Question
February 8, 2007
VIAE-MAIL
B.Michael Verne
PremergerNotification Office Bureau of Competition
Room303
FederalTrade Commission Washington, DC 20580
RE: Potential Item 4(c) Documents Dear Mr. Verne:
Thank you for speaking with me on February 5, 2007.This letter will summarize the matters we discussed. If after further reviewyou believe that I have not accurately summarized the Staff's position on thesematters, then please contact me.
In our conversation, I advised that ourclient is preparing to make a Hart-Scott-Rodino filing as an Acquired Person,and has several preliminary documents prepared by financial advisers that wereadvising the company about divestiture options available to it. Our client hasseveral divisions, and retained financial advisers to advise it on thepossibility of divesting one or more divisions. About eight months ago, thefinancial advisers made a presentation to our client's Board of Directors thatevaluated our client's business and outlined various options. That presentationis documented in a presentation package document. One option outlined in thepresentation was the sale of the division that our client presently intends tosell ("Division A"), and for which it now is preparing to make an HSRfiling. The presentation also outlines options for the sales of other divisions(Divisions B, C, etc.).
The presentation from Summer 2006 has nodiscussion or analysis of what eventually materialized into the sale ofDivision A (the transaction at issue) or the effect of the still unformedtransaction on market shares, competition, competitors, markets, potential forsales growth or expansion into product or geographic markets. The documentaddresses the options our client had available to it, noting the sale ofDivision A as one possible option. The document addresses what valuation thefinancial advisers could present for the various divisions.
In our conversation, I highlighted two points inparticular. The document contains a section that provides backgroundinformation compiled by the financial advisers about the industry in whichDivision A operates, and states general information about the industry, suchas, the industry has revenues of $X, with a Y% annual growth rate, etc. Thedocument also has a listing of 5-10 potential bidders for Division A, but noanalysis of how the transaction would go forward with them. I noted that thebidder that ultimately has been successful is on that list of potentialbidders, and the document contains a statement to the effect that a transactionwith that potential bidder would combine top players and would result in synergy/costsavings. However, there is no discussion or analysis of the likelihood of atransaction with that potential bidder, of the transaction itself that couldform with that potential bidder, or of the effect of any such transaction onmarket shares, competition, competitors, markets, potential for sales growth orexpansion into product or geographic markets.
With that background, you confirmedthat the document I described is a preliminary document that is not responsiveto Item 4(c) of the Notification and Report Form.
Again, thank you for your time and please contact mepromptly if this letter does not accurately reflect the Staffs position withrespect to this document.