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the votes, were only 0.054% of shares outstanding. As
the Class A Shares collectively have full control of the
Company, they (as a class) are worth a substantial
premium over their pro rata share of enterprise value *
* *
* * * * * * *
In determining the relative value of the Class A
Shares and Class B Shares, it is my opinion that it is
necessary first to value each class of stock in its
entirety, then calculate the undiscounted value per share
of the Class A Shares and Class B Shares, and only then
to apply the discounts for lack of marketability and for
minority interest to the Estate's Class A Shares and
Class B Shares. As the value of voting control held by
the Class A Shares collectively is a function of the
premium over economic value to the class for the voting
power, it is analytically incorrect to calculate the
premium for voting control on a per-share basis rather
than a class basis. (In this case, the premium for the
Class A Shares as a percent of the total value of the
Company would not change materially if the number of
Class A Shares doubled or tripled, but such change
obviously would materially impact the premium per share.)
Mr. Matthews posited that the 18 shares of class A stock at
issue represent a potential swing block. According to Mr.
Matthews, the value of voting control held by the class A voting
shares collectively is a function of the premium over economic
value to the class for the voting power.
Mr. Matthews agreed with Dr. Spiro that studies of publicly
traded high vote shares in U.S. markets were not useful in
determining a premium for shares of J.R. Simplot Co.'s voting stock
because the prices paid in public markets understate the value of
blocks of shares with the potential for control. Moreover, in his
mind, publicly traded stocks possess neither swing vote
characteristics nor the extreme disparities in the numbers of
nonvoting to voting shares present in this case.
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