Offer to Purchase or exchanging their Bankrate
shares for cash in the Merger under any federal, state, foreign
or other tax laws.
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6.
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Price
Range of Bankrate Shares; Dividends on Bankrate Shares
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Bankrate shares are listed on The Nasdaq Global Select Market
under the symbol RATE. Bankrate shares were listed
on The Nasdaq Stock Market from May 13, 1999 to
January 26, 2001, and subsequently have been listed on The
Nasdaq Stock Market at all times since January 9, 2003.
Between January 27, 2001 and January 8, 2003, Bankrate
shares were traded on the over the counter bulletin board.
The following table sets forth, for each of the periods
indicated, the high and low closing sales prices per share of
Bankrate common stock on The Nasdaq Global Select Market.
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High
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Low
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Year Ended December 31, 2007:
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First Quarter
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$
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44.77
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$
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32.94
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Second Quarter
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50.69
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33.91
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Third Quarter
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51.96
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36.21
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Fourth Quarter
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53.05
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35.92
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Year Ended December 31, 2008:
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First Quarter
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$
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56.85
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$
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39.12
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Second Quarter
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54.99
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|
|
|
39.04
|
|
Third Quarter
|
|
|
39.12
|
|
|
|
25.13
|
|
Fourth Quarter
|
|
|
38.62
|
|
|
|
23.05
|
|
|
|
|
|
|
|
|
|
|
Year Ending December 31, 2009:
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
39.45
|
|
|
$
|
16.05
|
|
Second Quarter
|
|
|
31.83
|
|
|
|
23.74
|
|
Third Quarter (through August 14, 2009)
|
|
|
28.91
|
|
|
|
22.84
|
|
On July 21, 2009, the last trading day before Parent and
Bankrate announced that they had entered into the Merger
Agreement, the last sale price of Bankrate shares reported on
The Nasdaq Global Select Market was $24.62 per share; therefore,
the Offer Price of $28.50 per share represents a premium of
15.76% over such price. On July 27, 2009, the last trading
day prior to the original printing of this Offer to Purchase,
the last sale price of Bankrate shares reported on The Nasdaq
Global Select Market was $28.69 per share. On
August 14, 2009, the last trading day prior to the
reprinting of this Offer to Purchase, the last sale price of
Bankrate shares reported on the Nasdaq Global Select Market was
$28.82 per share. Shareholders are urged to obtain
current market quotations for Bankrate shares before making a
decision with respect to the Offer.
Bankrate has never declared or paid any cash dividends on its
capital stock. In addition, under the terms of the Merger
Agreement, Bankrate is not permitted to declare or pay dividends
in respect of Bankrate shares unless approved in advance by
Parent in writing.
57
|
|
7.
|
Effects
on the Company if the Offer is Not Consummated
|
If the Offer is not consummated for any reason, shareholders
will not receive any payment for their shares in connection with
the Offer. Instead, Bankrate will remain an independent public
company and Bankrates shares will continue to be listed on
The Nasdaq Global Select Market. In addition, if the Offer is
not consummated, we expect that management will operate the
business in a manner similar to that in which it is being
operated today and that Bankrate shareholders will continue to
be subject to the same risks and opportunities as they currently
are, including, among other things, that Bankrates
operations can be materially affected by competition in its
target markets and by overall market conditions, among other
factors. Accordingly, if the Offer is not consummated, there can
be no assurance as to the effect of these risks and
opportunities on the future value of your Bankrate shares. From
time to time, Bankrates board of directors will evaluate
and review, among other things, the business operations,
properties, dividend policy and capitalization of Bankrate and
make such changes as are deemed appropriate and continue to seek
to identify strategic alternatives to enhance shareholder value.
If the Offer is not consummated for any reason, there can be no
assurance that any other transaction acceptable to Bankrate will
be offered, or that the business, prospects or results of
operations of Bankrate will not be adversely impacted.
|
|
8.
|
Possible
Effects of the Offer on the Market for the Bankrate Shares;
Stock Exchange Listing(s); Registration under the Exchange Act;
Margin Regulations
|
Possible
Effects of the Offer on the Market for the Bankrate
Shares
If the Offer is consummated but the Merger does not take place,
the number of shareholders, and the number of Bankrate shares
that are still in the hands of the public, may be so small that
there will no longer be an active or liquid public trading
market (or possibly any public trading market) for Bankrate
shares held by shareholders other than Purchaser. We cannot
predict whether the reduction in the number of Bankrate shares
that might otherwise trade publicly would have an adverse or
beneficial effect on the market price for, or marketability of,
the Bankrate shares or whether such reduction would cause future
market prices to be greater or less than the price paid in the
Offer. If the Merger is consummated, shareholders not tendering
their Bankrate shares in the Offer will receive cash in an
amount equal to the price per share paid in the Offer.
Therefore, if the Merger takes place, the only difference
between tendering and not tendering Bankrate shares in the Offer
is that tendering shareholders will be paid earlier.
Stock
Exchange Listing
Depending upon the number of Bankrate shares purchased pursuant
to the Offer, the Bankrate shares may no longer meet the
standards for continued listing on The Nasdaq Global Select
Market. If, as a result of the purchase of Bankrate shares
pursuant to the Offer, the Bankrate shares no longer meet the
criteria for continued listing on The Nasdaq Global Select
Market, the market for the Bankrate shares could be adversely
affected. According to The Nasdaq Global Select Market published
guidelines, for the Bankrate shares to meet the criteria for
continued listing on The Nasdaq Global Select Market, among
other things: (i) the price of a share must be at least
$1.00; (ii) there must be at least than
400 shareholders, and (iii) there must be at least
750,000 publicly held Bankrate shares, the aggregate market
value of publicly held Bankrate shares must be at least
$5.0 million, and there must be at least two registered and
active market makers (unless Bankrates shareholder equity
falls below $10.0 million, in which case more stringent
requirements apply). If, as a result of the purchase of Bankrate
shares pursuant to the Offer, the Bankrate shares no longer meet
the requirements of The Nasdaq Global Select Market for
continued listing and the listing of Bankrate shares is
discontinued, the market for
and/or the
value of the Bankrate shares could be adversely affected.
If The Nasdaq Global Select Market were to delist the Bankrate
shares (which we intend to cause Bankrate to seek if we acquire
control of Bankrate and the Bankrate shares no longer meet The
Nasdaq Global Select Market listing requirements), it is
possible that the Bankrate shares would trade on another
securities exchange or in the over-the-counter market and that
price quotations for the Bankrate shares would be reported by
such exchange or other sources. The extent of the public market
for the Bankrate shares and availability of
58
such quotations would, however, depend upon such factors as the
number of holders and the aggregate market value of the
publicly-held Bankrate shares at such time, the interest in
maintaining a market in the Bankrate shares on the part of
securities firms and the possible termination of registration of
the Bankrate shares under the Exchange Act.
Registration
under the Exchange Act
The Bankrate shares are currently registered under the Exchange
Act. The purchase of the Bankrate shares pursuant to the Offer
may result in the Bankrate shares becoming eligible for
deregistration under the Exchange Act. Registration may be
terminated upon application of Bankrate to the SEC if the
Bankrate shares are neither listed on a national securities
exchange nor held by three hundred or more holders of record.
Termination of the registration of the Bankrate shares under the
Exchange Act, assuming there are no other securities of Bankrate
subject to registration, would substantially reduce the
information required to be furnished by Bankrate to holders of
Bankrate shares and to the SEC and would make certain of the
provisions of the Exchange Act, such as the periodic reporting
requirements of Section 13, the short-swing profit recovery
provisions of Section 16(b), the requirement to furnish a
proxy statement pursuant to Section 14(a) in connection
with a shareholders meeting and the related requirement to
furnish an annual report to shareholders and the requirements of
Rule 13e-3
under the Exchange Act with respect to going-private
transactions, no longer applicable to Bankrate. Furthermore,
affiliates of Bankrate and persons holding
restricted securities of Bankrate may be deprived of
the ability to dispose of such securities pursuant to
Rule 144 promulgated under the Securities Act. If
registration of the Bankrate shares under the Exchange Act were
terminated, the Bankrate shares would no longer be margin
securities or eligible for stock exchange listing. We
believe that the purchase of the Bankrate shares pursuant to the
Offer may result in the Bankrate shares becoming eligible for
deregistration under the Exchange Act, and it would be our
intention to cause Bankrate to terminate registration of the
Bankrate shares under the Exchange Act as soon after
consummation of the Offer as the requirements for termination of
registration of the Bankrate shares are met.
If registration of the Bankrate shares under the Exchange Act is
not terminated prior to the Merger, then the registration of the
Bankrate shares under the Exchange Act and the listing of the
Bankrate shares on The Nasdaq Global Select Market will be
terminated following the completion of the Merger.
Margin
Regulations
The Bankrate shares are currently margin securities
under the regulations of the Board of Governors of the Federal
Reserve System (the Federal Reserve Board), which
has the effect, among other things, of allowing brokers to
extend credit on the collateral of such Bankrate shares.
Depending upon factors similar to those described above
regarding listing and market quotations, following the purchase
of Bankrate shares pursuant to the Offer the Bankrate shares
might no longer constitute margin securities for the
purposes of the Federal Reserve Boards margin regulations
and, therefore, could no longer be used as collateral for loans
made by brokers.
|
|
9.
|
Certain
Information Concerning Bankrate
|
Bankrate is a Florida corporation, with principal executive
offices at 11760 U.S. Highway One, Suite 200, North
Palm Beach, Florida 33408. The telephone number of
Bankrates principal executive offices is
(561) 630-2400.
