<PAGE>
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
SCHEDULE 13E-3
Rule 13E-3 Transaction Statement
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934)
----------------------------
RHONE-POULENC RORER INC.
(Name of Issuer)
----------------------------
RHONE-POULENC RORER INC.
RP VEHICLE, INC.
RHONE-POULENC S.A.
(Name of Person(s) Filing Statement)
----------------------------
Common Stock, Without Par Value
(Title of Class of Securities)
----------------------------
76242T 10 4
(CUSIP Number of Class of Securities)
----------------------------
Yves Brissy Richard T. Collier
Rhone-Poulenc S.A. Rhone-Poulenc Rorer Inc.
25, quai Paul Doumer 500 Arcola Road
92408 Courbevoie Cedex, France Collegeville, PA 19426
011-331-47-68-12-34 (610) 454-3862
(Name, Address and Telephone Number of Persons Authorized to Receive Notices
and Communications on Behalf of Person(s) Filing Statement)
----------------------------
With Copies to:
Hubertus V. Sulkowski, Esq. Margaret L. Wolff, Esq.
Shearman & Sterling Skadden, Arps, Slate, Meagher & Flom LLP
114, avenue des Champs-Elysees 919 Third Avenue
75008 Paris, France New York, NY 10022
011-331-53-89-70-00 (212) 735-3000
Creighton O'M. Condon, Esq.
Shearman & Sterling
599 Lexington Avenue
New York, New York
(212) 848-4000
This statement is filed in connection with (check the appropriate box):
a. [_] The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the
Securities Exchange Act of 1934.
b. [_] The filing of a registration statement under the Securities Act of
1933.
c. [X] A tender offer.
d. [_] None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies: [_]
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
================================================================================
Transaction Valuation Amount of Filing Fee
- --------------------------------------------------------------------------------
<S> <C>
$4,846,433,601.00* $969,286.72**
================================================================================
</TABLE>
* Calculated by multiplying $97, the per share tender offer price, by
49,963,233 the sum of the number of shares of Common Stock sought in the
tender offer and the 4,439,111 shares of Common Stock subject to options
which will be vested as of October 1, 1997.
** Calculated as 1/50 of 1% of the transaction value.
[X] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: $969,286.72 Filing Party: Rhone-Poulenc, S.A.
Form or Registration No.: Schedule 14D-1/Schedule 13D (Amendment No. 10)
Date Filed: August 22, 1997.
- --------------------------------------------------------------------------------
<PAGE>
INTRODUCTION
This Rule 13e-3 Transaction Statement on Schedule 13E-3 (the "Schedule
13E-3") is being filed by (i) Rhone-Poulenc S.A., a societe anonyme organized
under the laws of the Republic of France ("Purchaser"), (ii) RP Vehicle, Inc., a
Pennsylvania corporation ("Merger Subsidiary") and (iii) Rhone-Poulenc Rorer
Inc., a Pennsylvania corporation (the "Company") pursuant to Section 13(e) of
the Securities Exchange Act of 1934, as amended, and Rule 13e-3 thereunder in
connection with the tender offer by Purchaser for all the issued and outstanding
shares (the "Shares") of common stock, without par value, of the Company not
already owned by Purchaser or any of its affiliates, upon the terms and subject
to the conditions set forth in the Offer to Purchase dated August 22, 1997
(the "Offer to Purchase") and the related Letter of Transmittal (which together
constitute the "Offer"), copies of which are filed as Exhibits (d)(1) and (d)(2)
hereto, respectively.
The following Cross Reference Sheet, prepared pursuant to General
Instruction F to Schedule 13E-3, shows the location in the Tender Offer
Statement on Schedule 14D-1 filed by Purchaser (the "Schedule 14D-1") with the
Securities and Exchange Commission on the date hereof of the information
required to be included in this Schedule 13E-3. The information set forth in the
Schedule 14D-1, including all exhibits thereto, is hereby expressly incorporated
herein by reference as set forth in the Cross Reference Sheet and the responses
in this Schedule 13E-3, and such responses are qualified in their entirety by
reference to the information contained in the Offer to Purchase and the annexes
thereto.
The information contained in this Schedule 13E-3 concerning the Company,
including, without limitation, the information concerning the background of the
transactions, the deliberations of the Company's Board of Directors in
connection with the transaction, the opinion of the Company's financial advisor
and the Company's capital structure and historical financial statements and
projections, was supplied by the Company. Purchaser and Merger Subsidiary take
no responsibility for the accuracy of such information. The information
contained in this Schedule 13E-3 concerning Purchaser and Merger Subsidiary was
supplied by Purchaser and Merger Subsidiary. The Company takes no responsibility
for the accuracy of such information.
