Question
From: (redacted)
Sent: Friday, September 02, 2005 8:41 AM
To: Verne,B. Michael
Subject: HSR Question about the impact of transaction costs on"acquisition price"
In a voting securities acquisition, if the Buyer says "I'llpay Seller X dollars to acquire its shares, and in addition I'll also paySeller's related transaction costs," my understanding is that thetransaction costs don't count toward the "acquisition price" becausethey aren't consideration received by the Seller for the sale of its shares.
Suppose instead that the parties don't reach any agreement withrespect to transaction costs. Buyer pays Seller X dollars to acquire itsshares, and Seller pays its own transaction-related expenses. Can the Sellerexclude its transaction costs from the "acquisition price," since thetransaction costs ultimately reduce the consideration realized by the Sellerfor the sale of its shares?