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Technology's "blackout" policy9) and that the sale of stock
constitutes 15 to 25 percent of daily trading volume.
Mr. Much also considered "blockage" (referring to the market's
ability to absorb an individual block of stock without an adverse
impact on the market price), analyzing block trades between June
27, 1989, and April 16, 1993, the length of the holding period,
blackout restrictions, and the relative size of the block; he
concluded that a 5-percent blockage discount was appropriate.
Moreover, he took into account the transaction costs (estimated to
be $500,000) necessary to sell the block of shares. Mr. Much
concluded that gross proceeds to J.R. Simplot Co. would approximate
$173.7 million. As an alternative means of realizing value, Mr.
Much considered selling the Micron Technology stock via a secondary
stock offering. Using this means of selling the stock, Mr. Much
determined that J.R. Simplot Co. would realize $176.4 million. Mr.
Much then considered income taxes payable as a result of J.R.
Simplot Co.'s selling its Micron Technology holding. Using the
estimated $176.4 million sale proceeds (via a secondary stock
offering), and after considering corporate income taxes (40
percent) on the gain, Mr. Much determined the maximum amount of net
proceeds J.R. Simplot Co. would realize from the sale of its Micron
Technology stock was $111,193,870.
9 Micron Technology maintained a trading "blackout"
policy that prohibited insider transactions in the stock for a
period from 30 days before the end of each quarter until after
each quarterly earnings announcement (which typically occurred
approximately 2-3 weeks following the end of every quarter).
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