Question
From:
(Redacted)
Sent:
Thursday, March 04, 2010 10:44 AM
To:
Verne, B. Michael
Subject: Questionsabout Potential Transactions
Good morning,
I have somequestions about a few transactions that I'm working on. Please see thescenarios described below and let me know whether you agree with the analysesand please provide corrections where appropriate. Thanks very much for yourtremendous assistance.
Scenario 1
A is buying all ofB's stock. The acquisition will include
Warehouses = $80m(exempt under 802.2(h)) (acquisition price)
Trademarks = $40 m(The acquisition price and fair market value are the same)
Under the 802.2(h)analysis and 801.15(a) analysis and respective examples, A's acquisition isexempt from a filing because the value of the non-exempt assets standing alone,is below the $63.4 million size of transaction threshold.
Question:
Do you also applythe 802.4 analysis, which would give the same result?
Scenario 2
A is buying all ofB's stock. The acquisition will include
Warehouses =$80m(exempt under 802.2(h)) (acquisition price)
Trademarks =$80 m(The acquisition price and fair market value are the same)
Under the 802.2(h)analysis and 801.15 (a) analysis and respective examples, A's acquisition isnot exempt from a filing because the value of the non-exempt assets standingalone exceeds the $63.4 million size of transaction threshold.
Questions:
Do you also applythe 802.4 analysis, which would give the same result?
Is the transactionvalue for the filing the value of the trademarks only -$80 million or is it theoriginal total transaction value of $160 million? Is the voting securities boxchecked only or do you also check the assets box because trademarks are beingacquired?
Does the resultchange if the warehouses are held by one wholly owned US sub and the trademarksare held by a different wholly owned US sub (trademarks are for use in US)?
A is buying all ofB's stock. The acquisition will include
Warehouses =$80m(exempt under 802.2(h)) (acquisition price)
Trademarks =$40 m(The acquisition price and fair market value are the same)
Under the 802.2(h)analysis and 801.15 (a) analysis and respective examples, A's acquisition isexempt from a filing because the value of the non-exempt assets standing alone,is below the $63.4 million size of transaction threshold.
Approximately 75days later, A buys more trademarks from B and voting securities of B'ssubsidiary.
New trademarks =$80 m (The acquisition price and fair market value are the same) votingsecurities = $70
This transactionis reportable because the value, $150 m exceeds the $63.4 threshold.
Questions:
Under rule 801.15,does A have to aggregate the value of the trademarks, $40 m-from the firstacquisition, with the current acquisition such that the filing is for the oldand new trademarks and the voting securities of B's subsidiary?
Should the filingvalue be $190 million?
Are there anyother factors that should be noted or considered as part of the analysis?
Scenario 4
A is buying all ofB's stock. The acquisition will include
Warehouses = $80m (exemptunder 802.2(h)) (acquisition price)
Trademarks = $80 m(The acquisition price and fair market value are the same)
Under the 802.2(h)analysis and 801.15 (a) analysis and respective examples, A's acquisition isnot exempt from a filing because the value of the non-exempt assets standingalone exceeds the $63.4 million size of transaction threshold.
Approximately 75days later, A buys more trademarks from B and voting securities of B'ssubsidiary.
New trademarks =$80 m (The acquisition price and fair market value are the same) votingsecurities =$70
This transactionis reportable because the value, $150 m exceeds the $63.4 threshold.
Questions:
Does A need toaggregate the value of the current transaction $150 m with the value of theearlier one?
Or is that thevalue of the previous transaction simply counts in A's size of person/balancesheet calculation?
Please state thevalue of the transaction to be put on the form and indicate whether assets andsecurities are checked?
Scenario 5 -Differenttransaction
A is buying 100%of B's voting securities. B has three subsidiaries and B is a US company.
Sub 1 -US Sub=$150 million
Sub 2 -Foreign Sub with no US sales or assets =$75 million
Sub 3 -Foreign Sub with no US sales or assets = $150 million
Questions:
Subs 2 and 3 areexempt under 802.51, but is the filing for the value of only the US sub, $150million or the entire transaction value, including all three subs, $375million? Please explain whether 802.4 is relevant to this analysis.
I greatlyappreciate your taking the time to review this and your quick responses (as I'munder pressure to give answers). As you may know from queries from others,these issues can be confusing sometimes so I want to be sure the answers areconsistent with the PNO's views.