2408009 Informal Interpretation

Sheinberg, Samuel I.
From:
Sent:
To:
Subject:
HSRHe lp
Monday, August 12, 2024 2:57 PM
Berg, Karen E.; Musi ck, Vessel i na; Shaffer, Kristin; Shei nberg, Samue l I. ; Six, An n e;
Whiteh ead, No ra; Fetterman, Michelle; Burton, June; Larson, Peter
FW : Question Rega rdi ng Reportable Transaction St ructu re
From: Walsh, Kathryn E. <kwalsh@ftc.gov>
Sent : Mo nday, August 12, 2024 2:56 :28 PM (UTC-05:00) Eastern Time (US & Canada)
To:
Cc : HSRHelp <HSRHelp@ftc.gov>
Subject: FW : Question Regarding Reportable Tra nsa ction Structure
As long as the part i es can attest to the ir good faith intent to acquire 100%, fil i ng for that amount is fine. Additiona l detai l
in I tem 3(a) is always welcome.
The fi ling should be fo r non-corporate interests.
From:
Sent : Thursday, August 8, 2024 6:05:43 PM (UTC- 05 :00) Eastern Time (US & Canada)
To: HSRHelp <HSRHelp@ftc.gov>
Subject: Question Rega rding Reportable Transaction Structure
Good Afternoon,
We represent "Seller," which is the UPE of "Target." Se ll er is under negoti at ions w ith "Buyer" (Buyer is its own UP E) for
the sa le of all or the majority of the equity interest in Target. The parties have signed an exclusivity l ette r and te rm sheet
and are hoping to fi le the premerger notification on these documents (a/k/a the LO I). Under the terms of the te rm
sheet, Se ller would se ll 85% of the equity interest in Ta rget to Buyer and retain 15%.
The issue however is that the parties are still explo ring the possibili ty of Se ll er se lling 100% of the equ ity interest in
Target and in addition to Se ll er receiving cash for the 85%, a ls o gett ing ro llover equity in Buyer (in an amount equal to
15% of the tota l consideration for the purchase of Target).
Given that the rollover equity question is still to be determ ined, are the parties still able to file the premerger
not ification us ing the mo re "conservative" approach and t reat the fi ling as if it wou ld be a sa le of 100% of the equity
interest in Target and for Se ller to receive 1 5% in equival ent ro ll over equ ity . This wou ld be despite the fact that as the
transaction progresses, it may l ater be decided that Seller wou ld only sell 85%, retain the ir 1 5%, and not have any
rollover equity. Wou ld th is result in the pa rt ies havi ng to refile the premerger notification? If helpful, the parties can also
add some clarifying comments and background to the t ransaction descript ion port ion of the notification.
A second question is that curr ent ly Ta rget is a corporation, but Se ll er intends to convert Target into a l imited liabili ty
company immediately before closing (as part of an F-Reorganization). In other words, at the t ime of submission of the
premerger not ification, Target will be a corporation, however, upon closing, Target will be a li mited liabili ty company.
Should the premer ge r not ification be fi lled out treat i ng the acquired entity (Target) as (a)(i) a corpor at ion, for the
acquisition of (ii) voting securiti es; or should the premerger not ification be completed to reflect the t ransaction at
closing, wh i ch wou ld be (b)(i) a li mited liabi li ty company, for the acquisition of (i i) non-corporate interests?
Thank you aga in for your time.
Kind Regards,
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