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Jan 28, 2014

FTC | Competition Matters January 28, 2014: HSR Threshold Adjustments and Reportability

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By Premerger Notification Office Staff

 When Congress passed the Hart-Scott-Rodino Antitrust Improvements Act of 1976, it created minimum dollar thresholds to limit the burden of premerger reporting. In 2000, it amended the HSR statute to require the annual adjustment of these thresholds based on the change in gross national product. As a result, reportability under the Act changes from year to year as the statutory thresholds adjust. The PNO fields many questions about the upcoming adjustments to the HSR thresholds from parties whose transactions may take place around the time of the revisions.

The Commission recently announced the new HSR thresholds, which will become effective on February 24, 2014. The following rules-of-thumb should help parties determine the relevant thresholds and any resulting reporting obligations that apply based on when the filing is made, when the transaction closes, and when the thresholds adjust.

Rule 1: The correct threshold for determining reportability is the one in effect at the time of closing.
The most significant threshold in determining reportability is the minimum size of transaction threshold. This is often referred to as the “$50 million (as adjusted)” threshold because it started at $50 million and is now adjusted annually. For 2014, that threshold will be $75.9 million. To determine reportability for a deal that will close around the time that the new threshold is effective, look to what the $50 million (as adjusted) threshold will be at the time of closing. For example, a deal valued at $73 million which will close on or after February 24 is not reportable because it is below the new minimum size of transaction threshold, even though it exceeds the current threshold of $70.9 million.

Rule 2: The filing fee is determined by the value of the transaction at the time of filing.
If you determine that a transaction is reportable, the filing fee should be based on the filing fee threshold that is in effect at the time of filing. Note that the filing fees themselves do not change, only the thresholds for calculating the correct fee. Here are the new filing fee thresholds, effective February 24, 2014.
$45,000valued in excess of $75.9 million but less than $151.7 million
$125,000valued at $151.7 million or greater but less than $758.6 million; or
$280,000valued at $758.6 million or greater
Rule 3: Notification thresholds for subsequent purchases adjust yearly, too.

The HSR Rules contain additional notification thresholds that relieve parties of the burden of making another filing every time additional voting shares of the same person are acquired. So, when HSR notification is filed, the acquiring person has one year from the end of the waiting period to cross the threshold stated in its HSR filing. Under Section 802.21, you must cross the threshold stated in the filing within one year after the end or termination of the waiting period, or you will have to file a new HSR notification in order to cross that threshold. Section 802.21 also specifies that once the filed-for waiting period ends or terminates, you can acquire up to the next threshold over the next five years without filing again.

Here’s how this works. If you file on January 31, 2014, for a $90 million voting securities acquisition that will close sometime in April 2014, you should file to cross the $75.9 million threshold because that’s the $50 million (as adjusted) threshold in effect at the time of closing (See Rule 1). You then have one year from the end of the waiting period to cross the $75.9 million threshold, even though the $50 million (as adjusted) threshold may be higher next February when the thresholds adjust again.

The next relevant threshold is the “$100 million (as adjusted)” threshold (so called because it started as $100 million and is now adjusted annually). So, after the end of the waiting period for the filing to cross the $75.9 million threshold, you then have five years to acquire up to the next notification threshold—in this case, the $100 million (as adjusted) threshold—without an additional HSR filing. In each subsequent year of the five-year period under Section 802.21, that threshold will adjust and you always look to the revised threshold in effect at the time. The revised $100 million (as adjusted) threshold for 2014 will be $151.7 million, but in 2015, it will likely be higher and you would look to the higher 2015 figure for evaluating additional acquisitions at that time.

As always, contact the PNO with specific questions regarding the HSR rules

Bloomberg | Share The View 2 January 28, 2014: Presidential Powerlessness?

