Full opinion text
FRANK A. KAUFMAN, District Judge. Pargas, Inc. (Pargas) instituted this suit on May 7, 1976 seeking to restrain defendant Empire Gas Corporation (Empire) and other defendants alleged to be “controlling persons” of Empire from consummating a tender offer made by Empire on May 7, 1976 for a minimum of 850,000 shares and a maximum of 2,000,000 shares of Pargas’ common stock, i. e., for a minimum of 25.5% and a maximum of 60% of Pargas’ said stock. The stock of both Pargas and Empire is traded on the New York Stock Exchange. Pargas alleges that Empire’s tender offer violates disclosure requirements of sections 14(d) and 14(e) of the Securities Exchange Act of 1934, 15 U.S.C. § 78n(d), (e); that Empire obtained its financing for said tender offer in violation of Regulations T and/or X of the Federal Reserve Board, 12 C.F.R. §§ 220, 224 (1976) and of section 7(c) of the Securities Exchange Act of 1934, 15 U.S.C. § 78g (the Regulations issues); and that successful consummation of the tender offer by Empire would result in violations of section 2 of the Sherman Act, 15 U.S.C. § 2, and of section 7 of the Clayton Act, 15 U.S.C. § 18. Jurisdiction in this proceeding in which Par-gas asks for damages as well as injunctive relief exists pursuant to 15 U.S.C. §§ 15, 26 as well as under 15 U.S.C. § 78aa. ■ In the course of these proceedings, counsel for defendants brought to this Court’s attention the fact that plaintiff’s complaint in this case, plaintiff’s brief in support of its motion for preliminary relief herein, and possibly one or more other materials had been distributed by or on behalf of plaintiff (see Tr. of 5/12/76 at 170-83) in alleged violation of section 14(d)(4) of the Securities Act of 1934 and of one or more of the rules of the Securities and Exchange Commission, and moved for injunctive relief in connection with that claim. However, after the affidavits and representations of certain of counsel for plaintiffs indicated that neither plaintiff nor its counsel had acted in bad faith in disseminating the above-referenced materials, and after plaintiff and its counsel undertook to cease any further such disseminations and to recall, to the fullest extent possible, any materials which had to date been disseminated, counsel for defendants indicated that defendants would not press any quest for immediate relief in connection with that alleged violation. However, defendants did reserve the issue for further consideration at trial, and also asked that it be considered as a factor in the balancing of equities 'in the context of plaintiff’s quest for preliminary relief. (Tr. of 5/17/76 at 480-82). This Court, in so doing herein, concludes that that factor should be and accordingly herein is afforded little weight. On May 7, 1976, Empire’s tender offer was publicly announced. On that date, also, plaintiff instituted the within proceeding, and moved for immediate relief. Further, on %at same date, counsel on both sides conferred with the Court and agreed to an expedited schedule for discovery, briefing, and oral argument. That schedule culminated in lengthy hearings on May 12, 1976 and May 13, 1976. Because Empire’s tender offer was scheduled to expire at 10:00 A.M., Chicago time, on May 18, 1976, this Court, as requested by counsel, rendered on May 17, 1976 an oral opinion in which, for reasons then stated at length, this Court determined that Pargas had established a sufficient probability of violations of the federal securities and antitrust laws, and had also demonstrated that the balancing of the equities entitled plaintiff to some form of preliminary relief. At that time this Court reserved for subsequent determination the question of whether Pargas is also entitled to preliminary relief in connection with the Regulations issues. Subsequently, during the afternoon and early evening of May 17, 1976, this Court and counsel explored the possibility of devising an appropriate intermediate order which would not have the practical effect of depriving Empire, if it ultimately succeeded in its defense of the within suit, of its opportunity to attempt successfully to consummate its tender offer, but which would insure to Pargas and Empire that the “status quo” would be maintained as fully as possible during the pendency of this litigation. Defendant’s counsel took the position that while it disagreed with the Court’s conclusion that any preliminary injunctive relief should be granted, it did not desire to appeal from that determination as such. However,defendant’s counsel stressed that any preliminary decree which halted Empire’s pursuit of its tender offer and which would in Empire’s opinion cause it to lose the opportunity to succeed in its tender offer venture, whether or not Empire prevailed in this litigation, would be a decree in connection with which Empire would seek the fastest possible appellate review. Plaintiff’s counsel at first contended that nothing short of an absolute immediate halt of all Empire activities in pursuance of the tender offer was acceptable to Pargas, regardless of whether that would result, in practical effect, in killing the tender offer even if Empire ultimately won a victory in this case. However, after this Court instructed counsel on both sides to try to find a meeting point and to attempt to establish middle ground, counsel jointly agreed upon and presented to this Court in the evening of May 17, 1976 the preliminary decree which this Court signed and which bears that date. Thereafter, on May 26, 1976, that May 17,1976 Order was extended by a further Order dated May 26, 1976. Between May 17, 1976 and June 1, 1976, counsel conferred among themselves, filed further memoranda with this Court, and conferred further with this Court. All conferences with this Court were on the record, except for certain telephone conferences instituted by one or more of counsel but involving always counsel on both sides. After the lengthy public proceedings on May 12, May 13 and May 17, 1976, culminating with this Court’s delivery of its lengthy oral opinion on that latter date, and to and including June 7, 1976, all proceedings on the record in this case have been held in chambers. That procedure was followed with the agreement of all counsel because, inter alia, of the possible effect of argument and even tentative expression of views by counsel and Court upon the market behaviors of the stock of Pargas and Empire during such proceedings. Between May 17, 1976 and June 1, 1976, this Court continued to urge counsel to consider all factors including the percentage of stock which Empire might be permitted to acquire pursuant to its tender offer during the pendency of this suit, the conditions to govern the freezing and the non-voting of any such stock by Empire or anyone other than a neutral person appointed by the Court during such pendency; preservation of the right of any stockholder who tendered and/or sold his stock during that pendency to withdraw his tender and, if he had sold his stock, to reacquire it at the tender price in the event Pargas ultimately prevailed herein and Empire’s tender offer should be fully and finally proscribed; conditions to govern the ultimate disposal, in that latter event, on a controlled basis of any Pargas stock not so withdrawn and/or not so reacquired by Pargas’ stockholders so as to cause a minimum of damage to the financial and operating positions of Pargas