Question
From: (redacted)
Sent: Tuesday,March 21, 2006 10:02 AM
To: Verne,B. Michael
Subject: size ofperson & 802.51
Dear Mike,
I have a question regardingwhether the size of person test can apply to a transaction, a portion of whichis exempt under 802.51.
In this transaction, anon-US entity is directly acquiring foreign voting securities and US votingsecurities of a foreign UPE. The total value of the transaction is over $226.8million. However, the foreign portion is likely to be exempt under 802.51, asthe foreign entities to be acquired do not have US assets or sales of $56.7million or more.
Thus, the only reportableportion of the transaction is the acquisition of US voting securities, which isvalued at over $56.7 million but perhaps at less than $226.8 million. Theacquiring entity will likely be newly-formed and not controlled by any otherentity, and thus may not meet the size of person test.
Could this transaction beexempt due to not meeting the size of person test in 7A(a)(2)(B)? Should I belooking at the value of the entire transaction, or just the reportable (US)part? The definition of "hold" seems to say that for the size ofperson test in 7A(a)(2)(B), one must look at the value of the entiretransaction, not just the reportable part, but I wanted to check.