A quick look at Bloomberg News's opinion section
January 28, 2014For more, visit»
SOTU: Jonathan Bernstein: During tonight's State of the Union address, President Barack Obama "will exercise my very favorite presidential power: He will 'recommend to their Consideration such Measures as he shall judge necessary and expedient.' I love that clause, because it demonstrates just how vague the presidency was for the framers." Read more 

MEDICAL RESEARCH: "The growth in Medicare costs continues to be slow, in what is perhaps the most encouraging fiscal development for the U.S. in decades," Peter Orszag writes. "If the health-care system is to continue to provide better value for Americans, policy makers need to seize this moment. Sadly, they are instead largely sitting on the sidelines." Read more 

INEQUALITY: New empirical work on inequality is "casting a fresh light on contemporary political debates," Cass R. Sunstein writes. "In the U.S., intergenerational mobility has remained essentially static for about 50 years." Read more  

PETE SEEGER: ‏@SMihm (Stephen Mihm): Pete Seeger, left-wing troublemaker and successful businessman. 

UKRAINE: "Ukraine's protest movement has turned into a revolution, complete with barricades, giant slingshots and the seizure of government buildings across a third of the country," the Editors write. "Ultimately, President Viktor Yanukovych will have to leave office." Read more 

TURKEY: Read the QuickTake on Turkey's continental divide:


Kavitha Davidson 

• Kevin Durant continued his scoring barrage: Read more 
• According to the Super Bowl security report, weather -- not terrorism -- poses the biggest threat to the NFL's big game: Read more 
• ESPN skirts the line between cable subscribers and online streamers with WatchESPN: Read more 

Jonathan Weil 

• The federal government's backdoor bailout of Puerto Rico: Read more
• Iceland let its insolvent banks fail because it couldn't afford to save them, and now it's doing pretty well: Read more 
• The Justice Department's revolving door never stops: Read more 

William Pesek 

• How 1937 holds India back, too: Read more 
• Look in the mirror, emerging markets: Read more 
• Taiwan offers dash of good news: Read more 

Leonid Bershidsky 

• AT&T declines to pursue Vodafone merger: Read more 
• Ukrainian prime minister resigns: Read more 
• RBS to post multibillion-dollar loss because of surprise provision:Read more 

Jonathan Bernstein 

•  Robert Greenstein of the Center on Budget and Policy Priorities gives his thumbs up to the farm bill compromise: Read more 
• Lots of information about a new health care initiative from three Republican senators: Read more 
• Taking shots at Dinesh D'Souza is easy, but Jamelle Bouie goes beyond the obvious: Read more 

Barry Ritholtz 

• Study: A random wolf on Wall Street could calm stock markets(New Scientist) 
• Genetic Weapon Against Insects Raises Hope and Fear in Farming (NY Times) 
• A Federal Reserve Policy Maker Urges It to Do More (NY Times)

Matt Levine 

• Here is some fantastic business television: Read more  
• Sheila Bair has a new job: Read more 
• Herbalife analyst has a new job: Read more 

Find more analysis at the Ticker

DealBook P.M. Edition January 28, 2014: In Praise of Bitcoin, With Little Regard for Banks

