corresp
601 Lexington Avenue
New York, New York 10022
|
|
|
|
|
Joshua Korff
|
|
212 446-4800
|
|
Facsimile: |
To Call Writer Directly:
212 446-4943
jkorff@kirkland.com
|
|
www.kirkland.com
|
|
212 446-4900
Dir. Fax: 212 446-6460 |
August 17, 2009
VIA EDGAR AND OVERNIGHT DELIVERY
Mr. H. Christopher Owings
United States Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Mail Stop 3561
Washington, D.C. 20549
|
Re: |
|
Bankrate, Inc.
Amendment No. 1 to Schedule TO filed by Ben Merger Sub, Inc., et al.
Amendment No. 2 to Schedule 13E-3 filed by Bankrate, Inc., et al.
Amendment No. 2 to Schedule 14D-9 filed by Bankrate, Inc.
Filed August 11, 2009
File No. 005-57763 |
Dear Mr. Owings:
On behalf of Bankrate, Inc., a Florida corporation (Bankrate), our clients BEN Merger Sub, a
Florida corporation (the Purchaser), and BEN Holdings, Inc., a Delaware corporation (Parent
and, together with Purchaser, the Companies), and pursuant to the applicable provisions of the
Securities Act of 1933, and the rules promulgated thereunder, please find enclosed for filing with
the Securities and Exchange Commission (the Commission), a complete copy of Amendment No. 2
(Schedule TO Amendment No. 2) to the above-captioned Schedule TO of the Companies, filed on July
28, 2009 (the Schedule TO), a complete copy of Amendment No. 3 (Schedule 13E-3 Amendment No. 3)
to Schedule 13E-3 filed by Bankrate, Inc. (Bankrate), the Companies and the other filing persons
listed on the cover page thereto, and a complete copy of Amendment No. 3 (Schedule 14D-9 Amendment
No. 3 and, together with Schedule TO Amendment No. 2 and Schedule 13E-3 Amendment No. 3, the
Amendments) to the above-captioned Schedule 14D-9 of Bankrate (the Schedule 14D-9). We refer
to the Amendment No. 1 to Schedule 13E-3 filed by Bankrate, the Companies and the other filing
persons listed on the cover page thereto on August 5, 2009, as the Schedule 13E-3.
Securities and Exchange Commission
August 17, 2009
Page 2
A copy of each of the Amendments has been manually signed in accordance with Rule 302 of Regulation
S-T and the signature pages thereto will be retained by the Companies and Bankrate, as applicable,
for a period of five years.
The Amendments reflect certain revisions of the Schedule TO, the Schedule 13E-3 and the
Schedule 14D-9, in response to the comment letter to Mr. Mitch Truwit, Director, Vice President and
Assistant Secretary of the Purchaser, and Mr. Edward J. DiMaria, Chief Financial Officer of
Bankrate, dated August 14, 2009, from the staff of the Commission (the Staff).
The numbered paragraphs below set forth the Staffs comments together with our responses.
Unless otherwise indicated, capitalized terms used herein have the meanings assigned to them in the
Schedule TO.
Schedule TO/Schedule 13E-3
General
1. |
|
Staffs comment: Please revise the Schedule 14D-9 filed by Bankrate, Inc., as applicable, in
response to our comments issued on the Schedule TO/Schedule 13E-3. |
Response: Bankrate has revised the Schedule 14D-9 in response to the applicable
comments of the Staff to the Schedule TO and Schedule 13E-3.
Offer to Purchase
J. Special Factors, page 10
1. Background of the Offer, page 10
2. |
|
Staffs comment: We reissue comment 11. Please revise your disclosure in the offer document
and in the recommendation statement to briefly describe each alternative considered by
Bankrate or its affiliates (i.e., each filing person) and disclose why each alternative was
rejected. |
Response:
In response to the Staffs comment, page 18 of the Offer to
Purchase and page 14 of the Schedule 14D-9 have been revised to add additional
detailed disclosure regarding alternatives considered by
Bankrate and its affiliates.
3. |
|
Staffs comment: Please revise to discuss how you or your financial advisors determined to
contact the 14 strategic partners that you mention in the second paragraph. |
2
Securities and Exchange Commission
August 17, 2009
Page 3
Response:
In response to the Staffs comment, page 10 of the Offer to
Purchase and page 8 of the Schedule 14D-9 have been revised to describe how
the strategic partners and financial sponsors to be contacted were determined.
