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Biotech / Medical : ACMI - Accumed Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Frank Buck who wrote (1239)	1/22/1998 12:24:00 AM
From: Sigmund	Read Replies (1) \| Respond to of 1894

One argument for taking NewCo public would be if it were more desirable from an investment point of view than is ACMI. I am not sure that this would be the case. If it were and if NewCo were public and traded at a better price to asset or other measure (see Fluff analysis) than this would help establish the value of ACMI. If ACMI owned 30% of NewCo and if NewCo had a market cap of $100MM then ACMI should have a market cap of $30MM plus whatever value is assigned to the rest of ACMI not in NewCo. But unfortunately, I don't think that NewCo will have a $100MM market cap anytime soon. Also I think it is true that companies usually sell at a discount to the breakup value of their subsidiaries. Cable and Wireless is a good example of this. Their market cap usually just about equals the value of their holdings in Hong Kong Telecom with the market valuing the remainder of their assets at essentially zero. So I think that this is perhaps an unnecessary strategy by ACMI unless they see NewCo going off on its own acquisition program or being very aggessive re R&D.

To: Frank Buck who wrote (1239)	1/22/1998 7:12:00 PM
From: CARYTRE	Respond to of 1894

Frank, Sorry if there was some confusion in my statements. Let me clarify: 1) My reference to the "second IPO" was regarding Newco. 2) Regarding allowable percentage ownership enabling consolidation of sales/earnings. I only mentioned it as a point of reference. My assumption is that acmi will retain the same ownership it has now. 3)My take on the motivation for the IPO part of this JV is that Peter thinks the market cap will be higher, and that therefore, acmi stock will benefit from its ownership in the underlying shares of Newco, in addition to earnings consolidation. 4) The other benefits of the JV are evident in the synergies of broader sales channels and assymilation of product lines. 5) Again nothing has been given away or sold, but something new has been created. How can this be bad. Cheers! C.S.