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Agreement was executed on October 31, 1994 (subject to approval
by the district court). The $118 price was intended to
compensate for the value of the stock as augmented by the Hill
Rights. Specifically, the 1994 Agreement prohibited the transfer
of decedent's FABG common stock without FABG's consent and
granted reciprocal put and call options to decedent's personal
representative and FABG, respectively, to sell or purchase
decedent's FABG stock within 60 days after notice of her death
for the $118 price.
Cognizant of its fiduciary duties as conservator, Boatmen's
Bank of Iowa, N.A. obtained advice from a valuation specialist
for closely held business interests at Boatmen's Trust Co., a
related entity, in connection with the negotiations resulting in
the $118 price. To reach an opinion regarding a fair price for
decedent's FABG stock, including the Hill Rights, the valuation
specialist reviewed "merger multiples"13 for other Iowa and
Midwest region commercial bank mergers or acquisitions, comparing
the size, location, and profitability of the acquired banks with
Agri in order to identify appropriate comparables. On the basis
of her review, the valuation specialist concluded that Agri was
not worth an acquisition premium to FABG, so that a price equal
13 A merger multiple is computed as the ratio of the
purchase price for a bank to that bank's book value at the time
of acquisition.
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Last modified: May 25, 2011