- 41 -
and otherwise, for royalties due from DHLI for prior use of the
DHL trademark. It was estimated by the sellers’ representatives
that the possibility of an imputed royalty could fall in the
range of 4 to 6 percent of DHLI’s annual gross revenues.
It was at a May 10, 1989, meeting that the sellers’
representatives proposed using the purchase of the DHL trademark
as a vehicle for capitalizing DHL. It was proposed that any gain
on the trademark sale could be offset by DHL’s net operating
losses and that DHL could license the trademark from JAL and pay
royalties, and DHL’s taxable income could thereby be reduced.
The foreign investors retained the assistance of an
investment banker, Robert Fleming & Co., Ltd. (Fleming), and in
February 1989, Fleming prepared a preliminary draft report
concerning valuation. Fleming placed a value ranging from $600
million to $1.3 billion on the global DHL business, depending on
the methodology. Fleming also estimated that a prospective
purchaser could expect to pay a premium of 40 to 45 percent to
gain control. Fleming indicated that the DHL name, while
intangible, does have a value that the vendors would expect to
see reflected in the price. Fleming also suggested that the
selling shareholders might demand additional consideration for
the value of the DHL trademark in the range of 10 to 15 percent
of the DHLI/MNV stock price. After a more complete due
diligence, Fleming issued a second report dated June 9, 1989,
which determined that DHLI and MNV had a value in a range from
Page: Previous 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 NextLast modified: May 25, 2011