Question
FEDERAL EXPRESS
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
600 Pennsylvania Avenue, NW, Room 303
Washington, D.C. 20580
Dear Patrick:
As we discussed earlier today on the telephone, I am writing to request your offices confirmation of our position regarding the calculation of the total assets of an acquiring person pursuant to Section 8.01(11)(e) regulations of the premerger notification regulations.
The acquiring person ("Buyer") is a newly formed company whose only assets consist of 10% of the outstanding stock of the company to be acquired ("Target"). Buyer will pay $30,000,000 for the stock of Target it does not own, plus prepay $10,000,00 of Targets bank debt. Buyer will borrow approximately $41,000,000, $30,000,000 of which will be used to buy the stock of Target, $10,000,000 of which will be used to prepay Targets bank debt and the balance of which will be used to pay acquisition fees.
It is our understanding that, because both the shares of Target stock held by Buyer, and the $41,000,000 loan proceeds used for the stock acquisition fees, are all excluded under Section 8.01(11)(e), Buyerss total assets will be zero.
Based on this analysis, we will shortly be entering into an acquisition agreement which does not an acquisition agreement which does not provide for a Hart-Scott-Rodino premerger notification. We would therefore appreciate your views on the above as soon as practicable.
If you have any questions, please call me at above number.
Thank you.
Very truly yours,
cc: (redacted)