Question
From: (redacted)
Sent: Tuesday, May 19, 2009 4:56 PM
To: Verne, B. Michael
Subject: Structure of Transaction question
Dear Mike hope all is well with you I have a question about how to report a transaction.
Facts:
1. A is the UPE of B.
2. B will merge with and into Company with Company remaining as the surviving corporation.
3. B shareholders will receive 100% of the newly-issued Company shares of Class B Common Stock representing 72% of Company's outstanding voting securities.
4. Pre-closing Company shareholders will receive 100% of the newly-issued Company shares of Class A Common Stock representing 28% of Company's outstanding voting securities.
5. Post-closing A will hold 50% or more of Company's voting securities.
Questions:
1. A will submit an HSR filing in connection with its acquisition of 50% or more of Company voting securities.
2. To the extent any other B shareholder will receive Company voting securities with an aggregate value of $65.2 million would that shareholder
a. Be required to submit a separate HSR filing unless otherwise exempt?
b. If that shareholder needs to file an HSR would 802.4 apply and the value of the Company shares only include non-exempt assets (Company assets)?
3. The C shareholders will exchange their Company shares for newly-issued shares of C voting securities
a. Can those shareholders rely on 7A(c)(10) because their aggregate percentage interest will be reduced even though the shares now include the assets of B?
b. If C shareholders need to file HSR would they use 802.4 and value of the C shares only include non-exempt assets (B assets)?
4. If none of the above are correct how should it be treated?
Many thanks as always for your guidance.