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Date
Rule
802.4
Staff
Michael Verne
Response/Comments
I agree that no separate filings would be required for the acquisitions of the corporations that have minority holdings in the target corp. Those acquisitions would be exempt under 802.4 and the secondary acquisitions of the voting securities of target corp would be subsumed in the overall acquisition of 100% of target corp's voting securities.

Question

From: (redacted)

Sent: Wednesday, February 01, 2006 7:37 PM

To: Verne, B. Michael

Subject:HSR Question

Mike, I have a transactionthat I would like your comment on whether an HSR filing is necessary andthought it would be easier to explain in an email. I am representing the buyerwho will be acquiring 100% of the voting securities of the Target Corporationand we will be doing an HSR filing for the acquisition. One of the minorityshareholders ("X") of Target holds the voting securities of Targetvia a corporation ("Y"). For taxes reasons, X proposes that the buyeracquire Y rather than directly buy the voting securities of Target from Y. Atclosing of the acquisition of Y, the only assets in Y will be the votingsecurities of Target plus some cash for expenses. All other assets will beremoved. The acquisition of Y will occur though a merger with a subsidiary ofbuyer and is valued in excess of $56.7 million. (The transaction will closeafter the new thresholds take effect.) This acquisition will occur shortlybefore buyer's acquisition of the remaining voting securities of Target but isexpected to occur the same day-basically simultaneously.

I believe that in thissituation the parties can "look through" the acquisition of Y andtreat it as the acquisition of the voting securities of Target and just do anHSR filing for the acquisition of 100% of Target's voting securities and nothave to do a separate filing for the acquisition of Y There is another minorityshareholder who owns the target's voting securities via a corporation and wouldlike to do a similar transaction as well. This transaction is valued at leastthan $56.7 million. I do not believe that having two such acquisitions wouldchange the analysis but thought I should mention it.

Thank you and I look forwardto your response. If you have any questions please call.

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Informal interpretations provide guidance from previous staff interpretations on the applicability of the HSR rules to specific fact situations. You should not rely on them as a substitute for reading the Act and the Rules themselves. These materials do not, and are not intended to, constitute legal advice.

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