In Re Meyers Parking Systems Inc Exchange Act Release No.

26069 (1988)

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Nature of the Case

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Facts

The Fink-Gordon Group (Fink-Gordon) proposed a merger between Meyers Parking Systems (MPS) and MPS Acquisition Corporation (MPS Corp). MPS Corp had been formed for the purpose of acquiring the 20% of MPS that the Fink-Gordon principals had not already owned. The goal was a freeze-out merger. The minority shareholders of MPS were offered a merger price of $22 per share. MPS' board which was controlled by Fink-Gordon appointed a special committee to evaluate the merger. The committee was dissolved, and instead, Bear Sterns was retained to evaluate fairness. Bear Sterns indicated that the $22 price was unfair. Bear Stearns and Gordon-Fink then determined that $29.50 per share was fair. The same day, the board met to consider the merger at the new price. Bear Stearns gave a very brief presentation, on how the $29.50 per share price had been reached. The board proposed and approved the merger resolution without any real or independent analysis or discussions about the $29.50 price. Two days later MPS filed a Schedule 13E-3 transaction statement. Ten days later, Bear Stearns provided MPS with a written opinion stating that the merger price was fair. The Schedule 13E-3 listed the factors considered in determining the fairness of the price which included current and historical market prices of the shares, book value, going-concern value, liquidation value, and the opinion of Bear Stearns. Nothing given supported by any procedures used or steps taken to show how all the values were reached. P instituted an action to determine if MPS had failed to comply with §13(e).