Question
February 15, 2002
VIA FACSIMILE AND E-MAIL
Mr. Michael Verne
Compliance Specialist
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
Washington, D.C. 20580
Re: Item 4(c) - Investment Banker Book
Dear Mr. Verne:
I very much appreciate your time and assistance during the January 17th phone conversation you had with [redacted] and me concerning Item 4(c). As you will recall, the specific Item 4(c) issue raised on that call concerned whether a filing need include a draft of an investment banker book regarding the possible sale of a company which draft updated a prior version of the investment banker book when the prior version had been circulated and was going to be filed with the HSR filing. This letter confirms the substance of that conversation and your answer to that question which answer was that the draft would not be needed to be filed.
Background
In order to comply with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act), Item 4(c) of the Notification and Report Form (the Form) requires that the Form include copies of any study, survey, analysis or report which was prepared by or for any officer or director for the purpose of evaluating or analyzing the acquisition with respect to market share, competition, competitors, markets, potential for sales growth or expansion into product or geographic markets (Competitive Analysis).
Facts
We discussed the following facts:
A corporation (the Company) retained an investment bank (the Investment Bank) to assist it and its stockholders in connection with a possible sale of the Company. The Investment Bank prepared three books (January, October and November 2001) to facilitate a possible sale. The three books discussed the Company and the likely acquirers, as well as the anticipated financial effect of each of the likely acquirers of the acquisition of the Company, based on publicly available information. Each successive book updated the prior version of the book.
In November 2001, the Company and one of the likely acquirers (the Acquirer) began serious discussions about a possible acquisition of the Company. Upon commencement of those discussions, the Investment Bank began revising the November 2001 version of the book based on additional public information that became available regarding the Acquirer (the Draft Book). The Draft Book was never completed because discussions between the Company and the Acquirer proceeded quickly and the Draft Book became unnecessary. The Draft Book was never disseminated to any person outside of the Investment Bank.
Issue
You were kind enough to answer the following question concerning the above statement of facts.
Does the Draft constitute Competitive Analysis which must be submitted pursuant to Item 4(c) of the Form for purposes of complying with the HSR Act?
No. The Draft Book does not constitute Competitive Analysis which must be submitted pursuant to Item 4(c) of the Form for purposes of complying with the HSR Act because it was never completed and incomplete drafts need not be filed.
We also understand that the Draft Book would not need to be submitted pursuant to Item 4(c) even had prior books existed because it had not been circulated to any officer or director and never made it into the files of any officer or director.
I hope that this letter accurately summarized the advice we discussed with you. If I am correct in my summary of our conversation, please let me know.
Thank you for your time and help.