- 57 -
Dr. Spiro then applied a 35-percent lack of marketability
discount to the class A voting stock, thereby reducing the value of
decedent's voting shares to $616,116.36 per share. He applied a
40-percent lack of marketability discount to decedent's class B
nonvoting stock, resulting in a $3,522.79 per-share value. Thus,
Dr. Spiro determined a value of $11,090,094 (rounded) for
decedent's 18 shares of class A voting stock and $13,887,007
(rounded) for decedent's 3,942.048 shares of class B nonvoting
stock as of the valuation date.
2. Gilbert E. Matthews
Respondent's second expert, Gilbert E. Matthews, served as
chairman of Bear, Stearns & Co.'s valuation committee from 1970
through 1995. Presently, he is chairman of the board and a senior
managing director of Sutter Securities, Inc., an investment banking
firm. Mr. Matthews was requested to render an opinion as to the
fair market value of the class A voting and class B nonvoting stock
held by decedent as of June 24, 1993, assuming the equity value of
J.R. Simplot Co. was $830 million.27 He was not retained to render
an opinion as to the equity value of J.R. Simplot Co. as of June
24, 1993.
Mr. Matthews believed:
The unusual capital structure of the Company has a
material impact on the relative value of the Class A and
Class B Shares. The Class A Shares, which have 100% of
27 In his expert report, Mr. Matthews assumed a $900
million equity value, based on Dr. Spiro's original conclusion.
Mr. Matthews subsequently amended his calculations to conform to
Dr. Spiro's amended $830 million.
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