Page 2 of 13
<PAGE>
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
ITEM IN WHERE LOCATED IN
SCHEDULE 13E-3 SCHEDULE 14D-1
- -------------- --------------
<S> <C>
Item 1(a)...........................................................................................Item 1(a)
Item 1(b)...........................................................................................Item 1(b)
Item 1(c)...........................................................................................Item 1(c)
Item 1(d)...................................................................................................*
Item 1(e)...................................................................................................*
Item 1(f)...................................................................................................*
Item 2(a)...........................................................................................Item 2(a)
Item 2(b)...........................................................................................Item 2(b)
Item 2(c)...........................................................................................Item 2(c)
Item 2(d)...........................................................................................Item 2(d)
Item 2(e)...........................................................................................Item 2(e)
Item 2(f)...........................................................................................Item 2(f)
Item 2(g)...........................................................................................Item 2(g)
Item 3(a)..................................................................................Item 3(a) and 3(b)
Item 3(b)...........................................................................................Item 3(b)
Item 4 ...................................................................................................*
Item 5 ..............................................................................................Item 5
Item 6(a)...........................................................................................Item 4(a)
Item 6(b)...................................................................................................*
Item 6(c)...........................................................................................Item 4(b)
Item 6(d)...................................................................................................*
Item 7(a)..............................................................................................Item 5
Item 7(b)...................................................................................................*
Item 7(c)...................................................................................................*
Item 7(d)...................................................................................................*
Item 8 ...................................................................................................*
Item 9 ...................................................................................................*
Item 10(a)..........................................................................................Item 6(a)
Item 10(b)..................................................................................................*
Item 11 ..............................................................................................Item 7
Item 12(a)..................................................................................................*
Item 12(b)..................................................................................................*
Item 13 ...................................................................................................*
Item 14 ...................................................................................................*
Item 15(a)..................................................................................................*
Item 15(b).............................................................................................Item 8
Item 16 ..........................................................................................Item 10(f)
Item 17 .............................................................................................Item 11
</TABLE>
* The Item is located in the Schedule 13E-3 only.
Page 3 of 13
<PAGE>
ITEM 1. Issuer and Class of Security Subject to the Transaction.
(a)-(c) The response to Item 1(a)-(c) of the Schedule 14D-1 is
incorporated herein by reference.
(d) The information set forth in the Offer to Purchase under "THE
TENDER OFFER -- Section 6. Price Range of Shares" is incorporated herein by
reference.
(e) Not applicable.
(f) The information set forth in the Offer to Purchase under
"SPECIAL FACTORS -- Beneficial Ownership of Common Stock" are incorporated
herein by reference.
ITEM 2. Identity and Background.
(a)-(d) and (g) This Statement is being filed by Purchaser, Merger
Subsidiary and the Company. The response to Item 2 of the Schedule 14D-1 is
incorporated herein by reference as to Purchaser. The information concerning the
name, state or other place of organization, principal business and address of
the principal office of Merger Subsidiary and the Company, and the information
concerning the name, business address, present principal occupation or
employment and the name, principal business and address of any corporation or
other organization in which such employment or occupation is conducted, material
occupations, positions, offices or employments during the last five years and
citizenship of each of the executive officers and directors of Merger Subsidiary
and the Company is set forth under "INTRODUCTION", "THE TENDER OFFER -- Section
7. Certain Information Concerning the Company", "THE TENDER OFFER -- Section
8. Certain Information Concerning Purchaser" and Schedule I of the Offer to
Purchase and is incorporated herein by reference.
(e)-(f) The response to Item 2 of the Schedule 14D-1 is incorporated
herein by reference with respect to Purchaser. During the last five years,
neither Merger Subsidiary or Company, nor, to the best knowledge of Merger
Subsidiary or Company, any of the persons listed in Schedule I of the Offer to
Purchase has been (i) convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting activities subject to, federal or state
securities laws or finding any violation of such laws.
ITEM 3. Past Contacts, Transactions or Negotiations.
(a)-(b) The response to Item 3 of the Schedule 14D-1 is incorporated
herein by reference.
ITEM 4. Terms of The Transaction.
(a) The information set forth in the Offer to Purchase on the cover
page thereof and under "INTRODUCTION", "SPECIAL FACTORS -- Background of the
Offer and the Merger", "SPECIAL FACTORS -- The Merger Agreement", "THE TENDER
OFFER -- Section 1. Terms of the Offer; Expiration Date", "THE TENDER OFFER --
Section 2. Acceptance for Payment and Payment for Shares", "THE TENDER OFFER
- --Section 3. Procedures for Accepting the Offer and Tendering Shares", "THE
TENDER OFFER --Section 4. Withdrawal Rights", "THE TENDER OFFER -- Section 10.