The following description of Bankrate and its business has been
taken from Bankrates Annual Report on
Form 10-K
for the year ended December 31, 2008 (the
Form 10-K),
and is qualified in its entirety by reference to such
Form 10-K:
Bankrate was founded approximately 30 years ago as a print
publisher of the newsletter Bank Rate Monitor. From 1976 through
1996, Bankrates principal business was the publication of
print newsletters, the syndication of unbiased editorial bank
and credit product research to newspapers and magazines and
59
advertising sales of the Mortgage Guide and the CD &
Deposit Guide, a newspaper-advertising table consisting of
product and rate information from local mortgage companies and
financial institutions. The company that Bankrate operates today
was incorporated in the State of Florida in 1993.
In 1996, Bankrate began its online operations by placing its
editorially unbiased research on its web site, Bankrate.com. By
offering information online, Bankrate created new revenue
opportunities through the sale of graphical and hyperlink
advertising associated with its rate and yield tables. Over the
following decade, Bankrate implemented a strategy to concentrate
on building its online operations, and has added to and
complimented these operations through acquisitions.
Bankrate now regularly surveys more than 4,800 financial
institutions in more than 575 markets in all 50 states to
compile current, objective, and unbiased information. Because
Bankrate has developed a reputation of providing current,
objective, and unbiased information, hundreds of print and
online partner publications have come to depend on it as their
trusted source for financial rates and information.
Financial
Information
The audited consolidated financial statements of Bankrate as of
and for the fiscal years ended December 31, 2007 and
December 31, 2008 are incorporated herein by reference to
Item 8 to Bankrates
Form 10-K,
and the unaudited consolidated financial statements of Bankrate
as of and for the six months ended June 30, 2009 are
incorporated herein by reference to Item 1 to
Bankrates Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2009.
Summary
Consolidated Financial Information
The following tables set forth certain summary historical
consolidated financial information for the Company for the
fiscal years ended December 31, 2007 and December 31,
2008 and the fiscal six months ended June 30, 2008 and
June 30, 2009. This summary financial information has been
derived from, and should be read in conjunction with, our
audited consolidated financial statements as of, and for, the
years ended December 31, 2007 and December 31, 2008,
which are incorporated herein by reference to our annual report
on
Form 10-K
for the year ended December 31, 2008, and our unaudited
consolidated financial information as of, and for the six months
ended, June 30, 2008 and June 30, 2009, which is
incorporated herein by reference from our quarterly report on
Form 10-Q
for the three months ended June 30, 2009. We do not
anticipate that the cost of this Offer will have a material
effect on the summary financial information presented below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
Year Ended
|
|
|
|
June 31,
|
|
|
December 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
2008
|
|
|
2007
|
|
|
|
($ thousands except per share data)
|
|
|
BALANCE SHEET:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
55,089
|
|
|
$
|
75,169
|
|
|
$
|
46,055
|
|
|
$
|
125,058
|
|
Working capital
|
|
|
64,378
|
|
|
|
92,213
|
|
|
|
48,874
|
|
|
|
139,437
|
|
Current Assets
|
|
|
72,700
|
|
|
|
103,755
|
|
|
|
71,046
|
|
|
|
150,338
|
|
Non-current Assets
|
|
|
195,027
|
|
|
|
144,973
|
|
|
|
199,704
|
|
|
|
78,016
|
|
Total Assets
|
|
|
267,727
|
|
|
|
248,728
|
|
|
|
270,750
|
|
|
|
228,354
|
|
Current Liabilities
|
|
|
8,322
|
|
|
|
11,542
|
|
|
|
22,172
|
|
|
|
10,901
|
|
Non-current Liabilities
|
|
|
153
|
|
|
|
290
|
|
|
|
148
|
|
|
|
187
|
|
Total Liabilities
|
|
|
8,475
|
|
|
|
11,832
|
|
|
|
22,320
|
|
|
|
11,088
|
|
Stockholders Equity
|
|
|
259,252
|
|
|
|
236,896
|
|
|
|
248,430
|
|
|
|
217,266
|
|
Book value per share
|
|
$
|
13.78
|
|
|
$
|
12.54
|
|
|
$
|
13.18
|
|
|
$
|
11.79
|
|
60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
Year Ended
|
|
|
|
June 31,
|
|
|
December 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
2008
|
|
|
2007
|
|
|
|
($ thousands except per share data)
|
|
|
STATEMENT OF OPERATIONS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
69,364
|
|
|
|
82,656
|
|
|
|
166,855
|
|
|
|
95,592
|
|
Cost of revenues
|
|
|
27,902
|
|
|
|
33,766
|
|
|
|
66,095
|
|
|
|
25,847
|
|
Gross profit
|
|
|
41,462
|
|
|
|
48,890
|
|
|
|
100,760
|
|
|
|
69,745
|
|
Operating expenses
|
|
|
30,021
|
|
|
|
31,232
|
|
|
|
67,658
|
|
|
|
42,099
|
|
Other income (expense)
|
|
|
26
|
|
|
|
1,206
|
|
|
|
1,562
|
|
|
|
6,688
|
|
Net income from continuing operations
|
|
|
6,645
|
|
|
|
10,913
|
|
|
|
20,998
|
|
|
|
20,054
|
|
Net income
|
|
|
6,645
|
|
|
|
10,913
|
|
|
|
19,621
|
|
|
|
20,054
|
|
Net income per common share from continuing
operations basic
|
|
$
|
0.35
|
|
|
$
|
0.58
|
|
|
$
|
1.11
|
|
|
$
|
1.09
|
|
Net income per common share from continuing
operations diluted
|
|
$
|
0.34
|
|
|
$
|
0.55
|
|
|
$
|
1.08
|
|
|
$
|
1.04
|
|
Net income per common share basic
|
|
$
|
0.35
|
|
|
$
|
0.58
|
|
|
$
|
1.04
|
|
|
$
|
1.09
|
|
Net income per common share diluted
|
|
$
|
0.34
|
|
|
$
|
0.55
|
|
|
$
|
1.01
|
|
|
$
|
1.04
|
|
Ratio of earnings to fixed charges
|
|
|
33.7
|
|
|
|
60.8
|
|
|
|
54.1
|
|
|
|
60.5
|
|
|
|
|
(1) |
|
Fixed charges include gross interest expense, amortization of
deferred financing expenses and an amount equivalent to interest
included in rental charges. We have assumed that
one-third of
rental expense is representative of the interest factor. |
Certain
Projections
In connection with due diligence by the Apax, Bankrate provided
certain projected and budgeted financial information concerning
Bankrate to the Apax VII Funds. These are described, along with
their purpose and intent, in Bankrates Schedule 14D-9,
which will be filed with the SEC and is being mailed to the
shareholders of Bankrate together with this Offer to Purchase.
Shareholders of Bankrate are urged to, and should, carefully
read Bankrates Schedule 14D-9.
Preliminary
Financial Results
Bankrate has prepared preliminary financial results for the
month ended July 31, 2009. Subject to final adjustments,
including normal quarter- and year-end adjustments, total
revenue for July 2009 was $10.3 million compared to
$9.7 million for June 2009 and $15.1 million in July
2008. Bankrate reported a net loss of $523,000 or $0.03 per
fully diluted share in July 2009, compared to net income of
$770,000, or $0.04 per fully diluted share in June 2009 and
$1.9 million, or $0.10 per fully diluted share in July
2008. Earnings per fully diluted share, excluding share-based
compensation expense and non-recurring deal-related costs
(Adjusted EPS), was $0.03 for July 2009, compared to
Adjusted EPS of $0.07 for June 2009 and $0.13 for June 2008. The
number of fully diluted shares used to calculate the above was
determined as of the quarter ended June 30, 2009 for both
the July 2009 and June 2009 calculations and as of the quarter
ended June 30, 2008 for the July 2008 calculations.
Earnings before interest, taxes, depreciation and amortization
(EBITDA), including share-based compensation expense
and non-recurring deal-related costs were $211,000 in July 2009,
compared to $2.4 million in June 2009 and $3.9 million
in July 2008. Earnings before interest, taxes, depreciation, and
amortization, excluding share-based compensation expense of
$842,000 in July 2009 and non-recurring deal-related costs of
$1.2 million in July 2009 (there were no such
non recurring deal-related costs in June 2009
61
or July 2008)(Adjusted EBITDA), were
$2.2 million in July 2009, compared to $3.3million in June
2009 and $5.1 million in July 2008.
To supplement Bankrates financial statements presented in
accordance with generally accepted accounting principles
(GAAP), Bankrate uses non-GAAP measures of certain
components of financial performance, including EBITDA, Adjusted
EBITDA, Adjusted EPS and Operating EPS, which are adjusted from
results based on GAAP to exclude certain expenses, gains and
losses. These non-GAAP measures are provided to enhance
investors overall understanding of Bankrates current
financial performance and its prospects for the future.
Specifically, Bankrate believes the non-GAAP results provide
useful information to both management and investors by excluding
certain expenses, gains and losses that may not be indicative of
its core operating results. In addition, because Bankrate has
historically reported certain non-GAAP results to investors,
Bankrate believes the inclusion of non-GAAP measures provides
consistency in its financial reporting. These measures should be
considered in addition to results prepared in accordance with
GAAP, but should not be considered a substitute for, or superior
to, GAAP results. The non-GAAP measures included in this section
have been reconciled to the nearest GAAP measure.
