1304003 Informal Interpretation

Michael Verne

04/02/2013 See lnterp #116 in the PNPM, p.151 - paragraph beginning with "Moreover, the PNO..." This was specifically talking about cash to ·pay liabilities in a voting stock deal also being excluded under 801.11(e), but we have also applied it to any other cash that will be "exhausted by the acquisition" (including non-voting stock) to be acquired from the same issuer as the voting securities. KW concurs.


From:  (Redacted)
Sent:    Tuesday, April 02, 2013 2:36 PM
To:       Verne, B. Michael; Walsh, Kathryn
Subject: Question re: 801.11(e)

Dear Mike and Kate,

I have a question about 801.11(e) - specifically, if a newly formed entity without a balance sheet is acquiring $75 million of voting securities and $25 million of non-voting securities (bonds),and its only asset at closing will be the $100 million of cash to be used to pay for the voting securities and the non-voting securities. , is the entity entitled to deduct all $100 million of cash from its pro forma calculation or only the $75 million being used to pay for the voting securities? I found a couple of informal interpretations (links below),which seem somewhat relevant even though they are in the context of transactions where a portion of the transaction was exempt under 802.51. I would be grateful for your input.



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