Morrison-Knudsen (MRN) Message Board

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Non-Tech : Morrison-Knudsen (MRN)

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To: Mark Bauer who wrote ()	5/17/1996 12:46:00 PM
From: Ira Vine	of 27

They agreed to a merger today. Essentially, Washington Construction (WAS) will give the creditors $13 million and issue new stock to the bondholders (increase its own shares by 45%). WAS will also take on $50 million of MNR debt. In return, WAS gets a company 5 times its size. MNR shareholders get warrants to buy the new company's stock at $12 anytime over the next 5 years. If the new company is valued at the same rate as WAS now, it would be worth $14 to $15 (by my calculations) - although they will have to prove that the company can be run profitably before the market will give it that kind of valuation; so you may have a good bet on the warrants (of course, in the best case scenario, if the company is as profitable as it was a few years ago, there could be an eventual value of $30 to $40).

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