The Daily Alaska empire., 1928-01-20

fected through consolidation WhiCi would justify a high purchas
 price, while the prevailing loy
 rates of interest and abundanc
 of money would make the initid } financing problem fairly easy 9
 solution. II seems likely that. i
 the move is to proceed, the %
 tions now in hand will be used a! a basis of further negotiation.
 where the prices asked are deem
 ed excessive.
 Financing and Operation
 The initial proposition being or the basis of a straight cash sale
 it appears that few of the pack
 CTS approached have been taker into the promoters confidence as
 to either the financial or the op
 erating organization which is con
 templated None of the many packers interviewed will admit
 being directly interested in the
 proposed merger, but the opinicn nevertheless persists in some quarters that the move has the
 active backing of important inter
 ests now in the field who woulf, be prominent in the new organiza- ton. On the other hand, it seems
 logical to suppose that before che
 completion of the deal most or aii of those selling out would be in
 vited to participate financially:
 and some. indeed, assert that the
 cash proposal is merely in the nl- , ture of a "feeler."
 According to more or less def mite reports the projected finan- cial structure has already been
 outlined and tentative arrange
 ments made for business orgaui- zation. The amount of capitaliza- tion could hardly be determined
 at this stage, though there are all
 sorts of rumors about it; it might , easily be expected to amount to $20, 100000, or possibly much
 more. The financing plan, in lin
 with current custom in merger } of this nature, is believed to bs based on a relatively small issuf
 of first mortgage bonds, with .
 larger proportion of preferred } stock, accompanied by a com paratively small issue of com mon stock in which control oi
 operations would be vested.
 } The idea oI such a consolidl tion seems to be very favorabi' received by the industry in gen
 eral, practically all of the pack CTS interviewed on the subjec expressing hearty approval; al though many would not conside
 participating on any terms Ikel, to be offered. Practically all or the other hand, are convince' that the present effort cannot b' ' successful; even those who hay'
 turned in options are exceedingll sheptical, although a good manN believe that consolidation, on a '. least fairly large scale, is boun, Y to come eventually.
 For several reasons they ice that the present is an unusuali'
 opportune time for such move ,' not only because it has come tt be the fashion in industrial opei , ations generally and because 0 z the extraordinary ease of floatin; v large issues of securities, but il = view of the present stability o the salmon market resulting fror T curtailment of the pack by govern : ment regulations, and the genera II belief that operating condition also will be stabilized to coz
 siderable degree under the pres r. ent regulatory system. These fea e lures are believed to make tn s salmon industry more of 2 "bankable" proposition than it ha !. been in the past, and correspond :, ingly more attractive as a basi F. Of securities. From the producin if standpoint, moreover, many fec :. that greater consolidation of at :, Etivities will ultimately be neco; |. sary to overcome the evils of es .. cessive competition for raw m; r terial and superfluous duplics tion of equipment.
 . Some, on the other hand, ar |. convinced that salmon cannerie a whose records show them to b
 desirable properties should b
 worth more to the present Oper.
 tors than they could be to o.thers U and point out that, even if goo v prices are received for the propel 7 ties, it would be difficult, unde = present financial conditions, fo
 packers to find any other safe il e vestment that would bring theI as good returns as are derive Ie from canneries under their ow management.
 '- From present indications, ' does not seem very likely tho 's the proposed merger will be col l. summatedo at least in the nes d future. Similar projects, howevc IL will undoubtedly come up fro II time to time, and the idea is on IL that has strong appeal to man a- cannerymen. In considering sue III proposals, it will be we'll for pac' a' CTS, whether directly interested le not, to give careful thought
 1.-the results, not only to then II selves individually, but to the