- 42 -
$392.2 to $680.4 million and that a control premium of 40 percent
of the purchase price was appropriate. Peers & Co. (Peers),
which advised JAL, produced its report dated June 9, 1989,
determining that DHLI/MNV had a value ranging from $522 to $580.9
million and that a control premium of 40 to 60 percent of the
purchase price was appropriate.
During December 1989, the foreign investors’ objectives were
to gain collective control of DHLI and MNV, recapitalize DHL, and
insure DHL’s future financial viability. On June 14, 1989, the
foreign investors sent letters of intent, offering to purchase
the trademark for $50 million, subject to further evaluation by
the parties, and not less than 60 percent of the stock in DHLI
and MNV based on a $450 million value. JAL recognized that by
owning the DHL trademark it could gain some control over DHL’s
activities by including in any license agreement provisions
preventing DHL from engaging in economically irrational conduct.
DHLI would also be protected from DHL’s terminating the agency
agreement. On June 21, 1989, the DHL shareholders advised JAL
and Nissho Iwai, in writing, that although they did not agree to
all the terms in the June 14, 1989, letter, they remained
enthusiastic, and that further financial negotiations were
necessary. The DHL shareholders’ main concern was price.
JAL commissioned Arthur D. Little, Inc. (Little), a
consulting firm, to conduct a market study for its negotiations.
Little's March 31, 1989, report projected growth in the small
Page: Previous 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 NextLast modified: May 25, 2011