Thread: I have read the tax consequence section of the SEC filing a few times and it give me a head ache:
Q: WHAT ARE THE TAX CONSEQUENCES TO ME OF THE LEVERAGED BUYOUT AND THE MERGER?
A: We intend, but it is not certain, that the merger between Seagate and a
subsidiary of VERITAS will qualify as a "reorganization" within the meaning
of Section 368(a) of the Internal Revenue Code. If it qualifies, Seagate
stockholders will recognize gain, if any, for federal income tax purposes,
but only up to the amount of cash received and, in general, the fair market
value as of the closing of the merger of their proportionate share of any
amounts paid following the completion of the merger for tax refunds and
credits attributable to Seagate. To the extent a Seagate stockholder's
adjusted tax basis in his, her or its shares of Seagate common stock exceeds
the consideration received in exchange for such shares in connection with the
merger, the resulting loss will not be recognized for federal income tax
purposes. If the merger fails to qualify as a "reorganization," it would be a
fully taxable transaction.
The leveraged buyout will have no direct tax consequences to Seagate
stockholders. However, the amount of cash Seagate's stockholders receive in
connection with the merger will depend in part on the amount of cash Seagate
receives in connection with the leveraged buyout.
For a more complete description of the tax consequences of the merger, see
"Material United States Federal Income Tax Consequences of the Merger"
beginning on page 159 of this document.
[end of section quoted]
Lynn |
