0606006 Informal Interpretation

Date

June 1, 2006

Rule

15 USC 18a(c)(10) 7A(c)(10), 802.30

Staff

Michael Verne

Response/Comments

The only potentially reportable portion of this transaction is the acquisition by C of the 14% interest in HoldCo. The transfer by B of its 50% interest in ABC Co. is exempt under 802.30. The acquisition of HoldCo voting securities by existing A shareholders is exempt under 7A(c)(10), because they will hold a lower percentage in HoldCo than they did in A. N. Ovuka concurs.

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Question

From: (redacted)

Sent: Friday, June 09, 2006 2:08 PM

To: Verne, B. Michael

Subject: HSR Reportability

Dear Mr. Verne:

I write to request the PNO's determination whether the following transaction is reportable.

ABC Co. is 50% owned by A (which in turn is 67% owned by XY), and 50% owned by B, a wholly owned subsidiary of C. Pursuant to a settlement agreement, B intends to swap its 50% ownership stake in ABC Co. for a 14% common stock ownership interest in HoldCo, a newly created company that is majority owned by A.

Company A creates "HoldCo" to serve as a new holding company for Company A. The existing shareholders of Company A contribute their stock in A to HoldCo in exchange for HoldCo stock; at the same time Company C causes B to contribute its 50% interest in ABC Co. to HoldCo for HoldCo stock.

Following these 2 steps, HoldCo will be owned by existing Company A stockholders (86%) and Company C (14%). A will continue to own its existing assets, including the other 50% of ABC Co..

The basic size of person test for HSR filing purposes appears to be met here based on the size of the parties. Secondly, the size-of-transaction test, is met. The value of the stock to be acquired by C is around $100 million.

Is this reportable? Or is it exempt as an intraperson transaction under 802.30? If reportable, what are the filing obligations of Company C, the 14% stockholder of HoldCo.

Thank you. If you have any further questions, please feel free to call or email. Thank you.

From:
Sent: 	Friday, June 09. 2006 2:08 PM
To: 	Verne, 6. Micnael
Subject: 	HSR Peportabilitg
Dear Mr. Verne:
I write to request the PNO's determination whether the following transaction is reportable,
ABC CO.is 5096 owned by A (which in turn is 67% owned by XY), and 50% owned by B! a wholly
owned subsidiary of C. Pursuant to a settlement agreement, B intends to swap its 50% ownership
stake in ABC Co. for a 14% common stock ownership interest in HoldCo. a newly created company
that is majority owned by A.
Company A creates "HoldCo" to serve as a new holding company for Company A. The existing
shareholders of Company A contribute their stock in A to HoldCo in exchange for HoldCo stock; at
the same time Company C causes I3 to contribute its 50% interest in ABC Co. to HoldCo for HoldCo
stock.
Following these 2 steps, HoldCo will be owned by existing Company A stockholders (86%) and
Company C (14%). A will continue to own its existing assets, including the other 5096 of ABC Co
The basic size of person test for HSR filing purposes appears to be met here based on the size of
the parties. Secondly, the size-of-transaction test, is met. The value of the stock to be acquired by C
is around $100 million.
-Is this reportable? Or is it exempt as an intraperson transaction under 802.30? If reportable, what
are the filing obligations of Company C, the 14% stockholder of HoldCo.
Thank you. if you have any further questions, please feel free to call or ernail. Thank you.
6 ( C O - [ O L
The only potentially reportable portion oi this transaction is the acquisition by C of the
14% interest in HoldCo. The transfer by B of its 50% interest in ABC Co. is exempt
under 802.30. The acquisition of HoldCo voting securities by existing A shareholders is
exempt under iA(c)(l O), because they will hold a lower percentage in HoIdCo than they
did in A.
ri . bv"){ch 	Ca*iCclh>.

0606006 Informal Interpretation

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