Bankrate,
Inc.
Non-GAAP Measures Reconciliation
(In
thousands, except share and per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
July
|
|
|
June
|
|
|
July
|
|
|
Revenue
|
|
$
|
10,314
|
|
|
$
|
9,713
|
|
|
$
|
15,118
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IBIT
|
|
|
(901
|
)
|
|
|
1,327
|
|
|
|
3,325
|
|
Tax (provision) benefit
|
|
|
378
|
|
|
|
(557
|
)
|
|
|
(1,397
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
(523
|
)
|
|
|
770
|
|
|
|
1,928
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP fully diluted earnings (loss) per share
|
|
$
|
(0.03
|
)
|
|
$
|
0.04
|
|
|
$
|
0.10
|
|
Shares used in computing diluted net income per share, GAAP basis
|
|
|
19,379,325
|
|
|
|
19,379,325
|
|
|
|
19,557,759
|
|
Adjusted EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss), GAAP basis
|
|
|
(523
|
)
|
|
|
770
|
|
|
|
1,928
|
|
Share-based compensation expense, net of tax
|
|
|
505
|
|
|
|
552
|
|
|
|
733
|
|
Non-recurring deal-related costs, net of tax
|
|
|
687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income excluding share-based compensation expense and
non-recurring deal related costs -
|
|
|
669
|
|
|
|
1,322
|
|
|
|
2,661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EPS
|
|
$
|
0.03
|
|
|
$
|
0.07
|
|
|
$
|
0.13
|
|
Shares used in computing diluted net income per share, excluding
the impact of applying SFAS No. 123R and deal costs
|
|
|
19,658,662
|
|
|
|
19,658,662
|
|
|
|
19,909,843
|
|
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations, GAAP basis
|
|
|
(904
|
)
|
|
|
1,318
|
|
|
|
3,196
|
|
Depreciation and amortization
|
|
|
1,115
|
|
|
|
1,107
|
|
|
|
669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
211
|
|
|
|
2,425
|
|
|
|
3,865
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations, GAAP basis
|
|
$
|
(904
|
)
|
|
$
|
1,318
|
|
|
$
|
3,196
|
|
Share-based compensation expense
|
|
|
842
|
|
|
|
920
|
|
|
|
1,222
|
|
Depreciation and amortization
|
|
|
1,115
|
|
|
|
1,107
|
|
|
|
669
|
|
Non-recurring deal-related costs, net of tax
|
|
|
1,184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
2,237
|
|
|
$
|
3,345
|
|
|
$
|
5,087
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
62
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|
10.
|
Certain
Information Concerning Purchaser and Parent
|
Parent is a Delaware corporation and Purchaser is a Florida
corporation. Both companies were formed on July 17, 2009
solely for the purpose of completing the proposed Offer and
Merger and have conducted no business activities other than
those related to the structuring and negotiation of the Offer
and the Merger and arranging financing therefor. Upon the
consummation of the Merger, Purchaser will cease to exist and
Bankrate will continue as the surviving corporation. Until
immediately prior to the time Purchaser purchases Bankrate
shares pursuant to the Offer, it is not anticipated that Parent
or Purchaser will have any significant assets or liabilities or
engage in activities other than those incidental to their
formation and capitalization and the transactions contemplated
by the Offer and the Merger. Purchaser is a wholly owned
subsidiary of Parent and has not engaged in any business except
as contemplated by the Merger Agreement. As of July 22,
2009 all, of the outstanding common stock of Parent is owned by
Ben Holding S.à.r.l., a Luxembourg société à
responsabilité limitée, which does not engage in any
other business other than owning such outstanding common stock
of Parent. Ben Holding S.à.r.l. is owned by Apax US
VII, L.P., a Cayman Islands exempted limited partnership
(holding 7%) and Apax WW Nominees Ltd. (holding 93% as a nominee
for Apax Europe VII-A, L.P., Apax Europe VII-B, L.P. and Apax
Europe VII-1, L.P., each constituted under English limited
partnership law and domiciled in Guernsey). Apax WW Nominees
Ltd. does not engage in any other business other than serving as
such a nominee. The principal business of the Apax VII
Funds is to make investments in, buy, sell, hold, pledge and
assign securities. Apax US VII GP, L.P., a Cayman Islands
exempted limited partnership, is the general partner of Apax US
VII, L.P., which constitutes its principal business. Apax US VII
GP, Ltd., a Cayman Islands exempted limited company, is the
general partner of Apax US VII GP, L.P., which constitutes its
principal business. Apax Europe VII GP L.P. Inc., a Guernsey
incorporated limited partnership, is the general partner of each
of Apax Europe VII-A, L.P., Apax Europe VII-B, L.P. and Apax
Europe VII-1, L.P., which constitutes its principal business.
Apax Europe VII GP Co. Limited, a Guernsey incorporated company,
is the general partner of Apax Europe VII GP L.P. Inc., which
constitutes its principal business. Apax Europe VII GP L.P. Inc.
has appointed Apax Partners Europe Managers Limited, a company
constituted under English company law, as discretionary
investment manager of the investments of Apax Europe VII-A,
L.P., Apax Europe VII-B, L.P. and Apax Europe VII-1, L.P. The
principal business of Apax Partners Europe Managers Limited is
to serve as discretionary investment manager. The principal
office address of each of Purchaser and Parent is
c/o Mitch
Truwit, 601 Lexington Avenue, 53rd Floor, New York,
New York 10022. The telephone number at the principal
office is (212) 753-6300.
Each of Purchaser and Parent has minimal assets and liabilities
other than the contractual rights and obligations related to the
Merger Agreement and the financing commitments. See
Section III. 11 (Source and Amount of Funds). The Apax VII
Funds have committed an aggregate of $570.8 million in cash
as capital to Parent solely in connection with completion of the
Offer and the Merger and subject to the conditions of the Merger
Agreement and the Second Commitment Letter.
The name, business address, citizenship, present principal
occupation and employment history of each of the directors,
executive officers and control persons of each of Parent and
Purchaser and their respective affiliates are set forth in
Schedule A to this Offer to Purchase
(Schedule A). Except as set forth elsewhere in
this Offer to Purchase, (i) neither of Parent and Purchaser
nor any of the entities or persons listed in Schedule A
has, during the past five years, been convicted in a criminal
proceeding (excluding traffic violations or similar
misdemeanors), and (ii) neither of Parent and Purchaser nor
any of the entities or persons listed in Schedule A has,
during the past five years, been a party to any judicial or
administrative proceeding (except for matters that were
dismissed without sanction or settlement) that resulted in a
judgment, decree or final order enjoining the person from future
violations of, or prohibiting activities subject to, federal or
state securities laws, or a finding of any violation of federal
or state securities laws.
Except as set forth elsewhere in this Offer to Purchase
(including Schedule A), (i) neither of Parent and
Purchaser nor any of the entities or persons listed in
Schedule A, beneficially owns or has a right to acquire any
Bankrate shares or any other equity securities of Bankrate, and
(ii) neither of Parent and Purchaser nor any of the
entities or persons referred to in clause (i) above, has
effected any transaction in the Bankrate shares or any other
equity securities of Bankrate during the past 60 days.
63
Except as set forth elsewhere in this Offer to Purchase
(including Schedule A), (i) neither Parent and
Purchaser nor any of the entities or persons listed on
Schedule A, has any contract, arrangement, understanding or
relationship with any other person with respect to any
securities of Bankrate and (ii) during the two years
prior to the date of this Offer to Purchase, there have been no
transactions that would require reporting under the rules and
regulations of the SEC between Parent and Purchaser or any of
the entities or persons listed in Schedule A, on the one
hand, and Bankrate or any of its executive officers, directors
and/or
affiliates, on the other hand.
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11.
|
Source
and Amount of Funds
|
The Offer is not subject to any financing contingencies. The
Purchaser estimates that the total amount of funds necessary to
consummate the proposed Offer and Merger and the related
transactions is approximately $612.0 million, including
$570.8 million to be paid to Bankrates shareholders
(both amounts include the aggregate value to be contributed to
Parent by the Support Executives pursuant to their commitments
under the Support Agreements), with the remaining funds to be
used to pay customary fees and expenses in connection with the
proposed Offer and Merger and the related transactions.
Parent has received a commitment letter from the Apax VII Funds
pursuant to which the Apax VII Funds have agreed to invest up to
$570.8 million in cash into Parent to
fund Purchasers payment of the Offer Price for
Bankrate shares acquired pursuant to the Offer and the Merger.
The Apax VII Funds obligation to fund this commitment is
subject to the satisfaction or waiver by Parent of the
conditions precedent to Parents and Purchasers
obligations to complete the Offer and the Merger. Bankrate is a
direct party to and can enforce a separate equity commitment
letter from the Apax VII Funds, pursuant to which the Apax VII
Funds have agreed to invest up to $570.8 million in cash
into Parent solely to enable Parent to satisfy claims arising
out of a breach of Parents obligations under the Limited
Guarantee. Under the Limited Guarantee, Parent guarantees, in an
amount of up $570.8 million, (1) the Parent
Termination Fee, (2) Parents obligations to pay
damages to the Company under the Merger Agreement, and
(3) Parents or Purchasers obligations to
perform specifically the terms and provisions of the Merger
Agreement, in each case solely to the extent such Parent
Termination Fee, damages or specific performance are found in a
final judicial determination (or a settlement tantamount
thereto) to be due and payable or to be required pursuant to the
Merger Agreement. Each commitment letter is enforceable against
each of the Apax VII Funds that is a party thereto only in
proportion to such partys respective relative portion of
the aggregate commitment. See Section I.13 (The Merger
Agreement).
