Question
From (reacted)
Subject HSR Informal Opinion
Mike:
Thanks for taking the time this afternoonto discuss with us the HSR notification requirements of a proposed transaction.This will confirm our conversation and the advice you gave us with regard to(1) and (2) below.
Under a proposed merger agreement betweenCorporation A (the ultimate parent entity of person "A") andCorporation B (an entity included within person "C"), B will mergewith and into A, with A continuing as the surviving corporation. In the merger,A will issue new shares of its common stock to B's shareholders, representingapproximately 65% of the voting securities outstanding post-merger.
C is the ultimate parent entity of B, andas a result of the merger of A and B, it will receive newly issued shares ofcommon stock of A, representing approximately 52% of the voting securities outstandingof A post-merger. Therefore, as a result of the transaction, C will acquirecontrol of A, the surviving corporation.
(1) You agreed with us that, given thatthe merger of A and B and the acquisition of voting securities of A by C occursimultaneously, they should be viewed as a single acquisition in which Cacquires approximately 52% of the outstanding voting securities of A.Therefore, C is the only acquiring person in the transaction.
Upon consummation of the merger, A, the survivingcorporation, will hold the assets that it held pre-merger as well as the assetsof B.
A is a Special Purpose AcquisitionCompany, i.e., a newly formed blank check company that went public a fewmonths ago and raised cash for the purpose of effecting a business combinationwith an operating business. A currently holds only cash, and cash is consideredto be exempt assets pursuant to 801.21.
Given that C is B's ultimate parent entity,C and B are currently the same person by reason of 801.1 (b)(1). Therefore,the acquisition of B's assets by C is exempt from the requirement of the HSRAct under 802.30.
(2) In our conversation, you advised usthat the acquisition of voting securities of A by C is exempt under 802.4 asthe newly acquired assets of A will consist of assets (i.e., cash) whoseacquisition is exempt from the requirements of the HSR Act.
If our understanding of our conversationis mistaken, please contact either (redacted) or me (reacted) at your earliestconvenience. Thank you for your assistance in this matter.