Dividends and Distributions", "THE TENDER OFFER -- Section 12. Certain
Conditions of the Offer", "THE TENDER OFFER -- Section 13. Certain Legal Matters
and Regulatory Approvals" and "THE TENDER OFFER -- Section 15. Miscellaneous" is
incorporated herein by reference.
(b) Not applicable.
Page 4 of 13
<PAGE>
ITEM 5. Plans or Proposals of the Issuer or Affiliate.
(a)-(e) The response to Item 5(a)-(e) of the Schedule 14D-1 is
incorporated herein by reference.
(f)-(g) The response to Item 5(f)-(g) of the Schedule 14D-1 is
incorporated herein by reference.
ITEM 6. Source and Amounts of Funds or Other Consideration.
(a) The response to Item 4(a) of the Schedule 14D-1 is incorporated
herein by reference.
(b) The information set forth in the Offer to Purchase in "THE
TENDER OFFER -- Section 14. Fees and Expenses" is incorporated herein by
reference.
(c) The response to Item 4(b) of the Schedule 14D-1 is incorporated
herein by reference.
(d) Not applicable.
ITEM 7. Purpose(s), Alternatives, Reasons and Effects.
(a) The response to Item 5 of the Schedule 14D-1 is incorporated
herein by reference.
(b) The information set forth in the Offer to Purchase under
"SPECIAL FACTORS -- Recommendation of the Company Board; Fairness of the Offer
and the Merger" and "SPECIAL FACTORS -- Purpose and Structure of the Offer and
the Merger; Reasons of Purchaser for the Offer and the Merger" is incorporated
herein by reference.
(c)-(d) The information set forth in the Offer to Purchase under
"INTRODUCTION", "SPECIAL FACTORS -- Background of the Offer and the Merger",
"SPECIAL FACTORS -- Recommendation of the Company Board; Fairness of the Offer
and the Merger", "SPECIAL FACTORS -- Purpose and Structure of the Offer and the
Merger; Reasons of Purchaser for the Offer and the Merger", "SPECIAL FACTORS --
Plans for the Company After the Offer and the Merger; Certain Effects of the
Offer", "THE TENDER OFFER -- Section 5. Certain U.S. Federal and French Income
Tax Consequences" and "THE TENDER OFFER -- Section 11. Effect of the Offer on
the Market for the Shares, the NYSE, the Paris Bourse and Exchange Act
Registration" is incorporated herein by reference.
ITEM 8. Fairness of the Transaction.
(a)-(e) The information set forth in the Offer to Purchase under
"INTRODUCTION", "SPECIAL FACTORS -- Background of the Offer and the Merger",
"SPECIAL FACTORS -- Recommendation of the Company Board; Fairness of the Offer
and the Merger", "SPECIAL FACTORS -- Position of Purchaser Regarding Fairness of
the Offer and the Merger" and "SPECIAL FACTORS -- Purpose and Structure of the
Offer and the Merger; Reasons of Purchaser for the Offer and the Merger" is
incorporated herein by reference.
(f) Not applicable.
ITEM 9. Reports, Opinions, Appraisals And Certain Negotiations.
(a)-(c) The information set forth in the Offer to Purchase under
"SPECIAL FACTORS -- Background of the Offer and the Merger", "SPECIAL FACTORS --
Recommendation of the Company Board; Fairness of the Offer and the Merger",
"SPECIAL FACTORS -- Opinion of Goldman, Sachs & Co.", "SPECIAL FACTORS --
Page 5 of 13
<PAGE>
Position of Purchaser Regarding Fairness of the Offer and the Merger" and in
Schedule II is incorporated herein by reference.
ITEM 10. Interest in Securities of the Issuer.
(a) The response to Item 6(a) of the Schedule 14D-1 is incorporated
herein by reference.
(b) The information set forth in the Offer to Purchase in "SPECIAL
FACTORS -- Beneficial Ownership of Common Stock" is incorporated herein by
reference.
ITEM 11. Contracts, Arrangements or Understandings with Respect to the
Issuer's Securities.
The response to Item 7 of the Schedule 14D-1 and the information set
forth in the Offer to Purchase under "SPECIAL FACTORS -- Beneficial Ownership of
Common Stock" are incorporated herein by reference.
ITEM 12. Present Intention and Recommendation of Certain Persons with
Regard to the Offer and the Merger.
(a)-(b) The information set forth in the Offer to Purchase under
"INTRODUCTION", "SPECIAL FACTORS -- Background of the Offer and the Merger",
"SPECIAL FACTORS -- Recommendation of the Company Board; Fairness of the Offer
and the Merger", "SPECIAL FACTORS -- Interests of Certain Persons in the Offer
and the Merger" and "SPECIAL FACTORS -- Beneficial Ownership of Common Stock" is
incorporated herein by reference.
ITEM 13. Other Provisions of the Offer and the Merger.
