For purposes of corrective filings, where the closing date is known, the valuation should be based on the closing date. Rule 801.10(c)(i) contemplates valuation based on the date of the 803.5(a) notice for cases where the closing date is not known or is more than 45 days ahead of the filing.
Question
I have a hypothetical scenario involving a post-consummation filing to report the acquisition of voting securities of a publicly-traded company. Assume that the acquisition is subject to 801.30, that there was not a determined acquisition price, that the acquisition occurred many months before the post-consummation filing would be made and that the company whose voting securities were acquired has experienced significant fluctuations in its stock price.
Because the hypothetical transaction involves the acquisition of publicly-traded voting securities and there was not an acquisition price, the value of the transaction is based on market price. Pursuant to 801.10(c)(i), the market price of the voting securities is the lowest closing quotation “within the 45 calendar days prior to the receipt of the notice required by 803.5(a) or prior to the consummation of the acquisition.”
In this hypothetical scenario, the acquisition that would be reported occurred many months prior to when the corrective filing will be made, meaning that the two time periods contemplated in the market price determination above ((1) the 45 calendar days prior to the acquisition and (2) the 45 calendar days prior to the 803.5(a) notice being sent), are distinct periods of time. Additionally, given stock price fluctuations, assume that valuing the voting securities using the lowest closing quotation in the 45 calendar days prior to when the 803.5(a) notice is sent (which would occur the date the post-consummation filing is made) results in a lower valuation, and thus a lower filing fee tier, than if the voting securities are valued using the lowest closing price in the 45 calendar days prior to when the acquisition occurred. (For the avoidance of doubt, in both instances, the filing fees are calculated using the filing fee thresholds in effect now, when the corrective filing would be made.)
Based on the language in 801.10, in this scenario, it seems we are allowed to value the voting securities using the lowest closing price in the 45 days prior to when the 803.5(a) notice is sent, even though this results in a lower valuation and lower filing fee payment than if valuation is based on the lowest closing price in the 45 days prior to when the acquisition occurred. Can you please confirm this is correct?