4. |
|
Staffs comment: We note the revisions made in response to comment 16. Please tell us, with
a view toward revised disclosure, why you refer to approximately four equity firms. What
prevents you from being more definitive in your disclosure? |
Response:
In response to the Staffs comment, page 10 of the Offer to
Purchase and page 8 of the Schedule 14D-9 have been revised to remove the
word approximately.
5. |
|
Staffs comment: We note your response to comment 17 from our letter dated August 7, 2009.
We are unable to locate the changes you refer to and we, therefor, respectfully re-issue
comment 17. In this regard, please tell us how Bankrate determined Apax and Party A were
most likely to be seriously interested in and prepared to complete and capable of completing
a transaction expeditiously. |
Response: We respectfully note that in response to the Staffs prior comment,
additional disclosure was provided regarding occasional meetings with financial
sponsors after September 22, 2008 to indicate that no proposals resulted from such
meetings. In response to the Staffs comment, we have further revised this
disclosure on page 11 of the Offer to Purchase and page 9 of the
Schedule 14D-9 to further disclose information on the subject matter of these
meetings. We respectfully submit that the disclosure, as revised, includes all
material information with respect to these meetings, given that the meetings were
intermittent, generally high-level and exploratory in nature, and did not involve
proposals to acquire Bankrate.
6. |
|
Staffs comment: We note the revised disclosure in the first full paragraph on page 12 of
the Offer to Purchase that states that since the transaction treated director-shareholders
differently than shareholders generally, the disinterested members of the Bankrate board of
directors should approve the transaction pursuant to Section 607.0901 of the FBCA, Please
provide readers a cross-reference to where you describe the material aspects of Section
607.0901 of the FBCA. |
3
Securities and Exchange Commission
August 17, 2009
Page 4
Response:
In response to the Staffs comment, page 12 of the Offer to
Purchase and page 10 of the Schedule 14D-9 have been revised to include the
requested cross-reference.
7. |
|
Staffs comment: We note your response to comment 20 from our letter dated August 7, 2009.
We disagree with your conclusion that the report does not fall within the parameters of Item
1015(a) of Regulation M-A. Thus, please revise your disclosure to provide the information
required by Item 1015(b)(6) of Regulation M-A. |
Response: While we respectfully disagree with the Staffs conclusion, in response
to the Staffs comments, page 25 of the Schedule 14D-9 has been revised to
provide additional disclosure regarding the report.
8. |
|
Staffs comment: We also note your revisions to the Offer to Purchase regarding Allen &
Companys June 30, 2009 presentation. Please discuss in greater detail the general content of
the Wall Street estimates of future Bankrate performance that was discussed between Allen &
Company and Bankrates board of directors. Also, please discuss in greater detail in the
section titled Opinion of Allen & Company, LLC that begins on page 16 of the Schedule 14D-9
the differences between Allen & Companys June 30, 2008 presentation and their presentation on
July 22, 2009, |
Response:
In response to the Staffs comment, page 12 of the Offer to Purchase and
page 25 of the Schedule 14D-9 have been revised to describe the general
content of the referenced Wall Street estimates and the differences between the June
30 and July 22 presentations.
9. |
|
Staffs comment: Finally, we note on page
6 of exhibit (C)(5) to the Schedule 14D-9, that
some discussions were held with Warburg Pincus regarding a
transaction with Bankrate. If
Warburg Pincus is Party A, please revise your disclosure to so state. If not, please revise
your disclosure to describe any communications with Warburg Pincus. |
Response: In response to the Staffs comment, we have added further description of
Party A on page 11 of the Offer to Purchase and page 9 of the
Schedule 14D-9. We respectfully submit that a no-name disclosure is customary in
descriptions of past contacts and transaction backgrounds and that specific
identification of Party A is not material to an investors understanding of the
background of the transaction.
4
Securities and Exchange Commission
August 17, 2009
Page 5
10. |
|
Staffs comment: We note your response to comment 22 from our letter dated August 7, 2009.
Please discuss why it was determined that the Disinterested Directors should not conduct the
negotiations on behalf of the company, especially in light of the fact that with their
approval of the transaction it removed the possible requirement under 607.0901 of the FBCA
regarding approval of the transaction by a two-thirds majority vote of shareholders, Also,
please disclose any limitations or special powers that these Disinterested Directors were
granted at the time it was determined that they should separately review and approve the
transaction. |
Response:
In response to the Staffs comment, page 12 of the Offer to
Purchase and page 10 of the Schedule 14D-9 have been revised to provide
additional disclosure as to the role of the Disinterested Directors.
