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telecommunications industry, and (3) compared Eatel with nine
publicly traded companies in the telephone or telecommunications
industry. C & A calculated ratios for price/earnings,
price/cash-flow (after tax), price/revenue, and price/equity by
referring to the median ratios of the minority interests of the
publicly traded companies. C & A used these median ratios to
conclude that Eatel’s marketable minority value on July 16, 1991,
was $52 million. C & A chose a 35-percent marketability discount
and multiplied this discount by the $52 million figure to
conclude that Eatel’s "nonmarketable minority value" was $33.8
million; i.e., $35.20 per share for Eatel's outstanding shares on
July 16, 1991.
In September 1992, Eatel’s board of directors solicited
offers to purchase all of Eatel’s stock or assets. By letter
dated January 12, 1993, MDJ Communications, Inc., offered to buy
all of Eatel’s stock for $65 million. By letter dated
January 13, 1993, Telephone and Data Systems, Inc., offered to
buy all of Eatel’s stock for $48.2 million, “plus the assumption
of the existing indebtedness” (which was at least $25,547,938 on
December 31, 1992). By letter dated January 15, 1993, Century
Telephone Enterprises, Inc., offered to buy all of Eatel’s stock
for $65-75 million. By letter dated March 26, 1993, Brighton
Communications Corp. (Brighton), offered to buy all of Eatel’s
stock for $72.5 million; i.e., $75.1555 per share.
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