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Kodak
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Joyce P. Haag
General Counsel and
Senior Vice President |
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David L. Orlic
Office of Mergers & Acquisition
Division of Corporation Finance
U.S. Securities and Exchange Commission
100 F Street, NE
Mail Stop 3561
Washington, D.C. 20549
Dear Mr. Orlic:
On behalf of Eastman Kodak Company (the
“Company”), this letter responds to the letter of the
Office of Mergers & Acquisitions of the Division of Corporation Finance of the Securities and
Exchange Commission (the
“Staff”), dated
September 28, 2009, setting forth comments to the Tender
Offer on Schedule TO (the
“Schedule TO”) filed by the Company with the Securities and Exchange
Commission (the
“Commission”) on
September 18, 2009. Set forth below are the Staff’s comments,
indicated in bold, and the Company’s responses. Page or section references in our responses are to
the Offer to Purchase filed as Exhibit (a)(1)(i) to the Schedule TO. Any terms not defined herein shall have
the meanings as set forth in Amendment No. 1 to the Schedule TO.
General
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We note that the financing condition remains unsatisfied with respect to the KKR transaction.
Please confirm your understanding that at least five business days must remain in the offer
after the financing condition has been waived or satisfied, and the Schedule TO must be
appropriately amended to disclose the material change. Refer to Release No. 34-24296 (April
3, 1987). Because financing for the offer is a condition to the offer, actually obtaining
financing is a material change to the offer and investors should have adequate time to
consider the information and make an investment decision once financing is finalized. |
As of
September 29, 2009 the financing condition for the Offer has been satisfied, including
the completion of (i) the private placement offering of $400 million aggregate principal amount of
7.00% Convertible Notes due 2017 to qualified institutional buyers pursuant to Rule 144A, and (ii)
a transaction in which Kohlberg Kravis Roberts & Co. L.P. managed investment vehicles purchased
$300 million aggregate principal amount of 10.50% Senior
Secured Notes due 2017. The Company has revised the description in Section 10, “Conditions of
the Offer,” to reflect that the financing condition has been satisfied.
Accordingly, the Company has disclosed information regarding satisfaction of the financing
condition and is filing Amendment No. 1 to the Schedule TO
on
October 1, 2009, more than five
business days before the expiration date of the Offer on
October 19, 2009, as required under Exchange Act Rule
13e-4(e)(3).
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We note that the source of funds will be proceeds from debt financing transactions made on or
about the time of the offer. Please revise to state the specific sources of funds. Refer to
Item 1007(a) of Regulation M-A. Please also revise to include all of the information required
by Item 1007(b) and (d) of Regulation M-A. |
The Company has revised the description in Section 9, “Source and Amount of Funds,” to state
the specific source of funds to be used in the transaction, as required under Item 1007(a) of
Regulation M-A. Item 1007(b) of Regulation M-A requires that the company state any material
conditions to the financing used to fund the transaction. As described in the Company’s response
to the Staff’s Comment 1 above, the Company has revised the disclosure in Section 10, “Conditions
of the Offer,” to reflect that all financing conditions relating to the Offer have been satisfied.
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The offer does not qualify to rely on Instruction 2 to Item 10 of Schedule TO to exclude
nearly all financial information from the disclosure. In view of the fact that financial
information required by Item 10 has been incorporated by reference, please revise to provide a
summary of that information, as described in Item 1010(0)(1)-(3) of Regulation M-A. This
revised disclosure must be disseminated to security holders. See Instruction 6 to Item 10 of
Schedule TO and Interpretation I.H.7 in the July 2001 Interim Supplement to Publicly Available
Telephone Interpretations, which may be viewed at the following link:
http://www.sec.gov/interps/telephone/phonesupplement3.htm. |
The Company believes that summary financial information is not required, both because the
information is not material in the context of the Offer, and in reliance on Instruction 2 to Item
10 of Schedule TO.
Instruction 1 to Item 10 of the Schedule TO states that financial statements “must be provided
when the offeror’s financial condition is material to security holder’s decision whether to sell,
tender or hold the securities sought. The facts and circumstances of a tender offer, particularly
the terms of the tender offer, may influence a determination as to whether financial statements are
material, and thus required to be disclosed.” If the buyer’s financial condition is not material,
then the financial information is not required. The Company considered the facts and circumstances
of the Offer and concluded that the Company’s financial condition was not material to the Note
holders.
In its analysis, the Company considered the various factors generally deemed relevant to an
analysis of whether financial information is or would be material to
a holder of our 3.375% Convertible Senior Notes due 2033 (the
“Notes”), as outlined in
the Regulation M-A adopting release.
