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percent of PCAB of approximately $8,600,000 and result in a value
for a 56.7-percent interest of approximately $4,900,000.
Guideline Company Analysis and Market Transaction Analysis
BVS performed a guideline company analysis and concluded
“that the fair market value of the common stock in PCAB, as of
May 1, 1987, on a minority interest basis, can be reasonably
represented as: $14,536,000". Two of the companies selected,
Pepsi-Cola, Inc., and Coca-Cola Co., are so dissimilar in both
size and operations25 to PCAB that we doubt the comparisons are
meaningful. The other two guideline companies were also
significantly larger, having market capitalizations of $518.3
million and $4.2 billion. In addition to the large discrepancy
in size, we are not persuaded that the remaining guideline
companies’ bottling operations are similar to PCAB’s operations
which involve a very high percentage, approximately 75 percent,
of resale of product bottled elsewhere. For these reasons, we do
not accept BVS’ guideline company analysis as reflecting the
market value of PCAB shares.
BVS also performed a market transaction analysis that
isolated financial data from 16 acquisitions of bottling
companies ranging in size from $14.9 million to $1.4 billion in
market capital. The report gives no indication whether any of
25Richard Lawrence, a vice president of Pepsi-Cola Co.,
testified that Pepsi-Cola, Inc., and Coca-Cola Co. were in a
“different business” than PCAB.
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