In addition, pursuant to the Support Agreements, in connection
with the Merger, the Support Executives have committed to
contribute to the capital of Parent Bankrate shares or cash in
exchange for the same Parent securities, and in the same
proportions of such securities, as will be held by the Apax VII
Funds as follows: Mr. Evans has committed to invest
$4,500,000, the other executive officers who have entered into a
Support Agreement have committed to invest an aggregate of
$635,000 and each of Messrs. Morse and OBlock has
committed to invest between 30% and 50% of the after-tax value
of his equity holdings in Bankrate. The amount to be contributed
by each Support Executive was calculated based on each Support
Executives current equity holdings in Bankrate, based on
the Offer Price. Part of a Support Executives commitment
may be satisfied by contributing Bankrate shares identified as
rollover shares pursuant to the terms of the Support Agreement
to Parent. The shares so contributed to Parent by or on behalf
of the Support Executives will remain outstanding after the
Merger, and will not be entitled to receive any merger
consideration upon consummation of the Merger. The commitments
of the Support Executives terminate upon the earlier to occur of
(x) the closing of the Merger or (y) the termination
of the Merger Agreement in accordance with its terms. See
Section I. 2 (The Support Agreements).
The Purchaser believes that the financial condition of Parent
and its affiliates is not material to a decision by a holder of
Bankrate shares whether to tender such shares in the Offer
because (i) cash is the only consideration that will be
paid to the holders of Bankrate shares in connection with the
Offer and the Merger, (ii) Purchaser is offering to
purchase all of the outstanding Bankrate shares in the Offer,
(iii) the Offer is not subject to any financing
contingencies and (iv) Parent has available to it
sufficient cash and cash equivalents to
64
provide Purchaser with the amount of cash consideration payable
to holders of Bankrate shares in the Offer and the Merger.
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12.
|
Conditions
to the Offer
|
The following are all of the conditions to the Offer, and the
Offer is expressly conditioned on the satisfaction of these
conditions.
The Merger Agreement provides that Purchaser (i) is not
required to accept for payment or, subject to any applicable
rules and regulations of the SEC, pay for any tendered Bankrate
shares, and (ii) may delay the acceptance for payment of
or, subject to the rules and regulations of the Securities and
Exchange Commission, the payment for, any tendered Bankrate
shares, if immediately prior to the scheduled expiration of the
Offer (as it may be extended pursuant to the Merger Agreement)
(A) any waiting period under the HSR Act shall not have
expired or been terminated, (B) the Minimum Condition has
not been satisfied, or (C) any of the following shall have
occurred, or shall exist and be continuing:
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|
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|
|
any order, decree, injunction or ruling restraining or enjoining
or otherwise materially delaying or preventing the acceptance
for payment of, or the payment for, some or all of the Bankrate
shares or otherwise prohibiting consummation of the Offer shall
have been issued by any United States or foreign governmental or
regulatory agency, commission, court, body, entity or authority
or any statute, rule or regulation shall have been enacted that
prohibits or makes illegal the acceptance for payment of, or the
payment for, some or all of the Bankrate shares;
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|
certain of the representations and warranties of Bankrate set
forth in the Merger Agreement that relate to its authority to
enter into, and the enforceability of, the Merger Agreement, its
capitalization, equity interests held by Bankrate or any of its
subsidiaries in Bankrates significant subsidiaries, the
maintenance of internal controls over financial reporting and
the compliance of the SEC filings of Bankrate and its
significant subsidiaries with the Securities Act, the Exchange
Act, the Sarbanes Oxley Act of 2002 and United States GAAP,
without giving effect to materiality or Company Material
Adverse Effect (as defined in the Merger Agreement)
qualifications, shall not be true and correct in all material
respects at and as of immediately prior to the expiration of the
Offer as if made at and as of such time (other than such
representations and warranties that by their terms address
matters only as of another specified time, which shall be true
and correct in all material respects only as of such time) and
(ii) all of the remaining representations and warranties of
the Company set forth in the Merger Agreement, without giving
effect to materiality or Company Material Adverse
Effect qualifications shall not be true and correct at and
as of immediately prior to the expiration of the Offer as if
made at and as of such time (other than such representations and
warranties that by their terms address matters only as of
another specified time, which shall be true and correct only as
of such time) except, with respect to this clause (ii), where
the failure of such representations and warranties to be so true
and correct would not, individually or in the aggregate, have a
Company Material Adverse Effect;
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|
|
Bankrate shall have breached or failed to perform in any
material respect any of its covenants or obligations to be
performed or complied by it under the Merger Agreement prior to
the Expiration Date;
|
|
|
|
Bankrate shall have failed to deliver to Parent a certificate
signed by an executive officer of Bankrate dated as of the date
on which the Offer expires certifying that the conditions
specified in the two bullet points immediately above do not
exist;
|
|
|
|
since the date of the Merger Agreement, any fact(s),
circumstances(s), event(s), change(s), effect(s) or
occurrence(s) shall have occurred, other than as set forth in
the Company Disclosure Letter (as defined in the Merger
Agreement), which has or have had, individually or in the
aggregate, a Company Material Adverse Effect;
|
65
|
|
|
|
|
prior to the purchase of Bankrate shares pursuant to the Offer,
the Bankrate board of directors shall have withdrawn or modified
(including by amendment of the
Schedule 14D-9
pursuant to
Rule 14d-9
under the Exchange Act) in a manner adverse to Purchaser the
Recommendation or shall have made an Adverse Recommendation
Change; or
|
|
|
|
the Merger Agreement shall have been terminated in accordance
with its terms.
|
The foregoing conditions are for the sole benefit of Parent and
Purchaser and, subject to the terms and conditions of the Merger
Agreement, may be waived by Parent or Purchaser, in whole or in
part, at any time and from time to time until the Expiration
Date of the Offer, in the sole discretion of Parent and
Purchaser. The Minimum Condition may be waived by Purchaser, at
its sole option, (i) if the number of Bankrate shares
validly tendered and not withdrawn shall be at least equal to
the difference between (x) a majority of the outstanding
Bankrate shares, which is the minimum number of Bankrate shares
required to approve the Merger Agreement, the Merger and the
other transactions contemplated by the Merger Agreement pursuant
to the organizational documents of Bankrate and the FBCA, less
(y) the number of Bankrate shares subject to Support
Agreements or (ii) with the prior written consent of
Bankrate. Subject to the terms and conditions of the Merger
Agreement, the failure by Parent or Purchaser at any time to
exercise any of the foregoing rights will not be deemed a waiver
of any such right and each such right will be deemed an ongoing
right that may be asserted at any time and from time to time
until the Expiration Date. The Offer is expressly subject to the
satisfaction of each of the foregoing conditions.
If the Offer is terminated pursuant to the foregoing provisions,
all tendered Bankrate shares will be promptly returned to the
tendering shareholders.
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13.
|
Dividends
and Distributions
|
The Merger Agreement provides that prior to the date on which
Purchaser purchases shares of Bankrates shares pursuant to
the Offer, Bankrate shall not (i) split, combine or
reclassify any securities of Bankrate or its subsidiaries or
amend the terms of any capital stock of Bankrate or its
subsidiaries, (ii) declare, set aside or pay any dividend
or other distribution (whether in cash, stock or property or any
combination thereof) in respect of any capital stock or any
securities or obligations convertible or exchangeable for
capital stock of Bankrate or its subsidiaries other than a
dividend or distribution by a subsidiary in the ordinary course
of business, or (iii) issue or sell any equity interests of
Bankrate or its subsidiaries, or redeem, purchase or otherwise
acquire any capital stock or securities convertible into or
exchangeable for capital stock of Bankrate or its subsidiaries,
other than as permitted under the Merger Agreement.
The Merger Agreement provides that if prior to the effective
time of the Merger the number of Bankrate shares is changed into
a different number of Bankrate shares or a different class, by
reason of any stock dividend, subdivision, reclassification,
recapitalization,
split-up,
combination, exchange of Bankrate shares or the like, other than
pursuant to the Merger, the Offer Price (with respect to any
such event effective prior to the Expiration Date) and the
merger consideration shall be correspondingly adjusted.
14. Certain
Legal Matters; Regulatory Approvals
General
Four lawsuits have been filed on behalf of a putative class of
public shareholders of Bankrate against Bankrate, its directors
and officers, Parent and Purchaser. Three of the actions are
pending in the Florida Circuit Court, Fifteenth Judicial
Circuit, Palm Beach County, styled Pfeiffer v. Evans,
et al. (2009-CA-025137-xxxx-MB-AO), Bloch v.
Bankrate, Inc., et al. (2009-CA-025312-xxxx-MB-AO), and
KBC Asset Management N.V. v. Bankrate, Inc., et al.,
(2009-CA-025313-xxxx-MB-AO). The fourth is pending in the
United States District Court for the Southern District of
Florida: Novickv. Bankrate, Inc. et al.
