- 7 -
These underwriting agreements prevented Read-Rite from
unilaterally releasing Conner Malaysia from the restrictions on
sale without the underwriters’ express written consent.
On October 18, 1991, Read-Rite launched its IPO, and on
October 26, 1991, the asset sale between Read-Rite and Conner
Malaysia closed. The delivery date of the shares under the
Asset Purchase Agreement was November 14, 1991.
Conner Malaysia obtained a valuation by Unterberg Harris,
an investment banking firm, of the appropriate discount
applicable to the Read-Rite shares based upon the restrictions
on sale. The discount applied to the Read-Rite shares took into
account the lockup provisions applied to the shares. The
discounted value or book “cost” of the Read-Rite shares was
calculated to be $16,648,542. For financial reporting purposes,
Conner Malaysia calculated the gain realized on the sale of the
its assets to be $11,282,490. This figure was derived by
subtracting the book value of the assets from the discounted
value of the Read-Rite stock.
Pursuant to the Asset Purchase Agreement, the restrictions
on Conner Malaysia’s sale of the Read-Rite stock lapsed 180
days, 270 days and 1 year following the closing of the date of
the Read-Rite IPO. Once the restrictions lapsed, Conner
Malaysia was free to keep or sell the shares as it wished.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011