0908002 Informal Interpretation

From: (Redacted)
Sent: Monday, August 17, 2009 1 :00 PM
To: Ferkingstad, James H.

Subject: Question

Mr. Ferkingstad,

I am hoping youcan help me with the below fact pattern. Assume for purposes of this factpattern that both Corp 1 and Corp 2 meet the size of the parties test. I am tryingto determine how to value the acquisition of securities by each of Corp 1 andCorp 2 in the below fact pattern.

Corp 1 and Corp 2are unaffiliated entities. Corp 1 has a wholly-owned corporate sub (Sub A) towhich it contributes assets. Corp 2 has a wholly-owned corporate sub (Sub B) towhich it contributes assets. Sub B merges into Sub A with Sub A surviving.Following the merger, Corp 1 will own 75% of the surviving sub and Corp 2 willown 25% of the surviving sub. I have been reviewing the rules andinterpretations this morning and have not been able to determine how tocalculate the value of voting securities acquired by each party.