The Support Agreements, rage 15
11. |
|
Staffs comment: We note your response to comment 26 from our letter dated August 7, 2009.
We note that Mr. Morse has committed to invest between 30%-50% of the after-tax value of his
equity holdings in Bankrate into the Parent. Please revise to explain how this amount will
ultimately be determined. For example, please disclose if the final amount invested is at
Mr. Morses discretion or if other factors will determine the amount of their investment and
at what point in time the after-tax value is determined. |
Response:
In response to the Staffs comment, pages 16 and 27 of the
Offer to Purchase and page 4 of the Schedule 14D-9 have been revised to
indicate that Mr. Morse and Mr. OBlock have discretion to determine their
respective investment amounts within the ranges specified.
4. Position of the Disinterested Directors Regarding the Fairness of the Offer. . . . page 18
12. |
|
Staffs comment: We note your response to comment 29 from our letter dated August 7, 2009.
Please briefly discuss what aspects of the role under Florida law that disinterested directors
play led the Disinterested Directors to conclude that separate legal counsel was not
necessary. |
Response:
In response to the Staffs comment, page 19 of the Offer to
Purchase has been revised to include further description of the
Disinterested Directors role under Florida law that led to the determination that separate legal counsel was not
necessary.
5
Securities and Exchange Commission
August 17, 2009
Page 6
5. Position the Support Executives as to Fairness, page 18
13. |
|
Staffs comment: We note the Support Executives position with respect to the fairness of
the transaction to unaffiliated security holders was included in the filing, We also note that
the Support Executives based their determination regarding the fairness of the transaction to
unaffiliated security holders upon the factors that Bankrates Board of Directors relied upon
in reaching their conclusion. Please provide the Support Executives analysis of the material
factors upon which the Support Executives relied upon to reach their conclusion or,
alternatively, the Support Executives may adopt Bankrates board of directors analysis of
those factors. In addition, if the Support Executives based their fairness determination on
the analysis of factors undertaken by Allen & Company or Needham & Company, then the Support
Executives must expressly adopt these analysis and discussions as their own in order to
satisfy their disclosure obligations. Please refer to prior comments 52 and 53 for additional
guidance. |
Response:
In response to the Staffs comment, page 19 of the Offer to
Purchase has been revised to disclose that the Support Executives adopted the
analysis of the Bankrate Board of Directors as their own. We supplementally advise
the Staff that the Support Executives did not rely upon the analysis of factors in
the opinions or presentations of Allen or Needham & Company as those were rendered
only to the Bankrate board of directors and the Disinterested Directors,
respectively, and the Support Executives were not entitled to rely thereon.
14. |
|
Staffs comment: Please revise your disclosure to include the information required by Item
1013(a) of Regulation M-A with respect to the Support Executives. |
Response:
In response to the Staffs comment, page 19 of the Offer to
Purchase has been revised to add a new section regarding the purposes of the
transaction for the Support Executives as required by Item 1013(a) of Regulation
M-A.
6. Purposes and Reasons of Parent, Purchaser, the Apax VII Funds. . . . page 19
15. |
|
Staffs comment: We note your response to comment 30 from our letter dated August 7, 2009.
Please discuss how it was determined who would or would not invest in the Parent and who would
or would not enter into support agreements. Also, please discuss in this section or another
appropriate place in your filing the nature and status of the ongoing negotiations between the
Support Executives and Apax that you refer to in the third full paragraph on page 19. |
Response:
In response to the Staffs comment, page 20 of the Offer to
Purchase has been revised to discuss how it was determined who would invest in
Parent and
6
Securities and Exchange Commission
August 17, 2009
Page 7
who
would enter into Support Agreements. In addition, page 20 of the Offer
to Purchase has been revised to discuss the nature and status of ongoing
negotiations between Support Executives and Apax.
7. Position of Parent Purchaser, the Apax VII Funds and the Other Apax. . . . page 19
16. |
|
Staffs comment: We note your response to comment 33 from our letter dated August 7, 2009.
We reissue this comment as it relates to Ben Holding S.à.r.l. as we cannot locate its fairness
determination. |
Response:
In response to the Staffs comment, page 1 of the Offer to Purchase has
been revised to include Ben Holding S.à.r.l. in the definition of Other Apax
Entities, thereby including its fairness determination in the referenced section of
the Offer to Purchase.
