Third Point Settles FTC Charges: Minority Investors and Activist Stockholders Are Cautioned on the Limits of the Investment-only Exemption under the HSR Act
25 September 2015Antitrust, Competition, and Economic Regulation Alert/M&A Update
On August 24, 2015, the U.S. Federal Trade Commission (FTC) announced a settlement with Third Point, LLC and three affiliated investment funds (collectively, Third Point) for violations of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) in connection with their 2011 acquisitions of shares in Yahoo! Inc. (Yahoo). Third Point had asserted that it was exempt from the premerger filing requirements of the HSR Act under the “solely for the purpose of investment” exemption. However, the FTC countered that Third Point took actions inconsistent with an investment-only intent, such as communicating with third parties to determine their interest in becoming the CEO or a board candidate of Yahoo.