Question
March 1, 1996
Via Facsimile
Mr. Patrick Sharpe
Federal Trade Commission
Premerger Notification Office
Room 303,
6th & Pennsylvania Avenue
Washington, D.C. 20580
Dear Mr. Sharpe:
Attached is the transaction about which we spoke earlier this afternoon. Please give me a call at [redacted] when you have reviewed the transaction.
Very truly yours,
[redacted]
Enclosure
Broker X purchases and sells the on a take or pay contract to A1, a wholly owned subsidiary of A, for $3.65 per m.c.f. and A1 distributes the to its customers. For a payment of $28 million, X agrees to sell the over the term of the contract to A at $3.06 per m.c.f..
Simultaneously with the renegotiation of the contract with A and substitution of A as the purchaser for A1, Bank B or its subsidiary** will enter into the contract chain, pay A $31 million and begin to purchase the at $3.06 per m.c.f. Bank B will in turn sell the to A1 at $3.65 per m.c.f. for ultimate distribution to A1's customers.
Before [Diagram - - - -see pdf file]
After [Diagram - - - -see pdf file]
Is a report required for either step in the transaction?
[** Staff comment: bank? Does it engage in such transactions in its ordinary course of business?]