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a decrease in demand from domestic customers and only a small
increase in exports. There was also a trend towards price
reduction that favored large suppliers. In the construction
supply industry, prices were stable.
1989 Transaction
In 1988, Prudential-Bache Capital Funding Group was
authorized to solicit bids for the sale of Schlegel Corporation.
Schlegel Corporation was implementing new contracts and was in
need of additional capital to fund its business growth.
Accordingly, Schlegel Corporation wanted to sell its stock to a
company that could provide this additional capital. There were
as many as six prospective buyers for Schlegel Corporation,
including BTR Plc, Draftex, Pirelli/Metzler, Diversitech,
Standard Products, and Continental.
At all relevant times, BTR Plc, a producer of a variety of
rubber products, owned all of the stock of BTR International,
Ltd. (BTR International), and BTR Secretaries, Ltd. (BTR
Secretaries). All of these are U.K. companies. BTR Dunlop was a
Delaware corporation wholly owned by BTR International, and, from
January 1, 1987, through December 29, 1989, BTR Dunlop was the
parent corporation of an affiliated group of corporations (the
BTR affiliated group) that joined in filing a consolidated
Federal income tax return.
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