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Non-Tech : Lunn Industries (LUNN)

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To: Sandra who wrote (1259)	10/13/1997 11:49:00 PM
From: LPasko	of 1436

Not to be disrespectful, but I have major disagreements with Craig's analysis. If Newco earns .85-1.00 per share, and the multiple applied is 18-22, we get a Newco stock price of $15.30 (18 x .85) to a high of $22.00 (1.00 x 22). Now read your Proxy: "As a result of the Merger...each outstanding share of Lunn Common Stock...will be converted into the right to receive 0.1 of a share of Combined Company Common Stock." Thus, if I have 1000 shares trading at $1.40 today (now worth $1400), I will post-merger have 100 shares of Newco worth $15.30-$22,00, if projections hold. My 100 shares of Newco will therefore be worth $1530-2200, a respectable gain, but nothing quite like the windfall some are calculating. This transaction is confusing to be sure, but it can be deciphered through a careful reading of the Proxy.

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