Because the Founders will acquire and exercise beneficial ownership of the shares, the informal interpretation you reference isn’t relevant here.
Question
I have a question on which I was hoping to get your feedback.
We are aware of PNO’s position that an acquisition of voting securities followed by a same day sale of the same number of voting securities does not require an HSR filing because the acquiring person does not take beneficial ownership of the voting securities. I am working on a transaction where Company A plans to acquire Company B (“Transaction”). The following events will occur at the time of closing:
(i) Immediately prior to closing, the three founders of Company B will exercise their contractual right to acquire all Company B voting securities held by Investor 1.
(ii) The three founders will vote all of the Company B voting securities they hold, including those acquired from Investor 1, in favor of the acquisition.
(iii) Company A will acquire 100% of the voting securities of Company B from Company B’s shareholders.
All three events will occur the same day, meaning the founders will sell all the Company B voting securities they acquire from Investor 1 the same day. Given that the three founders will be required to vote the shares they acquire from Investor 1 immediately after acquiring the shares, I wanted to confirm that the founders can still rely on PNO’s position regarding same day sales as described above to conclude that they have not acquired beneficial ownership of the voting securities and will not need to submit an HSR notification to report the acquisition of shares from Investor 1. Please let me know if you have any questions.