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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
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SCHEDULE
13D
Under
the Securities Exchange Act of 1934
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RiskMetrics
Group, Inc.
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(Name
of Issuer)
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Common
Stock, $0.01 Par Value Per Share
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(Title
of Class of Securities)
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767735103
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(CUSIP
Number)
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Frederick
W. Bogdan
MSCI
Inc.
Wall
Street Plaza, 88 Pine Street
New
York, NY 10005
Tel.
No.: (212) 804-3900
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(Name,
Address and Telephone Number of Person Authorized to
Receive
Notices and Communications)
With
a Copy to:
John
A. Bick
Davis
Polk & Wardwell LLP
450
Lexington Avenue
New
York, New York 10017
(212)
450-4000
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February
28, 2010
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(Date
of Event which Requires Filing of this Statement)
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If
the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of §§240.13d-1(e), 240.13d-l(f) or
240.13d-l(g), check the following box.
o
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*The
remainder of this cover page shall be filled out for a reporting person’s
initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
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The
information required on the remainder of this cover page shall not be
deemed to be “filed” for the purpose of Section 18 of the Securities
Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of
the Act (however, see the Notes).
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1.
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Names
of Reporting Persons.
I.R.S.
Identification Nos. of above persons.
MSCI
Inc.
13-4038723
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2.
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Check
the Appropriate Box if a Member of a Group
(a)
o
(b)
o
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3.
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SEC
Use Only
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4.
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Source
of Funds
OO
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5.
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Check
if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or
2(e)
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o
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6.
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Citizenship
or Place of Organization
Delaware
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NUMBER
OF
SHARES
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
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7.
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Sole
Voting Power
-0-
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8.
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Shared
Voting Power
34,505,626
(1)
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9.
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Sole
Dispositive Power
-0-
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10.
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Shared
Dispositive Power
34,505,626
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11.
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Aggregate
Amount Beneficially Owned by Each Reporting Person
34,505,626
(2)
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12.
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Check
if the Aggregate Amount in Row (11) Excludes Certain Shares
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o
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13.
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Percent
of Class Represented by Amount in Row (11)
54.4%
(3)
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14.
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Type
of Reporting Person (See Instructions)
CO
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(1)
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Beneficial
ownership of the above referenced Shares (as defined below) is being
reported hereunder solely because MSCI may be deemed to have beneficial
ownership of such Shares as a result of the Voting Agreement (as defined
below). Neither the filing of this Schedule 13D nor any of its
contents shall be deemed to constitute an admission by MSCI that it is the
beneficial owner of any Shares for purposes of Section 13(d) of the
Securities and Exchange Act of 1934, as amended (the “
Exchange Act
”), or for
any other purpose, and such beneficial ownership thereof is expressly
disclaimed.
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(2)
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As
more fully described in response to Items 4 and 5 of this statement on
Schedule 13D, under certain conditions not all of the Shares beneficially
owned by the Supporting Stockholders (as defined below) are required to
vote in favor of the Merger (as defined
below).
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(3)
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Calculated
based on 63,426,593 Shares outstanding as of February 25, 2010, as
represented by RiskMetrics in the Merger Agreement (as defined
below).
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Item
1. Security and Issuer
The class
of equity securities to which this statement relates is the common stock,
$0.01 par value per share (the “
Shares
”), of RiskMetrics
Group, Inc., a Delaware corporation ( “
RiskMetrics
”). The
principal executive offices of RiskMetrics are located at One Chase Manhattan
Plaza, 44
th
Floor,
New York, NY, 10005.
Item
2. Identity and Background
(a)−(c)
and (f) The name of the person filing this statement is MSCI Inc., a
Delaware corporation (“
MSCI
”).
The
address of the principal business and the principal office of MSCI is Wall
Street Plaza, 88 Pine Street, New York, NY 10005. The name, business
address, present principal occupation or employment, and citizenship of each
director and executive officer of MSCI are set forth on Schedule A attached
hereto, and are incorporated herein by reference. The principal business of MSCI
is the providing of investment decision support tools, including indices and
portfolio risk and performance analytics for use by institutions in managing
equity, fixed income and multi-asset class portfolios.
(d)
During the last five years, neither MSCI nor, to the knowledge of MSCI, any of
the persons set forth on Schedule A attached hereto has been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During
the last five years, neither MSCI nor, to the knowledge of MSCI, any of the
persons set forth on Schedule A attached hereto was a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, U.S. federal or state securities laws or finding any violations with
respect to such laws.
