0412008 Informal Interpretation

us-ftc-hsr-informal-interpretations-53b7b2c2f4342b3e51ed2546781dbf6d0412008 Informal InterpretationGuidance

Open source
Date
Rule
801.40
Staff
Michael Verne
Response/Comments
Correctly, the last step would be reportable as an 801.40 formation. Proposed 802.10 would exempt it as long as pro-rata.

Question

From: (redacted)
Sent: Monday, December 13, 2004 4:11 PM
To: Verne, B. Michael
Subject: Can you backstop meon this one?

In anticipationof acquiring Target and taking it public, three parties (unrelated to oneanother) contribute $100 million cash apiece to the formation of an LLC.

LLC forms awholly owned corporate subsidiary.

Corporatesubsidiary acquires the stock of Target for $300 million. Transaction isreportable; ultimate parent LLC and Target company file; waiting periodexpires.

LLC then mergesinto its own Corporate subsidiary, with the latter surviving as the anticipatedissuer in the IPO.

Is the last step(the merger), and the consequent distribution of Corporate subsidiary stock toLLC members, separately reportable? Or does the filing for acquisition ofTarget cover the subsequent internal reorganization? Does it matter whether thesubsequent internal reorganization was disclosed in the description of theTarget acquisition that appeared in the HSR filingsfor that transaction?


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