(09-81138-Civ.). Apax Partners LLP is named as a defendant
in the KBC Asset Management and Novick actions. The
complaints variously allege, among other things, that the
defendants breached their fiduciary duties in connection with
the Offer, the Merger and the other transactions contemplated by
the Merger Agreement by failing to ensure that
66
shareholders would obtain fair and maximum consideration under
the circumstances, and by failing to disclose material
information in the public filings. The Pfeiffer complaint
also alleges that Bankrate and Parent, the KBC Asset
Management complaint alleges that Apax Partners LLP, Parent
and Purchaser, and the Novickcomplaint alleges that Apax
and Purchaser aided and abetted the breaches of duty. Certain of
the complaints variously seek, among other things, certification
of a class consisting of owners of Bankrate common stock
excluding defendants and their affiliates, an order
preliminarily and permanently enjoining the proposed
transaction, accounting by the defendants to plaintiff for all
damages allegedly caused by them and for all profits and any
special benefits obtained as a result of their purported
breaches of fiduciary duties, awarding plaintiff appropriate
damages plus interest, rescission of the transaction if it is
consummated, a judgement directing the individual defendants to
exercise their fiduciary duties to obtain a transaction that is
in the best interests of shareholders until the process for the
sale or auction of Bankrate is completed and the highest
possible price is obtained, and attorneys fees and
expenses. On July 30, 2009, the plaintiff in the Bloch
action filed an amended complaint, a motion for expedited
proceedings, and a motion to consolidate the three actions
pending in the Florida Circuit Court. On July 31, 2009, the
plaintiff in the KBC Asset Management action filed an
amended complaint, a motion for expedited proceedings, and a
motion to consolidate the three actions pending in the Florida
Circuit Court. On August 14, 2009, plaintiffs in the
Pfeiffer, Bloch, and KBC Asset Management actions
filed a motion for a preliminary injunction; on August 18,
plaintiffs withdrew their motion. The foregoing description does
not purport to be complete with respect to the pending
litigation and is qualified in its entirety by reference to
Exhibits (a)(1), (a)(2), (a)(3), and (a)(4) of the
Schedule 13E-3/A filed by Bankrate, Purchaser and Parent in
connection with the Offer and the Merger, which exhibits are
incorporated herein by reference.
Except as described in this Section III. 14 (Certain Legal
Matters; Regulatory Approvals), based on its examination of
publicly available information filed by Bankrate with the SEC
and other publicly available information concerning Bankrate,
Purchaser is not aware of any governmental license or regulatory
permit that appears to be material to Bankrates business
that might be adversely affected by Purchasers acquisition
of Bankrate shares as contemplated herein or of any approval or
other action by any governmental, administrative or regulatory
authority or agency, domestic or foreign, that would be required
for the acquisition or ownership of Bankrate shares by Purchaser
or Parent as contemplated herein. Should any such approval or
other action be required, Purchaser currently contemplates that,
except as described below under State Takeover Laws,
such approval or other action will be sought. While Purchaser
does not currently intend to delay acceptance for payment of
Bankrate shares tendered pursuant to the Offer pending the
outcome of any such matter, there can be no assurance that any
such approval or other action, if needed, would be obtained or
would be obtained without substantial conditions or that if such
approvals were not obtained or such other actions were not
taken, adverse consequences might not result to Bankrates
business, any of which under certain conditions specified in the
Merger Agreement, could cause Purchaser to elect to terminate
the Offer without the purchase of Bankrate shares thereunder
under certain conditions. See Section III. 12 (Conditions
to the Offer).
Florida
Anti-Takeover Statute
Bankrate is subject to Section 607.0902 of the FBCA.
Section 607.0902 of the FBCA provides that shares of
publicly-held Florida corporations that are acquired in a
control share acquisition generally will have no
voting rights unless such rights are conferred on those shares
by the vote of the holders of a majority of all the outstanding
shares other than interested shares. A control share acquisition
is defined, with certain exceptions, as the acquisition of the
ownership of voting shares which would cause the acquiror to
have voting power within the following ranges or to move upward
from one range into another: (i) one-fifth, but less than
one-third; (ii) one-third, but less than a majority; or
(iii) a majority or more of such votes.
Section 607.0902 of the FBCA does not apply to an
acquisition of shares of a publicly-held Florida corporation
(i) pursuant to a merger or share exchange effected in
compliance with the FBCA if the publicly-held Florida
corporation is a party to the merger or share exchange
agreement, or (ii) if such acquisition has been approved by
the corporations board of directors before the acquisition.
Because Section 607.0902 of the FBCA specifically exempts:
(i) an acquisition of shares of a publicly-held Florida
corporation which has been approved by the board of directors of
the such corporation before the
67
acquisition; and (ii) a merger effected in compliance with
the FBCA if the publicly-held Florida corporation is a party to
the merger agreement, the provisions of Section 607.0902 of
the FBCA are not applicable to the Offer or to the Merger.
Bankrate has advised Parent and Purchaser that at the
July 22, 2009 meeting of the Bankrate board of directors,
by unanimous vote of all directors, the Bankrate board of
directors approved the acquisition of the Bankrate shares
pursuant to the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger.
Section 607.0901 of the FBCA provides that, unless a
specified exception is met, an interested shareholder (i.e., a
person owning 10% or more of a corporations outstanding
voting stock) may not engage in an affiliated
transaction (including a merger or other significant
corporate transactions) with a Florida corporation unless such
transaction is approved by two-thirds of the voting Bankrate
shares excluding the Bankrate shares beneficially owned by the
interested shareholder.
This provision is not applicable under certain circumstances,
including when:
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a majority of the disinterested directors approve the
transaction (which has occurred in the case of the Offer and the
Merger),
|
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|
the corporation has not had more than 300 shareholders of
record at any time during the three years prior to the date on
which the affiliated transaction was announced,
|
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|
the interested shareholder has beneficially owned at least 80%
of the outstanding voting Bankrate shares for at least five
years prior to the date on which the affiliated transaction was
announced,
|
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|
the interested shareholder is the beneficial owner of at least
90% of the outstanding voting Bankrate shares exclusive of
Bankrate shares acquired directly from the corporation in a
transaction not approved by a majority of the disinterested
directors,
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the corporation is an investment company registered under the
Investment Company Act of 1940, or
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in the affiliated transaction, fair price
consideration (as set forth in Section 607.0901 of the FBCA) is
paid to the holders of each class or series of voting Bankrate
shares and certain other conditions are met.
|
Bankrate has advised Parent and Purchaser that Bankrates
disinterested directors have unanimously approved and voted in
favor of the Boards approval of the Merger Agreement and
the transactions contemplated by the Merger Agreement, including
the Offer and the Merger. Purchaser is not aware of any state
takeover laws or regulations which are applicable to the Offer
or the Merger and has not attempted to comply with any state
takeover laws or regulations. If any government official or
third party should seek to apply any state takeover law to the
Offer or the Merger or other business combination between
Purchaser or any of its affiliates and Bankrate, Purchaser will
take such action as then appears desirable, which action may
include challenging the applicability or validity of such
statute in appropriate court proceedings. In the event it is
asserted that one or more state takeover statutes is applicable
to the Offer or the Merger and an appropriate court does not
determine that it is inapplicable or invalid as applied to the
Offer or the Merger, Purchaser might be required to file certain
information with, or to receive approvals from, the relevant
state authorities or holders of Bankrate shares, and Purchaser
might be unable to accept for payment or pay for Bankrate shares
tendered pursuant to the Offer, or be delayed in continuing or
consummating the Offer or the Merger. See Section III. 12
(Conditions to the Offer).
State
Takeover Laws
A number of states have adopted takeover laws and regulations
that purport to be applicable to attempts to acquire securities
of corporations that are incorporated outside those states but
that have substantial assets, shareholders, principal executive
offices or principal places of business in those states. To the
extent that these state takeover statutes (other than under the
FBCA) purport to apply to the Offer or the Merger, we believe
that those laws conflict with United States federal law and are
an unconstitutional burden on interstate
68
commerce. In 1982, the Supreme Court of the United States, in
Edgar v. Mite Corp., invalidated on constitutional grounds
the Illinois Business Takeovers Statute, which, as a matter of
state securities law, made takeovers of corporations meeting
certain requirements more difficult. The reasoning in that
decision is likely to apply to certain other state takeover
statutes. In 1987, however, in CTS Corp. v. Dynamics Corp.
of America, the Supreme Court of the United States held that the
State of Indiana could, as a matter of corporate law and, in
particular, those aspects of corporate law concerning corporate
governance, constitutionally disqualify a potential acquiror
from voting on the affairs of a target corporation without the
prior approval of the remaining shareholders, as long as those
laws were applicable only under certain conditions.
Subsequently, in TLX Acquisition Corp. v. Telex Corp., a
federal district court in Oklahoma ruled that the Oklahoma
statutes were unconstitutional insofar as they apply to
corporations incorporated outside Oklahoma because they would
subject those corporations to inconsistent regulations.
Similarly, in Tyson Foods, Inc. v. McReynolds, a federal
district court in Tennessee ruled that four Tennessee takeover
statutes were unconstitutional as applied to corporations
incorporated outside Tennessee. This decision was affirmed by
the United States Court of Appeals for the Sixth Circuit. In
December 1988, a federal district court in Florida held, in
Grand Metropolitan PLC v. Butterworth, that the provisions
of the Florida Affiliated Transactions Act and the Florida
Control Share Acquisition Act were unconstitutional as applied
to corporations incorporated outside of Florida.