Cameron Winklevoss, left, and his twin brother, Tyler, testified on Tuesday at a hearing about Bitcoin.
In Praise of Bitcoin, With Little Regard for Banks A hearing on the regulatory future of Bitcoin gave advocates the chance to enumerate what they view as the advantages Bitcoin could provide over current systems of moving money around the world.
For the latest updates, go to »
J.C. Penney is still trying to recover from the missteps of its previous chief executive.
J.C. Penney Amends Poison Pill Plan The retailer lowered the threshold for its poison pill plan to 4.9 percent from 10 percent as it seeks to defend itself against potential activist investors and preserve a tax benefit.
Robert E. Diamond Jr. in 2011.
Robert Diamond's New Firm Hires Executive From J. C. Flowers Atlas Merchant Capital, the firm that Robert E. Diamond Jr. founded last year, said late on Monday that it had hired David Schamis from J. C. Flowers & Company as a founding partner.
Travelocity, whose advertisements feature a gnome, is owned by Sabre.
A Familiar Trip for a Pre-Crisis Buyout Seven years after taking airline reservations operator Sabre private, TPG and Silver Lake are returning to the public markets. It's one of many big buyouts that should land safely, says Jeffrey Goldfarb of Reuters Breakingviews.
John C. Malone's Liberty Global has been making acquisitions in Europe.
With Eye on Spain, Liberty Said to Join Hunt for ONO The Spanish cable operator ONO, an enticing prospect for any large telecommunications firm looking to expand in Europe, has reportedly drawn interest from John C. Malone's Liberty Global media company as well as the British cellphone giant Vodafone.
Carl C. Icahn bought on a dip and tweeted about it.
As Apple Shares Fall, Icahn Plucks More Carl C. Icahn took to his favorite broadcasting tool, Twitter, on Tuesday to disclose that he had purchased an additional $500 million shares in the iPhone maker.
Martin Marietta Materials Seals Deal for Texas Industries The acquisition of the construction supplies company Texas Industries will allow Martin Marietta Materials, a big producer of sand and gravel, to expand its range of offerings and deepen its presence in the fast growing Texas market.
The Lloyds Banking Group said in June 2011 that it would eliminate as many as 15,000 jobs by the end of 2014.
Lloyds Banking Group to Cut More Than 1,000 JobsThe Lloyds Banking Group will eliminate an additional 1,080 jobs and outsource 310 jobs as part of a restructuring it began in 2011.
Once heralded as a champion of teen clothing, Abercrombie & Fitch has fallen behind rivals.
Under Pressure, Abercrombie & Fitch Splits Roles of Chairman and C.E.O. The move to strip Michael S. Jeffries of his role as chairman comes as the embattled teen retailer faces pressure from investors. Mr. Jeffries will remain chief executive.
Vodafone and Verizon Shareholders Approve Wireless Deal The deal will return about $84 billion to shareholders in what Vodafone said was the single largest return of value in history, according to a presentation on its website.
The Royal Bank of Scotland and many of the world's largest banks are facing a series of investigations by regulators into whether traders attempted to manipulate key currency benchmarks in the $5-trillion-a-day foreign exchange market.
R.B.S. to Reduce Foreign Exchange Benchmark Offerings The Royal Bank of Scotland will reduce the range of foreign exchange benchmarks it offers to clients amid investigations into whether some traders colluded to manipulate the $5-trillion-a-day currency markets.
A customer prepares to sign a credit card slip at a Target store. The retailer has said hackers may have exposed credit and debit card information on up to 40 million customers.
White Collar Watch: Adding Up the Costs of Data Breaches Companies victimized by cyberattacks face a big need to disclose information, both to the victims and to shareholders.
Investors will be able to buy a stake in the future income stream of the San Francisco 49ers tight end Vernon Davis, pictured on Jan. 12.
Fantex Moves Forward With Football Player I.P.O.Fantex, a start-up looking to sell stocks tied to athletes' earnings, said on Tuesday that it was moving forward with a planned initial public offering of stock linked to Vernon Davis, the star tight end of the San Francisco 49ers who experienced a concussion last fall.
Offices of JPMorgan Chase in the Canary Wharf district of London.
Employee Falls to His Death at JPMorgan Building in London A JPMorgan Chase employee was killed after a fall from the office tower headquarters of the investment bank in London on Tuesday morning.