and the market price of its stock; and arrangements for accelerated discovery and trial of all issues herein. During that period, counsel for defendants expressed optimism that an appropriate and equitable middle ground could be found. On the other hand, counsel for plaintiff expressed great pessimism within 72 hours after this Court’s May 17, 1976 Order was entered during the evening hours of that date. At that time and thereafter, Pargas stated its fears of the possibility that if Pargas won this suit, there would exist a large bloc of its stock which would require disposal and that such disposal, even if it took place on a carefully controlled basis as to both times and amounts, would seriously impede Par-gas’ operations and growth both during the course of these proceedings and thereafter, even if Pargas ultimately prevailed herein, until all or most of such stock was disposed of. Pargas stated additionally its further fears that such uncertainty would put pressure upon Pargas’ current stockholders to accept Empire’s tender offer. Pargas and its financial advisors, in affidavit and deposition testimony, have stressed that if any such large bloc of stock existed, there would be uncertainty until its ultimate disposal as to who would buy it, whether it would be acquired by one purchaser, and whether such acquisition would result in such purchaser gaining control of Pargas and thereafter causing a change in Pargas’ management personnel. Pargas also noted the probable adverse effect of such uncertainty upon the market price of Pargas’ stock. Pargas thus pointed out that such uncertainty would leave Pargas’ current management, employees, customers and existing and potential financial sources in a state of confusion and lack of confidence, impede Pargas operations and financing, and seriously and adversely affect its non-tendering stockholders, up to and including not only the date of a final judgment Order in this case but also after that judgment were entered, even if it were in favor of Pargas, until the bloc of stock acquired by Empire pursuant to Empire’s tender offer was disposed of. The thrust of Pargas’ position was that while Empire might lose a large sum of money, i. e., the difference between the tender offer price and the ultimate disposal price of any such large bloc of stock and also incur heavy administrative and legal costs, Pargas, even if it were the ultimate victor, would be permanently and greatly damaged. In that connection, for purposes only of the motion for preliminary injunctive relief, this Court finds the following facts: 1. If Empire is allowed to purchase Par-gas shares pursuant to this tender offer pending a final resolution at trial of all factual and legal issues, a substantial probability exists that Pargas’ ability to obtain equity and debt financing will be impaired. This would occur even if Pargas ultimately prevailed on the merits. [Affidavit of B. F. New, (hereinafter “New Aff.”) Ex. D, Plaintiff’s Memorandum With Respect to Proposed Relief (hereinafter “Pargas Memorandum III”); Affidavit of Martin Alan Siegel, (hereinafter “Siegel Aff.”) Ex. C, Pargas Memorandum III.] 2. If Empire is allowed to purchase Par-gas shares pursuant to this tender offer pending a final resolution at trial of all factual and legal issues, there exists a substantial probability that the value of Pargas stock will be depressed for some period of time. This would occur even if Pargas ultimately prevailed on the merits. [Siegel Aff., supra.] 3. If Empire is allowed to purchase Par-gas shares pursuant to this tender offer pending a final resolution at trial of all factual and legal issues, a substantial probability exists that Pargas will experience some difficulty in retaining and holding management. This would occur even if Pargas ultimately prevailed on the merits. [Siegel Aff., supra.] 4. If Empire is allowed to purchase Par-gas shares pursuant to this tender offer pending a final resolution at trial of all factual and legal issues, a substantial probability exists that the future management and control of Pargas will remain uncertain. This would occur even if Pargas ultimately prevailed on the merits. [Siegel Aff., supra.] 5. If Empire is allowed to purchase Par-gas shares pursuant to this tender offer pending a final resolution at trial of all factual and legal issues, a substantial probability exists that Pargas’ employees will to some extent be demoralized, to the detriment of Pargas’ business operations. This would occur even if Pargas ultimately prevailed on the merits. [Affidavit of J. W. Curtis (hereinafter “Curtis Aff.”), Ex. F, Plaintiff’s Reply to “Defendants’ Memorandum In Support of its Proposed Order” (hereinafter “Pargas Memorandum IV”).] 6. If Empire is allowed to purchase Par-gas shares pursuant to this tender offer pending a final resolution at trial of all factual and legal issues, a substantial probability exists that there will be created a present incentive for Pargas shareholders to tender, to the detriment of the status quo and the public interest. This would occur even if Pargas should ultimately prevail on the merits. [Siegel Aff., supra.] 7. If Empire is allowed to purchase Par-gas shares pursuant to this tender offer pending a final resolution at trial of all factual and legal issues, a substantial probability exists that non-tendering Pargas stockholders will be forced to suffer uncertainty as to ultimate control of the company, relative illiquidity in a depressed market for Pargas shares, the business disadvantages of demoralizing Pargas’ labor force, the business disadvantages in Pargas’ inability to effectively obtain equity or debt funding, and the business disadvantages of Pargas’ inability to retain and hold management. These injuries would likely occur even if Pargas ultimately prevailed on the merits. [Siegel Aff., supra; New Aff., supra; Curtis Aff., supra.] The possibility of Empire being permitted to continue- its tender offer during the pendency of this suit and to consummate the purchase of a limited percentage of Pargas’ stock, not to exceed an agreed percentage thereof, which percentage would not be so large as to cause Pargas and its non-tendering stockholders the injuries feared by Pargas and recited supra, with any such stock to be subject to neutral control until final judgment herein, was explored in depth by this Court with counsel. However, Empire was and is not today willing to accept a percentage limitation of less than 60% or seemingly even to consider less than 35% and Pargas was and is today unwilling to state any acceptable percentage figure and has flatly opposed and continues to oppose any figure as high as 35%. In that context, Court and counsel agreed on June 1, 1976 and continue to agree today that an impasse had and has been reached. Pargas asked on June 1, 1976 for a decree substantially in the form entered by this Court on June 2,1976. Empire pointed to the word “purchase” in this Court’s May 17 and May 26, 1976 Orders and contended on June 1, 1976 that traders had bought and sold Pargas stock on the New York Stock Exchange since May 17, 1976 on the assumption that the tender offer would remain open during the pend-ency of this case and that any device proscribing further such purchases and sales during the pendency of this litigation would be unfair to such persons. From the point of view of 20-20 hindsight, this Court — and of course counsel