Except as set forth in this Offer to Purchase, Purchaser has not
attempted to comply with any state takeover statutes in
connection with the Offer or the Merger. Purchaser reserves the
right to challenge the validity or applicability of any state
law allegedly applicable to the Offer or the Merger, and nothing
in this Offer to Purchase nor any action that we take in
connection with the Offer is intended as a waiver of that right.
In the event that it is asserted that one or more takeover
statutes apply to the Offer or the Merger, and it is not
determined by an appropriate court that the statutes in question
do not apply or are invalid as applied to the Offer or the
Merger, as applicable, Purchaser and Parent may be required to
file certain documents with, or receive approvals from, the
relevant state authorities, and we might be unable to accept for
payment or purchase Bankrate shares tendered in the Offer or be
delayed in continuing or consummating the Offer. In that case,
Purchaser may not be obligated to accept for purchase, or pay
for, any Bankrate shares tendered. See Section III. 12
(Conditions to the Offer).
Florida
Short-Form Merger Statute
Assuming completion of the Offer and subject to the terms of the
Merger Agreement, the Merger will be completed under the FBCA.
It is intended that the Merger will be effected pursuant to the
short-form merger provisions contained in
Section 607.1104 of the FBCA.
Under Section 607.1104(1)(a) of the FBCA, a parent
corporation owning 80% or more of the outstanding shares of each
class of a subsidiary corporation may merge itself with the
subsidiary corporation without the approval of the
subsidiarys shareholders, subject to compliance with the
statutory requirements described below. In this case, following
the completion of the Offer and the exercise of the
Top-Up
Option, if required for Purchaser to obtain ownership of more
than 80% of Bankrates shares, Purchaser, as the owner of
80% or more of the outstanding shares of Bankrate and thereby as
the parent corporation of Bankrate, will formally
adopt a plan of merger that will provide that at the
effective time of the Merger, all remaining
shareholders of Bankrate other than Purchaser, any shareholder
of Bankrate that properly exercises appraisal rights under
Florida law and any shareholder of Bankrate who holds shares
identified as rollover shares pursuant to the Support Agreements
(collectively, the Minority Shareholders) will
receive the Offer Price (hereinafter sometimes called the
Merger Consideration). A merger that is completed in
accordance with the requirements of Section 607.1104 does
not require approval of the board of directors or shareholders
of the subsidiary (in this case Bankrate). Accordingly, your
consent to the Merger is not required and is not being solicited
in connection with the Merger.
Once Purchaser has adopted the above-described plan of merger
under Section 607.1104(1)(a), written notice will be mailed
to the remaining shareholders of Bankrate who have not tendered
in the Offer, as required by Section 607.1104(2). Such
notice will provide a copy of the plan of merger and will advise
such shareholders of their right to exercise appraisal
rights to seek a judicial determination of the fair
value of
69
their shares of Bankrate common stock under the appraisal rights
sections of the FBCA (Sections 607.1301 to 607.1333) if
they believe the Merger Consideration to be inadequate.
Pursuant to Section 607.1104(3), the parent (in this case
Purchaser) is not permitted to file Articles of Merger with the
Florida Department of State (the Department) and
thereby formally complete the Merger until at least 30 days
after it mails a copy of the plan of merger to each shareholder
of the subsidiary who owns shares as of the date that the plan
of merger under Section 607.1104(1)(a) is adopted by
Purchaser. The Purchaser intends to file the Articles of Merger
with the Department on or about the 31st day following the
required mailing and expects that the effective time
of the Merger will occur immediately upon the filing of the
Articles of Merger with the Department.
United
States Antitrust Law
Under the HSR Act, and the rules that have been promulgated
under the HSR Act by the Federal Trade Commission (the
FTC), certain acquisition transactions may not be
completed unless specified information has been furnished to the
FTC and the Antitrust Division of the Department of Justice (the
Antitrust Division) and certain waiting period
requirements have been satisfied. The Offer and the Merger are
subject to the filing and waiting period requirements of the HSR
Act.
The ultimate parent entity of Parent and Purchaser filed a
Notification and Report Form with respect to the Offer and
Merger with the Antitrust Division and the FTC on July 28,
2009. Such ultimate parent entity made a request pursuant to the
HSR Act for early termination of the
15-day
waiting period applicable to the Offer. The FTC granted such
request and terminated the waiting period applicable to the
Offer on August 3, 2009, effective as of that date.
The FTC and the Antitrust Division frequently scrutinize the
legality under the antitrust laws of transactions such as
Purchasers acquisition of Bankrate shares in the Offer and
the Merger. At any time before Purchasers acquisition of
Bankrate shares, the FTC or the Antitrust Division could take
such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin
Purchasers acquisition of Bankrate shares in the Offer,
the Merger or otherwise, or seeking the divestiture of
substantial assets of Parent, Bankrate or their respective
subsidiaries. At any time after Purchasers acquisition of
Bankrate shares in the Offer and the Merger, the FTC or the
Antitrust Division could take such action under the antitrust
laws as either deems necessary or desirable in the public
interest, including seeking the divestiture of the Bankrate
shares acquired by Purchaser in the Offer and the Merger or
seeking the divestiture of substantial assets of Parent,
Bankrate or their respective subsidiaries.
Private parties, as well as state governments, may also bring
legal action under the antitrust laws under certain
circumstances. There can be no assurance that a challenge to the
Offer or the Merger or other acquisition of Bankrate shares by
Purchaser on antitrust grounds will not be made or, if such a
challenge is made, of the result. See Section III. 12
(Conditions to the Offer) of this Offer to Purchase for certain
conditions to the Offer, including conditions with respect to
litigation and certain governmental actions.
Other
Applicable Foreign Antitrust Laws
Other than the filings with the Antitrust Division and the FTC,
Parent does not believe that any additional material pre-merger
antitrust filings are required with respect to the Offer or the
Merger. To the extent that any additional antitrust filings are
required pursuant to other applicable foreign antitrust laws,
Parent, Purchaser and Bankrate, as appropriate, will make such
filings.
Purchaser and Parent have retained the Information Agent and the
Depositary for the Offer. Each of the Information Agent and the
Depositary will receive reasonable and customary compensation
for its services, will be reimbursed for certain reasonable
out-of-pocket expenses and will be indemnified against certain
liabilities and expenses in connection with its services,
including certain liabilities and expenses under United States
federal securities laws.
70
The Information Agent may contact holders of Bankrate shares by
mail, telephone, facsimile, email, telegraph and personal
interview and may request banks, brokers, dealers and other
nominees to forward materials relating to the Offer to
beneficial owners of Bankrate shares.
Neither Purchaser nor Parent will pay any fees or commissions to
any broker or dealer or other person (other than to the
Depositary, to the Information Agent and in the event that the
laws of one or more jurisdictions require the Offer to be made
by a broker or dealer licensed in such jurisdiction, to such
broker or dealer) in connection with the solicitation of tenders
of Bankrate shares in connection with the Offer. Upon request,
Purchaser will reimburse brokers, dealers, banks, trust
companies and other nominees for customary mailing and handling
expenses incurred by them in forwarding material to their
customers.
The following table presents the estimated fees and expenses to
be incurred by Purchaser in connection with the Offer:
|
|
|
|
|
SEC Registration Fee
|
|
$
|
32,682
|
|
Legal and Accounting Fees and Expenses
|
|
|
5,241,000
|
|
Other Professional Fees and Expenses
|
|
|
4,000,000
|
|
Information Agent Fees and Printing and Mailing Expenses
|
|
|
250,000
|
|
Depositary
|
|
|
20,000
|
|
Miscellaneous Expenses
|
|
|
1,500,000
|
|
|
|
|
|
|
Total
|
|
$
|
11,233,682
|
|
|
|
|
|
|
The Offer is not being made to (nor will tenders be accepted
from or on behalf of) holders of Bankrate shares in any
jurisdiction in which the making of the Offer or the acceptance
of the Offer would not be in compliance with the laws of such
jurisdiction. Neither Purchaser nor Parent is aware of any
jurisdiction in which the making of the Offer or the acceptance
of the Offer would not be in compliance with the laws of such
jurisdiction. To the extent that Purchaser or Parent becomes
aware of any state law that would limit the class of offerees in
the Offer, Purchaser may amend, in its discretion, the Offer
and, depending on the timing of such amendment, if any, may
extend, in its discretion, the Offer to provide adequate
dissemination of such information to holders of Bankrate shares
prior to the expiration of the Offer. In any jurisdiction where
the securities, blue sky or other laws require the Offer to be
made by a licensed broker or dealer, the Offer shall be deemed
to be made on behalf of Purchaser and Parent by one or more
registered brokers or dealers licensed under the laws of such
jurisdiction to be designated by Purchaser.
No person has been authorized to give any information or to
make any representation on behalf of Purchaser or Parent that is
not contained in this Offer to Purchase or in the Letter of
Transmittal and, if given or made, such information or
representation must not be relied upon as having been
authorized.
The Purchaser and Parent have filed with the SEC a
Schedule TO and a
Schedule 13E-3,
together with exhibits, furnishing certain additional
information with respect to the Offer, and may file amendments
to such document. In addition, Bankrate has filed with the SEC a
Schedule 14D-9,
together with exhibits, containing its recommendation with
respect to the Offer and the reasons for such recommendation and
furnishing certain additional information with respect to the
Offer.
