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price and was conditioned on satisfying the U.S. Department of
Transportation requirement that no more than 25 percent of DHL be
foreign owned. Counsel for the foreign investors were also aware
that a sale of DHL’s assets, including the trademark, for less
than their fair market value could generate legal repercussions
caused by minority shareholders or creditors. Allen, Po Chung,
Robinson, and Hillblom did not want to divest 100 percent of
their interest in the DHL entities. Hillblom, in particular,
wanted to continue his interest in the resulting enterprise.
JAL and Nissho Iwai concluded, before making an offer, that
the combined value of DHLI and MNV was $450 million. Before
determining that value, JAL and Nissho Iwai examined valuations
by independent financial advisers and a market forecast by
Arthur D. Little, Inc. On June 14, 1989, JAL and Nissho Iwai
sent a letter of intent to the selling shareholders, offering to
purchase not less than 60 percent of the stock or net assets of
DHLI and MNV at a price based on the $450 million value for a
100-percent interest. The letter of intent indicated that the
foreign investors would not acquire an interest in $80 million of
DHL’s class B common stock held by DHLI.
The foreign investors retained Coopers & Lybrand (Coopers)
to prepare a report on the DHL operations, including DHL, MNV,
and DHLI. The report, dated May 31, 1989, was based on
information furnished by employees and representatives of the DHL
entities, both through documents and in meetings and interviews.
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