Question
From: (redacted)
Sent: Monday,March 13, 2006 4:25 PM
To: Verne,B. Michael
Cc: (redacted)
Subject: HSRExemption under 15 USC sec. 18a (c)(7)
Mike,
Here is the follow up emailto our telephone call of last week.
Our client (Bank HoldingCompany A) is acquiring a bank holding company (Bank Holding Company B) whoseUPE is an individual. The individual will be receiving stock and cash of BankHolding Company A in a merger of Bank Holding Company B with Bank HoldingCompany A. Assume that the "size of the transaction" and the"size of the parties" thresholds are met and that each of BankHolding Company A and the individual are acquiring parties subject to filingunder the HSR Act unless an exemption applies. Bank Holding Company Aprincipally operates through its wholly owned subsidiary Bank A and BankHolding Company B principally operates through its wholly owned subsidiary BankB.
Bank Holding Company A hassought and expects to receive from the Federal Reserve under Section225.12(d)(2) of 12 C.F.R. an exemption from the Federal Reserve's priorapproval required under 1842 of 12 U.S.C. [Section 3 of the Bank HoldingCompany Act] for the acquisition of Bank Holding Company B and Bank B. Thiswaiver is expected to be obtained, in part, because immediately after theholding companies merge Bank B will merge into Bank A and this bank merger willhave received the prior approval from the FDIC under the Bank Merger Act, 1828(c) of 12 U.S.C. Because, however, the individual will receiveapproximately 24% of Bank Holding Company A's voting shares in the holdingcompany merger and Bank Holding Company A is receiving the exemption describedabove, the Federal Reserve is requiring the individual to file a Change in BankControl Act Notice under the Change in Bank Control Act, 1817(j) of 12 U.S.C.
In our discussion last week,I asked you if the exemption under Section 18a (c) (7) should apply to thisentire transaction. In our call you expressed the view that no HSR filing wasrequired for this transaction. Please confirm that (i) the acquisition of BankHolding Company B by Bank Holding Company A and (ii) the acquisition by theindividual of 24% of the voting shares of Bank Holding Company A in thatacquisition are both exempt under 18a (c)(7) of 15 U.S.C. and that no HSRfilings will be required.