Question
June 2, 2004
VIA: FACSIMILE
Nancy Ovuka
Premerger Notification Office
Bureau of Competition
Federal Trade Commission - Room 303
6th Street and Pennsylvania Avenue, N. W.
Washington, D.C. 20580
Dear Nancy:
This letter isconfirming our telephone conversation on Thursday, May 27, 2004, regarding the filing requirements of the Hart-Scott-RodinoAntitrust Improvements Act of 1976, as amended, 15 U.S.C. 18a (the"HSR Act" or the "Act"), andthe rules promulgated thereunder, 16 C.F.R. 801.10 et seq. (the"Rules"), relating to an acquisition of voting securities of amortgage lending company.
As we discussed,Company A will acquire the voting securities of Company B for more than $50million in consideration. Company B is in the mortgage loan business. Atclosing, the assets of Company B will consist of mortgage loans, mortgageservicing rights, cash, furniture and a few other items. The acquisition ofmortgage loans is exempt under 7A(c)(2). Therefore, 802.4 applies, andthe transaction is exempt if the aggregate fair market value of the nonexemptassets held by Company B does not exceed $50 million.
In determiningthe fair market value of the non-exempt assets, Company A should exclude themortgage loans, mortgage servicing rights associated with those loans, and anyother assets of Company B that are associated with the mortgage loans. Forexample, cash and goodwill associated with the mortgage loans and the mortgageloan business would be excluded.
Please let meknow if I have misunderstood any part of our conversation. Thank you for yourattention to this matter.