- 42 -
adjustments for long-term debt and cash, Mr. Much believed that
under the discounted cash-flow method, all interest-bearing debt
must be taken into account, and the inclusion of cash provides an
adjustment to reflect the seasonal nature of the Company's
operations.)
Next, Mr. Much turned his attention to the relative voting
premium, if any, to be accorded the 18 class A voting shares vis-a-
vis the value of the 3,942.048 class B nonvoting shares, using the
following factors: (1) The potential for economic benefits (if
any) which might be attributable to class A shareholders and not to
class B shareholders; (2) market-based evidence of the allocation
of sale proceeds between dual class voting and nonvoting shares of
public companies involved in a sale or takeover; and (3) market-
based evidence of daily trading market data for public companies
with dual classes of voting and nonvoting shares.
In ascertaining the potential economic benefits attributable
to the class A voting shares, Mr. Much reviewed the compensation
11(...continued)
Cash balance (May 31, 1993) 31,232,000
Adjusted total invested
capital (rounded) 1,209,070,000
Interest bearing debt (564,418,000)
Equity value of J.R.
Simplot Co. (rounded) 644,650,000
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