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premium (expressed as a percentage of the equity value of J.R.
Simplot Co.) to be accorded the class A voting stock.
In determining the proper equity value of J.R. Simplot Co.,
Mr. Much and Dr. Spiro used similar approaches. They began by
valuing J.R. Simplot Co. exclusive of its Micron Technology holding
and later added the value of the Micron Technology holding. In
determining the equity value of J.R. Simplot exclusive of its
Micron Technology holding, both used the income and market
approaches and averaged the two values obtained. Excluding the
investment for Micron Technology and the reduction for short-term
debt, the values that Mr. Much and Dr. Spiro determined are not
materially different. These values can be summarized as follows:
Income Approach Market Approach
Mr. Much
Total Invested Capital $1,079,900,000 $1,066,740,000
Plus Cash 31,232,000 31,232,000
1,111,132,000 1,097,972,000
Less: Long-term debt (375,536,000) (375,536,000)
Net value 735,596,000 722,436,000
Dr. Spiro
Net value 720,926,000 719,809,000
As is discernible from this chart, under the income approach
the values are within 2 percent of each other, and under the market
approach the difference is less than 1 percent. Dr. Spiro's
average of the two values is $720,000,000 (rounded), which is
approximately 1 percent less than Mr. Much's average value of
$729,016,000.
The nominal disparity in their respective equity values arises
from adjustments Mr. Much made for the Company's short-term debt
($188,882,000) and for a 6-percent minority discount in valuing the
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