Item
3. Source and Amount of Funds or Other Consideration
To induce
MSCI to enter into the Merger Agreement (as defined below), on February 28,
2010, Ethan Berman, the chief executive officer of RiskMetrics, General Atlantic
Partners 78, L.P., Gapstar, LLC, GAP Coinvestments III, LLC, GAP Coinvestments
IV, LLC, Gapco GmbH & Co., KG, TCV V, L.P., TCV Member Fund, L.P.,
Technology Crossover Management V, L.L.C., Spectrum Equity Investors IV,
L.P., Spectrum Equity Investors Parallel IV, L.P. and Spectrum IV Investment
Managers’ Fund, L.P. (collectively, the “
Supporting Stockholders
”)
entered into a Voting and Irrevocable Proxy Agreement (the “
Voting Agreement
”) with MSCI
with respect to the Shares beneficially owned by the Supporting
Stockholders. As of February 28, 2010, the Supporting Stockholders
collectively owned 34,505,626 Shares, or approximately 54.4% of the outstanding
Shares. As described in response to Item 4, the Shares beneficially
owned by the Supporting Stockholders have not been purchased by MSCI, and thus
no funds were used for such purpose. MSCI did not pay any monetary
consideration to the Supporting Stockholders in connection with the execution
and delivery of the Voting Agreement. For a description of the Voting
Agreement, see Item 4 below, which description is incorporated by reference in
response to this Item 3.
Item
4. Purpose of Transaction
The
purpose of the Voting Agreement is to facilitate the consummation of the
transactions contemplated by the Merger Agreement.
The Merger
Agreement
On
February 28, 2010, MSCI, Crossway Inc., a wholly owned subsidiary of MSCI and a
Delaware corporation (the “
Merger Subsidiary
”), and
RiskMetrics entered into an Agreement and Plan of Merger (the “
Merger
Agreement
”). The Merger Agreement provides that, upon the
terms and subject to the conditions set forth in the Merger Agreement, the
Merger Subsidiary will merge with and into RiskMetrics (the “
Merger
”), with RiskMetrics
continuing as the surviving corporation and a wholly owned subsidiary of
MSCI.
At the
effective time and as a result of the Merger, each outstanding Share will be
converted into the right to receive a combination of (i) 0.1802 shares of MSCI
Class A common stock and (ii) $16.35 in cash, without
interest.
In
addition, upon completion of the Merger, (i) the directors of the Merger
Subsidiary immediately prior to the effective time of the Merger will become the
directors of the surviving corporation, and the officers of RiskMetrics
immediately prior to the effective time of the Merger will become the officers
of the surviving corporation, in each case until successors are duly appointed
or elected and (ii) the certificate of incorporation and the bylaws of the
surviving corporation will be amended to be identical, with certain exceptions,
to the certificate of incorporation and the bylaws of the Merger Subsidiary in
effect immediately prior to the effective time of the Merger.
Consummation
of the Merger is subject to certain conditions, including (i) the adoption of
the Merger Agreement by RiskMetrics’ stockholders, (ii) the absence of any law
or order prohibiting the closing, (iii) the receipt in full of the debt
financing for the transaction,
(iv)
the expiration or termination of the applicable Hart-Scott-Rodino waiting period
and receipt of certain foreign antitrust approvals, (v) subject to certain
exceptions, the accuracy of representations and warranties, (vi) the
effectiveness of the registration statement for the MSCI Class A common stock
being issued in the Merger and (vii) certain other customary closing
conditions.
MSCI and
RiskMetrics have made customary representations, warranties and covenants in the
Merger Agreement, including, among others, covenants to conduct their respective
businesses in the ordinary course consistent with past practice between the
execution of the Merger Agreement and consummation of the Merger and to use
reasonable best efforts to cause the Merger to be consummated. In
addition, RiskMetrics has covenanted (i) to cause a stockholder meeting to
be held to consider approval of the transactions contemplated by the Merger
Agreement, (ii) subject to certain exceptions, for its board of directors to
recommend adoption of the Merger Agreement by RiskMetrics’ stockholders, (iii)
not to solicit proposals relating to alternative business combination
transactions and (iv) subject to certain exceptions, not to enter into
discussions concerning or provide confidential information in connection with
alternative business combination transactions.
Prior to
adoption of the Merger Agreement by RiskMetrics’ stockholders, RiskMetrics’
board of directors may, in certain circumstances, change its recommendation with
respect to the Merger in response to a Superior Proposal or an Intervening Event
(in each case, as defined in the Merger Agreement) upon compliance with certain
notice and other specified conditions set forth in the Merger
Agreement.