(a) The information set forth in the Offer to Purchase under
"SPECIAL FACTORS -- Rights of Shareholders in the Offer and the Merger",
"SPECIAL FACTORS--The Merger Agreement" and in Schedule III is incorporated
herein by reference.
(b) Not applicable.
(c) Not applicable.
ITEM 14. Financial Information.
(a) The information set forth in the Offer to Purchase under "THE
TENDER OFFER -- Section 7. Certain Information Concerning the Company" is
incorporated herein by reference. In addition, the Company's audited financial
statements for the fiscal years ended December 31, 1995 and December 31, 1996,
and the Company's unaudited financial statements for the period ended June 30,
1997, are attached to the Offer to Purchase as Schedules IV and V thereto,
respectively.
(b) Not applicable.
ITEM 15. Persons and Assets Employed, Retained or Utilized.
(a) The information set forth in the Offer to Purchase under
"SPECIAL FACTORS -- Background of the Offer and the Merger", "SPECIAL FACTORS --
Recommendation of the Company Board; Fairness of the Offer and the Merger",
"SPECIAL FACTORS -- Plans for the Company After the Offer and the Merger;
Certain Effects of the Merger" and "THE TENDER OFFER -- Section 11. Effect of
the Offer on the Market for the Shares, the NYSE, the Paris Bourse and
Exchange Act Registration" is incorporated herein by reference.
Page 6 of 13
<PAGE>
(b) The response to Item 8 of the Schedule 14D-1 is incorporated
herein by reference.
ITEM 16. Additional Information.
The response to Item 10(f) of the Schedule 14D-1 is incorporated herein
by reference.
ITEM 17. Material to Be Filed as Exhibits.
(a)(1) Summary of Terms and Conditions (FF 2,500,000 Short Term Credit
Facility) dated August 6, 1997 between Purchaser and *.+
(a)(2) Summary of Terms and Conditions (FF 2,000,000,000 Short Term
Credit Facility) dated August 1, 1997 between Purchaser and *.+
(a)(3) Summary of Terms and Conditions (FF 1,500,000,000 Revolving
Credit Loan Facility) dated August 6, 1997 between Purchaser and *.+
(a)(4) Summary of Terms and Conditions (FF 1,500,000,000 Revolving
Credit Facility) dated August 1, 1997 between Purchaser and *.+
(a)(5) Summary of Terms and Conditions (FF 2,000,000,000 Revolving
Credit Facility) dated August 4, 1997 between Purchaser and *.+
(a)(6) Summary of Terms and Conditions (FF 1,000,000,000 Revolving
Credit Facility) dated August 1, 1997 between Purchaser and *.+
(a)(7) Summary of Terms and Conditions (FF 1,000,000,000 Revolving
Credit Facility) dated August 5, 1997 between Purchaser and *.+
(a)(8) Summary of Terms and Conditions (FF 750,000,000 Revolving Credit
Facility) dated August 1, 1997 between Purchaser and *.+
(a)(9) Summary of Terms and Conditions (FF 500,000,000 Revolving Credit
Facility) dated July 31, 1997 between Purchaser and *.+
(a)(10) Summary of Terms and Conditions (USD 80,000,000 Five Year
Bilateral Credit Facility) dated July 23, 1997 between Purchaser and *.+
(a)(11) Summary of Terms and Conditions (FF 500,000,000 Revolving Credit
Facility) dated August 5, 1997 between Purchaser and *.+
(a)(12) Summary of Terms and Conditions (FF 1,000,000,000 Revolving
Credit Facility) dated August 4, 1997 between Purchaser and *.+
(a)(13) Summary of Terms and Conditions (FF 500,000,000 Revolving Credit
Facility) dated August 4, 1997 between Purchaser and *.+
(a)(14) Summary of Terms and Conditions (USD 150,000,000 Revolving
Credit Facility) dated August 7, 1997 between Purchaser and *.+
(a)(15) Summary of Terms and Conditions (FF 500,000,000 Revolving Credit
Facility) dated August 7, 1997 between Purchaser and *.+
(a)(16) Summary of Terms and Conditions (FF 4,000,000,000 Short Term
Credit Facility) dated August 8, 1997 between Purchaser and *.+
(a)(17) Summary of Terms and Conditions (FF 2,000,000,000 Revolving
Credit Facility) undated between Purchaser and *.+
(a)(18) Summary of Terms and Conditions (USD 850,000,000 Bridge Loan
Facility) dated August 8, 1997 between Purchaser and *.+
(b)(1) Opinion of Goldman, Sachs & Co. dated August 19, 1997
(attached as Schedule II to the Offer to Purchase).*
(b)(2) Presentation of Goldman, Sachs & Co. dated August 19, 1997.
