Question
From: (redacted)
Sent: Friday, October 05, 2007 12:37 PM
To: Verne, B. Michael
Subject: Confirmation on HSR Analysis
Mr.Verne:
I would like to call you to confirmour conclusion regarding the HSR filing requirements for a proposedtransaction. In advance of my call, Ithought it would be helpful to provide you with the following summary of thetransaction and our conclusions:
Company A has two shareholders -- S-1and S-2 -- who each own 50% of the voting securities of Company A.
Company A will merge into a wholly-ownedsubsidiary of Company B (the subsidiary of Company B will survive the merger, effectively resulting in the acquisitionof Company A by Company B). Company B is a publicly-traded company thatis its own UPE.
As consideration for the merger, S-1will receive newly-issued voting securities of Company B that will give S-1 more than 50% of the voting securities ofCompany B. S-2 will receive approximately $65 to $70 million in cash.
Basedon this structure, we have concluded the following:
S-1 is an acquiring person because hewill control Company B after the merger. Company B controls the entity thatsurvives the merger.
S-1 will hold voting securities inCompany B that he did not hold prior to the merger. The value of those CompanyB voting securities will exceed the HSR size-of-transaction threshold.Therefore, S-1 (as an acquiring person) andCompany B (as an acquired person) must file for the acquisition of Company B'svoting securities. Both parties meet the relevant size-of-person tests.
The acquisition of S-2's Company Avoting securities for cash is exempt under the 802.30 intra-person exemption because S-1 controls Company A at thetime of the merger through his ownership of 50% of the votingsecurities.
Thankyou for your help with this matter.