Question
From: (redacted)
Sent: Tuesday, July 17, 2007 10:55 AM
To: Verne, B.Michael
Subject: (c)(10) statutoryexemption
Mike,
Would the A, B, C & D be able totake advantage of the (c)(10) statutory exemption (transaction does notdirectly or indirectly increase voting percentage) under the following facts?
Today, A, B, C, andD each own 25% of Holdings.
E is going toindirectly buy 80% of Holdings and A-D will each drop to 5% each. E has filedan HSR for this purchase.
For tax and Bermuda law reasons, rather than Epurchasing 80% of Holdings, two new entities are being created on top ofHoldings.
A-D E
| |
5% each 80%
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[Parent]
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100%
|
[Buyer]
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100%
|
[Holdings]
The only asset ofParent will be 100% of Buyer. The only asset of Buyer will be 100% of Holdings.
Technically, A, B, C, and D willexchange their Holdings shares for cash plus shares in Parent. I know there isan interpretation that the creation of a new holding company above an existingholding company that is done on a pro rata basis is exempt. This is not beingdone on a pro rata basis, but E is filing HSR for its acquisition. Can A, B, C& D take advantage of (c)(10) because their voting interest is beingreduced from 25% each to 5% each, even though Parent is technically a different"issuer" than Holdings?
If you need any other facts, pleaselet me know. Thank you,