Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: Don Westermeyer who wrote (21066)	5/1/1998 6:42:00 PM
From: Douglas V. Fant	Read Replies (2) of 95453

Don, Nice day in oil stocks, eh? Heh-heh. No no catch with CST and EVI. The risk is that the merger would fall through for some reason. But as noted in the last CST earnings release, the FTC has already approved the merger, so only shareholder approval is left before the July merger. I reread the last earnings release and the deal is .74391 shares of EVI for each share of CST and also $3.60 in cash. Then $1.92 in cash later on a couple of years down the road I believe after indemnity provisions expire. At $58/share valuation for EVI, that makes .74391 x $58/share which is $43.146 value. Add in $3.60 and $1.92 and you get a valuation of CST of $48.66/share. Now realistically since the $1.92 payment comes later subject to some conditions we need to discount to a pw value the current day value of that payment, say maybe to $1.00. Still that leaves a value per share of $47.75/share for CST.... CST has a logistics business- I wonder if EVI will keep this portion of CST's business or just sell it.... Sincerely, Doug F.

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