SEC Division of Corporation Finance no-action letter: Oak Leaf B.V.

SKADDEN I ARPS I SLATE, MEAGHER & FLOM LLP
I 440 NEW YORK AVENUE, N.W.
WASHINGTON, D.C. 20005-2 I
TEL: !202l 371 -7000

FAX: !202l 393-5760

WWN.skadden.com
DIRECT DIAL
ZOZ-371-71 eo DIRECT f"AX
ZOZ..el6 I -90 I 0
EMAIL ADDRESS
BRIAN .BREHENY@SKADDEN .COM
Securities Act of 1933
Sections 2(a)(3) and 5; Rule 145
U.S. Securities and Exchange Conunission

100 F Street, N.E.

Washington, D.C. 20549

Attention: Thomas J . Kim, Chief Counsel and Associate Director

Jonathan A. Ingram, Deputy ChiefCounsel
MatthewS. McNair, Special Counsel

Office ofChief Counsel

Division of Corporation Finance

RE: Oak LeafB.V. Offer for all ofthe Ordinary Shares of D.E. Master Blenders 1753 N .V. l'lRM/AmUA'Tl: OFTICES 80S'roN CHICAGO HOUSTON LOS ANGELES NEW YORK PALOAI.:ro WILMING'ION BEI.JIHG

BRUSSELS

F'RANKF\JRT
HONG KOHG
LONDON
MO:SCOW
MUNICH
PARIS sAo PAULO
SHANGHAI
SINGAPORE
SYDNEY lt)KYO lQRONro
VIENNA
Dear Messrs. Kim and Ingram:
We are writing on behalfof Oak LeafB.V ., a private limited liability company incorporated under the laws ofthe Netherlands (" Oak Leaf'), Acorn B.V., a private limited liability company incorporated under the laws ofthe Netherlands ("Acorn"), and Acorn Holdings B.V, a private limited liability company incorporated under the laws ofthe Netherlands ("Acorn Holdings" and, collectively with Oak Leaf, Acorn and Acorn Holdings, the "Bidders"). On April12, 2013, Oak Leaf announced its intention to make a public offer (the "Offer") to acquire all ofthe ordinary shares, nominal value ofEUR 0.12 (the "DEMB Shares"), ofD.E Master Blenders 1753 N .V., a public limited liability company incorporated under the laws of the Netherlands ("DEMB"). DEMB's Board ofDirectors (the "DEMB Board") has unanimously reconunended the acceptance ofthe Offer to the shareholders ofDEMB. The Bidders intend to

structure the Offer to comply with applicable Dutch laws as well as with the U.S. federal securities laws, including Regulation l4D and l4E under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), except to the extent of the relief granted by the Staff ofthe Division ofCorporation Finance (the "Staff') ofthe U.S. Securities and Exchange Commission (the "Commission") pursuant to the letter issued to us, on behalf ofthe Bidders, dated May 21, 2013 (the "May 21 51 Letter"). The DEMB Board and Oak Leaf have agreed, subject to certain conditions, to implement certain post-offering transactions after the Offer concludes in order for Oak Leaf to acquire 100% ofthe DEMB and full ownership ofDEMB's business. One ofthe potential post-offering transactions (the "Post-Offering Merger and Liguidation") would include DEMB merging with and into Oak Sub B.V., a private limited liability company incorporated under the laws ofthe Netherlands ("Oak Sub") and a wholly owned subsidiary of New Oak B.V., a private limited liability company incorporated under the laws ofthe Netherlands that is a wholly owned subsidiary of Oak Leaf ("New Oak" and, collectively with Oak Sub and the Bidders, the "Acguirors"), with Oak Sub as the surviving entity (such merger, the "Post-Offering Merger"). Each holder ofone or more DEMB Shares immediately prior to the completion ofthe PostOffering Merger would be allocated one or more shares in the capital ofNew Oak ("New Oak Shares") on a share-for-share basis as an intermediate, transitory step in an all-cash liquidation transaction conducted pursuant to Dutch law. Upon the completion ofthe Post-Offering Merger, New Oak would sell and transfer all issued and outstanding capital shares of Oak Sub (the "Oak Sub Shares") to Oak Leaf in exchange for a payment of cash and debt, New Oak would liquidate in accordance with Dutch law and each holder ofNew Oak Shares would immediately receive a predetermined, provisional distribution ofcash equal to the consideration paid in the Offer, all as more fully described below. All ofthe steps ofthe Post-Offering Merger and Liquidation are expected to occur within three business days ofthe completion ofthe Offer. We respectfully request on behalfofthe Acquirors that the Staff confirm that it will not recommend enforcement action to the Commission ifthe allotment ofthe New Oak Shares in the Post-Offering Merger and Liquidation, as more fully described below, proceeds without registration under the Securities Act of 1933, as amended (the "Securities Acf'). Please note that we are admitted to practice only in the State ofNew York and the District ofColumbia. To the extent this letter describes matters ofDutch law, we have relied on advice from Stibbe N.V., Dutch counsel to the Acquirors.
I. Description of the Acquirors and DEMB
The Acquirors
Oak Leaf was incorporated on March 27, 2013 under the laws ofthe Netherlands. Oak Leaf has been incorporated to complete the purchase ofthe DEMB Shares under the Offer and has not carried on any business prior to the date hereof, other than with respect to the Offer and related equity and debt financing arrangements.