for Pargas — would employ, as of May 17, 1976 or as of May 26, 1976, different language both in form and in substance than appears in the Orders bearing those dates. But as of June 1, 1976, faced with (1) its determination that there was a substantial possibility that Par-gas would ultimately, on the merits, obtain total injunctive relief herein on antitrust grounds and perhaps also because of the Regulations issues, and that such relief might proscribe entirely the consummation of Empire’s tender offer, and with (2) the damages which Pargas and its non-tendering stockholders might well suffer on a continuing and even permanent basis, even if Pargas should prevail ultimately herein, if Empire is permitted to acquire (no matter what conditions might be placed upon such acquisition) and later be required to dispose of a bloc of stock of Pargas as large as 35%, and with (3) Empire’s refusal to consider any substantially smaller percentage even if this Court adopted a percentage figure over Pargas’ opposition, this Court, balancing and weighing all considerations and factors, entered its June 2, 1976 Order. Pursuant thereto, at 11:40 A.M. on June 2, 1976, this Court issued a preliminary injunction enjoining Empire from taking any steps in furtherance of its original tender offer, and indicating that a final and appealable Order to that effect would be entered as soon as this Court determined the amount of a penalty bond appropriate in this case and entered further findings of facts and conclusions of law in accordance with this Court’s earlier statements in the course of the oral opinion delivered on May 17, 1976 (Tr. at 455) that it reserved the right to write an opinion, either in whole or in part, in substitution for or in addition to said oral opinion. The within opinion is such a substituted Opinion, written after this Court, subsequent to June 1, 1976, afforded counsel on both sides the further opportunity to persuade this Court, through written submissions to and including 10:00 A.M. on June 8, 1976 and through further oral argument on June 7, 1976, that this Court’s views expressed on June 1, 1976 were in one or more respects erroneous. Defendant’s counsel announced on June 1,1976 an intention (in the event this Court did not alter any of the conclusions so expressed by it on June 1, 1976 and/or in the event this Court determined one or more of the Regulations issues, which this Court had not previously decided, adversely to defendant) to appeal from the refusal of this Court to enter an Order permitting Empire to continue to purchase, pay for, and take title to up to 60% of the stock of Pargas, under an amended tender offer and pursuant to carefully prescribed conditions, during the pendency of this litigation. At the same time, defendant’s counsel stated that an expedited appeal from this Court’s final decision herein would be particularly requested by defendant in the light of Maryland’s new anti-tender statute which became law on May 17, 1976 and which by its own terms takes effect on July 1, 1976. That new law seemingly does not proscribe Empire’s tender offer or any reasonably contemplated amended tender offer. However, it would appear to require submission to, and approval by, Maryland’s Securities Commissioner of any tender offer not consummated by July 1, 1976. Empire fears the delays which might result therefrom. However, this Court does note that Empire has expressed willingness to amend its tender offer to meet any and all disclosure requirements imposed by this Court. Indeed, defendant’s counsel has advised this Court that Empire will, if it is permitted to continue to pursue its tender offer during the course of this litigation, amend its tender offer to comply with any and all reasonable disclosure requirements imposed by this Court, without appealing from the same. Additionally, defendant’s counsel has stated that Empire stands ready to enter into new financing arrangements completely in accord with all applicable laws and regulations, if this Court will permit Empire to make and pursue an amended tender offer pending determination in this case, of the question of whether the consummation of Empire’s tender offer can or cannot withstand the Sherman Act and/or Clayton Act attacks mounted herein by Pargas. However, Empire has not presented any details of such substitute financing nor any basis for enabling this Court to conclude that Empire could conclude such new financing arrangements, amend its tender offer and consummate the same by July 1, 1976 or by any later date. Preliminary Injunctive Standards In Elco Corp. v. Microdot, Inc., 360 F.Supp. 741, 746 (D.Del.1973), Judge Staple-ton wrote: Section 16 of the Clayton Act, 15 U.S.C. § 26, authorizes this Court to grant relief against a threatened violation of the antitrust laws “when and under the same conditions and principles as injunctive relief against threatened conduct that will cause loss or damage is granted by courts of equity . . .”. Thus, while “injunctive relief is particularly suited to the preventive function of § 7,” the rules relating to the prerequisites for preliminary and permanent injunctive relief in Section 7 cases do not differ materially from those applicable in other areas. Where preliminary injunctive relief is sought the Court must weigh the potential of irreparable harm to the plaintiff absent judicial intervention, the potential of irreparable harm to the opposing party from judicial interference, the potential harm to the public interest and the likelihood of the plaintiff’s prevailing on the merits. Allis-Chalmers Mfg. Co. v. White Consolidated Indus., Inc., 414 F.2d 506 (3rd Cir. 1969); Winkleman v. New York Stock Exchange, 445 F.2d 786 (3rd Cir. 1971); Nelson v. Miller, 373 F.2d 474 (3rd Cir. 1967). In the Allis-Chalmers case, the Third Circuit discussed the plaintiff’s burden as follows: Recognizing that preliminary relief is a serious remedy, and because application for such relief, particularly in a complex case, is often based on a record less comprehensive than that which a full adjudication would yield, the courts have required that a plaintiff show a reasonable chance of ultimately prevailing on the merits. In an action by a private party, the plaintiff must also show that it will suffer irreparable injury unless relief is granted. Note, 40 N.Y.U.L.Rev. 771, 778 (1965). The burden so imposed is warranted by the extraordinary nature of the relief which is sought. But I am also mindful of the fact that it is preliminary relief which is being requested, and if the moving party establishes a reasonable probability of a § 7 violation the “possibility that the court may decide the right to permanent relief adversely to plaintiff does not preclude it from granting the temporary relief * * . In Alaska Interstate Co. v. McMillian, 402 F.Supp. 532, 539-40 (D.Del.1975), Judge Stapleton also expressed the following views, in connection with a quest for preliminary relief in connection with a tender offer: THE APPLICABLE LEGAL STANDARDS. The parties are in substantial agreement about the legal standards to be applied in considering the applications now before the Court. First, they agree that in order to be entitled to a preliminary injunction, a movant must show: either a combination of probable success on the merits and the possibility of irreparable injury or that plaintiff has raised questions going to the merits so