(c)(1) Form of Stock Option Agreement.*
(c)(2) Acquisition Agreement, dated as of March 12, 1990 between
Purchaser and Rover Group Inc., predecessor in interest to the Company
(incorporated by reference to the registration statement on Form F-4 of the
Purchaser (Registration Number 33-35645)).
(c)(3) Agreement and Plan of Merger, dated August 19, 1997 among
Purchaser, Merger Subsidiary and the Company.*
(d)(1) Form of Offer to Purchase dated August 22, 1997.*
(d)(2) Form of Letter of Transmittal sent to holders of Shares.*
(d)(3) Form of Notice of Guaranteed Delivery.*
(d)(4) Form of Letter from Morgan Stanley & Co. Incorporated and UBS
Securities LLC to Brokers, Dealers, Commercial Banks, Trust Companies and
Nominees.*
(d)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees to Clients.*
(d)(6) Form of Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.*
(d)(7) Summary Advertisement as published in The Wall Street Journal on
August 22, 1997.*
(d)(8) Press Release issued by Purchaser on August 20, 1997.*
Page 7 of 13
<PAGE>
(d)(9) English translation of French-language Communique published in
Les Echos and La Tribune on August 22, 1997.*
(e) Sections 1930(a) and 1571-80 (Subchapter 15) of the Pennsylvania
Business Corporation Law (attached as Schedule III to the Offer to Purchase).*
(f) Not applicable.
- -----------------------
* Incorporated by reference to the Statement on Schedule 14D-1 filed by
Purchaser on August 22, 1997.
+ Request for Confidential Treatment filed by Purchaser on August 22, 1997.
Page 8 of 13
<PAGE>
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
August 22, 1997
RHONE-POULENC S.A.
By:/s/ Jean-Rene Fourtou
----------------------------------
Name: Jean-Rene Fourtou
Title: Chairman and Chief Executive Officer
Page 9 of 13
<PAGE>
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
August 22, 1997
RP VEHICLE, INC.
By:/s/ Igor Landau
-----------------------------------
Name: Igor Landau
Title: President
Page 10 of 13
<PAGE>
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
August 22, 1997
RHONE-POULENC RORER INC.
By:/s/ Michel de Rosen
-----------------------------------
Name: Michel de Rosen
Title: Chairman and Chief Executive Officer
Page 11 of 13
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
<S> <C>
(a)(1) Summary of Terms and Conditions (FF 2,500,000 Short Term
Credit Facility) dated August 6, 1997 between Purchaser and *.+
(a)(2) Summary of Terms and Conditions (FF 2,000,000,000 Short Term
Credit Facility) dated August 1, 1997 between Purchaser and *.+
(a)(3) Summary of Terms and Conditions (FF 1,500,000,000 Revolving
Credit Loan Facility) dated August 6, 1997 between Purchaser
and *.+
(a)(4) Summary of Terms and Conditions (FF 1,500,000,000 Revolving
Credit Facility) dated August 1, 1997 between Purchaser and *.+
(a)(5) Summary of Terms and Conditions (FF 2,000,000,000 Revolving
Credit Facility) dated August 4, 1997 between Purchaser and *.+
(a)(6) Summary of Terms and Conditions (FF 1,000,000,000 Revolving
Credit Facility) dated August 1, 1997 between Purchaser and *.+
(a)(7) Summary of Terms and Conditions (FF 1,000,000,000 Revolving
Credit Facility) dated August 5, 1997 between Purchaser and *.+
(a)(8) Summary of Terms and Conditions (FF 750,000,000 Revolving
Credit Facility) dated August 1, 1997 between Purchaser and *.+
(a)(9) Summary of Terms and Conditions (FF 500,000,000 Revolving
Credit Facility) dated July 31, 1997 between Purchaser and *.+
(a)(10) Summary of Terms and Conditions (USD 80,000,000 Five Year
Bilateral Credit Facility) dated July 23, 1997 between
Purchaser and *.+
(a)(11) Summary of Terms and Conditions (FF 500,000,000 Revolving
Credit Facility) dated August 5, 1997 between Purchaser and *.+
(a)(12) Summary of Terms and Conditions (FF 1,000,000,000 Revolving
Credit Facility) dated August 4, 1997 between Purchaser and *.+
(a)(13) Summary of Terms and Conditions (FF 500,000,000 Revolving
Credit Facility) dated August 4, 1997 between Purchaser and *.+
(a)(14) Summary of Terms and Conditions (USD 150,000,000 Revolving
Credit Facility) dated August 7, 1997 between Purchaser and *.+
(a)(15) Summary of Terms and Conditions (FF 500,000,000 Revolving
Credit Facility) dated August 7, 1997 between Purchaser and *.+
(a)(16) Summary of Terms and Conditions (FF 4,000,000,000 Short Term
Credit Facility) dated August 8, 1997 between Purchaser and *.+
(a)(17) Summary of Terms and Conditions (FF 2,000,000,000 Revolving
Credit Facility) undated between Purchaser and *.+
(a)(18) Summary of Terms and Conditions (USD 850,000,000 Bridge Loan
Facility) dated August 8, 1997 between Purchaser and *.+
(b)(1) Opinion of Goldman, Sachs & Co. dated August 19, 1997
(attached as Schedule II to the Offer to Purchase).*
(b)(2) Presentation of Goldman, Sachs & Co. dated August 19, 1997.
