Question
August 18, 1994
VIA FACSIMILE
Premerger Notification Office
Bureau of Competition, Room 303
Federal Trade Commission
Sixth Street and Pennsylvania Avenue, N.W.
Washington, D.C. 20580
Attention: Patrick Sharpe, Esq.
Re: Purchase of General Partnership Interests
Dear Mr. Sharpe:
Our firm represents a (redacted) [PNO note here: Formations are potentially reportable] which will be acquiring a one-third interest in an existing general partnership, partly by way of a cross-purchase of interests from two 50 percent general partners, and partly by a contribution of (redacted) to the partnership for additional partnership interests. The ultimate parent entities of our client and the other two partners are unrelated. The sizes of the ultimate parent entities and of the transactions themselves are sufficient to meet the Asize of persons@ and Asize of transaction@ thresholds under The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the AAct@). [PNO note here: The acquisition of how (redacted) is exempt under 802.1, ordinary course of business].
We have concluded that the contribution of the (redacted) is covered by the Act=s exemption for (redacted), and we are not seeking any guidance with respect to that aspect of the transaction. (Notes #1 and #2). [PNO note here: agreed, 802.1]
With regard to the cross-purchase, it is our understanding that the FTC [PNO note here: PMN Office] has taken the position that interests in a general partnership are not Avoting securities@ for purposes of the Act. We understand the FTC [PNO note here: PMN Office] has also taken the position that an acquisition of less than all of the interests in a general partnership is not an acquisition of Aassets@ which requires a filing and observance of the waiting period under the Act. See, e.g., Premerger Notification Practice Manual, Interpretation #93. [PNO note here: If as a result of the acquisition one holds less than 100% of the part. int. B not reportable]. We would appreciate an opportunity to discuss this issue with you by telephone today or tomorrow to confirm that the FTC=s position in this respect has not changed. Although we believe interpretation #93 is still accurate, the ultimate parent entity of our client will shortly be making a filing under the Act on an acquisition which is unrelated to this transaction, but involves a business within the same SIC code. Since it is likely there will be press reports about the transaction described in this letter, our client does not want to give the impression that it is withholding information required under the Act. [PNO note here: under 803.1(b) may disclose such minority partnership purchase in its filing]. Thank you for your attention to this matter, and feel free to contact me at (redacted) if you have any questions in advance of my contacting you. Very truly yours, (redacted)