serious, substantial, and difficult as to make them a fair ground for further litigation and deliberations. Plaintiff must also show that the balance of equities sharply weighs in its favor. Ronson Corp. v. Liquifin Aktiengesellschaft, Civ. 785-73 (D.N.J.), aff’d, 483 F.2d 846 (3rd Cir. 1973), cert. denied, 419 U.S. 870 [95 S.Ct. 129, 42 L.Ed.2d 108] (1974). See also Sonesta International Hotels Corp. v. Wellington Associates, 483 F.2d 247 (2d Cir. 1973); Gulf & Western Industries, Inc. v. Great Atlantic & Pacific Tea Co., 476 F.2d 687, 692 (2d Cir. 1973); Elco Corp. v. Microdot, Inc., 360 F.Supp. 741, 746 (D.Del.1973). Further, the parties agree that the Court must weigh “the balance of the equities” and, in doing so, must consider more than the potential of injury to the movant. * * * Finally, the parties agree, in general at least, with the advice offered by Judge Friendly in the following two quotations from Electronic Specialty Co. v. International Controls Corp., 409 F.2d 937 (2nd Cir. 1969): Probably there will no more be, a perfect tender offer than a perfect trial. Congress intended to assure basic honesty and fair dealing, not to impose an unrealistic requirement of laboratory conditions that might make the new statute a potent tool for incumbent management to protect its own interests against the desires and welfare of the stockholders. These considerations bear on the kind of judgment to be applied in testing conduct — of both sides — and also on the issue of materiality. Id. at 948 * * * [emphasis by Judge Stapleton]. ifc Sfi . [W]e think that in administering § 14(d) and (e), district judges would do well to ponder whether, if a violation has been sufficiently proved on an application for a temporary injunction, the opportunity for doing equity is not considerably better than it will be later on. The court will have a variety of tools usable at that stage. If the filings are defective or the tender offer misleading, the court can [for example] require correction, along, of course, with an opportunity to withdraw . Id. at 947. In West Virginia Highlands Conservancy v. Island Creek Coal Co., 441 F.2d 232, 235-36 (4th Cir. 1971), while not in the context of a tender offer case or in connection with antitrust or federal securities questions, Judge Winter laid down the following general principles with respect to preliminary injunctive relief: The decision to grant a preliminary injunction is discretionary with the district judge and may not be set aside on appeal unless an abuse of discretion is shown. Singleton v. Anson County Board of Education, 387 F.2d 349 (4 Cir. 1967); Meiselman v. Paramount Film Distributing Corp., 180 F.2d 94 (4 Cir. 1950); Sinclair Refining Co. v. Midland Oil Co., 55 F.2d 42 (4 Cir. 1932). The factors to be considered by the district judge have long been settled in this circuit: [I]t is sufficient if the court is satisfied that there is a probable right and a probable danger and that the right may be defeated, unless the injunction is issued, and considerable weight is given to the need of protection to the plaintiff as contrasted with the probable injury to the defendant * * * Sinclair Refining Co. v. Midland Oil Co., 55 F.2d at 45. As the above quotation indicates, it is not necessary that Conservancy demonstrate an absolute right to the relief it seeks in order to sustain the issuance of this preliminary injunction; it need establish only “probable right.” It is apparent that Conservancy has raised substantial issues concerning the application of recent federal conservationist legislation to the administration of the National Forest system. Such issues are of great current public concern. They should be fully developed and litigated at the trial level in order to insure their proper resolution. It is at that stage that the various defenses raised by Dorrell should be asserted. While we express no opinion on these questions on their merits, we can say that their resolution is not immediately apparent. That is enough to say that Conservancy has not embarked on frivolous litigation, and thus interlocutory relief is not improper if Conservancy can also show a need for protection which outweighs any probable injury to Dorrell. * * * * * * The public interest is also a relevant consideration. Yakus v. United States, 321 U.S. 414, 64 S.Ct. 660, 88 L.Ed. 834 (1944); Huard-Steinheiser, Inc. v. Henry, 280 F.2d 79 (6 Cir. 1960). Usually the public interest comes into play when an injunction is sought to restrain enforcement of a statute or a regulation designed to further the public interest, and then it is sometimes concluded that a private party must suffer the risk of irreparable injury rather than to restrain the enforcement of that which, although it may be later determined to be invalid, is designed to further the public good. The district judge did not abuse his discretion in issuing the preliminary injunction. In deference to the position of the defendants, however, we suggest that the district court proceed to a final determination on the merits as expeditiously as practicable. See also Conservation Council of North Carolina v. Costanzo, 505 F.2d 498, 502 (4th Cir. 1974); Stark v. New York Stock Exchange, 466 F.2d 743, 744 (2d Cir. 1972), and authorities cited thereat; Checker Motors Corp. v. Chrysler Corp., 405 F.2d 319, 323 (2d Cir.), cert. denied, 394 U.S. 999, 89 S.Ct. 1595, 22 L.Ed.2d 777 (1969). Under the applicable standards— standards which have in and of themselves not been the subject of dispute in this case — it is not necessary for a plaintiff seeking preliminary injunctive relief to establish an absolute right to the relief he seeks. Rather, a plaintiff need establish only a “probable right” to relief, and to demonstrate that his need for protection outweighs the probable injury to defendants which would result from the grant of such relief. For reasons which will be explicated more fully infra, this Court concludes that with regard to each of the claimed violations of the federal securities and antitrust laws and also with regard to the Regulations issues, plaintiff has demonstrated the existence of “substantial issues concerning the application of * * * federal * * * legislation * * * of great current public concern” and amply demonstrated the probable right to relief, and assuredly has not “embarked upon frivolous litigation”, as those words were used by Judge Winter in West Virginia Highlands. Further, on the basis of evidence presented to this Court to date, plaintiff has also demonstrated a need for preliminary injunctive protection which outweighs any probable injury defendants may suffer from the grant of the same to plaintiff. See the findings set forth supra. In that connection, it is apparent herein that this Court’s decision to award preliminary injunctive relief may result in some possible future harm to Empire, in the sense that Empire may, on a permanent as well as a temporary basis, lose a significant business opportunity to acquire control of Pargas. Sections 14(d) and (e) of the Securities Act of 1934, as amended, require full and adequate disclosure in tender offers. One of the disclosure failures by Empire which Pargas asserts is that Empire inadequately disclosed in its May 7, 1976 tender offer the intentions of Empire with respect to the latter’s proposed deployment of Par-gas’ assets. In that regard, Pargas points to certain pro forma statements