17010003 Informal Interpretation

Date:

Tags:

Rule:
Question on 7A(c)(10)
Staff:
Kristin Shaffer
Response/Comments:

[Redacted],

We would not consider this to be the same acquisition, so 7A(c)(10) does not apply.

Also, we are rolling out a new email address for HSR questions for the shop. When you email HSRHelp@ftc.gov, every PNO attorney will receive your question at the same time. In the future, unless you are inquiring about a particular filing, please use this email address rather than our individual addresses. We expect that this will make it easier for us to efficiently address questions and get responses out as soon as we can.

Best regards,

Kristin

Question

From: Shaffer, Kristin

Sent: Friday, October 20, 2017 2:27 PM

To: [Redacted]

Cc: HSRHelp

Subject: RE: Question on 7A(c)(10)

[Redacted],

We would not consider this to be the same acquisition, so 7A(c)(10) does not apply.

Also, we are rolling out a new email address for HSR questions for the shop. When you email HSRHelp@ftc.gov, every PNO attorney will receive your question at the same time. In the future, unless you are inquiring about a particular filing, please use this email address rather than our individual addresses. We expect that this will make it easier for us to efficiently address questions and get responses out as soon as we can.

Best regards,

Kristin

Kristin Shaffer

From: [Redacted]

Sent: Thursday, October 19, 2017 2:36 PM

To: Whitehead, Nora

Cc: Walsh, Kathryn E.

Subject: Question on 7A(c)(10)

Nora,

I have a question on 7A(c)(10).

Would it apply to a transaction in which five (5) shareholders enter into a single binding Stock Purchase Agreement ("SPA") with the Issuer as a $100 million financing round of the Issuer to raise more capital. Each of the five shareholders will receive 20% of the newly‐issued common stock for $20 million each. After the transaction, all shareholders except Shareholder A will own less than $80.8 million of Issuer's voting securities. Shareholder A currently owns $70 million in shares of Issuer that represent 25% of the Issuer. After all closings, Shareholder A will hold less than 25% of the Issuer's voting securities (as it is only getting 20% of the new shares, its holdings will be diluted).

This is one transaction with multiple closing dates. For financial reasons, there will be five separate closing for each shareholder based on their ability to come up with the $20 million cash each needs for the transaction that will span a 35‐day period. Assume there will be one closing for each shareholder every 7 days (5x7=35 days).

Question: For purposes of 7A(c)(10), can the transaction involving the five shareholders described in the SPA be considered the same "acquisition" such the Shareholder A will not need to file?

[Redacted]

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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