See II.G.2. of SEC Release No. 33-7760 (
Oct. 22,
1999). Those factors are as follows: (1) the terms of the tender offer, particularly terms
concerning the amount of securities sought; (2) whether the purpose of the tender offer is for
control of the subject company; (3) the plans or proposals of the bidder; and (4) the ability of
the bidder to pay for the securities sought in the tender offer.
Applying the factors to the Offer, the Company noted that: (1) the Company is seeking to
repurchase all outstanding Notes; (2) the Offer does not relate to a potential change of control;
(3) the issuer is making the Offer, rather than a third party; and (4) sufficient funds are readily
available to pay for any and all Notes tendered in the Offer. With respect to sufficient funding,
we note that as of
June 30, 2009, the Company reported an excess of $1 billion in cash and cash
equivalents on its balance sheet. As a result, the Company concluded that summary financial
information would not be material to a Note holder in connection with the Offer.
In addition, because the financing condition for the Offer has been satisfied, the Company now
may rely on the “safe harbor” set forth in Instruction 2 to Item 10 for excluding financial
information. Instruction 2 to the Schedule TO states that financial statements are not material
when “(a) the consideration offered consists solely of cash; (b) the offer is not subject to any
financing condition; and either: (c) the offeror is a public reporting company under Section 13(a)
or 15(d) of the Act that files reports electronically on EDGAR, or (d) the offer is for all
outstanding securities of the subject class.” The Offer meets all of these requirements.
For the reasons set forth above, the Company respectfully submits that the summarized and
other financial information outlined in Item 1010 of Regulation M-A is not required pursuant to
Item 10 of the Schedule TO.
Purpose of the Offer, page 4
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You state that the purpose of the offer is to extend the maturity of your outstanding debt;
however, the maturity of the 3.375% Convertible Senior Notes is not being amended and the new
notes being issued in the concurrent financings appear to have shorter maturities than the
3.375% Convertible Senior Notes. Please advise, or revise your disclosure. |
The holders of the Notes have the right to
require the Company to purchase their Notes for cash at a purchase price equal to 100% of the
principal amount of the Notes plus any accrued and unpaid interest on
October 15, 2010. The
Company believes that it is likely the Note holders will request that the Company purchase all, or
nearly all, of the Notes on
October 15, 2010, making the effective maturity date of the Notes 2010,
rather than 2033. Recognizing this likelihood, the Company has presented 2010 as the maturity date
for the full amount of the outstanding Notes in note 8 to the financial statements included its
2008 Annual Report on Form 10-K, filed with the Commission on
February 27, 2009.
Under the concurrent financing transactions described in Section 9 “Source and Amount of
Funds,” both the Convertible Notes due 2017 and the Senior Secured Notes due 2017 will mature in
2017, effectively extending the maturity date of the outstanding debt.
Payment for Notes, page 12
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We note that payment will be made in “federal or other immediately available funds.” Please
revise to clarify what you mean by federal funds. |
The Company has revised the disclosure on page 12 in the subsection “Payment for Notes” to
clarify that payment in “federal funds” means payment of U.S. funds through a bank wire.
Exhibit (a)(1)(iv) — Letter to Clients
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We refer to the last sentence in the second bold paragraph on the last page of this document,
which indicates that security holders are to specify the price at which they wish to tender.
Please advise. |
The last sentence of the final paragraph in the Letter to Clients contains an inadvertent
typographical error. We have corrected the disclosure in the Letter to Clients to address the
Staff’s comments.
Please
do not hesitate to contact me at (
585) 781-9072 with any questions.
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cc:
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Peggy Kim |
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Securities and Exchange Commission |
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Division of Corporation Finance |
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Brian J. Lane
James Moloney
Stephanie Tsacoumis
Gibson, Dunn & Crutcher LLP |
David L. Orlic
Office of Mergers & Acquisition
Division of Corporation Finance
U.S. Securities and Exchange Commission
100 F Street, NE
Mail Stop 3561
Washington, D.C. 20549
Dear Mr. Orlic:
As General Counsel for Eastman Kodak company (the
“Company”), I hereby provide the following
response to your letter dated
September 28, 2009 with respect to the Tender Offer on Schedule TO
filed by the Company on
September 18, 2009 with the Securities and Exchange Commission (the
“Commission”).
The Company acknowledges that it is responsible for the adequacy and accuracy of the
disclosure in the filings. The Company further acknowledges that (i) 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 (ii) the Company 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.
Thank you for your consideration of the above. If you have any questions, please contact me
at (
585) 781-9072.
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cc:
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Peggy Kim |
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Securities and Exchange Commission |
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Division of Corporation Finance |
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Brian J. Lane |
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James Moloney |
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Stephanie Tsacoumis |
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Gibson, Dunn & Crutcher LLP |