prepared by Empire in connection with the latter’s efforts to obtain financing for the tender offer. Pargas contends that those statements demonstrate Empire’s intent to turn certain of Pargas’ assets into cash by disposing of some of the same, by reducing Pargas’ inventories, and by making loans from Pargas to Empire. (Tr. of 5/12/76 at 62-76; 92-94). Empire dismisses those pro forma statements as recording “possibilities” not seriously considered by Empire (Tr. of 5/12/76 at 122-55, 164-67). However, in the preliminary posture of this case, this Court cannot assign to those pro forma documents the insignificance attributed to them by defendant. On the contrary, this Court is satisfied that plaintiff has established a substantial danger that an unrestricted takeover of Pargas by Empire would result in the “milking” and “up-streaming” activities adverted to at length by counsel for plaintiff. (See Plaintiff’s Exhibit 2, tabs 2, 3, 4, 5, 12, 14 and the affidavit of Michael Lowry). Further, once this Court has concluded that plaintiffs have shouldered the burden of demonstrating the probable right to relief, West Virginia Highlands teaches that this Court must also consider the public interest in determining whether and what type of preliminary injunctive relief is appropriate. Herein, the consequences of alleged violations of both the securities and antitrust laws and the existence of the Regulations issues also require, in the public interest, the grant of plaintiff’s request for preliminary injunctive relief. See Gulf & Western Industries, Inc. v. Great Atlantic & Pacific Tea Co., Inc., 476 F.2d 687, 693 (2d Cir. 1973). Disclosure Under the Williams Act of 1968 The Williams Act of 1968 reflects the view of the Congress that corporate takeovers by way of tender offers are sometimes consistent and sometimes not consistent with the public interest and that they should only be proscribed for good and appropriate reasons. The Williams Act also discloses a clear congressional determination that full and fair disclosure is required in connection with every tender offer. The Williams Act establishes two types of information which must be disclosed — (1) specific items of information required by the Act and Rules promulgated thereunder, and (2) all other material information. Section 13(d) and the SEC Rules promulgated under it require the filing of specified information by any person who acquires more than 5% of a company’s stock. Section 14(d) and the SEC Rules promulgated thereunder require that a person making a tender offer for more than 5% of a corporation’s stock also file and disclose similar information. Section 14(e) provides: It shall be unlawful for any person to make any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or to engage in any fraudulent, deceptive, or manipulative acts or practices, in connection with any tender offer or request or invitation for tenders, or any solicitation of security holders in opposition to or in favor of any such offer, request, or invitation. The Commission shall, for the purposes of this subsection, by rules and regulations define, and prescribe means reasonably designed to prevent, such acts and practices as are fraudulent, deceptive, or manipulative. In Sonesta International Hotel Corp. v. Wellington Associates, 483 F.2d 247, 251 (2d Cir. 1973), Judge Mansfield has written: The probability of success on the merits in any application for injunctive relief turns greatly upon whether the plaintiff has shown that the tender offer under attack has misstated or omitted material facts. The materiality of facts allegedly misstated or omitted depends, in turn, upon whether a reasonable investor might have considered them to be important in deciding whether to accept the tender offer. This standard was set forth by the Supreme Court in Affiliated Ute Citizens v. United States, 406 U.S. 128, 153-154, 92 S.Ct. 1456, 31 L.Ed.2d 741 (1972), where the Court, in finding that the withholding of a material fact established the requisite element of causation in fact, expressed itself as being concerned with materiality “in the sense that a reasonable investor might have considered [the Misstated or undisclosed facts] important in the making of this decision [whether to sell shares].” See Butler Aviation International, Inc. v. Comprehensive Designers, Inc., 425 F.2d 842, 845 (2d Cir. 1970) (“inaccurate statements . . . which may have had some tendency to affect the decision of Butler stockholders with respect to the exchange offer”). To be material a statement in a tender offer need not necessarily relate to a past or existing condition or event. It may refer to a prospective event, even though the event may not occur, provided there appears to be a reasonable likelihood of its future occurrence. Gulf & Western Industries, Inc. v. The Great Atlantic & Pacific Tea Company, Inc., supra, 476 F.2d at 697; Gerstle v. Gamble-Skogmo, Inc., 478 F.2d 1281, 1298 (2d Cir. 1973). A reasonable stockholder, once informed of the contingency, can then determine whether to assume the risk of its occurrence or non-occurrence in accepting or rejecting the tender offer. Where the event, if it should occur, could influence the stockholder’s decision to tender, the chance that it might well occur is a factor that should be disclosed to the investor for consideration in making his or her decision. Pargas alleges that Empire’s tender offer fails to meet Williams Act disclosure requirements, for many reasons, including the following: (1) the number of shares of Par-gas, which under a combination of Maryland statutory law and Pargas’ corporate charter, must vote affirmatively in order to effect a merger of Pargas with another corporation is not accurately stated; (2) Empire’s own financial condition is not sufficiently analyzed and set forth; (3) Empire’s intention to utilize the assets and/or income of Pargas for the purpose of servicing the debt incurred by Empire in financing Empire’s tender offer is not sufficiently revealed; (4) Empire’s intention to effectuate a merger between Empire and Pargas is not appropriately stressed; (5) the extent of the antitrust obstacles which may preclude Empire from successfully acquiring control of Pargas are not spelled out; (6) the importance of the appeal pending on May 7, 1976 and taken by the Government from Judge Oliver’s decision in United States v. Empire Gas Corp., 393 F.Supp. 903 (W.D.Mo.1975), since affirmed by the Eighth Circuit on May 28, 1976, is underplayed; (7) the fact that the financing Empire obtained for its tender offer was in violation of one or more Federal Reserve Board regulations and related laws and regulations, with the result that new financing of the tender offer may need to be obtained by Empire, is not revealed. Subsequent to the institution of the within lawsuit, Empire at first seemingly conceded that, with regard to item (1) supra, certain of the statements in the tender offer do not adequately take into consideration the Seventh Article of Pargas’ corporate charter which together with Maryland law seems to permit a merger with a majority as opposed to a two-thirds vote of stock voting in favor of merger. Under Maryland law, but for that charter provision, a two-thirds vote would be required. See Md.Corp. & Ass’n Code Ann., § 2 — 104(b)(4), (5) (1975). Accordingly, it would appear that Empire’s May 7, 1976 tender offer, which states that a two-thirds