June 18,2013
Oak Leaf is a wholly owned subsidiary ofAcorn, which is itself a wholly owned subsidiary ofAcorn Holdings, and Acorn Holdings is a wholly owned subsidiary of JAB Forest B.V., a private limited liability company incorporated under the laws ofthe Netherlands. New Oak is a wholly owned subsidiary ofOak Leafand, as New Oak is a newly incorporated entity without any operational or other activities, New Oak will not have any assets or liabilities as of the closing ofthe Post-Offering Merger except for the paid up share capital at incorporation in the amount of EUR 0.12. New Oak and Oak Sub were incorporated for the sole purpose ofthe Post-Offering Merger and Liquidation. The Bidders are members of a privately-held affiliated group of companies, operating under the Job. A. Benckiser Group ("JAB") trade name. JAB is focused on long tenn investments in companies with premium brands in the fast-moving consumer goods category. JAB's portfolio includes a majority stake in Coty Inc., a global leader in beauty, a majority stake in Peet's Coffee & Tea Inc ., a premier specialty coffee and tea company, a majority stake in Caribou Coffee Company, Inc., a specialty retailer of high-quality premium coffee products and a minority stake in Reckitt Benckiser Group PLC, a global leader in health, hygiene and home products. Job. A. Benckiser also owns Labelux, a luxury leather goods company with brands such as Jimmy Choo, Bally and Belstaff. In the ordinary course ofits business JAB examines potential investments in or acquisitions ofcompanies in the coffee and tea category. DEMB According to publicly available infonnation, DEMB is a leading, focused pure-play coffee and tea company that offers an extensive range of high-quality, innovative coffee and tea products that are well-known in retail and out ofhome markets across Europe, Brazil, Australia and Thailand. We understand that DEMB is a "foreign private issuer" as defined in Rule 3b-4(c) under the Exchange Act. The DEMB Shares are listed for trading on NYSE Euronext in Amsterdam, under the symbol DE. There were 594,859,274 DEMB Shares outstanding as ofAprill2, 2013. The primary trading market for the DEMB Shares is NYSE Euronext in Amsterdam; trading of the DEMB Shares in the U.S. is only done over the counter and the average daily trading volume~ ofthe DEMB Shares in the U.S. over a recent twelve-month period was approximately 5.4%. At the time ofthe Post-Offering Merger, the DEMB Shares held by U.S. holders are estimated to be approximately 10% of all issued and outstanding DEMB Shares.
II. Description ofthe Transactions
The Offer
Oak Leaf and DEMB are parties to an amended and restated merger protocol, pursuant to which Oak Leafagreed, subject to certain pre-commencement conditions, to commence the Offer. As noted above, the Offer is structured as a single offer made concurrently in the Netherlands and the United States, in compliance with applicable Dutch securities laws as well as with the U.S. federal securities laws, including Regulation 14D and 14E under the Exchange