BEN MERGER SUB, INC.
July 28, 2009
71
SCHEDULE A
DIRECTORS
AND EXECUTIVE OFFICERS OF
PURCHASER,
PARENT AND CONTROLLING ENTITIES
Purchaser, a Florida corporation, was formed on July 17,
2009 solely for the purpose of completing the proposed Offer and
Merger and has conducted no business activities other than those
related to the structuring and negotiation of the Offer and the
Merger and arranging financing therefor. Purchaser is a direct
subsidiary of Parent and has not engaged in any business except
as contemplated by the Merger Agreement. The principal office
address of Purchaser is
c/o Mitch
Truwit, 601 Lexington Avenue, 53rd Floor, New York, New
York 10022. The telephone number at the principal office is
212-753-6300.
Directors
and Executive Officers of Purchaser
The name, position, business address, citizenship, present
principal occupation or employment and material occupations,
positions, offices or employment for the past five years of each
of the directors and executive officers of Purchaser are set
forth below. In connection with the consummation of the Offer,
it is expected that Mr. Evans will be appointed as
President and Chief Executive Officer of Purchaser and
Mr. DiMaria will be appointed as Senior Vice President and
Chief Financial Officer of Purchaser, and that
Messrs. Stahl and Truwit will resign from their respective
positions with Purchaser.
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|
Business Address
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|
|
Name and Position
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|
and Citizenship
|
|
Present Principal Occupation or Employment and Employment
History
|
|
Christian Stahl
Director
Vice President and
Secretary
|
|
Apax Partners
601 Lexington Avenue,
53rd Floor, New York,
New York 10022
German citizen
|
|
Partner of Apax Partners,
Director, Vice President and Assistant Secretary of Parent,
Director of Cengage Learning (previously Thomson Learning),
Director of Tommy Hilfiger,
Director of Central European Media Enterprises (CME), and
Director of Telcast Media Group.
Christian Stahl joined Apax Partners in 1999 and transferred to
New York in 2007 where he is currently working. Prior to
joining in 1999, Christian Stahl worked at Bain & Company
in their German and Boston offices.
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Mitch Truwit
Director
Vice President and
Assistant Secretary
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|
Apax Partners
601 Lexington Avenue,
53rd Floor, New York,
New York 10022
United States citizen
|
|
Partner of Apax Partners,
Director, Vice President and Assistant Secretary of Parent,
Chairman of Maple Tree Holdings,
Director of Hub International I N.S. Co.,
Director of Hub International II N.S. Co.,
Director of Hub International Parent Holdings, Inc.,
Director of Maple Tree Acquisition Corporation,
Director of Maple Tree Holdings GP, LLC,
Director of Hub International Limited, and
Chair of the Audit Committee and Compensation Committee of Hub
International Limited.
Mitch Truwit joined Apax Partners in 2006 as a partner in the
New York Office. Prior to joining in 2006, Mitch Truwit
was President and Chief Executive Officer at Orbitz Worldwide in
Chicago. Prior to joining Orbitz Worldwide, Mitch Truwit was
the Chief Operating Officer at Priceline.com, Inc.
|
S-1
Parent, a Delaware corporation, was formed on July 17, 2009
solely for the purpose of completing the proposed Offer and
Merger and has conducted no business activities other than those
related to the structuring and negotiation of the Offer and the
Merger and arranging financing therefor. Parent is a direct
subsidiary of Ben Holding S.à.r.l. and has not engaged in
any business except as contemplated by the Merger Agreement. The
principal office address of Parent is
c/o Mitch
Truwit, 601 Lexington Avenue, 53rd Floor, New York, New
York 10022. The telephone number at the principal office is
212-753-6300.
Directors
and Executive Officers of Parent
The name, position, business address, citizenship, present
principal occupation or employment and material occupations,
positions, offices or employment for the past five years of each
of the directors and executive officers of Parent are set forth
below.
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|
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|
Business Address
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|
|
Name and Position
|
|
and Citizenship
|
|
Present Principal Occupation or Employment and Employment
History
|
|
Christian Stahl
Director
Vice President and
Assistant Secretary
|
|
See respective information
under Directors and
Officers of Purchaser in
Section 1 of this
Schedule A.
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See respective information under Directors and Officers of
Purchaser in Section 1 of this Schedule A.
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Mitch Truwit
Director
Vice President and
Assistant Secretary
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See respective information
under Directors and
Officers of Purchaser in
Section 1 of this
Schedule A.
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See respective information under Directors and Officers of
Purchaser in Section 1 of this Schedule A.
|
Ben Holding S.à.r.l. is a Luxembourg société
à responsabilité limitée, which is owned by Apax
US VII, L.P., a Cayman Islands exempted limited partnership
(holding 7%) and Apax WW Nominees Ltd. (holding 93% as a nominee
for Apax Europe VII-A, L.P., Apax Europe VII-B, L.P. and Apax
Europe VII-1, L.P., each constituted under English limited
partnership law and domiciled in Guernsey). The principal office
address of Ben Holding S.à.r.l. is 41 Boulevard Prince
Henri, L-1724 Luxembourg. The telephone number at the principal
office is +352 26868726.
Directors
and Executive Officers of Ben Holding S.à.r.l.
The name, position, business address, citizenship, present
principal occupation or employment and material occupations,
positions, offices or employment for the past five years of each
of the directors and executive officers of Ben Holding
S.à.r.l. are set forth below.
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Business Address
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Name and Position
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and Citizenship
|
|
Present Principal Occupation or Employment and Employment
History
|
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Andrew Guille
Class B Director
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Third Floor Royal Bank
Place
1 Glategny Esplanade
St Peter Port, Guernsey
GY1 2HJ
Guernsey citizen
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Director of Apax Europe VII GP Co. Limited
Director of Apax Guernsey (Holdco) Limited
Prior to joining Apax Partners Guernsey Ltd., Andrew Guille has
held a position at International Private Equity Services Ltd.
from before 2004 until 31 January 2007.
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S-2
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Business Address
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Name and Position
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and Citizenship
|
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Present Principal Occupation or Employment and Employment
History
|
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Geoffrey Henry
Class A Director
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41 Boulevard Prince Henri
L-1724 Luxembourg
Belgian citizen
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Director of Facts Services S.à.r.l. in Luxembourg
Prior to joining Fact Services S.à.r.l. as a Chartered
Accountant, Geoffrey Henry has been a Senior Manager in the
Corporate Finance Department of Deloitte & Touche until
December 31, 2004.
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Stef Oostvogels
Class A Director
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Route dArlon
291 - BP 603
L-2016 Luxembourg
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Partner of Oostvogels Pfister Feyten, a Luxembourg based law firm
Stef Oostvogels has been a partner with Oostvogels Pfister Feyten for the past five years.
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Belgian citizen
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Isabelle Probstel
Class B Director
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Possartstr. 11
81679 Munich
French citizen
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Head of Finance at Apax Partners Beteiligungsberatung GmbH
Isabelle Probstel has held a position at Apax Partners
Beteiligungsberatung GmbH for the past five years.
|
S-3
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4.
|
Apax
Europe VII GP Co. Limited
|
Apax Europe VII GP Co. Limited is a Guernsey incorporated
company, which is a direct subsidiary of Apax Guernsey (Holdco)
Limited. Apax Europe VII GP Co. Limited is the general partner
of Apax Europe VII GP L.P. Inc. Apax Europe VII GP L.P. Inc., a
Guernsey incorporated limited partnership, is the general
partner of each of Apax Europe VII-A, L.P., Apax Europe VII-B,
L.P. and Apax Europe VII-1, L.P. The registered office address
of Apax Europe VII GP Co. Limited is Third Floor Royal Bank
Place, 1 Glategny Esplanade, St. Peter Port, Guernsey GY1
2HJ. The telephone number at the principal office is
+44 1481 810 000.
Directors
and Executive Officers of Apax Europe VII GP Co.
Limited
The name, position, business address, citizenship, present
principal occupation or employment and material occupations,
positions, offices or employment for the past five years of each
of the directors and executive officers of Apax Europe VII GP
Co. Limited are set forth below.
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Business Address
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Name and Position
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and Citizenship
|
|
Present Principal Occupation or Employment and Employment
History
|
|
Andrew Guille
Director
|
|
See respective information
under Directors and
Officers of Ben Holding
S.à.r.l. in item (iii) of this
Schedule A.
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See respective information under Directors and Officers of
Ben Holding S.à.r.l. in item (iii) of this Schedule A.
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Denise Fallaize
Director
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|
Third Floor Royal Bank
Place
1 Glategny Esplanade
St Peter Port, Guernsey
GY1 2HJ
Guernsey citizen
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|
Director of Apax Europe VII GP Co. Limited
Director of Apax Guernsey (Holdco) Limited
Prior to joining Apax Partners Guernsey Ltd. Denise Fallaize has
held a position at International Private Equity Services Ltd.
from before 2004 until 31 January 2007.
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Jeremy Arnold
Director
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Third Floor Royal Bank
Place
1 Glategny Esplanade
St Peter Port, Guernsey
GY1 2HJ
Jersey citizen
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Director of Apax Europe VII GP Co. Limited
Director of Apax Guernsey (Holdco) Limited
Jeremy Arnold has been retired from accountancy practice for
over ten years. He now serves as a professional non-executive
director in various entities.
