0310003 Informal Interpretation

From: (redacted)
Sent: Tuesday, October 14, 2003 11:02 PM
To: Verne, Michael
Subject: Premerger Notification Question

Michael

I left you a voice mail thismorning. I have a question regarding whether a client of mine must file apremerger notification report form.

My client is a corporation (ABCCorp.) It is buying 100% of the stock of another corporation (XYZ Corp.) XYZCorp has $900 Million in non-voting stock and $34 Million in voting stock. Who(if anyone) must file?

Although ABC Corp is acquiring$934 Million in total stock, only $34 Million is voting stock, so it would seemto me that ABC Corp. does not have to file because the $50 Million thresholdhas not been met. Also, 16 CFR 801.21 states that securities are not consideredassets when acquired, so it doesn't seem appropriate to count the $900 Millionin XYZ Corp. non-voting stock as assets for the purposes of determining whetherto file. On the other hand, XYZ Corps stock will be wholly owned by ABC Corp.after the transaction, so ABC Corp. will as a practical matter control all ofXYZ Corps assets.

Thanks in advance for yourassistance in this matter.