Act, except to the extent ofthe relief granted pursuant to the May 21st Letter. In connection with the Offer, the Bidders have filed with the Commission a tender offer statement on Schedule TO, to which an offer memorandum (the "Offer Memorandum") is attached as an exhibit. As described above, Oak Leaf will offer to purchase all ofthe outstanding DEMB Shares at a purchase price ofEUR 12.50 per Share in cash (the "Offer Price"). The Offer will remain open for acceptance for an initial period of eight weeks. The Offer will be subject to conditions customary for offers of this type, including, among others, that (i) the number of DEMB Shares that are tendered in the Offer, (ii) the DEMB Shares that are directly or indirectly held by Oak Leaf or any ofits affiliates and (iii) the DEMB Shares that are unconditionally and irrevocably committed to Oak Leaf or any of its affiliates shall represent at least 95% of all DEMB Shares on a fully diluted basis, and that the extraordinary general meeting of DEMB shareholders shall have adopted certain resolutions. If any condition is not satisfied or waived at the conclusion of the initial offer period, Oak Leaf may extend the acceptance period once for a period of at least two weeks and not more than ten weeks. Oak Leafs purpose is to acquire control of, and ultimately the entire equity interest in, DEMB. Ifat the completion ofthe Offer (including any and all extensions), Oak Leaf does not acquire I 00% ofthe DEMB Shares, Oak Leaf intends to enter into one or more transactions to enable Oak Leaf or an affiliate ofOak Leaf to acquire all shares not acquired pursuant to the Offer. As soon as possible following the Offer, Oak Leaf intends to procure that DEMB's listing on NYSE Euronext in Amsterdam will be terminated. Delisting may be achieved on the basis of 95% or more ofthe issued share capital ofDEMB having been acquired by Oak Leaf or on the basis ofa statutory merger. The Post-Offering Transactions If, following the settlement ofthe Offer, Oak Leaf and its affiliates, alone or together with DEMB, hold at least 95% ofDEMB's aggregated issued share capital on a fully diluted basis, Oak Leaf shall commence a statutory buy-out, in accordance with applicable Dutch law, in order to acquire the remaining DEMB Shares not tendered and not held by Oak Leaf or DEMB. The DEMB Shares acquired in a statutory buy-out will be entitled to cash consideration equal to the Offer Price. If, however, the Offer is declared unconditional and the sum of (i) the DEMB Shares that are directly or indirectly held by Oak Leaf or any ofits affiliates and (ii) the DEMB Shares that are unconditionally and irrevocably committed to Oak Leaf or any of its affiliates represent more than 80% and less than 95% ofall DEMB Shares on a fully diluted basis, at the time and date on which the Offer, as it may be extended from time to time, expires. The DEMB Board and Oak Leaf have agreed, subject to certain conditions, to implement the Post-Offering
Merger and Liquidation in order for Oak Leaf to acquire 100% ofthe DEMB and full ownership ofDEMB's business.

