Question
[redacted]
September 20, 2000
Mr. B. Michael Verne
Investigator
Premerger Notification Office
Bureau of Competition
Room 303
Federal Trade Commission
6th Street and Pennsylvania Avenue, N.W.
Washing ton, D.C. 20580
Dear Mr. Verne:
The purpose of this letter is to confirm your recent advice regarding the application of the exemption from premerger notification afforded by 16 C.F.R. § 802.9. The facts I have laid out for you are as follows:
1. Four limited partnerships ("A", "B", "C" and "D"), each of which is its own ultimate parent entity, are shareholders of a corporation ("Target"). Target will be acquired by Acquiror in a stock-for-stock merger (the "Merger").
2. As a result of the Merger, each partnership will hold voting securities of Acquiror with a value in excess of $15 million but representing less than 10% of the voting securities of Acquiror.
3. A, B, C and D will be granted, collectively, the right to one seat on the board of directors of Acquiror. The natural person who will represent A, B, C and D on the board of directors of Acquiror is a general partner of partnerships A and B and is one of 11 managing members of a limited liability company (the "LLC") which is the general partner of partnerships C and D. He does not have the right to 50% or more of the profits of the LLC or to 50% or more of its assets in the event dissolution.
You have advised me that, as to partnerships A and B, the exemption of 16 C.F.R. § 802.9 is not available because the director is a general partner of A and B. You have further advised that, as to partnerships C and D, their shared right to one seat on the board of Acquiror does not preclude them from relying on the exemption of 16 C.F.R. § 802.9 because neither partnership has the unilateral right to designate a director and the director is not a general partner or a controlling member of the general partner of either partnership."
Please let me know whether I have accurately summarized you advice. When you have an opportunity to respond, or if you need any clarification in respect of this analysis, please call me at [redacted]
Very truly yours,
[redacted]