vote is required for a merger of Pargas with any other corporation, overstates the number of Pargas shareholders whose votes are necessary to consummate a merger and understates the number of such shareholders whose votes could block the same. In an attempt to cure that defect Empire has published an amended tender offer adopting the construction placed upon Pargas’ own charter by Pargas’ own counsel. Subsequently, however, counsel for Empire has stated that the statements in the initial tender offer with regard to merger may not have been erroneous and that the construction placed upon Pargas’ charter by Pargas’ own counsel is not entirely free from doubt because of certain allegedly ambiguous language in Pargas’ charter and bylaws (Tr. of 5/12/76 at 107-10, 113-14). Empire on May 26,1976 submitted to this Court and to counsel for Pargas a proposed amended tender offer. That document does not disclose the doubts which Empire’s counsel has expressed. However, Empire’s counsel has stated Empire’s willingness to disclose whatever this Court requires with regard to the “merger percentage” problem. In addition, while continuing to assert the adequacy of the disclosures in its May 7, 1976 tender offer as amended by its subsequent publication with regard to the merger matter, Empire’s counsel has stated that Empire is willing to file an amended tender offer in which it will make all additional disclosures reasonably required by this Court, and indeed, as related supra, submitted the same on May 26, 1976. In the light of defense counsel’s desires to appeal as soon as possible from this Court’s June 2, 1976 Order, the complexity of many of the issues herein, and the shortness of time, counsel on both sides have asked that this Court defer, for the present, consideration of the specific language of the amended tender offer. This Court has acceded to that request. Accordingly, this Court will not at this juncture further examine the numerous disclosure questions posed herein. However, this Court will keep in mind when it deals with those disclosure matters the following remarks of the District Court in Missouri Portland Cement Co. v. Cargill, Inc., 375 F.Supp. 249, 268 (S.D.N.Y.), aff’d in part, rev’d in part, 498 F.2d 851 (2d Cir.), cert. denied, 419 U.S. 833, 95 S.Ct. 150, 42 L.Ed.2d 123 (1974): As with each of the securities law claims, what this Court requires under the Williams Act concerning financial statements should be regarded as the very minimum standard for disclosure. It is hoped that the Williams Act, as well as the other disclosure and anti-fraud provisions of the Securities Exchange Act of 1934, would cause corporations to act, not as close as possible to the fine line between adequate disclosure and omission, or between a questionable statement and misrepresentation, but rather to give full and clear statements to shareholders at all times. However, this Court also has kept and will keep well in mind Judge Friendly’s warning in Electronic Specialty Co. v. International Controls Corp., 409 F.2d 937, 948 (2d Cir. 1969), that courts must not be blind to the possibility that “there will no more be a perfect tender offer than a perfect trial”, and that imposition of unrealistic standards in connection with tender offers provide to incumbent management of a target corporation such as Pargas “a potent tool” “to protect its own interests against the desires and welfare of the stockholders.” Judge Friendly, also stressed, however, (at 948) the need to assure “basic honesty and fair dealing” in connection with tender offers. While alleging as grounds for the grant of permanent injunctive relief and the award of damages that defendants have violated both section 7 of the Clayton Act and section 2 of the Sherman Act, Pargas has sought preliminary injunctive relief solely on the basis of alleged violations of section 7 of the Clayton Act. That latter section provides, in pertinent part: No corporation engaged in commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no corporation subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another corporation engaged also in commerce, where in any line of commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly. In Phillips v. Crown Central Petroleum Corp., 376 F.Supp. 1250, 1253-54 (D.Md. 1973), a case also involving antitrust issues, Judge Harvey of this Court commented that the fact-finding process involved in a preliminary relief setting often amounts to a “battle of affidavits”, and that when the parties have joined in such a battle, they have consented to a decision based upon the same. In this case, as in Crown Central, urgent time pressures have brought about a battle of affidavits, depositions and other documents. Also, as in Crown Central, although there exists some conflict within the mountain of such documents, and although the ultimate resolution of such conflicts may need to await trial, there exists in this case at this time a large number of highly relevant and material facts as to which there is little or no dispute. Those facts provide a sufficient basis upon which this Court may fairly reach a decision with regard to the issuance of preliminary relief for antitrust reasons and because of the existence of the Regulations issues. Findings of Facts 1. Empire Gas Corporation (“Empire”) is a Missouri corporation with its principal place of business at South Highway 5, Box 303, Lebanon, Missouri 65536. Empire’s common shares are listed for trading on the New York Stock Exchange. Empire, through and in conjunction with its wholly-owned subsidiaries, is primarily engaged in the retail and wholesale distribution, transportation, purchase and sale of LP-gas and related products. 2. Pargas, Inc. (“Pargas”) is a publicly held corporation organized and existing under the laws of the State of Maryland, with its principal office in Waldorf, Maryland. Pargas is engaged either directly or through wholly-owned subsidiaries in the retail and wholesale distribution, transportation, purchase and sale of LP-gas and related products and in the mining and sale of coal. Its stock is listed for trading on the New York Stock Exchange. 3. On May 7, 1976, Empire made a tender offer for the purchase of a minimum of 850,000 shares (approximately 25.5%) up to a maximum of 2,000,000 shares (approximately 60%) of Pargas common stock for cash at $18.50 net per share (hereinafter referred to as the “offer”). One purpose of the offer is to give Empire voting control of Pargas and to allow it to obtain representation on the Pargas board. [Empire Tender offer published in New York Times, May 7, 1976, para. 10, attached to Affidavit of William C. Hill, Ex. 1, Memorandum In Support Of Motion Of Pargas, Inc. For A Temporary Restraining Order Or A Preliminary Injunction (hereinafter “Pargas Memorandum I”)]. 