June 18,2013
The possibility that the Post-Offering Merger and Liqudation will occur and the structure, timing and result ofthose transactions have been disclosed in the Offer Memorandum. DEMB shareholders will also have the opportunity to vote on the merger proposal relating to the PostOffering Merger at an extraordinary general meeting of shareholders (the "DEMB Shareholder Meeting,) to occur in the Netherlands at least six Dutch business days prior to the date on which the acceptance period under the Offer, as such period may be extended pursuant to the terms of the Offer, expires. DEMB shareholders will receive information about the DEMB Shareholder Meeting in accordance with the requirements of Dutch law. The occurrence of the Post-Offering Merger and Liquidation is conditioned on DEMB shareholders approving and adopting the merger proposal relating to the Post-Offering Merger at the DEMB Shareholder Meeting. DEMB shareholders, however, will not have any dissenters or appraisal rights related to the PostOffering Merger. In the Post-Offering Merger and Liquidation, DEMB will merge with and into Oak Sub, with Oak Sub as the surviving entity . Upon the completion ofthe Post-Offering Merger, (i) each holder ofone or more DEMB Shares immediately prior to the completion of the Post-Offering Merger will receive one or more New Oak Shares on a share-for-share basis as a transitory step in a liquidation transaction conducted pursuant to Dutch law, (ii) Oak Sub will acquire all assets and liabilities of DEMB by operation of law, (iii) DEMB will cease to exist and (iv) DEMB will be delisted from NYSE Euronext in Amsterdam. Following the completion ofthe Post-Offering Merger, each holder ofone or more DEMB Shares immediately prior to the completion ofthe Post-Offering Merger will hold an equal number ofNew Oak Shares. In addition, Oak Leaf will continue to hold New Oak Shares. Upon the completion of the Post-Offering Merger, New Oak will sell and transfer all Oak Sub Shares to Oak Leaf (the "Share Sale,,) in exchange for a payment equal to the product of (x) the Offer Price multiplied by (y) the total number ofNew Oak Shares issued and outstanding immediately prior to completion ofthe Share Sale, excluding any New Oak Shares held by New Oak, without interest (the "Consideration,). A portion ofthe Consideration equal to the product of(x) the Offer Price multiplied by (y) the total number ofDEMB Shares held by Oak Leaf and its affiliates immediately prior to completion ofthe Share Sale shall be paid by means ofa loan note (the ''Note,,). The remainder ofthe Consideration will be paid in cash (the "Cash Consideration,). Prior to the date ofthe Post-Offering Merger, Oak Leaf as sole shareholder ofNew Oak will resolve to dissolve and liquidate New Oak in accordance with Dutch law (the "Liquidation,,) subject to consummation ofthe Post-Offering Merger and completion ofthe Share Sale. As a result, the Liquidation will .commence upon completion ofthe Share Sale. It is
expected that the liquidator will arrange for a liquidation distribution by New Oak to the New Oak shareholders in advance of the Liquidation, which will result in the payment ofan amount equal to the Offer Price for each New Oak Share held by a New Oak shareholder (the "Liquidation Paymenf,). The Cash Consideration will be used to fund the payment in cash ofthe Liquidation Payment to each shareholder ofNew Oak, other than Oak Leaf, in connection with the Liquidation. The Note will be used to fund the payment ofthe Liquidation Payment to Oak Leaf in connection with the Liquidation.

June 18,2013
It is expected that the Share Sale will be completed on the first business day after the Post-Offering Merger becomes effective. It is also expected that the Liquidation will commence and the Liquidation Payment will be made on the same day as the Share Sale and, unless any creditor or other party entitled thereto files an opposition with the competent court in the Netherlands, it is expected that the Liquidation will be completed after approximately two to three months. Following the payment ofthe Liquidation Payment, the New Oak shareholders will remain New Oak shareholders until the completion ofthe Liquidation, but, after the payment ofthe Liquidation Payment, it is not expected that New Oak will make any further distributions by means of an advance liquidation distribution or otherwise. Once the final liquidation distribution, if any, has occurred, New Oak will be effectively liquidated and will cease to exist by operation oflaw. In the effectuation ofthe Post-Offering Merger and Liquidation, due consideration will be given to the interests ofminority shareholders ofDEMB and all such minority shareholders, including any U.S. holders, will be treated equally in accordance with applicable laws. The withholding and other taxes, if any, imposed on a New Oak shareholder, however, may be different from, and possibly greater than, the taxes imposed on a DEMB shareholder that tenders its DEMB Shares under the Offer.
III. Relief Requested
Although the Post-Offering Merger and Liquidation involves the allotment ofNew Oak Shares to DEMB shareholders, it is our view that such allotment ofNew Oak Shares should not have to be registered pursuant to Section 5 ofthe Securities Act. We respectfully request on behalfofthe Acquirors the Staff's confirmation that it will not recommend enforcement action to the Commission ifthe allotment ofthe New Oak Shares as described herein proceeds without registration under the Securities Act. The allotment ofthe New Oak Shares is merely an intermediate, transitory step in the Post-Offering Merger and Liquidation. When DEMB shareholders consider whether to sell their DEMB Shares in the Offering and vote on the Post-Offering Merger, they will be fully informed that when the Bidders proceed with the Post-Offering Merger and Liquidation after the Offer has concluded, any holders of DEMB Shares at that time will be subject to the preapproved Liquidation. As a result, DEMB shareholders will not make any investment decision at the time that the New Oak Shares are offered or allotted. The value ofthe New Oak Shares is a predetermined cash Liquidation Payment, which will be equal to the Offer Price, and that payment is expected to be made within one day ofthe Post-Offering Merger and shortly after the. Offer concludes. After the Liquidation Payment is made, there should be no basis to support any value for the New Oak Shares. New Oak shareholders will receive the Liquidation Payment without having to take any action. Holders ofNew Oak Shares will not have control over the ultimate disposition ofthe New Oak Shares or any investment risk related to the value ofthe shares. The New Oak Shares will not be listed on an exchange and there is no public market expected for the New Oak Shares. New Oak will also not have any business operations or acquire any assets after the Post-Offering Merger. Holders ofNew Oak Shares will also be

