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venture being interested in acquiring the food division and the
other being interested in acquiring the chemical division).
We agree with respondent's expert that on the valuation date,
a hypothetical buyer would consider the likelihood that one day
decedent's block of voting shares potentially could become the
largest block of voting shares because the record reveals that Don,
Gay, and Scott intended, upon their deaths, to pass their class A
shares to their children and thereafter no one shareholder (other
than the hypothetical buyer) would own 18 shares of voting stock.
Moreover, we agree with respondent that it was foreseeable on the
valuation date that following the deaths of Don, Gay, and Scott,
third-generation Simplots (a multiple number of descendants with
different personal objectives) would most likely be more willing to
sell their class A voting shares to outsiders than their parents or
grandfather would. And at that time, the hypothetical buyer would
benefit from the right of first refusal restriction on the voting
stock.
Petitioner asserts that Don, Gay, and Scott acted as a
cohesive group in following J.R. Simplot's philosophy to operate
the Company in a manner ensuring its perpetual existence and to
pass their shares and philosophy to their children. We believe
this assertion to be flawed in that J.R. Simplot was the glue that
bonded Don, Gay, and Scott. Indeed, Mr. Ettelson testified that,
over time, chances increase that closely held companies will
eventually sell, merge, or go public.
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