1105004 Informal Interpretation

Michael Verne

  – Agree
– not reportable.


Mr. Michael B. Verne
Premerger Notification Office
Federal Trade Commission
600 Pennsylvania Avenue, NW Room 303
Washington, DC 20580

RE: Reportability of Acquisition ofTimberland Assets by a REIT

Dear Michael:

Thank youfor your time in speaking with me this afternoon. This letter confirms our telephoneconversation today in which you advised that the facts described below do notgive rise to a l1ling obligation under the Hart-Scott-Rodino Act (the "HSRAct"):

Company A is conducting business as areal estate investment trust ("REIT"), as defined by the applicableprovisions of the Internal Revenue Code ("IRC"). In the proposedacquisition, Company A, or one of its qualified REIT subsidiaries' (a"REIT Sub") to be determined, intends to acquire certain timberlandsfrom Company B (which mayor may not be a REIT).

We assumethat the parties to the proposed transaction satisfy the size of the partiestest and that the transaction exceeds the size of the transaction test. We arealso assuming for purposes of this letter that the proposed transaction doesnot qualify for exemption under section 802.2(c).

Section802.5 provides that acquisitions of investment rental property assets areexempt from the requirements of the HSR Act. Accordingly, as a REIT (or a REITSub) operating in conformity with the applicable provisions of the IRC, CompanyA's acquisition of real property assets from Company B will be exempt from thepremerger filing requirements of the HSR Act. This conclusion is consistentwith the Premerger Notification Office's longstanding position that realproperty acquisitions by a REIT (including, without limitation, timberlandacquisitions) are exempt from premerger filing requirements of the HSR Act.

As Inoted in our telephone conversation, Company A finds this to be an importantdetermination, in that it (or a REIT Sub) may make additional acquisitions ofreal property (including, without limitation, timberland) in the future basedon the same factual circumstances discussed herein, and will necessarily relyon the Premerger Notification Office's advise that such acquisitions are exemptfrom the filing requirements of the HSR Act.


* A qualified RElTsubsidiary, as used herein, means a subsidiary o[Company A that is controlledby Company A, where "controlled" is as defined in 16 C.F.R. 801.1(b) generally as, (i) with respect to a corporation or other entity that issuesvoting securities, holding 50 percent or more of the outstanding votingsecurities of the issuer, or having a contractual right to designate 50 percentor more of the board of directors, or (ii) with respect to an entity that doesnot issue voting securities (e.g. partnership, limited liability company, orother noncorporate entity), having the light to 50 percent or more of itsprofits or assets upon dissolution.

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