Actually there is a revision to this code, dated 1996. (I'm not a lawyer, but I know one who dug this up.)
(d) Appraisal rights shall be perfected as follows:
(2) ...The surviving or resulting corporation, either before the effective date of the merger or consolidation or within 10 days thereafter, shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all of the shares of such class or series of stock of the constituent corporation, and shall include in such notice a copy of this section; [...] Any stockholder entitled to appraisal rights may, within 20 days after the date of mailing of the notice, demand in writing from the surviving or resulting corporation the appraisal of his shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holder's shares.
[pages and pages of crap deleted]
So it seems that we will all be receiving a notice, probably along with the proxy statement that allows us to vote for or against the merger.
It also seems that 7.5% is not a legal boundary, as any number of shareholders may or may not ask for appraisal, and the appraisal value is irrespective of the amount of shares requested for appraisal: it is simply a threshold over which Triarc MAY (or may not) terminate the agreement if too many people are granted too high a price.
If shares are appraised at a higher price, it does not stop the merger: it merely guarantees the deal which the appraisees will get.
Also, the costs of appraisal MAY (or may not) be passed to those requesting it, so it is advantageous to have as many people asking for it as possible.
Someone will have to represent the shareholders to the Court which is appraising the shares, as you can bet that Triarc will be there. I, personally, am a long way from Delaware. Counsel will probably be necessary, which costs $: therefore, again, it behooves us to collect as many stockholders as possible. Please e-mail Anthony if you haven't already (calcpacfp@aol.com). If we get enough people we may find someone willing to take the case on contingency...
My cursory reading of the case law surrounding what the Court counts as "fair value" for an appraisal indicates that we have a chance at more than $3.25, but $6 may not be realistic. Price before announcement of merger weighs heavily, trailing earnings (they don't use forward estimates), P/E multiples of analogous stocks, and book or asset value (if significant) come into play -- pretty much what you'd expect. Anyone have the 5-year growth figure? Baseline only goes back a few years...
Assuming 30%, trailing earnings of .16, and fair P/E of 30, we get $4.80. Price was $4 just before the announcement. Even assuming only 25 P/E we get $4. Anyone check the beverage industry for P/E lately? They're well above these figures. So it seems tough to justify anything less than $4/share.
Actually, if Triarc continues its free-fall, they may call off the merger anyway, as one of the optional terms is a minimum price of $15 on TRY.
Steve |