Time Warner Cable faces a declining television subscriber base and technological challenges as it works to compete with Verizon and Comcast, but it may not feel the need to make a deal.
Time Warner Cable Can Take Heart in History of Failed Hostile Bids A review of many of the most prominent failed hostile bids suggests that targets that avoided being pressured into an unwanted deal often came out ahead.
Casablanca Capital Urges Changes at Cliffs Natural ResourcesCasablanca Capital, an activist hedge fund, disclosed on Tuesday that it had taken a 5.2 percent stake in Cliffs Natural Resources, while urging the mining company to spin off its international assets and make other changes.
Bill Downe is the chief executive of the BMO Financial Group.
Bank of Montreal Parent Acquires British Asset Manager for $1.2 Billion The BMO Financial Group will buy F&C Asset Management of Britain for 708 million pounds in a deal to merge F&C with BMO Global Asset Management, creating a combined business with £162 billion in assets under management.
A Top Manager Resigns From China's Foreign Exchange AgencyThe government did not explain why Zhu Changhong, a former fund manager at Pimco, was no longer the chief investment officer at the State Administration of Foreign Exchange.
Medium Raises $25 Million in New Financing Round Medium, the blogging-as-longform-publishing platform started by a Twitter co-founder, Evan Williams, has raised $25 million in a new round of financing, ReCode reported on Tuesday.
The Swan Song of Bernanke The Federal Reserve's policy-making committee on Wednesday will meet for the last time under the leadership of the departing chairman Ben S. Bernanke. He will be succeeded at the end of the month by the Fed's vice chairwoman, Janet L. Yellen. The Fed bought $85 billion in Treasury and mortgage-backed securities each month last year. In December it said it would reduce the volume by $10 billion a month. Many analysts expect the Fed to announce another $10 billion cut on Wednesday, keeping it on pace to end the campaign this year.
Chrysler to Report Results Chrysler reports its financial results Wednesday, the day that the board of its Italian parent, Fiat, is expected to announce the new name of the newly merged automotive giant, and its future legal headquarters and stock-exchange listing.
A Key Measure of Economic Growth On Thursday, the Commerce Department will release its initial estimate of economic growth in the fourth quarter of 2013. This data point will be followed especially closely as economists and investors try to gauge whether the more robust growth recorded in the third quarter continued through the end of the year. After initially worrying that the government shutdown and business caution might slow growth, economists have been steadily increasing their estimates amid healthier data on consumption and trade in October, November and December. Specialists polled by Bloomberg expect reported growth of 3.2 percent.
Holiday Ads Expected to Life Google Earnings Google is expected to reap the benefits of the holiday shopping season when it announces its fourth-quarter earnings on Thursday, particularly because of strength in its e-commerce ads. Mobile ads, a continuing challenge for Google, are also expected to have performed well, largely because of people comparing prices and making purchases on phones while shopping in stores. Yet analysts say the shares of Google, up 30 percent since its last earnings announcement, are already fully valued.
Energy Volatility and Exxon Mobil Earnings for big oil companies have been volatile in recent quarters, and Exxon Mobil, the biggest American oil company by far, has been no exception. On Thursday, Exxon Mobil will report its earnings for the fourth quarter, and results will probably be mixed. Natural gas prices have recovered somewhat over the last year, and earnings from Exxon Mobil's chemical and refinery businesses have been strong. But oil prices have softened and costs for big projects around the world are rising.
Labor Market Report in Europe On Friday, Eurostat will release its December labor market report and a first estimate of January inflation. The unemployment rate was stuck at 12.1 percent in November, and economists are watching to see if hiring might finally begin to perk up, in line with recent signs that output in the region is gathering speed. Consumer prices are under scrutiny for hints about the European Central Bank's monetary policy.
For the latest updates, go to »