The
Merger Agreement contains certain termination rights for both MSCI and
RiskMetrics, including (i) the right of RiskMetrics in certain circumstances to
terminate the Merger Agreement to accept a Superior Proposal (as defined in the
Merger Agreement), (ii) the right of MSCI to terminate the Merger Agreement if
RiskMetrics’ board of directors changes its recommendation with respect to the
Merger, (iii) the right of MSCI to terminate the Merger Agreement between March
29, 2010 and April 2, 2010 if MSCI is unable, prior to March 29, 2010, to agree
with the counterparty to the debt commitment letter relating to the financing
for the Merger after good faith negotiations with such counterparty on the terms
and conditions of the covenants to be offered to the market in connection with
the financing contemplated by the debt commitment letter and (iv) certain other
customary termination rights. The Merger Agreement further provides
that upon termination of the Merger Agreement under specified circumstances,
including the circumstances described in the foregoing clauses (i) and (ii),
RiskMetrics would be required to pay MSCI a cash termination fee of $50
million. In addition, MSCI is obligated under the Merger Agreement to
pay a cash termination fee of $100 million to RiskMetrics if (x) the Merger
Agreement is terminated because the Merger is not consummated by September 1,
2010 and prior to the date of termination, all closing conditions to MSCI’s
obligation to close are satisfied other than the financing condition or (y) MSCI
terminates the Merger Agreement between March 29, 2010 and April 2, 2010 as
described above. If either party pays the termination fee as
described in the prior sentence, the termination fee will constitute the other
party’s sole remedy against the paying party for the failure to
close. In addition, the Merger Agreement provides that under
specified circumstances, including if RiskMetrics’ stockholders fail to adopt
the Merger Agreement, RiskMetrics may be required to reimburse MSCI for its
expenses incurred in connection with the transaction, up to $10 million in the
aggregate.
The
foregoing description of the Merger Agreement does not purport to be complete
and is qualified in its entirety by reference to the Merger Agreement, which was
filed as Exhibit 2.1 to MSCI’s current report on Form 8-K filed on March 1,
2010.
MSCI
anticipates that, if the Merger is completed in accordance with the Merger
Agreement, the listing of the Shares on the New York Stock Exchange will be
terminated and that RiskMetrics will terminate its registration and reporting
obligations under the Exchange Act.
The Voting
Agreement
On
February 28, 2010, as an inducement for and in order to facilitate the entry of
MSCI and Merger Subsidiary into the Merger Agreement, the Supporting
Stockholders entered into the Voting Agreement with MSCI with respect to all
Shares beneficially owned by such Supporting Stockholders. The Voting
Agreement provides that the Supporting Stockholders will vote (or cause to be
voted) all of their Shares (i) in favor of, among other things, the approval and
adoption of the Merger Agreement and (ii) against, among other things, any
alternative business combination involving RiskMetrics.
The
Supporting Stockholders’ agreements to vote their Shares as described above is
subject to the limitation that if RiskMetrics’ board of directors changes its
recommendation in response to an Intervening Event (as defined in the Merger
Agreement), the Supporting Stockholders are required to vote a total of
22,199,310 Shares, or approximately 35% of the outstanding Shares as of February
28, 2010, with each Supporting Stockholder’s remaining Shares voted in a manner
deemed appropriate by such Supporting Stockholder in its or his sole
discretion.
To the
extent that any Supporting Stockholder acquires beneficial ownership of any
Shares during the term of the Voting Agreement, such Shares will become subject
to the terms of the Voting Agreement to the same extent as though such Shares
were owned by such Supporting Stockholder as of the date of the Voting
Agreement.
Each
Supporting Stockholder has also granted an irrevocable proxy appointing MSCI as
such Supporting Stockholder’s attorney-in-fact to vote his or its shares covered
by the aforementioned voting obligations as required.
Each
Supporting Stockholder has agreed that, other than according to the terms of the
Voting Agreement, it will not (i) grant any proxies or enter into any voting
trust or other agreement or arrangement with respect to the voting of any Shares
or (ii), subject to certain limited exceptions, transfer, sell or otherwise
dispose of any Shares during the term of the Voting Agreement. Mr.
Berman has also agreed to exercise all of his options to acquire Shares within
five business days prior to the completion of the Merger to the extent he has
not previously exercised such options.
