- 3 -
The purchase price to be paid by petitioner was set forth in
paragraph 2 of the Contract as follows:
(i) $60,030,000 to be paid by the delivery to the
Seller [Chemetron] of 3,335,000 original issue shares
of the Buyer's [petitioner's] Common Stock, no par
value, which shares have been valued by the parties at
a fair market value of $60,030,000 based upon recent
market values of the Buyer's Common Stock in the over-
the-counter market, the present book value of the
Buyer's Common Stock, the size of the block of shares
to be issued to the Seller, the restrictions upon
transfer of such shares and the limited size of the
public market for the Buyer's shares, and (ii) the
Buyer's assumption and agreement to pay or discharge
the Seller's liabilities and obligations to the extent
provided in Paragraph 4(a) hereof; the foregoing
purchase price reflecting the fair market value of the
assets of the Business as set forth in the report of
Valuation Research Corporation, dated March 1, 1978,
containing, among other things, an appraisal of the
industrial gas assets of the Seller which are used in
the Business, a copy of which has previously been
delivered to the Buyer.
The parties to the Contract obtained two outside appraisals
in connection with the transaction. First, in a letter dated
June 2, 1978, addressed to the board of directors of Allegheny,
Smith Barney, Harris Upham & Co. (Smith Barney) concluded that
the fair market value of 3,335,000 shares of petitioner's common
stock was approximately $60,000,000 as of May 18, 1978. In so
concluding, Smith Barney considered the effect of the following
factors on the value of petitioner's common stock: (1) The
shares to be received by Allegheny in the transaction would be
restricted stock; (2) upon receipt of the stock, Allegheny would
hold a minority interest in petitioner equal to approximately 32
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011