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I I I I I I I I I I I I I I I I I I I GGG9 water was being suspended. CWS never announced, what percentage of the shares had been acquired; however. the number was clearly less than the 51% sought. The CWS plan was controversial, spawning statewide press coverage, Intervention by the Colorado Governor, legislative proposals, local government task forces, an4 state administrative agency studies.2 The offer documents were difficult for the potential sell~rs and their representatives to understand and evaluate. The apparent purchase price was $22281 per share (Master Contract, 1991, Section 3) with closing within 90 days (Section 28) of completion of certain conditions (Section 26). In summary, the conditions and requirements included: a. A reliable yield of 1.1 acre feet after water court transfer and water treatment processes . b. A water court decree without conditioAs that would delay the project or increase h . I t e project costs i c. Receipt of all necessary government p~rmits, and d. Completion of 90 percent of any revegetation. (A more complete explanation of the conditions is included in Appendix 2.1): Ft. Lyon shareholders voiced a number of concerns with the CWS contract. These included loss of control of the management of the company, lack o( consideration of well rights (dealt with in the proposed contract amendment), long term encumbrance of the shares during the contract, uncertainties about revegetation, the numerous reaso~s CWS could escape from the contract, the long time until final payment, and lack of protection for themselves and neighbors if water was ultimately withdrawn from parts of laterals, or parts of the canal in injurious fashion. The concerns were expressed at a Ft. Lyon special shareholders' meeting in February, 1992. The $2228 per share may have been considered adequate by shareholders, absent the other questions about the offer terms. However, assuming! 8 to 9 years to complete the transfer and establish revegetation, a net discount rate of 7 perceqt and an assumed "reliable yield" as stated in the offer, rough computations place the net presenr value of the offer at about $500 to $1000 per share, depending on interpretati~n of certain term~ in the document offer. This estimate is not to be considered authoritative due to the uncertainties in definitions contained in the CWS offer. I In March 1992, shareholders of approximately 28,600 shares formed a group to respond to the CWS proposal called Fort Lyon Ownership of Water, Inc. (FLOW). The purpose of FLOW is i , 2 Refer to newspaper articles: Denver Post, Februan- 23,1992, c-1; Pueblo Chieftain, February 27, 1992; Westward 15(26) 10; Arkansas Valley Journal, March 3, 1992; Colorado Springs Gazette Telegraph, February 24, 1992; Rocky Mountain News, March 14, 1992. 2-4