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Date
Rule
801.10
Staff
Michael Verne
Response/Comments
The distribution of cash would not affect the acquisition price unless B is being compensated by A for the distribution.

Question

From:(redacted)

Sent:Thursday, March 22, 2007 8:01 AM

To:Verne, B. Michael

Subject:Reportability questions size of transaction

Mike,

In this transaction acquiring person "A" willacquire target B the acquisition price is $7.5 in cash and earn out paymentswhich could bring the total to $67 million. The earn out payments are notsufficiently certain that the consideration is "determined". A hasdone a fair market valuation and does not believe the total payments will reach$50 million in which case the transaction does not reach the threshold. B hassome cash which it intends to distribute out to its shareholders either at orprior to closing. Would the distribution of the cash either prior to or atclosing change the acquisition price for HSR purposes? That is would the cashdistribution be included in the acquisition price?

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