10. Interests of BankRates page 23
17. |
|
Staffs comment: We note your response to prior comment 34. Please tell us whether the
payment for the options described in the referenced disclosure involves an investment decision
by the option holders and whether those holders will be required to submit a letter of
transmittal in order to receive the payment described. |
Response: In response to the Staffs comment, we advise the Staff that the payment
for options described in the referenced disclosure does not involve an investment
decision by the option holders; rather, the payment will be made pursuant to the
terms of the Merger Agreement, which provides for a cash payment in respect of all
in the money options that are outstanding immediately prior to the Acceptance
Time, to the extent that the Offer Price exceeds the exercise price for such
options. As a result, no letter of transmittal will be required.
18. |
|
Staffs comment: We note your response to comment 37 from our letter dated August 7, 2009.
Please discuss the status of negotiations regarding how the return on total investment will be
calculated. |
Response:
In response to the Staffs comment, page 28 of the Offer to
Purchase and page 5 of the Schedule 14D-9 have been revised to discuss the
status of these negotiations.
7
Securities and Exchange Commission
August 17, 2009
Page 8
III. The Tender Offer, page 46
9. Certain Information Concerning Bankrate, page 56
19. |
|
Staffs comment: Please tell us what consideration you have given to updating the financial
information to include the information for the quarter ended June 30, 2009. |
Response:
In response to the Staffs comment, page 59 of the Offer to
Purchase has been revised to update the summary financial information for the
quarter ended June 30, 2009. Furthermore, page 60 of the Offer to Purchase
and page 42 of the Schedule 14D-9 have been revised to provide preliminary
financial results for the month ended July 31, 2009.
12. Conditions to the Offer, page 60
20. |
|
Staffs comment: We note your response to prior comment 42 and we reissue it. Your
disclosure continues to state that this section of the offer document is only a summary and
continues to improperly refer security holders to the Merger Agreement for additional
information. Please revise your disclosure to include all offer conditions in the offer
document disseminated to security holders. |
Response:
In response to the Staffs comment, page 63 of the Offer to
Purchase has been revised to remove the statement that this section is only a
summary and to remove the reference to the Merger Agreement for additional
information.
Schedule 14D-9
Item 4. The Solicitation or Recommendation, page 7
(c) Reasons for the Recommendation, page 13
21. |
|
Staffs comment: We note your response to comment 52 and comment 56 from our letter dated
August 7, 2009. In the final sentence of the first paragraph on page 16 you state in part
that the Board of Directors found Allen & Companys reliance on the information that
management provided reasonable subject to the understandings regarding the nature of the
financial projections. . . . We are uncertain if you are describing the assumptions
underlying managements projections as described in Item 8(f) or if you are referring to
something else. Please revise your disclosure to clarify why
|
8
Securities and Exchange Commission
August 17, 2009
Page 9
your adoption of Allen & Companys analyses is subject to such limitation or revise to
remove it.
Response:
In response to the Staffs comment, page 17 of the Schedule 14D-9
has been revised to clarify that the referenced phrase refers to the assumptions
underlying managements projections as described in Item 8(f).
22. |
|
Staffs comment: We note your response to comment 54 from our letter dated August 7, 2009.
We reissue it as to the Board of Directors consideration of historical market prices. |
Response:
In response to the Staffs comment, page 17 of the Schedule 14D-9
has been revised to further describe the consideration of historical market prices
by the Bankrate board of directors.
Item 5. Persons/Assets Retained, Employed, Compensated or Used, page 16
(a) Opinion of Allen & Company, LLC, page 16
23. |
|
Staffs comment: We note your response to comment 58 from our letter dated August 7, 2009.
With respect to Allen & Companys Comparable Precedent Transactions Analysis, please describe
the effect, if any, that the multiple unavailable data has on (i) the multiple range (ii) on
Allens analysis and conclusion, and (iii) on the boards reliance on this analysis and
Allens opinion, Also, explain why, with the amount of data unavailable, this range is still
relevant. Please also discuss why this information was unavailable. |
Response:
In response to the Staffs comment, page 22 of the Schedule 14D-9 has
been revised to describe why certain data was unavailable with respect to the
Comparable Precedent Transactions Analysis, the relevancy of the multiples derived
from such analysis in light of such unavailable data and the effect such unavailable
data had on (i) the multiple range, and (ii) Allens
analysis and conclusion and page 17 of the Schedule 14D-9 has
been revised to describe the effect of such unavailable data on
the Boards reliance on such analysis and conclusion.
