Question
[redacted]
November 21, 2000
By Hand
Mr. Michael Verne
Premerger Notification Office
Bureau of Competition, Room 303
Federal Trade Commission
6th Street & Pennsylvania Avenue, N.W.
Washington, D.C. 20580
Dear Mr. Verne:
This is to confirm the conversations and I had with you on November 2 and 16, 2000 relating to the determination of the consideration and filing parties in the following transaction.
Company A is going to purchase the stock of serveral corporation whose only assets are interest in an LLC. The corporations jointly own 100% of the LLC, but none owns 50% or more. The consideration for the purchase of the LLC is stock of Company A, cash and either the assumption of liabilities of the LLC or payment of the liabilities of the LLC at the closing. The debt of the LLC is guaranteed by the corporations being acquired or their ultimate parent entities or intervening corporations.
You advised us that since the substance of the acquisition was the purchase of the LLC interests that we should look through the corporate ownership to the LLC. As a result the filing party would be the LLC as the seller and Company A as the purchaser. You further advised that since an LLC was being purchased, a filing would not need to be made for staggered closing except for the last acquisition which would convey ownership of 100% of the LLC interests to Company A.
The consideration for the purchase of the LLC interests will be stock of Company A, which is publicly traded. The value of the stock should be determined in accordance with 16 C.F.R. 801.10. Liabilities discharged by the transactions would not be added to the value of the securities of Company A received by the sellers.
We appreciate your advice on this matter. Please call me should you disagree with any of the above. Thank you very much.
Sincerely,
[redacted]
[redacted]
cc: [redacted]