Question
From:(redacted)
Sent:Thursday, October 05, 2006 7:16 PM
To:Verne, B. Michael
Subject:Fw: Follow-up questions
Mike,
Irepresent the buyer ("Y") in the transaction described in Lynda'semail below and have the following question which affects the level of filingfee to be paid for this transaction.
Thetransaction will be financed in part through the incurrence by LLC X ofapproximately $900 million of bank debt and in part through an equityinvestment of approximately $320 million by Y. As a result of the transaction,X will receive a cash payment of approximately $1.2 billion, part of which willbe generated by LLC X's additional borrowing and part by Y's investment. As aresult of the transaction, Y will hold a 52% interest in LLC X and Xwill retain a 48% interest in LLC X. Thevalue of the interests to be held by Y in LLC X as aresult of this transaction is approximately $320 million and the value of theinterest to be retained by X is approximately $300 million.
Whatis the correct way to value this transaction for HSR purposes? Can we excludethe debt incurred by the target company (LLC X)?
Many thanks in advance for your guidance. Regards,