0605003 Informal Interpretation

Verne, B. Michael
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Sent:
To: 	Verne, 8.Michael
Subject: 	Votinglnon-voting stock valuation question
Dear Mike -- I would like to confirm that in the following
circumstances, no HSR filing is required. We represent a client who
intends to purchase 100% of the shares of a target company for $120
million. The target has a total of 100,000 outstanding shares, 1,000
(= 1%) of which are voting and 99,000 (= 99%) are non-voting. Except
for the voting rights, the shares are otherwise identical,
specifically, voting and non-voting shares are entitled to the same
dividend payments and to an equal claim to the assets in the event of
dissolution. Both voting and non-voting shares are of the same class.
Because the voting securities only represent 1% of the economic value
of the target, the acquiring person values the voting securities at
less than $56.7 million. Given that Section 7A(a)(2) of the Clayton
Act only looks to the value of the voting securities held by the
acquiring person after the transaction, no filing should be required.
Do you agree with that analysis? Best regards'
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