Question
November 5, 2007
BY EMAIL
Mr. B. Michael Verne
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
600 Pennsylvania Avenue, N.W. Washington DC 20580
Re: Certain Transfers of VotingSecurities in Mergers
Dear Mr. Verne:
The purpose of this letter is toconfirm my understanding from our recent telephone conversation relating torequirements under the Hart-Scott-Rodino Antitrust Improvement Act of 1976 (asamended, the "Act") and the regulations thereunder in connection withcertain transfers of voting securities in mergers.
The common stock of CorporationA is publicly traded, and the common stock of Corporation B is publicly traded.Corporation A and Corporation B entered into an Agreement and Plan of Mergerwhereby Corporation B will be merged into a subsidiary of Corporation A. Thevalue of the transaction exceeded $500 million (as adjusted). Filings under theAct were made, and the waiting period under the Act and the regulationsexpired.
The consideration paid to theshareholders of Corporation B will consist of the common stock of Corporation Aand cash. Subject to the common stock pool and/or the cash pool beingoversubscribed, the shareholders of Corporation B can elect the amount ofcommon stock of Corporation A they wish to receive.
Corporation B has several large shareholders, and itis possible that one of more of those shareholders could receive as mergerconsideration common stock of Corporation A having a value of $59.8 million ormore. None of those shareholders will acquire 10% or more of the outstandingvoting securities of Corporation A or will participate in the management ofCorporation A. In addition, Corporation A is unaware that any of thoseshareholders has an intention to hold the common stock of Corporation A otherthan "solely for the purpose of investment"within the meaning of 16 C.F.R. 801.1(i)(1) and 802.9. However, Corporation Acannot be certain of the intentions of those or any other shareholders.
Based on the foregoing,Corporation A does not have a duty under the Act to determine the intentions ofthose shareholders, and Corporation A would not violate the Act by transferringto any of those shareholders of Corporation B, as merger consideration, commonstock of Corporation A having a value of $59.8 million or more.
Please confirm that my understanding is correct. Thank you very much foryour assistance.