- 57 -
We also differ with Mr. Magee on his use of ratios that more
closely resemble the minority group data than the control group
data. Inasmuch as the estate shares had effective control, we
think that they should be valued as a controlling, rather than
minority, interest. Accordingly, we value the estate shares
using the control group data.
We disagree with Mr. Fuller's optimistic assessment of
Peoples' standing among comparable institutions (or the less-
than-comparable institutions he used). Had we not removed the
excess equity in performing the guideline method, then perhaps
Peoples would be more attractive than its financials would
otherwise suggest, due solely to the value of excess equity,
which could be paid out as an extraordinary dividend. However,
when using the guideline method to value Peoples' equity from
operations (and adding back the excess capital), we think that
the attractiveness of Peoples, and of the estate shares, takes a
dramatic nosedive.
As an institution, Peoples was financially sound, but
offered an investor little hope of meaningful growth in revenues
or earnings. A number of negative factors have been discussed
supra, such as a limited market, limited product offerings,
aggressive competitors, and outdated technology. Peoples was
also hindered by its employees, who on average were at least in
their midfifties, and tended to resist change. In sum, we think
that Peoples showed little potential to be much more than what it
Page: Previous 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 NextLast modified: May 25, 2011