0704019 Informal Interpretation

Date

April 30, 2007

Rule

802.2(e), 802.4, 801.10

Staff

Michael Verne

Response/Comments

Once you have determined that the acquisition of the voting securities is reportable, the value is the total value of those voting securities. All assets (and liabilities) of the issuer would be taken into account in determining the value, including the exempt assets. This would also be true of a reportable acquisition of voting securities of an issuer that holds exempt foreign assets valued at more than $59.8 MM.

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Question

From: (redacted)

Sent: Monday, April 30, 2007 8:13 AM

To: Verne, B. Michael

Subject: 802.4 / 802.2(e)exemption hotels, trademarks, franchise operations

Mike, hope youenjoyed the weekend. Here we have the following:

1.Ais acquiring the voting securities of B, B's assets consist of hotels and therelated trademarks and franchise operations.

2.Valueof the Trademarks and franchise operations is over 59.8 million.

The question is what is the totalvalue of the transaction for HSR purposes? I understand the acquisition ofhotels is exempt (802.2(e)) however the acquisition of any associated trademarkand franchise operations are not exempt. I thought once a transaction isreportable to determine the total value of the transaction in acquisitions ofvoting securities you must include the value of all of the assets beingacquired (whether or not they are exempt assets) except for foreigncorporations with total US sales/assets of less than 59.8 million which may beexcluded from the total value of the transaction. The other party is under theimpression the exempt assets - here hotels - may be excluded.

Can you clarify?

0704019 Informal Interpretation

Question

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