WSJ | Biggest Decliners Closing January 28, 2014.

Biggest Decliners Closing
Biggest Decliners
4:46 pm ET 01/28/2014
Advantest Corp ADS (ATE)73,357$10.57-1.21-10.27
Marine Harvest ADS (MHG)30,70612.44-1.31-9.56
Natural Grocers by Vitamin Cottage (NGVC)271,43134.75-3.32-8.72
MagnaChip Semiconductor (MX)1,563,61116.16-1.41-8.03
Cementos Pacasmayo ADS (CPAC)76,7209.77-0.67-6.42
Corning (GLW)41,137,69617.10-1.12-6.15
Special Opportunities Fund (SPE)459,89716.01-1.00-5.88
Huaneng Power International ADS (HNP)45,22536.53-2.25-5.80
XPO Logistics (XPO)1,577,74126.17-1.26-4.59
Olin (OLN)3,664,85225.76-1.14-4.24
Banco Macro ADS (BMA)192,77019.40-0.85-4.20
National Bank of Greece ADS (NBG)3,679,5614.48-0.19-4.07
Gabelli Global Multimedia Trust (GGT)135,58010.71-0.45-4.03
Rhino Resource Partners (RNO)219,77112.02-0.50-3.99
Rentech Nitrogen Partners LP. (RNF)253,77818.42-0.70-3.66
Burlington Stores (BURL)396,81926.36-0.94-3.44
ITT Educational Services (ESI)827,19139.60-1.41-3.44
GameStop Cl A (GME)4,502,77836.05-1.27-3.40
Container Store Group (TCS)478,37936.49-1.25-3.31
Mobile Telesystems ADS (MBT)5,058,67917.81-0.60-3.26
Polaris Industries (PII)2,587,564128.12-3.98-3.01
Hill International (HIL)43,1114.53-0.14-3.00
Ann (ANN)1,316,60832.35-0.98-2.94
BBVA Banco Frances ADS (BFR)266,7186.62-0.20-2.93
LG Display ADS (LPL)835,09911.82-0.34-2.80
Rent-A-Center (RCII)7,549,601$24.30-6.92-22.17
Chefs' Warehouse (CHEF)2,211,10723.50-3.81-13.95
VimpelCom (VIP)9,558,61210.14-1.49-12.81
Seagate Technology (STX)17,566,72451.52-6.53-11.25
First Cash Financial Services (FCFS)654,05649.82-5.70-10.27
Burcon Nutrascience (BUR)11,2443.11-0.34-9.85
National Security Group (NSEC)4,1698.85-0.87-8.95
Apple (AAPL)36,938,526506.50-44.00-7.99
VelocityShares Daily 2x VIX Short Term ETN (TVIX)9,276,4807.53-0.64-7.83
Twin Disc (TWIN)53,20623.77-1.98-7.69
America First Multifamily Investors (ATAX)8,237,9235.86-0.48-7.57
Rambus (RMBS)4,431,9178.89-0.69-7.20
Himax Technologies ADS (HIMX)15,346,05113.54-1.00-6.88
ProPhase Labs (PRPH)286,2902.10-0.15-6.67
Tile Shop Holdings (TTS)4,741,33113.74-0.98-6.66
IntriCon (IIN)19,5904.34-0.31-6.65
Liberty Global Cl B (LBTYB)2,92081.50-5.70-6.54
The9 ADS (NCTY)111,7952.31-0.16-6.48
TransGlobe Energy (TGA)408,8227.43-0.51-6.42
RMG Networks Holding (RMGN)150,7954.71-0.31-6.18
Aerie Pharmaceuticals (AERI)173,80015.76-0.98-5.85
Ezcorp Cl A (EZPW)1,033,0429.35-0.58-5.84
Reliv International (RELV)9,6792.27-0.14-5.81
Epizyme (EPZM)322,50731.20-1.84-5.57
Life Partners Holdings (LPHI)97,2852.55-0.15-5.56
VelocityShares 3x Inverse Natural Gas ETN linked to the S&P GSCI Natural Gas Index Excess Return (DGAZ)13,761,472$4.79-0.59-11.05
ProShares Ultra VIX Short-Term Futures ETF (UVXY)4,480,75568.44-6.12-8.21
ProShares UltraShort DJ-UBS Natural Gas (KOLD)207,67347.45-3.47-6.82
Direxion Daily Junior Gold Miners Index Bear 3X Shares (JDST)169,17338.84-2.53-6.12
Direxion Daily Gold Miners Bear 3x Shares (DUST)2,986,29830.74-1.86-5.71
Direxion Daily Natural Gas Related Bear 3x Shares (GASX)51,35124.19-1.32-5.17
