Universal Compression, Hanover Compressor File Merger Proxy Statement

Universal Compression (UCO) and Hanover Compressor (HC) filed an initial proxy statement for their proposed merger with the SEC on March 20, under the name "Iliad Holdings."

Regarding the second request issued by the FTC, the proxy states the following:

On March 26, 2007, Hanover and Universal each received a request for additional information from the Antitrust Division regarding the proposed mergers. The effect of the request is to extend the waiting period imposed by the HSR Act until 30 days after Hanover and Universal have substantially complied with the request, unless that period is extended voluntarily by the parties or terminated sooner by the Antitrust Division. Hanover and Universal intend to cooperate fully and respond promptly.

The operative word above, of course, being "promptly." Given the nature of this combination and the relatively complexity of the relevant market, promptly could be as quickly as two months or a as lengthy as four months in terms of complying to the second request.

The impression at this point is that the companies will attempt to, and very likely succeed, in submitting all the necessary market information in the earlier time frame. Again, the companies would probably be looking at a six-month HSR review process under the previous FTC. The current FTC, however, is likely to accept the companies' arguments regarding the market for natural gas compression and clear the merger before the end of August.

The proxy also discloses some non-U.S. regulatory requirements, but does not provide the exact jurisdictions. As the HSR review will clearly be the key timing factor in the deal, any/all non-U.S. reviews can be considered secondary.

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