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David Staples
Director
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Third Floor Royal Bank
Place
1 Glategny Esplanade
St Peter Port, Guernsey
GY1 2HJ
Guernsey citizen
|
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Director of Apax Europe VII GP Co. Limited
David Staples has been retired from accountancy with
PricewaterhouseCoopers since April 2003. He now serves as a
professional non-executive director in various entities.
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Catherine Brown
Director
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33 Jermyn Street
London SW1Y 6DN
British citizen
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Director of Apax Europe VII GP Co. Limited
Director of Apax Guernsey (Holdco) Limited
Catherine Brown has also held a position at Apax Partners UK
Ltd. from before 2004 until present.
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Stephen Tilton
Director
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|
33 Jermyn Street
London SW1Y 6DN
British citizen
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Director of Apax Europe VII GP Co. Limited
Director of Apax Guernsey (Holdco) Limited
Stephen Tilton has also held a position at Apax Partners UK Ltd.
from before 2004 until present.
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S-4
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5.
|
Apax
Guernsey (Holdco) Limited
|
Apax Guernsey (Holdco) Limited is a Guernsey incorporated
company, which is a direct subsidiary of The Hirzel III
Trust, a Guernsey charitable trust with RBC Trustees (Guernsey)
Limited as trustees. Apax Guernsey (Holdco) Limited is the
general partner of Apax Europe VII GP Co. Limited. The principal
office address of Apax Guernsey (Holdco) Limited is Third Floor
Royal Bank Place, 1 Glategny Esplanade, St Peter Port, Guernsey
GY1 2HJ. The telephone number at the principal office is +44
1481 810 000.
Directors
and Executive Officers of Apax Guernsey (Holdco)
Limited
The name, position, business address, citizenship, present
principal occupation or employment and material occupations,
positions, offices or employment for the past five years of each
of the directors and executive officers of Apax Guernsey
(Holdco) Limited are set forth below.
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|
Business Address
|
|
|
Name and Position
|
|
and Citizenship
|
|
Present Principal Occupation or Employment and Employment
History
|
|
Andrew Guille
Director
|
|
See respective information
under Directors and
Officers of Ben Holding
S.à.r.l. in Section 3 of this
Schedule A.
|
|
See respective information under Directors and Officers of
Ben Holding S.à.r.l. in Section 3 of this Schedule A.
|
|
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|
Denise Fallaize
Director
|
|
See respective information
under Directors and
Officers of Apax Europe
VII GP Co. Limited in
Section 4 of this
Schedule A.
|
|
See respective information under Directors and Officers of
Apax Europe VII GP Co. Limited in Section 4 of this
Schedule A.
|
|
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|
|
Jeremy Arnold
Director
|
|
See respective information
under Directors and
Officers of Apax Europe
VII GP Co. Limited in
Section 4 of this
Schedule A.
|
|
See respective information under Directors and Officers of
Apax Europe VII GP Co. Limited in Section 4 of this
Schedule A.
|
|
|
|
|
|
Catherine Brown
Director
|
|
See respective information
under Directors and
Officers of Apax Europe
VII GP Co. Limited in
Section 4 of this
Schedule A.
|
|
See respective information under Directors and Officers of
Apax Europe VII GP Co. Limited in Section 4 of this
Schedule A.
|
|
|
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|
|
Stephen Tilton
Director
|
|
See respective information
under Directors and
Officers of Apax Europe
VII GP Co. Limited in
Section 4 of this
Schedule A.
|
|
See respective information under Directors and Officers of
Apax Europe VII GP Co. Limited in Section 4 of this
Schedule A.
|
S-5
Apax US VII GP, Ltd., a Cayman Islands exempted limited company,
is the general partner of Apax US VII GP, L.P. Apax US VII GP,
L.P., a Cayman Islands exempted limited partnership, is the
general partner of Apax US VII, L.P. The registered office
address of Apax US VII GP, Ltd. is P.O. Box 908GT,
George Town, Grand Cayman, KY1-9002, Cayman Islands. The
telephone number at the registered office is
+1 345 949 0100.
Directors
and Executive Officers of Apax US VII GP, Ltd.
The name, position, business address, citizenship, present
principal occupation or employment and material occupations,
positions, offices or employment for the past five years of each
of the directors and executive officers of Apax US VII
GP, Ltd. are set forth below.
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|
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|
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|
|
Business Address
|
|
|
Name and Position
|
|
and Citizenship
|
|
Present Principal Occupation or Employment and Employment
History
|
|
John F Megrue
Director
Chief Executive
Officer
|
|
Apax Partners,
601 Lexington Avenue,
53rd Floor, New York,
New York 10022
United States citizen
|
|
Chief Executive Officer of Apax Partners,
Executive Committee Member of Apax Partners, and
Director of Apax US VII GP, Ltd.
John F Megrue originally joined Apax Partners in 1988 and
rejoined in 2005 from Saunders, Karp and Megrue. He is now
Chief Executive Officer of Apax Partners in New York.
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Nico Hansen
Vice President
|
|
Apax Partners,
601 Lexington Avenue,
53rd Floor, New York,
New York 10022
German citizen
|
|
Partner of Apax Partners,
Director of The Trizetto Group, Inc.
Director of Xerium Technologies, Inc.,
Vice President of 0783587 B.C. Ltd., and
Vice President of Maple Tree Acquisition Corporation
Nico Hansen joined Apax Partners in 2000 and transferred to New
York in 2007 where he is currently working. Prior to joining in
2000, Nico Hansen worked at McKinsey, where he specialized in
telecoms.
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|
|
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|
Christian Stahl
Vice President
|
|
See respective information
under Directors and
Officers of Purchaser in
item (i) of this
Schedule A.
|
|
See respective information under Directors and Officers of
Purchaser in item (i) of this Schedule A.
|
|
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|
Robert Marsden
Chief Financial
Officer
|
|
Apax Partners,
601 Lexington Avenue,
53rd Floor, New York,
New York 10022
United States citizen
|
|
Chief Financial Officer of Apax US VII GP, Ltd.
Robert Marsden joined Apax Partners in January 2001. Prior to
joining Apax Partners, Robert Marsden was a Senior Audit Manager
at PricewaterhouseCoopers.
|
S-6
|
|
7.
|
Apax
Partners Europe Managers Limited
|
Apax Partners Europe Managers Limited, a company constituted
under English company law, has been appointed by Apax Europe VII
GP L.P. Inc. as discretionary investment manager of the
investments of Apax Europe VII-A, L.P., Apax Europe VII-B, L.P.
and Apax Europe VII-1, L.P. The principal office address of Apax
Partners Europe Managers Limited is 33 Jermyn Street, London,
SW1Y 6DN. The telephone number at the principal office is +44
0207 872 6300.
Directors
and Executive Officers of Apax Partners Europe Managers
Limited
The name, position, business address, citizenship, present
principal occupation or employment and material occupations,
positions, offices or employment for the past five years of each
of the directors and executive officers of Apax Partners Europe
Managers Limited are set forth below.
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|
|
|
|
|
|
Business Address
|
|
|
Name and Position
|
|
and Citizenship
|
|
Present Principal Occupation or Employment and Employment
History
|
|
Martin Halusa
Director
Chief Executive
Officer
|
|
33 Jermyn Street,
London, SW1Y 6DN
Austrian citizen
|
|
Chief Executive Officer of Apax Partners
Martin Halusa has held a position at Apax Partners for the past
five years.
|
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|
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|
|
Ian Jones
Director
|
|
33 Jermyn Street,
London, SW1Y 6DN
British citizen
|
|
Partner of Apax Partners
Ian Jones has held a position at Apax Partners for the past five
years.
|
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|
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Paul Fitzsimons
Director
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33 Jermyn Street,
London, SW1Y 6DN
Irish citizen
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Partner of Apax Partners
Paul Fitzsimons has held a position at Apax Partners for the
past five years.
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Stephen Grabiner
Director
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33 Jermyn Street,
London, SW1Y 6DN
British citizen
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Partner of Apax Partners
Stephen Grabiner has held a position at Apax Partners for the
past five years.
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S-7
Manually signed photocopies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Bankrate
shares and any other required documents should be sent or
delivered by each shareholder of Bankrate or such
shareholders broker, dealer, bank, trust company or other
nominee to the Depositary at one of its addresses set forth
below.
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By Registered or Certified Mail:
Computershare Trust Company, N.A.
c/o Voluntary
Corporation Actions
P.O. Box 43011
Providence, RI
02940-3011
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By Overnight Courier:
Computershare Trust Company, N.A.
c/o Voluntary
Corporate Actions Suite V
250 Royall Street
Canton, MA 02021
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Fax Number for Eligible Institutions:
(617) 360-6810
Confirmation of Fax:
(781) 575-2332
Questions regarding the Offer, and requests for assistance in
connection with the Offer, may be directed to the Information
Agent at the address and telephone numbers listed below.
Additional copies of this Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery or any other
materials related to the Offer may be obtained from the
Information Agent. You may also contact your broker, dealer,
bank, trust company or other nominee for assistance concerning
the Offer.
The Information Agent for the Offer is:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Shareholders May Call Toll-Free:
(888) 750-5834
Banks and Brokers May Call Collect:
(212) 750-5833