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To: John F. Dowd who wrote (12442)	5/20/1999 11:54:00 AM
From: Trevor Goodchild	Respond to of 12559

John, I'm with you 100% on this options fiasco. Regarding the cash versus stock issue,I was referring to the fact that $1 cash is worth $1 while every other instrument is a derivative of cash and discounted based on its liquidity. A stock swap without dilution, and well received by the market would be the best, however, very often while the acquiree's price drifts towards the offer price, the acquirer's price drifts down until a market equilibrium is reached. The premium offered by an acquirer to investors needs to beat their internal "hurdle rate", and this usually is the capital gains rate. In this case, GEC's premium did more than offset the cap gains rate. Regards.T