Acontecimientos

At a private meeting in late April, Simmons tentatively agreed to support a Monmouth-Robertson merger on the condition that the price be at least $50 foreach Robertson share he held.

Mr. Vincent was now faced with the critical decision of whether to move for control. If he decided to seek control, it would benecessary to establish both the price and the form of the offer. Clearly, the terms would have to be sufficiently attractive to secure the shares needed togain majority control.

Mr. Vincent also felt that the terms should be acceptable to management. Once the merger was complete, Monmouth would need to workwith the Robertson family and management. He did not want them to feel that they and other Robertson stockholders had been “cheated” by the merger. As amatter of policy, Monmouth had never made an “unfriendly” acquisition, and this one was to be no exception. The offer should be one that would besupported by the great majority of the stockholders.

However, the price and the form of the payment had to be consistent with Monmouth’s concern that theacquisition earn a satisfactory long-term return and improve the trend of Monmouth’s earnings per share over the next five years. (A forecast of Monmouth’searnings per share is shown in Exhibit 5). The company anticipated making additional acquisitions, possibly in an exchange of the stock. Stocks of Monmouthand Robertson closed at $24 and $44, respectively. (Exhibits 6 and 7 provide valuation information on quasi-comparable companies and on capital markets.)