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that the Company's cash-flow could have been substantially greater
if the assets of the Company had been better used. Thus, in Dr.
Spiro's opinion, if the hypothetical buyer could maximize the
Company's cash-flows, the aggregate equity value of the Company
would be greater than $720 million.)
The next step of Dr. Spiro's analysis was to determine the
fair market value of J.R. Simplot Co.'s interest in Micron
Technology on a freely traded, minority basis. He multiplied
Micron Technology's share price on June 24, 1993 ($34.63)21 by the
number of shares J.R. Simplot Co. owned (5,259,800) and arrived at
$110,269,092.22 (For purposes of this analysis, Dr. Spiro assumed
that any perceived blockage discount would be offset by the
anticipated premium from a sale of the block.)
Dr. Spiro then added the $110,269,092 valuation of J.R.
Simplot Co.'s Micron Technology holdings to the $720 million fair
market value of J.R. Simplot Co., rendering a total of $830
million23 aggregate equity value (rounded) for J.R. Simplot Co. on
a freely traded, minority-interest basis.
At this point, Dr. Spiro used the $830 million fair market
value to ascertain the value of decedent's class A voting and class
21 This is an average of the high and low prices reported
during trading on June 24, 1993.
22 Dr. Spiro deducted estimated underwriting costs of
3.825 percent and estimated taxes of 40 percent attributable to
the appreciation in value of the Micron Technology shares.
23 In Dr. Spiro's expert witness report, he arrived at a
$900 million aggregate equity value. Subsequently, he revised
this value to $830 million.
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