Laidlaw Transportation, Inc. and Subsidiaries - Page 20

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          E.   LTL's Purchase of GSX                                                  
               1.   The Agreement To Buy GSX                                          
               LTL bought the stock of GSX for $349,812,613 in 1986.12                
          DeGroote and Haworth asked three investment banks if they wanted            
          to provide long-term financing for LII to buy GSX.  Dean Witter,            
          Bear Stearns, and Donaldson, Lufkin & Jenrette each gave LII                
          tentative proposals.  Each investment bank said that the GSX                
          acquisition could be financed through a combination of equity (or           
          convertible debt), subordinated debt, and bank loans.  The                  
          investment banks based their proposals in part on information               
          about GSX's finances that LTL later found to be unreliable.  Each           
          proposal would have required petitioners to publicly issue stock            
          or debt.  However, petitioners could not issue equity or debt               
          because GSX did not have separate audited financial statements.             
          Haworth opposed a public offering at that time.                             
               LTL and LII rejected the investment banks' proposals                   
          because:  (a) GSX did not have separate audited financial                   
          statements; (b) equity or convertible debt would dilute LTI's               
          interests in LII; and (c) debt from commercial lenders could not            
          be secured on terms as favorable as debt from LIIBV.                        
               Ferrill (identified at par. I-C-2-a, above) was a member of            
          a special committee for LII's board of directors which was                  
          considering the investment banks' proposals.  He relied on                  
          Haworth's judgment in deciding that LII should reject the                   

               12 GSX's parent had agreed to reduce the price by                      
          C$24,743,000 because Coopers & Lybrand identified problems with             
          GSX's operations.                                                           

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