Question
From: (redacted)
Sent: Friday, November 11, 2005 9:30 AM
To: Verne,B. Michael
Subject: I don't do thisto torment you.
Here's a realcase that came up yesterday.
X will pay $75million to acquire all of the common stock from the shareholders of Y. Y alsohas four classes of preferred stock, which also have present voting rights. Inaddition to acquiring the common stock from the Y shareholders, X agrees to pay$50 million directly to Y, so that Y can redeem (for cash) all of the preferredstock.
Is this a $75million deal or a $125 million deal for HSR purposes?
I would beinclined to say that X has acquired all of the voting securities of Y and haspaid consideration of $125 million to do so. Even though X doesn't technicallyacquire the preferred stock, X acquires all of the voting power, including thevoting power that had been represented by the preferred stock. Thus, I wouldcount the $50 million toward the acquisition price.