Question
From:
Redacted
Sent:
Tuesday, August 03, 2010 2:48 PM
To:
Verne, B. Michael
Subject: Question about 25% threshold& 802.21
Mike,
I hope all is going well for you.
We had a question about the 25%threshold.
Assume A files at the $500 million (asadjusted) threshold to acquire shares of B. (A and B are their own UPEs andthere are no aggregation issues.) Assume within one year of filing that A makesan acquisition such that its total holdings exceed the $500 million (asadjusted) threshold.
On those assumptions, A can of courseacquire more of B for up to five years after the waiting period expires so longas it does not meet the next notification threshold.
Assume 25% of B is presently valued atless than $1 billion (as adjusted). That would mean that A's filing wouldenable it to acquire up to one share less than 50% of B's outstanding votingsecurities without having to do an additional filing.
Assume that, taking advantage of thatfact, A acquires shares such that its holdings are now 25% of B's outstandingvoting securities, but still valued at less than $1 billion (as adjusted).
Now assume that the value of B's votingsecurities increases so that 25% are valued at greater than $1 billion (asadjusted).
Here's the question: can A make furtheracquisitions (within five years of the expiration of the original notificationat the $500 million (as adjusted) threshold) without doing a new filing? Itwould seem yes because 802.21 exempts acquisitions (within the five years) thatwould not "increase the holdings of the acquiring person to meet or exceeda notification threshold (as adjusted) greater than the greatest notificationthreshold met or exceeded in the earlier acquisition." It does not seem torequire that the original filing specify the 25% threshold, just that thelatest acquisition not be the one that "meets or exceeds" the nexthigher threshold.
It would also seem that the answer to thequestion is not dependent on when the 25% threshold was crossed within the fiveyears, so long as the acquisition that resulted in the threshold being crossedwas at a time when 25% of the voting securities of B was valued at less than $1billion (as adjusted).