restricted pursuant to the Articles ofAssociation ofNew Oak from transferring those shares until February 28, 2014 (the "Restricted Period'')- a period extending well beyond the anticipated time period necessary to finalize the liquidation ofNew Oak.1 Furthermore, if after the Restricted Period New Oak has not been fully liquidated, any transfer ofNew Oak Shares would require the execution ofa notarial deed and any shareholder wishing to make a transfer ofNew Oak Shares would need to first seek approval from the board ofNew Oak, which approval the board can withhold ifthe board designates another purchaser which is willing to acquire the shares for fair market value. Although highly unlikely because ofthe expected timing ofthe completion ofthe Liquidation, ifthis were to occur Oak Leafor an affiliate ofOak Leafwould be designated to acquire such shares, unless at that time a legal or other restriction (e.g., a fiduciary duty obligation) on such acquisition existed. There are no such restrictions that Oak Leafexpects at this time would exist to an acquisition under these facts. Although New Oak Shares will have voting rights, during the period following the Post-Offering Merger, while the Liquidation is finalized, New Oak will not take any action that would require a shareholder vote.2 Similarly, while New Oak Shares will be entitled to receive dividends, no dividends will be declared or paid during the period following the Post-Offering Merger and preceding the Liquidation. DEMB Shares will not have any dissenters or appraisal rights related to the PostOffering Merger or the New Oak Shares received pursuant thereto. While we have not found a previous Staffnon-action letter which addresses precisely the fact situation presented in the Post-Offering Merger and Liquidation, the significant factors present here have been addressed by the Staffpreviously in no-action relief from the registration provisions ofthe Securities Act.3 We believe that taken as a whole, the operative facts and No share certificates will be issued to holders ofNew Oak Shares. Record share ownership will be reflected on New Oak's share register. Under New Oak's Articles ofAssociation, however, a change ofrecord ownership of New Oak Shares during the Restricted Period will not be possible. Under Dutch law, a change to the share ownership can only be validly effected through the execution ofa deed oftransfer, executed in front of a civillaw notary in the Netherlands. Even if a civil-law notary would be willing to execute a deed oftransfer, in violation ofthe provisions ofthe Articles ofAssociation, the transfer would be null and void. New Oak Shares held on behalfofbeneficial owners by a third party custodian, such as Euroclear, will also be subject to the same limitations pursuant to Dutch law. 2 After the Post-Offering Merger, one or more shareholders ofNew Oak representing a minimum of 1% ofthe total outstanding New Oak Shares may petition the board ofNew Oak to convene a
shareholder meeting. Any such petition, however, is subject to approval by the board ofNew Oak based on the exercise ofits fiduciary duties. There is no action known at this time that would require shareholder action or be the basis ofa valid shareholder petition. 3 See Cambior Inc. (available Oct. I , 1987 and Jan. 22, 1987); Getty Oil (Canadian Operations) Ltd. (available May 19, 1983); RMV Acquisition Inc. and Vulcan Packaging Inc. (available Nov. 2 , 1988). The Staffhas employed a similar analysis in connection with "vendor placements," in which target security holders do not become entitled to the incidents ofownership ofthe bidder's securities. In vendor placements, by accepting the bidder's offer, target security holders agree that they will receive cash for the securities See Singapore Telecommunications Ltd. (available May 15, 2001); Office Specialty Inc. (available Jan. 5, 2000); Airline Industry Revitalization Co. (available Sept. 9, 1999); TABCORP Holdings (available Aug. 27, 1999); Durban Roodepoort Deep Limited (available June 22, 1999); AMP Limited (available Sept. 17, 1998); Oldcastle Inc. (available July 3, 1986); Hudson Bay Mining & Smelting Co., Ltd. (available June 19, 1985).

