8304008 Informal Interpretation

(redacted)

April 25, 1983

Ms. Sandra Vidas
Office of Premerger Notification
Federal Trade Commission
7th and Pennsylvania Avenue, N.W.
Room 301

Washington, D.C. 20580

Dear Ms. Vidas:

I want to thank you, and Mr. Patrick Sharpe, for your

kind assistance on Friday. I understand, based on my con-

versatons with you Friday, April 22, that the following

transaction would not require a Hart-Scott-Rodino filing.

Our Client, Company a, has total assets of over $100

million and is presently the sole owner of a subsidiary,

Company B, worth $45,000,000. Company C, formed less than

1 year ago, currently has $300,000 worth of stock outstanding,

all of it owned by Company D, which also has assets valued

at more than $100 million. Sometime between now and August 1,

1983, Company C will issue 3,6,000,000 shares of stock, for

approximately $10 per share. It is contemplated that 80.1%

Of the shares will be sold in a public offering, and that

Company A will purchase 19.9% of the newly issued stock,

worth about $7,000,000. After this transaction, no other

entity, including Company D, will control Company C.

On or around August 1, Company C will acquire all of the

stock in Company B from its present owner, Company A. The

purchase price will be $45,000,000. After this transfer,

Company Cs total assets will be less than $10,000,000 not

including the value of the acquired Company B. In fact,

Company C will probable then be in debt to Company A.

From our recent telephone conversations, I gather that

a newly formed corporation, such as Company C, does not meet

the size of person test if, after the transaction ins question,

it has less than $10,000,000 in assets, excluding the worth

of the acquisition. Since Company C, when it purchases

Company B from our client, will be under no other companys

control and will not be worth $10,000,000, it is not obligated

to file a premerger notification.

It also appears that company As purchase of $7,000,000

worth of Company Cs common stock is exempt, under Section 802.20,

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and the voting securities acquired do not confer control over

Company C.

I would appreciate it if you would let me know if the

above analysis is correct, or if you need more information.

Sincerely,

(Redacted)