(c) Agreement and Plan of Merger, dated August 19, 1997 among
Purchaser, Merger Subsidiary and the Company.*
(d)(1) Form of Offer to Purchase dated August 22, 1997.*
(d)(2) Form of Letter of Transmittal sent to holders of Shares.*
(d)(3) Form of Notice of Guaranteed Delivery.*
(d)(4) Form of Letter from Morgan Stanley & Co. Incorporated and
UBS Securities LLC to Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees.*
(d)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees to Clients.*
(d)(6) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.*
(d)(7) Summary Advertisement as published in The Wall Street Journal
on August 22, 1997.*
(d)(8) Press Release issued by Purchaser on August 20, 1997.*
(d)(9) English translation of French-language Communique published in
Les Echos and La Tribune on August 22, 1997.*
</TABLE>
Page 12 of 13
<PAGE>
Exhibit (B)(2)
GOLDMAN
SACHS
PRESENTATION TO THE SPECIAL COMMITTEE OF THE
BOARD OF DIRECTORS OF RHONE-POULENC RORER
Goldman, Sachs & Co.
August 19, 1997
<PAGE>
TABLE OF EXHIBITS
EXHIBIT
IMPLIED TRANSACTION MULTIPLES 1
SUMMARY OF WORK PERFORMED TO DATE 2
STOCK PRICE & VOLUME HISTORY 3
DCF ANALYSIS - WHOLE COMPANY 4
SUMMARY OF COMPONENTS OF LONG-TERM VALUE 5
Pharmaceutical Operations A
Excluded Pipeline B
Centeon C
COMPARISON OF SELECTED PUBLICLY TRADED COMPARABLE COMPANIES 6
IMPLIED VALUES OF FUTURE STOCK PRICE 7
MINORITY BUYOUT PREMIA ANALYSIS 8
ANALYSIS OF SELECTED CONTROL TRANSACTIONS IN THE PHARMACEUTICAL INDUSTRY 9
EFFECT ON RHONE-POULENC 10
<PAGE>
TAB 1
<PAGE>
IMPLIED TRANSACTION MULTIPLES
(DOLLARS IN MILLIONS)
---------------------------------------- -------
PRICE PER SHARE $ 97.00
----------------------------------------- -------
Premium to Pre-Bid Price (a) 22.1%
Premium to 52-WK High (b) 19.9%
Premium to 52-WK Low (c) 53.1%
Premium to 8/18/97 Close (d) 2.6%
Equity Value $13,987
Net Debt (e) 2,290
Levered Value 16,277
LEVERED MULTIPLE OF: w/ De-load w/o De-load
---------------------------------------- ------------------------
REVENUES (f)
1997E 3.2x 3.1x
1998E 3.1 3.1
1999E 2.9 2.8
EBITDA (f)
1997E 14.6x 13.8x
1998E 13.9 13.2
1999E 12.6 12.0
EPS (f)
1997E 29.6x 29.6x
1998E 28.3 25.9
1999E 23.4 21.8
(a) Pre-Bid Price on 6/25/97 (day prior to RP announcement) = $79.44.
(b) 52-Wk High Closing Price prior to RP announcement on 6/13/97 =
$80.88.
(c) 52-Wk Low Closing Price prior to RP announcement on 7/24/96 =
$63.38.
(d) Closing Price as of 8/18/97 = $94.56.
(e) Net Debt as of 6/30/97.
GOLDMAN (f) 1997,1998, and 1999 estimates for Revenue, EBITDA and EPS are
SACHS based on management projections.
