Question
(redacted)
March 9, 1998
VIA FACSIMILE
Patrick Sharpe
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
600 Pennsylvania Avenue, NW, Room 303
Washington, D.C. 20580
Re:Premerger Notification Requirements under the Hart-Scott-Rodino Antitrust Improvements Acts of 1976, as amended (the Act)
Dear Mr. Sharpe:
I am writing to you to (cant spell it) the telephonic conversations we had on March 5, 1998, and march 9, 1998 (the Conversations). In the Conversations we discussed the issue of whether the acquisitions solely for the purpose of investment exemption found under 802.9 of the Act (the Exemption) would be available to XYZ, LP under the facts provided to you in my letter dated March 4, 1998. As you probably recall, the facts were as follows (the Original Facts):
1.Parent, Inc. intends to acquire Target, Inc. in a stock for stock merger (the transaction). Upon consummation of the Transaction, Parent, Inc. will be the sole stockholder of Target, Inc.
2.XYZ, LP, a limited partnership, is a stockholder of Target, Inc. and will acquire in excess of $15 million in Parents voting securities in connection with the Transaction. The securities to be acquired by XYZ, LP will not amount to 10% of the outstanding voting securities of Parent.
3.XYZ, LP consists of approximately 90 limited partners and one general partner (GP).
4.GP is a general partnership with eight general partners, one of whom, X, is a director of Parent, Inc. It is anticipated that X will continue to serve as a director of Parent, Inc. after the consummation of the Transaction.
In the Conversations, I provided you with the following additional information (the Additional Information):
A. Generally, the Managing General Partner of GP is responsible for the management and control of the business affairs of GP. Action by GP with respect to investment and disinvestment decisions may only be taken by the affirmative vote of a Majority-in-Interest of GP, which is the greater of (i) six general partners of (ii) a numerical majority of the general partners.
B. If the Managing General Partner is not part of the Majority-in-Interest with respect to a matter, the affirmative vote of 80% or more of the General Partners would be needed to approve such matter.
C. X is not the Managing General Partner.
Based upon the Original Facts and the Additional Information, you advised me that the Exemption was available to XYZ, LP, notwithstanding the fact that X, one of the eight general partners of the sole general partner of XYZ, LP is also a director of Parent, INc. Please confirm that this correctly reflects you view. [Note: I agree]
If you have any additional questions or comments regarding this letter, please call me at the above-referenced telephone number. Thank you in advance for your prompt consideration of these matters.
Very truly yours,
(redacted)
cc: (redacted)