4. For its fiscal year ending June 1975, Empire had net sales of $72.02 million — approximately 92% of which were sales of LP-gas, with the balance representing sales of LP-gas appliances and storage equipment. Empire’s assets in fiscal 1975 were $62.3 million and its net income after taxes was $5.5 million. During the same period, Empire sold approximately 183,977,518 gallons of LP-gas. Empire currently operates LP-gas bulk plants and sales facilities in some 34 states including Missouri, Arkansas, Louisiana, Mississippi, Tennessee, Alabama, Georgia, Florida, Iowa, Oklahoma, Illinois, Indiana, Ohio, Wisconsin, Minnesota, Nebraska, Kansas, Wyoming, Colorado, Washington, Oregon, California, Alaska, Kentucky, Michigan, Montana, Texas, Idaho, South Dakota, Virginia, West Virginia, South Carolina, North Carolina and Maryland. Empire’s business is conducted through 300 wholly-owned subsidiaries and 18 service support subsidiaries, operating some 375 bulk storage plants and employing over 1,200 people. By 1973, Empire ranked fourth in sales among the largest independent distribution companies engaged primarily in the sale of LP-gas at retail. [Annual Report of Empire Gas Company 1973 at 3, Ex. 20, Pargas Memorandum I; Empire 1975 Form 10K, Ex. 11, Pargas Memorandum I; Bacon, Whipple & Company Analysis at 1, Ex. 19, Deposition of William I. Thompson, May 24, 1976 (hereinafter “Thompson Dep.”); Affidavit of David Ray Kamerschen, (hereinafter “Kamerschen Aff.”) Ex. 31, Pargas Memorandum I; Affidavit of Daryl Floyd McClendon at 3, (hereinafter “McClendon Aff.”) Ex. 21, Pargas Memorandum I; Ex. 33, Deposition of Robert W. Plaster, May 8, 1976 (hereinafter “Plaster Dep.”).] 5. In 1975, Pargas had LP-gas sales revenues of approximately $100 million, employed approximately 2,000 people and operated some 329 bulk storage plants. During the same period, Pargas sold approximately 248,638,625 gallons of LP-gas. Par-gas currently operates LP-gas bulk plants and storage facilities in 22 states including New York, Pennsylvania, New Jersey, Maryland, West Virginia, Virginia, Kentucky, North Carolina, South Carolina, Tennessee, Georgia, Florida, Alabama, Mississippi, Louisiana, Texas, Illinois, Minnesota, Washington, Oregon, Nevada and California. Pargas ranks third in sales among the largest independent distribution companies engaged primarily in the sale of LP-gas at retail [McClendon Aff., supra, at 3; Bacon, Whipple & Company Analysis at 1, Ex. 19, Thompson Dep.] 6. LP-gas includes various gases of the methane series which have been compressed into a liquid state, principal examples of which are propane and butane or a mixture thereof. These gases are by-products of the refining of crude oil and the processing of natural gas. From the refining or processing location, the product is transported by pipeline, truck and/or rail to bulk storage facilities where it is subsequently distributed further in trucks by route salesmen to retail customers and dealers. LP-gas is sold for a variety of residential, commercial, industrial and agricultural uses. LP-gas is principally sold to residential users in areas not served by natural gas mains. [Empire Gas Corporation Annual Report 1975, Ex. 1, Deposition of Martin F. Dryden, May 8, 1976 (hereinafter “Dryden Dep.”); Suburban Propane Gas Corporation, 1975 Form 10K, Ex. 11, p. 4, Empire Gas Corp.’s Brief in Opposition to Motion of Pargas, Inc. for a Temporary Restraining Order or a Preliminary Injunction (hereinafter “Empire Memorandum I”); Dryden Dep., supra at 32; 65-66; Bacon, Whipple & Co. Analysis, supra.] 7. LP-gas products possess distinct characteristics and uses in comparison with other energy sources. Unlike natural gas and other fuels, LP-gas is stored and transported under pressure and in liquid form. Its physical and chemical characteristics differ from those of solid fuels, such as wood and coal, and also from other liquid fuel, such as fuel oil, which are not stored and transported under pressure. LP-gas is chemically and physically distinct from other gaseous fuels. LP-gas is most often distributed by delivery truck to end users. Numerous consumers of propane are unable to use alternate energy sources. The clean-burning characteristics, easy portability and safety features of LP-gas further distinguish it from other fuels. [Dryden Dep., supra at 29-42; Affidavit of Norbert LeRoy Langley (hereinafter “Langley Aff.”), at 3, Ex. 24, Pargas Memorandum I Supplemental Affidavit of Norbert LeRoy Langley (hereinafter “Langley Supp. Aff.”) at 2-3, attached to Plaintiff’s Reply Brief (hereinafter “Pargas Memorandum II”); Kamerschen Aff., supra at 6.] 8. LP-gas is widely recognized within the petroleum industry, and by the public, as a distinct product. Thus, there is a national association of LP-gas industry members, the National LP-Gas Association, and a variety of state LP-gas associations and multi-state associations. The DEL-MARVA LP-Gas Association (Delaware-Maryland-Virginia) is an example of such a regional association. Additionally, there are a number of industry publications which are concerned exclusively with the purchase, transportation, distribution and sale of LP-gas. Industry recognition of LP-gas is also demonstrated by the fact that a number of major producers, themselves involved in the production of a variety of petroleum products, have designated separate departments, divisions and executive personnel exclusively relating to LP-gas. The federal government also recognizes LP-gas as a special product category. For example, the Bureau of Mines produces on a regular basis a compilation of LP-gas sales statistics; and, the Federal Energy Administration has promulgated special LP-gas regulations. [Dryden Dep., supra at 41-2; Langley Aff., supra at 3-4.] 9. LP-gas is characterized by prices different from those of other energy sources. [Langley Aff., supra at 3.] 10. LP-gas distribution requires unique facilities, and these facilities are possessed by specialized vendors. Ordinarily, LP-gas distributors do not sell other fuels. LP-gas customers are distinct in that they are often located in rural areas without access to natural gas pipelines; such customers frequently have appliances and fixtures which are not readily convertible to use of other fuels. [Dryden Dep., supra at 32, 41-2, 139-40; Langley Aff., supra at 3; Langley Supp. Aff., supra.] 11. Although LP-gas is a distinct product, it does compete in many areas and in many uses with other sources of energy, particularly fuel oil and electricity. [Par-gas, Inc. 1975 Form 10-K filed with the Securities and Exchange Commission on March 18, 1976, Ex. 9, p. 3, Empire’s Brief in Opposition to Motion of Pargas, Inc. for a Temporary Restraining Order or a Preliminary Injunction (hereinafter “Empire Memorandum I”); Petrolane Incorporated 1975 Form 10-K, Ex. 10, p. 11, Empire Memorandum I; Suburban Propane Gas Corporation 1975 Form 10-K, Ex. 11, p. 6, Empire Memorandum I; Pargas Advertising Literature, Ex. 8, Empire Memorandum I; Deposition of Martin Dryden, Jr., Empire Vice President, May 8, 1976, pp. 30-38 (hereinafter “Dryden Dep.”).] 12. Transportation costs ordinarily limit the sales of LP-gas distributors to roughly 20-35 miles of their bulk distribution plants. In some geographic areas where population is sparse, the sales area can be as large as 60 to 150 miles from the bulk distribution plant. By reason of the location of his residence or place of business, a consumer is to some extent likewise limited in his ability to purchase LP-gas from alternative suppliers. [Langley Aff., supra at 4; Dryden Dep., supra at 43-45, 69-70; Kamerschen Aff., supra at 6; Dryden Dep., p. 70; Affidavit of Robert Lee Boggs (hereinafter “Boggs Aff.”), Ex. 28, par. 4, Memorandum In Support of Motion of Pargas, Inc. for a Temporary Restraining Order or a Preliminary Injunction (hereinafter “Par-gas Memorandum I”).] 