Question
February 24, 1993
CONFIDENTIAL
VIA FAX
Premerger Notification
Bureau of Competition
ATTN: Victor Cohen, Esq.
Federal Trade Commission
6th Street and Pennsylvania Ave., N.W.
Washington, D.C. 20580
Re: Sale of Undeveloped Real Estate
Gentlemen:
Our client, [redacted] (Seller), a federally chartered institution located in the [redacted], acquired approximately 15,915 acres of undeveloped real estate with standing old growth timber located in [redacted] and [redacted] by foreclosure in February 1992. Seller has not derived any income from timber sales since it acquired the property. The only income derived by Seller from the land, if any, relates to some small trapping lease revenues. Timber has not been harvested on this property not any income generated therefrom for at least five years.
Seller has entered into an agreement to sell this property to [redacted] (Buyer), a [redacted] corporation for a total consideration of $22,500,000.00. Ten percent of the purchase price is being paid in cash, with the remainder being financed by Seller. Seller will retain a mortgage on the property being sold, and will have an additional security interest in [redacted] real estate owned by Buyer.
[Redacted] is a closely held corporation. Approximately 75% of the stock is held by the [redacted]. The remaining 25% is held by [redacted] of its affiliates.
Buyer is in the timber business and is acquiring this property for its timber inventory and in order to cut and harvest timber on the property.
As we discussed this morning, we believe that this transaction is exempt from the premerger notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act because it is an acquisition of goods and realty in the ordinary course of business (15 U.S.C. 18(a)(c)(1)). See also, ABA ANTITRUST SECTION, PREMERGER NOTIFICATION MANUAL, Section 14, at page 14 (1991 edition).
Thank you for your attention to this matter.
Yours very truly,
[redacted]
cc: (redacted)