No written comments
Dana Abrahamsen, Esq.
Premerger Notification Office
Federal Trade Commission
6th Street & Pennsylvania Avenue, N.W.
Washington, D.C. 20580
Re: April 5, 1984 Telephone Conversation
In a conversation this morning, I requested an informal opinion with respect to the following factual situation:
Mr. X (a $100 million person), together with his wife and children (not minors), will form Partnership A. Partnership A will join with unrelated party B to form Newco. Partnership A will own 75% of Newco, unrelated party B will own 25% of Newco.
Newco will receive a total of $3 million in contributions from A and B. Newco also will borrow $25 million from unrelated sources, and these funds will not be guaranteed by any entity.
Newco will make a tender offer for Company Y, followed by a merger, for $28 million.
Do any of the above transactions require a filing pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976?
You have advised me that none of the transactions described above requires a Hart-Scott-Rodino filing for the following reasons:
(a) The formation of a partnership is not subject to the filing requirements of Hart-Scott-Rodino Act;
(b) The formation of Newco, a corporation which will have total assets of $3 million, does not meet the requirements of Rule 801.40; and
(c) Newcos tender offer for, and merger with, Company Y is not reportable because Newco, together with its ultimate parent entity, Partnership A, does not meet the $10 million size of person test. You noted that the $25 million borrowed by Newco for its transaction with Company Y is not counted as an asset of Newco in assessing Newcos size.
I believe this accurately describes our conversation and the informal opinions which you rendered today. If it does not, please contact me as soon as possible.