13. There is a trend toward increased concentration in the LP-gas industry nationally. Additionally, localized marketing areas in which LP-gas is distributed are characterized by high concentration. [Bacon, Whipple & Company Analysis, supra, at 2; Kamerschen Aff., supra, at 8; Langley Aff., supra at 4; Affidavit of Charles Philip German (hereinafter “German Aff.”) Exhibit 23, Pargas Memorandum I; Affidavit of Donald Cecil Long, (hereinafter “Long Aff.”) Exhibit 25, Pargas Memorandum I; Affidavit of Harley Victor Boswell, (hereinafter “Boswell Aff.”) Exhibit 26, Pargas Memorandum I; Affidavit of Kenneth R. Dunn, (hereinafter “Dunn Aff.”) Exhibit 27, Pargas Memorandum I; Affidavit of Robert Lee Boggs, (hereinafter “Boggs Aff.”) Exhibit 28, Pargas Memorandum I; Affidavit of E. W. Throndson, (hereinafter “Throndson Aff.”) Exhibit 29, Pargas Memorandum I; Affidavit of J. Howard Wheatley, (hereinafter “Wheatley Aff.”) Exhibit 30, Pargas Memorandum I.] 14. There have been numerous acquisitions in the LP-gas industry over the past several years by many of the largest competitors in the industry. Since 1963, Empire has made over 87 separate acquisitions. These have included such chain acquisitions as those consummated with Unigas, Super Propane, Gas & Chemicals and Phillips. Pargas has made over 107 acquisitions since September 16,1966. Petrolane, Incorporated, the first ranking independent LP-gas distributor, has made a number of acquisitions of LP-gas companies in the northeastern United States, Indiana, Tennessee and Missouri. In 1971, Suburban Propane Gas Corporation, the second ranking independent distributor, acquired another significant LP-gas marketer, Vangas, Inc. In an apparent change of policy, major petroleum producers now, however, refrain from acquisitions in the retail LP-gas distribution market. [Empire 1975 Form 10K, supra; Petrolane, Incorporated 1975 Form 10K, Exhibit 10, Empire Memorandum I; Suburban Propane Gas Corporation, 1975 Form 10K, Exhibit 11, Empire Memorandum I; Thompson Dep., supra, at 139-40; Plaster Dep. at 81, 82, 110 and 111.] 15. Plaintiffs have raised serious questions as to whether barriers to successful entry into LP-gas distribution, particularly on a multi-state basis, are substantial. In LP-gas markets, long-standing customer and dealer ties with established competitors provide advantages for existing firms. Attracting customers and dealers and building customer and dealer loyalty require of any new entrant into a given market more time and capital than is necessary in markets where customer and dealer ties are less significant. Entry into the LP-gas industry generally requires a storage tank of between 1,000 and 30,000 gallon capacity, a supply of LP-gas, a truck, and certain consumer tanks. A typical 18,000 gallon storage tank requires an investment of about $15,000. Empire in October, 1975 acquired an ongoing LP-gas operation in Hancock, Maryland at a purchase price of approximately $175,000. [Deposition of Darrell Deputy, Jr., May 10, 1976 (hereinafter “Deputy Dep.”) at 97; Dryden Dep. at 42-45, 91; see United States v. Empire Gas Corp., 537 F.2d 296 (8th Cir. 1976).] 16. In LP-gas markets, the relatively high cost of product transportation places some competitive premium on having ready access to sources of supply. Competitors with large storage facilities appear to possess some competitive advantage over smaller competitors without such facilities, particularly in periods of short supply. [Deputy Dep., supra, at 86-97; Dryden Dep., supra, at 130; Deposition of Earl Noe, May 10, 1976 (hereinafter “Noe Dep.”) at 20-28.] 17. Successful entry into a market is facilitated by marketing experience and know-how. [Langley 'Aff., supra at 2; Dryden Dep., supra at 91.] 18. In the past five years there appear to have been few new entrants into the LP-gas business. [Langley Aff., supra at 2.] 19. In the past five years, new competition in local markets has seemingly been provided almost wholly by existing LP-gas companies extending their service areas by building or acquiring facilities. [Langley Aff., supra at 2.] 20. Empire and Pargas are direct com- ; petitors in the sale of LP-gas in at least eleven local markets. These include: Hancock (Maryland) District; Foley (Alabama) District; Placerville (California) District; Lafayette (Louisiana) District; Eunice (Louisiana) District; Columbus (Mississippi) District; Owensboro (Kentucky) District; Wilson (North Carolina) District; Robersonville (North Carolina) District; Oneonta (Alabama) District; Huntsville (Alabama) District. [German Aff., supra; Boswell Aff., supra; Dunn Aff., supra; Boggs Aff., supra; Wheatley Aff., supra.] 21. Eleven of the local district markets in which Empire and Pargas directly compete were analyzed in detail and reflect the following: A. HANCOCK (MARYLAND) DISTRICT The total volume of LP-gas sold by Par-gas and its competitors in the Hancock (Maryland) District during 1975 was approximately 1,134,179 gallons. Pargas sold approximately 484,179 gallons, which accounted for 42.7% of this local market. Empire sold approximately 650,000 gallons, which accounted for 57.3% of this market. A third company, Dawson Hardware, made retail sales of 325,000 gallons during this period, but Dawson purchased its entire supply from Empire on a wholesale basis. Thus, since all of Dawson’s sales were merely resales of purchases from Empire, the Hancock District is concentrated to the point that two firms account for 100% of the local market. If Empire were to acquire Pargas, Empire’s sales would account for 100% of the LP-gas market in the Hancock District. This acquisition, therefore, might provide Empire with what appears at this preliminary stage to be a virtual monopoly in the marketing area. 1975 Sales Percentage Competitor (Gallons’) of Market EMPIRE 650,000 57.3 PARGAS 484,179 42.7 AFTER ACQUISITION Sales Percentage Competitor (Gallons') of Market EMPIRE - PARGAS 1,134,179 100 The above figures, it is noted, exclude certain sales provided in the Hancock region by the Shawley Gas Co. of Hagerstown, Md. (28 miles east of Hancock), of the Pyrofax, Smith, and Kendall Gas Companies located in McConnellsburg, Pa. (25 miles north of Hancock), and of Thompson’s of Boonsboro, Md. (also within 20-30 miles of Hancock). [German Aff., supra; Aff. of Charles McCarty, Ex. A to Defendant’s Ex. 6.] B. FOLEY (ALABAMA) DISTRICT The total volume of LP-gas sold by Par-gas and its competitors in the Foley (Alabama) District during 1975 was approximately 2,958,213 gallons. Pargas sold 558,-213 gallons, which accounted for 18.9% of this local market. Empire sold approximately 400,000 gallons, which accounted for 13.5% of this market. If Empire were to acquire Pargas, Empire’s sales would account for 32.4% of the market. Moreover, this acquisition would reduce the number of competitors in the Foley District, more than double Empire’s present market share, and further concentrate this market to the point where the two top competitors would control more than 66% of the entire market and the top four firms will account for 100% of the market. 1975 Sales Percentage Competitor (Gallons') of Market Blossman Gas 1,000,000 33.8 National Butane 600,000 20.0 PARGAS 558,213 18.9 EMPIRE 400.000 13.5 Corporal Gas 400.000 13.5 AFTER ACQUISITION Competitor Sales Percentage (Gallons') of Market Blossman Gas 1,000,000 33.8 EMPIRE - PARGAS 958,213 32.4 National Butane 600,000 20.0 Corporate Gas 400,000 13.5 [Boswell Aff., supra.] C. PLACERVILLE (CALIFORNIA) DISTRICT The total volume of LP-gas sold