Question
From: (redacted)
Sent: Wednesday, February 01, 2006 7:37 PM
To: Verne, B. Michael
Subject:HSR Question
Mike, I have a transactionthat I would like your comment on whether an HSR filing is necessary andthought it would be easier to explain in an email. I am representing the buyerwho will be acquiring 100% of the voting securities of the Target Corporationand we will be doing an HSR filing for the acquisition. One of the minorityshareholders ("X") of Target holds the voting securities of Targetvia a corporation ("Y"). For taxes reasons, X proposes that the buyeracquire Y rather than directly buy the voting securities of Target from Y. Atclosing of the acquisition of Y, the only assets in Y will be the votingsecurities of Target plus some cash for expenses. All other assets will beremoved. The acquisition of Y will occur though a merger with a subsidiary ofbuyer and is valued in excess of $56.7 million. (The transaction will closeafter the new thresholds take effect.) This acquisition will occur shortlybefore buyer's acquisition of the remaining voting securities of Target but isexpected to occur the same day-basically simultaneously.
I believe that in thissituation the parties can "look through" the acquisition of Y andtreat it as the acquisition of the voting securities of Target and just do anHSR filing for the acquisition of 100% of Target's voting securities and nothave to do a separate filing for the acquisition of Y There is another minorityshareholder who owns the target's voting securities via a corporation and wouldlike to do a similar transaction as well. This transaction is valued at leastthan $56.7 million. I do not believe that having two such acquisitions wouldchange the analysis but thought I should mention it.
Thank you and I look forwardto your response. If you have any questions please call.