24. |
|
Staffs comment: Also with respect to the Comparable Precedent Transactions Analysis,
explain why the figures disclosed for the Kaboose transaction do not appear to be
mathematically accurate (i.e., transaction value of $95 million divided by LTM adjusted EBITDA
of $10 results in a multiple of 9.8x instead of 9.5x). Also, explain why the multiples for
the Bebo transaction are not measurable/meaningful in light of your disclosure of the
components of the components of the multiples. |
9
Securities and Exchange Commission
August 17, 2009
Page 10
Response:
In response to the Staffs comment, page 22 of the Schedule 14D-9 has
been revised to explain that, due to rounding, the transaction multiples included in
the table may be slightly different than the multiples indicated by the ratio of
transaction value to LTM EBITDA included in the table.
In
response to the Staffs comment, page 22 of the Schedule 14D-9 has been revised
to explain why Allen did not deem the transaction multiple derived from the Bebo
transaction to be meaningful for the purposes of its analyses.
25. |
|
Staffs comment: We also reissue comment 58 as it related to the Selected Companies, the
Selected Transactions, and Discounted Cash Flow analyses in the Needham & Company opinion.
Our comment sought disclosure of the data underlying the results presented, not just the
multiples derived from that data. If the referenced data was not presented to the
Disinterested Directors, please state so. Also, with respect to the DCF analysis, please
show how Needham arrived from the projected unlevered cash flows for the Company from
2009 to 2013 to the implied per share equity reference range for the company of $19.38-$36.96. |
Response: In response to the Staffs comment regarding the disclosure with respect
to the Needham & Company opinion, the disclosures under Selected Companies
Analysis on page 30 of the Schedule 14D-9 has been revised to provide additional
information underlying the results described. Other than as included in the revised
disclosure regarding Needhams opinion, no additional underlying data was provided
by Needham & Company to the Board with respect to any of its methods of analysis. In
response to the Staffs comment regarding the disclosure with respect to the implied
per share equity reference range in Needhams DCF analysis, the disclosure under
Discounted Cash Flow Analysis on page 35 of the Schedule 14D-9 has been expanded
to show how Needham arrived from the projected unlevered cash flows for the Company
from 2009 to 2013 to the implied per share equity reference range for the company of
$19.38-$36.96.
26. |
|
Staffs comment: With respect to the Discounted Cash Flows analysis conducted by Needham &
Company, please describe which financial metrics it used in ultimately determining an
appropriate discount rate. |
Response: In response to the Staffs comment, the disclosure under Discounted Cash
Flow Analysis on page 34 of the Schedule 14D-9 has been expanded to further
describe which financial metrics Needham used in determining the discount rate.
10
Securities and Exchange Commission
August 17, 2009
Page 11
Form 10-Q for the Fiscal Quarter Ended June 30,2002
Exhibits 32.1 and 32.2 Section 906 Certifications
27. |
|
Staffs comment: We note that your Section 906 Certifications refers to your Form 10-Q for
the fiscal quarter ended March 31, 2009 rather than your Form 10-Q for the fiscal quarter
ended June 30, 2009. Please re-file your Form 10-Q for the fiscal quarter ended June 30, 2009
to include Section 906 Certifications that refer to the correct Form l0-Q. |
Response: In response to the Staffs comment, an Amended Quarterly Report on Form
10-Q/A has been filed that includes Section 906 Certifications that
refer to the 10-Q for the fiscal quarter ended June 30, 2009.
In addition, each of the Companies and Bankrate hereby acknowledges that:
|
|
|
it is responsible for the adequacy and accuracy of the disclosure in the
filings; |
|
|
|
|
Staff comments or changes to disclosure in response to Staff comments do not
foreclose the Commission from taking any action with respect to the filings; and |
|
|
|
|
it may not assert Staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United States. |
We hope that the foregoing has been responsive to the Staffs comments.
If you have any questions related to this letter, please contact me at (212) 446-4943 or
Christopher Kitchen of this office at (212) 446-4988.
|
|
|
|
|
|
Sincerely,
|
|
|
/s/
Joshua N. Korff |
|
|
Joshua N. Korff |
|
|
|
|
|
cc: |
|
Mitch Truwit
Edward J. DiMaria
Lawrence S. Makow, Esq. |
11