circumstances in this situation are closely analogous to those described in those other letters. We also believe that our position expressed in this letter is consistent with the position taken by the Staffin its responses to those other letters. The other letters also involved situations where a security was issued as an intennediate, transitory step in a business combination transaction and those securities did not possess traditional incidents of ownership and were not subject to investment risk. We believe that the transitory, intennediate nature ofthe New Oak Shares, the structure ofthe Post-Offering Merger and Liquidation and the disclosures provided to the DEMB shareholders in connection with the Offer and at the time ofthe vote on the Post-Offering Merger regarding the Post-Offering Merger, the Liquidation Payment and the Liquidation support a similar conclusion that the issuance ofthe New Oak Shares does not require registration under the Securities Act. Registration of the New Oak Shares would also serve no regulatory or investor protection purpose. Pursuant to the Offer Memorandum and the materials provided in connection with the DEMB Shareholder Meeting, the DEMB shareholders will be provided with all ofthe material infonnation needed to pennit them to make an infonned voting decision regarding the PostClosing Merger and Liquidation. Because New Oak shareholders will have no continuing interest in New Oak following the Liquidation, it is unlikely that any additional infonnation that would appear in a registration statement would be useful or infonnative to the receipt ofthe intennediate, transitory New Oak Shares. We also note that DEMB and New Oak are foreign private issuers and, under applicable Dutch law, a prospectus is not required to be delivered in connection with issuance ofthe New Oak Shares. As noted above, at the time the New Oak Shares are allotted U.S. holders are expected to be approximately 10% ofthe outstanding New Oak Shares and the average daily trading volume ofDEMB in the U.S. over a recent twelve-month period was approximately 5.4%. We believe that the low expected U.S. ownership of the DEMB Shares at the time ofthe Post-Offering Merger and the low percentage oftrading in the U.S. over the last twelve months, further support deference to the regulation ofthe Post-Closing Merger and Liquidation under Dutch law. The Commission recognized this approach when it adopted the exemption for offerings in connection with business combinations for the securities offoreign private issuers in Rule 802 ofthe Securities Act. Although the Acquirors will not be eligible to rely on Rule 802 because, among other things, the U.S. ownership calculation rules in Rule 800 ofthe Securities Act require that any DEMB Shares held by the Acquirors be excluded from the calculation, the policy considerations recognized by the Commission when it adopted Rule 802 are present in the Post-Offering Merger and Liquidation.
IV. Conclusion
Based upon the foregoing facts, we respectfully request on behalf ofthe Acquirors that the Staffconfinn that it will not recommend enforcement action to the Commission ifthe allotment ofthe New Oak Shares as described herein proceeds without registration under the Securities Act.

June 18,2013
We appreciate the Staffs consideration ofthese matters. Ifyou have any questions or require any further information, please contact me at (202) 371-7180, Paul T. Schnell at (212) 735-2322 or Sean C. Doyle at (212) 735-2554. Very truly yours, ~ cc: Paul T . Schnell and Sean C. Doyle, Skadden, Arps, Slate, Meagher & Flom LLP Derk Lemstra and Bjorn van der Klip, Stibbe N.V.

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