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Fair Catering

Is it fair?

Kenneth had built a publicly traded conglomerate of several companies starting from his original catering company. Now, tired from all the work, he wanted to buy back his original company and leave the conglomerate.

As chairman of the board, how could Ken conduct the transaction so as to be fair to the other shareholders and to satisfy SEC requirements?

A lifelong love

Catering was Kenneth's passion as a child so it was only natural that after college he started his own catering company. Using the profits, and some of his own money, he expanded his holdings, eventually forming a large multi-company conglomerate that was publicly traded.

Now Ken wanted out. The shareholders weren't so happy, but Ken had an agreement that allowed him to buy back the catering business. The critical issue was to set a price that would be fair to the other shareholders and would meet SEC requirements.

Jerrold Katz was called to value the catering company and to render a fairness opinion.

The analysis was fairly straightforward, but we had to be careful to see if there were any synergy issues between the catering company and the rest of the conglomerate. What was the value of the catering company if it was independent of the conglomerate? How would separation effect the conglomerate?

We worked quickly to answer that and other questions so the transaction could take place on time, while ensuring our report was - as always - precise and accurate.