Query whether transactions with Spinco must be arms length:
I post rarely, not having RTFM, but follow always with great interest. Today's announcement and posters' analysis all indicate that, following the IPO and spinoff, Q will give preferential treatment to Spinco (eg, no royalty fees). In my eons ago life as a corporate lawyer, I seem to recollect a requirement that dealings between certain parties must be at arms length. One scenario in which this is true is where the parties are "related." Thinking out loud, after the distribution of Q's remaining interest to shareholders, Q and Spinco are no longer "related parties," so no problem? Maybe, maybe not. In addition, I have a little nagging thought that there is an anticompetitive issue of some sort lurking. Some of this, like the related party stuff, may only be a tax and accounting issue. The anticompetitive issue, if it exists, is larger.
I am sure that between Q's lawyers and the Goldman Sachs lawyers they have signed off on all of these issues, but like I said, my thought-to be-dead lawyer's antennae are waving all around.
Any thoughts? Lynn |
