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Date
Rule
801.50, 15 USC 18a
Staff
Michael Verne & Shelia Clark-Colman
Response/Comments
Agree.

Question

From: Verne, B. Michael

Sent: Monday, March 03, 2008 2:31 PM

To: Clark-Coleman, Sheila Subject: RE: Houston Market Sale

This looks OK to me. Are you going to respond to him or do you want me to?

------- Original Message

From: Clark-Coleman, Sheila

Sent: Monday, February 25, 2008 3:51 PM

To: Verne, B. Michael

Subject: FW: Houston Market Sale

Mike

Did you get a chance to review the situation below?

Sheila Clark-Coleman Premerger Notification Office (202) 326-2759

------- Original Message

From: (redacted)

[mailto: (redacted)]

Sent: Wednesday, February 20, 2008 6:29 PM

To: Clark-Coleman, Sheila; Verne, B. Michael

Subject: Houston Market Sale

Hi Sheila and Michael, Please let me know if you agree with the following analysis for the subject deal. Feel free to call me if you have any questions. (redacted)

Step 1 Transaction-Formation of the LLC

(redacted) and (redacted)("(redacted)") will form a Limited Liability Company ("LLC") in the State of Delaware named (redacted) Group, LLC ("(redacted)") (redacted)and (redacted) will each invest $12.5 million in cash for their respective 50% interests in (redacted). The formation of the LLC is not reportable under the Hart-Scott-Rodino ("H-S-R") Act because the LLC is being capitalized solely with cash and, pursuant to 16 CFR 801.21, the acquisition of cash is not considered an "acquisition of assets" for H-S-R reporting purposes.

Step 2 Transaction - Sale of Stations to the LLC

(redacted) will purchase approximately 162 (redacted)-branded stations in the greater Houston area from (redacted) for a purchase price of $106.8 million. (redacted) Bank will finance 76% of the purchase price with the remaining 24% sourced from the initial cash contributions. This transaction is reportable under the H-S-R Act because the parties meet the Size-of-Person Test (i.e., (redacted)has more than $126.2 million in sales and (redacted) has more than $12.6 million in sales) and the $106.8 million transaction value exceeds the 2008 minimum transaction reporting threshold of $63.1 million.

Step 3 Transaction - H-S-R Reporting Requirements for (redacted) and (redacted)


(redacted) will be required to file an H-S-R Notification Form with respect to this transaction as the Ultimate Parent Entity ("UPE") of the "acquiring entity" by virtue of its 50% interest in (redacted). Even though (redacted)is considered a UPE of the "acquiring entity" by virtue of its 50% interest in (redacted), it will not be required to file an HS-R Notification Form with respect to this transaction pursuant to 16 CFR 802.30(a) which states that an acquisition is exempt from the requirements of the act in which the acquiring person and at least one of the acquired persons are the same person. (redacted) (redacted) plc ("(redacted)") and (redacted)("(redacted)") are 50%-50% owners of (redacted) and, as such, both companies are considered UPE's of (redacted), the "acquired entity". Both (redacted) and (redacted) will file separate H-S-R Notification Forms as UPE's of the "acquired person". As an "acquired entity" in this transaction, (redacted) will only have to provide 2002 and 2007 revenue figures for the approximately 162 retail stations that are being sold to (redacted), but will not have to provide any revenue figures with respect to its or (redacted)'s or (redacted)'s other operations.

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Informal interpretations provide guidance from previous staff interpretations on the applicability of the HSR rules to specific fact situations. You should not rely on them as a substitute for reading the Act and the Rules themselves. These materials do not, and are not intended to, constitute legal advice.

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