1304003 Informal Interpretation

Michael Verne


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.



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.

Learn more about Informal Interpretations.