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Corrections Corporation of America Message Board

  • wildwillietwo wildwillietwo Mar 4, 2000 9:39 AM Flag

    RP & Yieldseeker

    A few additional points you may want to consider
    in addressing the need for the remerger and making
    Baron & Sodexo whole (which is done in both PL & BS
    proposals):

    Baron & Sodexo are both significant shareholders in
    PZN. In fact, they are probable the swing votes that
    will decide which proposal is ultimately approved. So
    in effect, making them whole buys their votes for
    the deal. Thus, PL has no choice but to treat them
    the same as in the BS proposal.

    Second, if you
    don't remerge with OPCO how are you going to control
    the operations of the company going forward? As I
    believe RP has said before, PZN/CCA is really in the
    prison management business--without control over
    operations, you don't have much of a business to manage
    IMHO.

    Finally, what are you going to do about the service
    companies (owned 95% by PZN I think)? In reality they
    account for about 40% of the actual beds currently in
    operation--but we don't own a one of them. If you look carefully
    at the disclosures with the BS proposal you will see
    that occupancy at the service companies is quite high,
    while OPCO occupancy is way under where it needs to be.
    What do you do with the service companies if you don't
    remerge with OPCO? Does PZN hace the executive staff to
    operate these companies--and even if they can acquire the
    staff, will it be cost effective?

 
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