Question
From: (redacted)
Sent: Tuesday, May 02, 20062:23 PM
To: Verne, B.Michael
Subject:Voting/non-voting stock valuation question
DearMike -- I would like to confirm that in the following circumstances, no HSRfiling is required. We represent a client who intends to purchase 100% of theshares of a target company for $120 million. The target has a total of 100,000outstanding shares, 1,000 (= 1 %) of which are voting and 99,000 (= 99%) arenon-voting. Except for the voting rights, the shares are otherwise identical, specifically,voting and non-voting shares are entitled to the same dividend payments and toan equal claim to the assets in the event of dissolution. Both voting andnon-voting shares are of the same class. Because the voting securities onlyrepresent 1% of the economic value of the target, the acquiring person valuesthe voting securities at less than $56.7 million. Given that Section 7A(a)(2)of the Clayton Act only looks to the value of the voting securities held by theacquiring person after the transaction, no filing should be required. Do youagree with that analysis? Best regards,