Question
From: (redacted)
Sent: Thursday, June OS, 2008 4:41 PM
To: Verne, B. Michael
Cc: (redacted)
Subject: HSRQuestion
Dear Mr. Verne:
I have a questionregarding the application of the HSR rule 802.3 to a proposed transaction. Inthe proposed transaction, the acquiring person will be acquiring (A) 80% of thevoting stock of a corporation (the "Mine Operator") that owns coalmining exploration and production equipment and surface land surrounding a coalmine for $25 million in cash and (B) railroad assets of an affiliated company(the "Mine Owner") that provide rail access to the coal mine for $50million in cash. The Mine Owner also owns the coal mine and all the coalreserves. The acquiring person will not be acquiring any assets or votingsecurities of the Mine Owner except the rail assets, i.e., it will not beacquiring any of the coal reserves. Currently, the Mine Operator and the MineOwner are each owned by the same ultimate parent entity.
My question is,assuming that the coal mining exploration and production equipment and surfaceland being acquired in the transaction constitute "associated explorationor production assets" under HSR Rule 802.3, would the acquisition of thevoting securities relating to these assets qualify for $200 million thresholdunder HSR Rule
802.3 despite the fact that the acquiring person was not,in fact, acquiring any coal reserves in the transaction?Thank you very muchfor help.