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Boesky's purchases of FMC stock as the market
price advanced wiped out any premium in the deal price
over the market price that the management shareholders
expected would exist in their favor over the interests
of the public shareholders. No admissible evidence was
presented by FMC that the pre-transaction market price
of FMC stock was artificially high and did not
represent the stock's true fair value nor was there any
other indication by specific fact that the
recapitalization overcompensated FMC's public
shareholders for the equity they gave up. Further, all
shareholders, including the management shareholders,
shared in the benefits of the rise in price of FMC's
stock. * * *
The new FMC shares which were projected under the
revised recapitalization to trade at about $17.14 per
share opened actually at $19.25. This unerringly
suggests that the projected price was in fact a slight
under-valuation of the true fair value of FMC stock and
not inflated. Where "the factual context renders
[plaintiffs'] claim implausible--if the claim is one
that simply makes no economic sense--[plaintiffs] must
come forward with more persuasive evidence to support
their claim than would otherwise be necessary."
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 587, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d
538 (1986). FMC's bald assertion that the market price
of FMC stock was artificially high in April, 1986,
because of Boesky's buying program falls far short of
this standard and is unsupported by specific facts.
Boesky may have reaped illegal profits in trading
on the non-public information that a recapitalization
was brewing, and he was sued by FMC therefor and
settled in cash with FMC. But the only other parties
who suffered legally cognizable injury would be those
who bought or sold securities with Boesky directly, or
even indirectly through the market, not FMC, whose
recapitalization was neither executed on the market nor
approved by FMC's shareholders until May 22, 1986, well
after the non-public information had been publicly
disclosed by FMC itself: first on April 2nd when it
publicly filed its Form S-2 with the SEC and again on
May 2nd when it publicly issued its joint proxy
statement/prospectus. * * *
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