Question
From:
(Redacted)
Sent:
Wednesday, September 08, 2010 9:45 AM
To:
Verne, B. Michael
Cc:
(Redacted)
Subject: RE: Beneficial ownershipquestion
Thank you for taking the time, Mike.
We would like to confirm that no HSR filingis required as a result of the following transactions, because the foreignacquirer would not hold 50% or more of the voting securities of a foreigntarget
Company A, a foreign acquiring person,is seeking to acquire additional voting securities of company S, a foreignissuer. (Assume that the relevant thresholds contained in 802.51 are exceeded.)At present, company A holds just below 30% of the outstanding voting securitiesof company B.
Company A now wants to raise a takeoveroffer for all the outstanding voting securities of company B. Even though theoutcome of such takeover offer is not foreseeable, and it is not very likelythat the offer will lead to company A holding 50% or more of the votingsecurities of company B, the risk cannot be excluded. Company A understandsthat, should it seek to hold 50% or mare of the voting securities of a, theexemption from HSR filing contained in 802.51 would not apply. The offer is notconditioned upon satisfaction of the HSR requirements.
Therefore, company A would like to setup the following structure to ensure that it does not hold 50% of more of thevoting securities of company B, at least until such time as any required HSRfilings are submitted, and the waiting period observed:
Immediately following the close of theoffer, company A will dispose of all shares which exceed 49.95% of theoutstanding voting securities of B in the following ways:
(a)depending on the amount of the shares obtained In the offer, a significant partof them would be sold to a third party (Third Party 1) with all Third Party 1having all rights pertaining to such shares including full voting rights,rights to dividends, and the right to sell and transfer the shares to thirdparties. There will also be a "cash settled total return swap"between Third Party 1 and company A which covers the economic risk of ThirdParty 1 in full in the event that the market price changes following a furtherresale of these shares, but excludes any physical settlement of shares.
(b) forat least approx. 0.05 % of the voting securities in excess of 49.95%, company Awill sell those shares to another third party (Third Party 2) and immediatelyenter into a repurchase agreement which will only be settled if and when anyrequired HSR filings are made and applicable waiting period observed. If theHSR Act obligations are not satisfied by a particular date, there will be acash settlement mechanism in place similar to the one described under (a). Inthe meantime, Third Party 2 has full voting rights and all other rightspertaining to the shares, except that it would not be allowed to sell theshares.
The agreements described in (a) and (b),with Third Party 1 and 2, respectively, would both be executed prior to theclosing of the tender offer.
Please confirm that our understanding iscorrect that, as a result of consummating the transactions described above,company A would not be deemed to hold voting securities of company in excess of49.95% of the outstanding voting securities of B, and thus no HSR filing wouldbe required until and if A acquires additional shares of B by way of therepurchase agreement described in (b) or otherwise.