1709006 Informal Interpretation

[Redacted],

In the transaction you describe, you need only value the voting securities of Corporation X to determine the size of transaction.

Karen

From: [Redacted]

Sent: Tuesday, September 12, 2017 6:42 PM

To: Berg, Karen E.

Subject: Non-Voting Securities Question

Karen—

This may be a very rudimentary question and, if so, I apologize for clogging your email inbox. My client is in discussions to acquire all of the capital stock of Corporation X. The capital stock of Corporation X is divided between 100 Voting Common Shares and 900 Non‐Voting Common Shares. I know that the acquisition of non‐voting securities is disregarded, so the value of those shares should not be included in determining whether the size‐of‐transaction test has been satisfied.

However, Corporation X owns 99% of the membership interests in LLC Y, and my client will also acquire the remaining 1% of the membership interests in LLC Y. As a result of the acquisition of all of the capital stock of Corporation X and the acquisition of the remaining 1% of membership interests in LLC Y, my client will own (directly) all of the capital stock of Corporation X and (directly or indirectly) all of the membership interests in LLC Y.

It appears as though, if the non‐voting common shares are removed as exempt, then, based on the FMV of the remaining items being acquired (the voting common shares of Corporation X and the 1% membership interest in LLC Y), the SOT threshold will not be satisfied. I believe that this is the correct HSR analysis (Informal Interpretation #1607003 seems to support this conclusion). Is that right? I am seeking confirmation, since if my client had instead directly acquired all of the membership interests in LLC Y, this transaction would have satisfied the SOT threshold, and I believe that Corporation X may simply be a holding company.

Thank you for your time.

Best regards,

[Redacted]