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Date
Rule
801.2, 802.4
Staff
Michael Verne
Response/Comments
1. I assume you meant Corp A's acquisition of Corp B, and yes I agree that is potentially reportable. 2. In a stock for stock transaction both A's acquisition of B and any of B's shareholders' acquisition of A voting securities is analyzed as if a snapshot of A and B's holdings just prior to the merger. So when C is looking at its acquisition of A voting securities, the only thing A holds is cash. You don't have to look at A holding B post merger. So C's acquisition of up to 49% of A's voting securities would still be exempt under 802.4 (as would be PE's acquisition of A stock). 3. I also agree that PE's acquisition of B stock prior to the merger is also potentially reportable.

Question

From:

(redacted)

Sent:

Wednesday, November 12,2008 5:03 PM

To:

Verne, B. Michael

Subject: Fw: HSR Informal Opinion

Mike,

I am following up on the advice belowbecause the facts have changed from the perspective of my client (Person C in theemail below). At this time, this information is confidential to my client; theother party is not aware of all of these changes.

Facts

Prior to the merger transaction, a newinvestor, Company PE, will acquire about 33% of the outstanding voting securitiesof Corporation B. Company C will hold the remaining 67% and, therefore, willstill control Corporation B.

As before, Corporation B will then mergerwith and into Corporation A, with A continuing as the surviving company. Asbefore, Corporation A will issue new shares of its common stock to theCorporation B shareholders as consideration.

Now, however, as a result of Company PE'sinvestment and some changes in the number of shares being acquired, thepost-merger shareholding structure has changed. Specifically, post merger,Company C will hold less than 50% of the outstanding voting securities of(thecombined) Corporation A. Company C may hold up to 49% of the outstanding sharesof Corporation A and may still have the voting power to appoint half theCorporation A board post-merger.

Analysis

In the structure below, you agreed withour view that it was exempt because Company C was the UPE before and after theacquisition and the only thing it was essentially acquiring was cash, which isexempt. Now, Company C may still be the UPE of Corporation A by having theability to appoint half the board, but it will not be the UPE pursuant to801.1(b)(l). Does this change the analysis?

If so, I think this means that there aretwo potentially reportable acquisitions:

1.Corporation B's acquisition ofCorporation A via the merger. :.

2.Company C's acquisition of Corporation Astock. Would this be exempt, however, because Company C is acquiring shares inCorporation A, which post-merger only holds (a) cash, which is exempt and (b)Corporation B assets, which Company C controlled pre-merger?

(Of course, Company PE's pre-transactionacquisition of Company B stock is also potentially reportable if the SOTthreshold is met.)

Thanks in advance.

11/13/2008 Regards,

-----Forwarded by (redacted) on11/12/2008 04:38 PM ----

(redacted) 05/19/2008 06:47 PM

Subject HSR Informal Opinion

Mike:

Thanks for taking the time this afternoonto discuss with us the HSR notification requirements of a proposed transaction.This will confirm our conversation and the advice you gave us with regard to(1) and (2) below.

Under a proposed merger agreement betweenCorporation A (the ultimate parent entity of person "A") andCorporation B (an entity included within person "C"), B will mergewith and into A, with A continuing as the surviving corporation. In the merger,A will issue new shares of its common stock to B's shareholders, representingapproximately 65% of the voting securities outstanding post-merger.

C is the ultimate parent entity of B, andas a result of the merger of A and B, it will receive newly issued shares ofcommon stock of A, representing approximately 52% of the voting securities outstandingof A post-merger. Therefore, as a result of the transaction, C will acquirecontrol of A, the surviving corporation.

(1 ) You agreed with us that, given thatthe merger of A and B and the acquisition of voting securities of A by C occursimultaneously, they should be viewed as a single acquisition in which Cacquires approximately 52% of the outstanding voting securities of A.Therefore, C is the only acquiring person in the transaction

Upon consummation of the merger, A, thesurviving corporation, will hold the assets that it held pre-merger as well asthe assets of B.

A is a Special Purpose AcquisitionCompany, i.e., a newly formed blank check company that went public a fewmonths ago and raised cash for the purpose of effecting a business combinationwith an operating business. A currently holds only cash, and cash is consideredto be exempt assets pursuant to 801.21.

Given that C is B's ultimate parententity, C and B are currently the same person by reason of 801.1 (b)(1).Therefore, the acquisition of B's assets by C is exempt from the requirement ofthe HSR Act under 802.30.

(2) In our conversation, you advised usthat the acquisition of voting securities of A by C is exempt under 802.4 asthe newly acquired assets of A will consist of assets (i.e., cash) whoseacquisition is exempt from the requirements of the HSR Act.

If our understanding of our conversationis mistaken, please contact either (redacted) or me (redacted)) at your earliestconvenience. Thank you for your assistance in this matter.

About Informal Interpretations

Informal interpretations provide guidance from previous staff interpretations on the applicability of the HSR rules to specific fact situations. You should not rely on them as a substitute for reading the Act and the Rules themselves. These materials do not, and are not intended to, constitute legal advice.

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