To: JJB who wrote (5190 ) 10/5/1999 12:19:00 PM From: Harry J. Respond to
JJB - for $ #s and exch ratios, see the tables on pages I-37 and I-38 of the QWST proxy. I think they support your conclusion that, if a person intends to hold QWST long term and if that person presumes the merger will go through at a QWST Average Price below $39.90, the place to buy now is in USW instead of QWST. The table on page I-37 illustrates the # of QWST shares which USW holders would receive at different Average Prices and the value of the shares based on that Price. The table on I-38 illustrates the # of QWST shares *plus* the amount of cash which USW holders would receive if QWST and USW decide to pay the maximum amount of cash in lieu of just exchanging stock. For example, from the I-37 table, at $34/Qwst share Average Price, USW holders would get 2.02941 shares of QWST ($69/$34) for each USW share if only stock is exchanged. With each USW share selling for, what?, about $59, that's a $10 premium. From the I-38 table, at an Average Price of $34/QWST share, USW holders would get 1.783 shares of QWST *plus* $8.38 cash for each USW share if the maximum cash payout is made. Anybody care to calculate that premium? I note that no fractional shares are to be issued but that cash in lieu of fractional shares would be paid, anyway. On the other hand, mid-2000, the estimated time of the merger if it occurs, is more than half a year off. Is the risk-reward worth the wait? On the third hand, if it were easy to make such choices, everybody would do it. But, we each have to decide based on our own situations and threshhold for pain and anxiety. Maybe it's why I held QWST instead of shorting it and loading up on USW . . . 8-)