<PAGE>
TAB 2
<PAGE>
SUMMARY OF WORK PERFORMED TO DATE
[_] OVERVIEW MEETING WITH SPECIAL COMMITTEE (JULY 21,1997)
-- Meeting with Special Committee members and Skadden Arps to
discuss work plan and timing
[_] INITIAL DUE DILIGENCE (JULY 28-29, 1997)
-- Discussed sales projections and year-to-date performance with
Tim Rothwell, President of RPR
-- Discussed methodology and assumptions behind P&L projections
with Guillaume Prache, RPR's CFO and Philippe Maitre, RPR's
Comptroller
[_] CENTEON DUE DILIGENCE (JULY 30,1997)
-- Met with John Sedor, CEO of Centeon and Perry Premdass, CFO of
Centeon
-- Discussed the rationale behind Centeon's formation, the events
surrounding its product recall, measures taken to improve
regulatory compliance and Centeon's latest projections
[_] R&D PIPELINE DUE DILIGENCE (AUGUST 4, 1997)
-- Met with Manfred Karobath in Paris to discuss disclosed and
undisclosed pipeline products
-- Discussed strategy of Gencell and products in its pipeline
[_] FOLLOW-UP DUE DILIGENCE (AUGUST 4, 1997)
-- Met with Tasos Konidaris and Philippe Maitre to discuss back-up
behind projections model
[_] MEETING WITH MICHEL DE ROSEN (AUGUST 8, 1997)
-- Overview of RPR'S history and strategic positioning
[_] FOLLOW-UP CONVERSATIONS WITH MEMBERS OF MANAGEMENT DURING THE WEEKS
OF JULY 28 - AUGUST 11, 1997
[_] ATTENDED DUE DILIGENCE SESSIONS BETWEEN MORGAN STANLEY DEAN WITTER
GOLDMAN DISCOVER BANKERS AND MANAGEMENT (MICHEL DE ROSEN, TIM ROTHWELL,
SACHS GUILLAUME PRACHE, MANFRED KAROBATH, JOHN SEDOR AND PERRY PREMDASS)
<PAGE>
TAB 3
<PAGE>
RHONE-POULENC RORER
DAILY COMMON STOCK PRICE AND TRADING VOLUME HISTORY
<TABLE>
<CAPTION>
RPR RPR
DATE PRICE VOLUME
<S> <C> <C>
10-Aug-95
11-Aug-95
14-Aug-95 44.25 55500
15-Aug-95 44.25 32600
16-Aug-95 43.50 59600
17-Aug-95 43.38 24900
18-Aug-95 42.13 325700
21-Aug-95 43.88 509200
22-Aug-95 43.63 166100
23-Aug-95 43.50 56400
24-Aug-95 44.13 239900
25-Aug-95 44.25 217700
28-Aug-95 44.13 77200
29-Aug-95 44.00 91400
30-Aug-95 44.13 22300
31-Aug-95 44.25 62400
1-Sep-95 43.88 44400
4-Sep-95 43.88
5-Sep-95 43.63 73400
6-Sep-95 43.50 145800
7-Sep-95 42.75 127900
8-Sep-95 42.38 147800
11-Sep-95 43.00 130400
12-Sep-95 43.13 65900
13-Sep-95 43.38 69600
14-Sep-95 43.88 55900
15-Sep-95 44.25 107600
18-Sep-95 44.38 123700
19-Sep-95 44.25 129100
20-Sep-95 44.63 69400
21-Sep-95 45.88 173000
22-Sep-95 44.88 80300
25-Sep-95 44.38 58000
26-Sep-95 45.00 124400
27-Sep-95 45.00 85900
28-Sep-95 45.38 103500
29-Sep-95 45.50 137100
2-Oct-95 45.88 110000
3-Oct-95 44.88 241900
4-Oct-95 46.63 104300
5-Oct-95 46.63 121400
6-Oct-95 46.25 132000
9-Oct-95 44.38 83600
10-Oct-95 44.38 69100
11-Oct-95 45.38 95900
12-Oct-95 46.00 55000
</TABLE>
Page 1
<TABLE>
<CAPTION>
RPR RPR
DATE PRICE VOLUME
<S> <C> <C>
13-Oct-95 46.88 83300
16-Oct-95 46.75 27100
17-Oct-95 47.88 225300
18-Oct-95 48.88 123100
19-Oct-95 49.00 102300
20-Oct-95 48.75 171300
23-Oct-95 49.00 204200
24-Oct-95 48.50 215600
25-Oct-95 48.50 238900
26-Oct-95 48.50 29200
27-Oct-95 48.63 81800
30-Oct-95 48.13 170900
31-Oct-95 47.13 148900
1-Nov-95 47.38 100900
2-Nov-95 46.50 95400
3-Nov-95 46.38 39300
6-Nov-95 46.00 41400
7-Nov-95 46.75 89800
8-Nov-95 47.13 104300
