On September 21, 2020, the Federal Trade Commission (“FTC”) announced that it was issuing an Advance Notice of Proposed Rulemaking (“ANPRM”) related to the Hart-Scott-Rodino Antitrust Improvements Act (“HSR”) and its implementing rules and interpretations. This ANPRM requests information related to corporate structure and investment activity. Specifically, the ANPRM is seeking information related to the following seven topics:
- Size of transaction
- Real estate investment trusts
- Non-corporate entities
- Acquisitions of small amounts of voting securities
- Influence outside the scope of voting securities
- Transactions or devices for avoiding HSR requirements
- Issues pertaining to the HSR filing process
Of note, particularly for nonprofit transactions, is that the FTC seeks information about transaction valuation for a size-of-transaction determination. In particular, the FTC is seeking information on what methodologies an acquiring person uses to support a transaction valuation, the methods for determining fair market value (under HSR rules), and how the determination is similar to or differs from the ordinary course of due diligence—including whether the determination has changed over time.
The FTC is seeking information on all of these topics, and on November 16, 2020, it will host a question and answer session with more information about the ANPRM.