- 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 32Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011