Viewing page 38 of 116

This transcription has been completed. Contact us with corrections.

- 37 -

quotations of $56.50 per share as of June 30, 1955, resulting in a total consideration of $14,707,000. Eastern's stock closed on the New York Stock Exchange at $44.75 per share on October 18, 1955. Under National's theory that the last available data should be used, Eastern's consideration would be only $11,648,000. It also should be noted that there is no consistency in the methods of appraisal of the assets involved in the various acquisitions set forth in National's analysis.

Finally it should be noted that National's analysis reflects a difference in dollar value of consideration paid for intangibles in each instance. Thus National fails to make allowance for the size of the transaction involved. The amount of consideration paid in dollars for the intangibles might be unreasonable in the sale of a small company, whereas in the acquisition of a larger company, the same dollar value would not have nearly the relative importance. A more equitable comparison would be on the basis of the percentage relationship between the price paid for the intangibles and the total price paid for the assets transferred.

In prior cases where the value of fixed assets has been established on the basis of market value, the Board has granted approval of acquisitions even though substantial portions of the purchase price were for intangibles. In the United States No. 68 Case, supra, the