1201001 Informal Interpretation

Date:
Rule:
802.4, 802.5
Staff:
Michael Verne
Response/Comments:

  – Agree.

Question

From:

(Redacted)

Sent:

Tuesday, January 03, 2012 4:01 PM

To:

Verne, B. Michael

Subject:

RE: Exemption Pursuant to Rule 802.5

January3, 2012

Mr. Michael Verne
Premerger Notification Office ("PNO")
Federal Trade Commission, Room 303
Washington, DC 20580

DearMr. Verne:

Weare writing to confirm our telephone conversation concerning whether apremerger notification filing under the Hart-Scott-Rodino Act ("Act")would be necessary for a proposed transaction ("Transaction").Pursuant to the Transaction, Buyer will acquire all of the outstanding equityinterests of certain subsidiaries of Seller

("TargetSubsidiaries"). The vast majority of the assets of the Target Subsidiariesare comprised of certain rights in ground leases ("Ground Leases")relating to real property ("Premises") that supportstelecommunications towers or directly hosts telecommunications antennae.Specifically, pursuant to various agreements, each Ground Lease was sold andassigned to the Target Subsidiaries, subject to the obligation of the assigninglandlord to continue to perform certain obligations with respect to the Premises.In essence, the rights and benefits of the Ground Leases (including the rightto receive all rents and income and to enforce lessor's rights and remedies)("Ground Lease Rights") were transferred to and are held by theTarget Subsidiaries, while the obligations and burdens of the ground leasesremain with the assigning landlord.

Pursuantto an informal interpretation dated July 28, 2011 the PNO staff indicates thata stock transaction to acquire a business whose assets consist of groundeasements, ground leases and, in some cases, fee simple title to real estate(such as land, rooftops and other structures) that either supportstelecommunications towers or directly hosts telecommunications antennae isexempt under Rule 802.5. The July 28, 2011 informal interpretation alsoindicates that the acquisition of ground easements and leases (as opposed tofee simple title) would be exempt under Rule 802.5 where a transfer of the realestate underlying those easements and leases would have been exempt under Rule802.5.

Pursuantto the Ground Leases, the Premises are currently rented or held for rent tothird parties. Following Buyer's acquisition of the Ground Lease Rights, thePremises will continue to be leased to third-party wireless providers or tothird-party tower-operators who, in turn, will lease space on the towers to thewireless service providers. Consequently, since the Premises underlying theGround Lease Rights are currently held for rent and will continue be rented outto third parties, we conclude that the Ground Lease Rights and the Transactionwill be exempt under Rule 802.5.

Asa result of the Transaction, Buyer would also acquire certain other assets ofTarget Subsidiaries which may or may not be exempt under the Act. The fairmarket value of such assets is expected to be less than $66 million.

About Informal Interpretations

Informal interpretations provide guidance from previous staff interpretations on the applicability of the HSR rules to specific fact situations. You should not rely on them as a substitute for reading the Act and the Rules themselves. These materials do not, and are not intended to, constitute legal advice.

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