9603002 Informal Interpretation

Date

March 4, 1996

Rule

802.1 (c)(1)

Staff

Patrick Sharpe

Response/Comments

[redacted] confirmed that B, a bank, routinely makes acquisitions similar to this one. This transaction is exempt in the ordinary course of business. 802.1-c-1. Called [redacted] 3/4/96. PS. RS concurs.

Original Image File (67.01 KB)

Question

March 1, 1996

Via Facsimile

Mr. Patrick Sharpe
Federal Trade Commission
Premerger Notification Office
Room 303,
6th & Pennsylvania Avenue
Washington, D.C. 20580

Dear Mr. Sharpe:

Attached is the transaction about which we spoke earlier this afternoon. Please give me a call at [redacted] when you have reviewed the transaction.

Very truly yours,

[redacted]

Enclosure

Broker X purchases and sells the on a take or pay contract to A1, a wholly owned subsidiary of A, for $3.65 per m.c.f. and A1 distributes the to its customers. For a payment of $28 million, X agrees to sell the over the term of the contract to A at $3.06 per m.c.f..

Simultaneously with the renegotiation of the contract with A and substitution of A as the purchaser for A1, Bank B or its subsidiary** will enter into the contract chain, pay A $31 million and begin to purchase the at $3.06 per m.c.f. Bank B will in turn sell the to A1 at $3.65 per m.c.f. for ultimate distribution to A1's customers.

Before [Diagram - - - -see pdf file]

After [Diagram - - - -see pdf file]

Is a report required for either step in the transaction?

[** Staff comment: bank? Does it engage in such transactions in its ordinary course of business?]

9603002 Informal Interpretation

Question

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