VelocityShares 3x Inverse Crude ETN linked to the S&P GSCI Crude Oil Index Excess Return (DWTI)8,29033.04-1.77-5.08
C-TRACKS Exchange Trade Notes based on the Performance of the Citi Volatility Index Total Return (CVOL)14,6053.50-0.18-4.76
ProShares VIX Short-Term Futures ETF (VIXY)1,193,23129.11-1.29-4.24
Barclays Bank iPath S&P 500 VIX Short Term Futures ETN (VXX)37,758,22943.55-1.84-4.05
Direxion Daily Financial Bear 3x Shares (FAZ)5,169,91623.00-0.91-3.81
PowerShares DB 3x Long 25+ Year Treasury Bond Exchange Traded Note (LBND)3,60033.22-1.17-3.40
Direxion Daily FTSE Europe Bear 3x Shares (EURZ)8,54343.08-1.42-3.19
Direxion Daily Small Cap Bear 3x Shares (TZA)11,039,10917.86-0.57-3.09
ProShares UltraPro Short Russell2000 (SRTY)394,57345.16-1.44-3.09
Direxion Daily FTSE China Bear 3X Shares (YANG)69,31527.64-0.86-3.03
ProSharesUltraShortDJUBSCrudeOil (SCO)1,388,10232.31-0.95-2.86
Direxion Daily Developed Markets Bear 3x Shares (DPK)8,52235.81-1.03-2.80
ProShares UltraPro Short MidCap400 (SMDD)20,13257.90-1.66-2.79
PowerShares DB Crude Oil Double Short ETN (DTO)115,81136.61-0.98-2.61
Direxion Daily Real Estate Bear 3x Shares (DRV)23,88759.13-1.57-2.59
Direxion Daily Energy Bear 3x Shares (ERY)286,29622.64-0.59-2.54
ProShares UltraShort Financials (SKF)277,41118.23-0.46-2.46
Direxion Daily Mid Cap Bear 3x Shares (MIDZ)17,84119.29-0.48-2.40
Direxion Daily Emerging Markets Bear 3x Shares (EDZ)1,200,71050.42-1.15-2.23
LiveDeal (LIVE)2,070,279$16.10-7.42-31.55
Rent-A-Center (RCII)7,549,60124.30-6.92-22.17
Chefs' Warehouse (CHEF)2,211,10723.50-3.81-13.95
VimpelCom (VIP)9,558,61210.14-1.49-12.81
Seagate Technology (STX)17,566,72451.52-6.53-11.25
VelocityShares 3x Inverse Natural Gas ETN linked to the S&P GSCI Natural Gas Index Excess Return (DGAZ)13,761,4724.79-0.59-11.05
Advantest Corp ADS (ATE)73,35710.57-1.21-10.27
First Cash Financial Services (FCFS)654,05649.82-5.70-10.27
Burcon Nutrascience (BUR)11,2443.11-0.34-9.85
Zhone Technologies (ZHNE)1,652,0124.13-0.44-9.63
Marine Harvest ADS (MHG)30,70612.44-1.31-9.56
ThermoGenesis (KOOL)2,122,3042.22-0.23-9.39
Huttig Building Products (HBP)30,9003.79-0.38-9.11
National Security Group (NSEC)4,1698.85-0.87-8.95
InfoSonics (IFON)1,041,6712.66-0.26-8.90
Liberator Medical Holdings (LBMH)1,169,7434.26-0.41-8.78
Natural Grocers by Vitamin Cottage (NGVC)271,43134.75-3.32-8.72
ProShares Ultra VIX Short-Term Futures ETF (UVXY)4,480,75568.44-6.12-8.21
MagnaChip Semiconductor (MX)1,563,61116.16-1.41-8.03
Apple (AAPL)36,938,526506.50-44.00-7.99
VelocityShares Daily 2x VIX Short Term ETN (TVIX)9,276,4807.53-0.64-7.83
Twin Disc (TWIN)53,20623.77-1.98-7.69
America First Multifamily Investors (ATAX)8,237,9235.86-0.48-7.57
Escalon Medical (ESMC)12,6002.01-0.16-7.37
Rambus (RMBS)4,431,9178.89-0.69-7.20
See All Decliners
Includes common, closed end funds, ETFs, ETNs and REITS with prior day close of $2 a share or higher, with volume of at least 2,000.
x - stock is trading ex-dividend
Source: WSJ Market Data Group