Skip to main content
Date
Rule
801.10
Staff
Michael Verne
Response/Comments
Advised that $125 mm is the acquisition price. B. Michael Verne 7/19/02

Question

From:(Redacted)

To:Mike Verne

Date:7/16/02 5:10PM

Subject:Valuation question

Hi Mike.

Company A executed a "forward purchase agreement" with individual B. Pursuant to the Agreement, Company A paid individual B $125 million for the right to receive voting securities of Company C at some date in the future. That future date is now approaching and Company A will soon take delivery of the Company C stock. The current market value of the Company C stock to be received is $13 million. Is Company A stuck with the "purchase price" of $125 million that it paid years earlier for the right to receive this stock?

Thanks,

(Redacted)

About Informal Interpretations

Informal interpretations provide guidance from previous staff interpretations on the applicability of the HSR rules to specific fact situations. You should not rely on them as a substitute for reading the Act and the Rules themselves. These materials do not, and are not intended to, constitute legal advice.

Learn more about Informal Interpretations.

Return to top