The
Voting Agreement will terminate upon the earliest of (i) the adoption of the
Merger Agreement by RiskMetrics’ stockholders, (ii) the conclusion of a
RiskMetrics’ stockholder meeting at which the stockholders failed to approve the
Merger Agreement, (iii) November 28, 2010 and (iv) the termination of the Merger
Agreement in accordance with its terms or any amendment to the Merger Agreement
that reduces the per share Merger consideration, changes the kind or form of, or
the cash/equity per share allocation of, consideration to be received (other
than by adding cash consideration) or amends the termination provisions of the
Merger Agreement.
The
foregoing description of the Voting Agreement does not purport to be complete
and is qualified in its entirety by reference to the Voting Agreement, which was
filed as Exhibit 2.3 to MSCI’s current report on Form 8-K filed on March 1,
2010.
Except as
set forth in this Item 4, the Merger Agreement or the Voting Agreement, neither
MSCI nor, to its knowledge, the persons set forth on Schedule A hereto, has any
plans or proposals that relate to or would result in any of the actions
specified in clauses (a) through (j) of Item 4 of Schedule 13D
(although
MSCI reserves the right to develop such plans).
The
Merger Agreement has been included to provide security holders with information
regarding its terms. It is not intended to provide any other factual
information about MSCI or RiskMetrics. The representations,
warranties and covenants contained in the Merger Agreement were made solely for
purposes of such agreement and as of specific dates, were solely for the benefit
of the parties to the Merger Agreement, may be subject to limitations agreed
upon by the contracting parties, including being qualified by confidential
disclosures made for the purposes of allocating contractual risk between the
parties to the Merger Agreement instead of establishing these matters as facts,
and may be subject to standards of materiality applicable to the contracting
parties that differ from those applicable to security
holders. Security holders are not third-party beneficiaries under the
Merger Agreement and should not rely on the representations, warranties and
covenants or any descriptions thereof as characterizations of the actual state
of facts or condition of MSCI or RiskMetrics. Moreover, information
concerning the subject matter of the representations and warranties may change
after the date of the Merger Agreement, which subsequent information may or may
not be fully reflected in RiskMetrics’ or MSCI’s public
disclosures.
Item
5. Interest in Securities of the Issuer
(a)
As a result of the Voting Agreement, MSCI may be deemed for the purposes of Rule
13d−3 promulgated under the Exchange Act to beneficially own 34,505,626 Shares
representing, for the purposes of Rule 13d−3, approximately 54.4% of the
outstanding shares of voting stock of RiskMetrics based on RiskMetrics’
representations in the Merger Agreement that there were 63,426,593 Shares issued
and outstanding at the close of business on February 25,
2010. Neither the filing of this Schedule 13D nor any of its contents
shall be deemed to constitute an admission by MSCI that it is the beneficial
owner of any Shares for purposes of Section 13(d) of the Exchange Act, or for
any other purpose, and such beneficial ownership thereof is expressly
disclaimed.
For
purposes of reporting, MSCI has included all of the Shares beneficially owned by
the Supporting Stockholders because MSCI may be deemed to have shared voting and
dispositive power over all such Shares by virtue of the voting and transfer
restrictions contained in the Voting Agreement described in response to Item
4. However, under certain circumstances described in Item 4 not all
of the Shares beneficially owned by the Supporting Stockholders and subject to
the Voting Agreement are required to be voted in favor of the
Merger.
Except as
set forth in this Item 5(a), neither MSCI nor, to the best knowledge of MSCI,
any of the persons set forth on Schedule A hereto beneficially owns any
Shares.
(b) MSCI
is not entitled to any rights of a stockholder of RiskMetrics as to any
Shares. Except to the extent that it may be deemed to by virtue of
the Voting Agreement, MSCI does not have the sole or shared power to vote or to
direct the vote or the sole or shared power to dispose or to direct the
disposition of any of the Shares.
(c) Except
for the execution and delivery of the Merger Agreement and the Voting Agreement,
neither MSCI nor, to the knowledge of MSCI, any of the persons set forth on
Schedule A hereto has effected any transaction in the Shares during the past 60
days.
(d) Except
for the Merger Agreement and the Voting Agreement and the transactions
contemplated by those agreements, neither MSCI nor, to the knowledge of MSCI,
any of the persons set forth on Schedule A hereto has the right to receive or
the power to direct the receipt of dividends from, or the proceeds from the sale
of, the securities of RiskMetrics reported herein.
(e) Inapplicable.
Item
6.
Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
Other
than as described in Items 3, 4 and 5, to the knowledge of MSCI, there are no
contracts, arrangements, understandings or relationships (legal or otherwise)
among the persons named in Item 2 or between such persons and any other person
with respect to any securities of RiskMetrics, including, but not limited to,
transfer or voting of any of the securities, finder’s fees, joint ventures, loan
or option arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies, including any
securities pledged or otherwise subject to a contingency the occurrence of which
would give another person voting power or investment power over such securities
other than standard default and similar provisions contained in loan
agreements.
Item
7. Material to be Filed as Exhibits
Exhibit
Number
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Exhibit
Name
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1.
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Agreement
and Plan of Merger dated as of February 28, 2010 among MSCI Inc., Crossway
Inc. and RiskMetrics Group, Inc. (incorporated by reference to Exhibit 2.1
to MSCI’s Current Report on Form 8-K filed March 1,
2010).
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2.
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Voting
and Irrevocable Proxy Agreement dated as of February 28, 2010 among MSCI
Inc. and the stockholders named therein (incorporated by reference to
Exhibit 2.3 to MSCI’s Current Report on Form 8-K filed March 1,
2010).
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SIGNATURE
After
reasonable inquiry and to the best of the undersigned’s knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
March 10,
2010
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MSCI
Inc.
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By:
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/s/
Henry Fernandez
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Name:
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Henry
Fernandez
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Title:
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Chief
Executive Officer
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SCHEDULE
A
DIRECTORS
AND EXECUTIVE OFFICERS OF MSCI
The name
and present principal occupation of each of the directors and executive officers
of MSCI are set forth below. Except as otherwise indicated, each
occupation set forth opposite an individual’s name refers to MSCI, and all of
the persons listed below are citizens of the United States of
America. Directors are noted with an asterisk.
Name
and Business Address
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Present
Principal Occupation
(principal
business of employer)
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Name
and Address of Corporation or Other Organization (if different from
address provided in Column 1)
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David
C. Brierwood
1
MSCI
Inc.
88
Pine Street
New
York, NY 10005
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Chief
Operating Officer of MSCI Inc.
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*Benjamin
F. duPont
MSCI
Inc.
88
Pine Street
New
York, NY 10005
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Founder
and President of yet2.com
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yet2.com
10
Kearney Rd., Suite 100
Needham,
MA 02494
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*Henry
A. Fernandez
MSCI
Inc.
88
Pine Street
New
York, NY 10005
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Chief
Executive Officer and President of MSCI Inc.
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*Alice
W. Handy
MSCI
Inc.
88
Pine Street
New
York, NY 10005
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Founder
and Chief Executive Officer of Investure
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Investure,
LLC
126
Garrett St, Suite J
Charlottesville,
VA 22902
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*Catherine
Kinney
MSCI
Inc.
88
Pine Street
New
York, NY 10005
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Former
President and Co-Chief Operating Officer of NYSE Group Inc. and NYSE
Euronext
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Michael
K. Neborak
MSCI
Inc.
88
Pine Street
New
York, NY 10005
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Chief
Financial Officer of MSCI Inc.
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C.D.
Baer Pettit
2
MSCI
Inc.
88
Pine Street
New
York, NY 10005
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Head
of Client Cov
er
age of MSCI Inc.
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Gary
Retelny
MSCI
Inc.
88
Pine Street
New
York, NY 10
00
5
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Head
of Strategy and Business Development and Chief Administrative Officer of
MSCI Inc.
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1
U.K. citi
ze
n.
2
Dual U.S. and U.K.
citizen.
*Linda
H. Riefler
MSCI
Inc.
88
Pine Street
New
York, NY 10005
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Global
Head of Research of Morgan Stanley
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Morgan
Stanley
1585
Broadway
New
York, NY 10036
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*George
W. Siguler
MSCI
Inc.
88
Pine Street
New
York, NY 10005
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Co-Founder
and Managing Director of Siguler Guff & Company
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Siguler
Guff & Company
825
Third Avenue, 10
th
Floor
New
York, NY 10022
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*Scott
M. Sipprelle
MSCI
Inc.
88
Pine Street
New
York, NY 10005
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President
of Westland Ventures
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Westland
Ventures
15
Hodge Rd.
Princeton,
NJ 08540
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*Rodolphe
M. Vallee
MSCI
Inc.
88
Pine Street
New
York, NY 10005
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Chief
Executive Officer of R. L. Vallee, Inc.
|
|
R.
L. Vallee, Inc.
280
S. Main St.
St.
Albans, VT 05478
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_____________________
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