9-Nov-95 46.38 108000
10-Nov-95 45.63 158100
13-Nov-95 45.88 82600
14-Nov-95 46.00 152400
15-Nov-95 46.25 120200
16-Nov-95 46.38 82200
17-Nov-95 47.13 102800
20-Nov-95 46.50 108400
21-Nov-95 46.75 111500
22-Nov-95 46.50 28500
23-Nov-95 46.50
24-Nov-95 46.63 10200
27-Nov-95 46.50 43400
28-Nov-95 47.63 86800
29-Nov-95 48.25 88500
30-Nov-95 47.88 119800
1-Dec-95 48.50 110500
4-Dec-95 49.00 102600
5-Dec-95 49.13 123500
6-Dec-95 48.88 119100
7-Dec-95 49.38 62000
8-Dec-95 49.63 74900
11-Dec-95 49.88 101800
12-Dec-95 49.63 99500
13-Dec-95 50.00 134900
14-Dec-95 52.13 278700
15-Dec-95 54.00 247600
18-Dec-95 53.50 227800
19-Dec-95 52.50 134700
20-Dec-95 51.63 218700
21-Dec-95 51.75 215700
</TABLE>
Page 2
<TABLE>
<CAPTION>
RPR RPR
DATE PRICE VOLUME
<S> <C> <C>
22-Dec-95 52.13 56700
25-Dec-95 52.13
26-Dec-95 52.00 65800
27-Dec-95 53.38 101200
28-Dec-95 53.13 105900
29-Dec-95 53.25 63000
1-Jan-96 53.25
2-Jan-96 52.13 92800
3-Jan-96 52.38 141900
4-Jan-96 52.13 90500
5-Jan-96 51.50 146100
8-Jan-96 52.00 28700
9-Jan-96 51.75 115800
10-Jan-96 51.25 63600
11-Jan-96 50.88 33500
12-Jan-96 51.63 43700
15-Jan-96 51.38 55500
16-Jan-96 52.13 87100
17-Jan-96 52.50 66700
18-Jan-96 53.13 75400
19-Jan-96 53.75 151600
22-Jan-96 53.88 74400
23-Jan-96 54.00 66800
24-Jan-96 54.00 106900
25-Jan-96 54.38 51900
26-Jan-96 55.25 128000
29-Jan-96 59.50 424800
30-Jan-96 63.63 652500
31-Jan-96 64.75 424800
1-Feb-96 63.25 324300
2-Feb-96 63.13 199800
5-Feb-96 62.75 217700
6-Feb-96 62.50 304500
7-Feb-96 61.13 495400
8-Feb-96 60.88 208900
9-Feb-96 61.00 163000
12-Feb-96 61.75 84300
13-Feb-96 61.75 169200
14-Feb-96 62.63 180300
15-Feb-96 63.75 236400
16-Feb-96 64.75 312700
19-Feb-96 64.75
20-Feb-96 64.38 318500
21-Feb-96 64.38 137000
22-Feb-96 66.75 140200
23-Feb-96 65.88 153400
26-Feb-96 65.38 147900
27-Feb-96 64.00 169600
28-Feb-96 64.13 321900
29-Feb-96 64.00 336200
</TABLE>
Page 3
<TABLE>
<CAPTION>
RPR
DATE PRICE VOLUME
<S> <C> <C>
1-Mar-96 63.88 66500
4-Mar-96 64.25 206400
5-Mar-96 64.25 184400
6-Mar-96 64.38 332500
7-Mar-96 64.63 697400
8-Mar-96 62.38 499200
11-Mar-96 62.25 151500
12-Mar-96 61.50 522400
13-Mar-96 61.00 104100
14-Mar-96 61.38 128100
15-Mar-96 62.00 119700
18-Mar-96 62.13 620000
19-Mar-96 61.75 109500
20-Mar-96 61.88 53300
21-Mar-96 62.25 119000
22-Mar-96 63.13 169100
25-Mar-96 62.13 105800
26-Mar-96 63.13 70600
27-Mar-96 61.75 55100
28-Mar-96 61.50 37800
29-Mar-96 61.00 48100
1-Apr-96 63.75 122800
2-Apr-96 63.63 84100
3-Apr-96 63.75 62500
4-Apr-96 64.00 71200
5-Apr-96 64.00
8-Apr-96 62.75 139400
9-Apr-96 60.88 73700
10-Apr-96 61.50 146000
11-Apr-96 60.25 137400
12-Apr-96 61.63 123400
15-Apr-96 61.50 37000
16-Apr-96 61.38 68200
17-Apr-96 60.50 52400
18-Apr-96 60.50 53700
19-Apr-96 60.75 32400
22-Apr-96 60.25 28200
23-Apr-96 60.50 30400
24-Apr-96 61.38 166400
25-Apr-96 61.75 68100
26-Apr-96 62.00 48700
29-Apr-96 62.25 54300
30-Apr-96 62.00 53100
1-May-96 62.19 86900
2-May-96 60.50 97400
3-May-96 60.25 60400
6-May-96 60.00 55700
7-May-96 59.75 23800
8-May-96 59.00 79000
9-May-96 58.38 47300
</TABLE>
Page 4
<TABLE>
<CAPTION>
RPR RPR
DATE PRICE VOLUME
<S> <C> <C>
10-May-96 59.13 218900
13-May-96 59.88 58500
14-May-96 61.25 94800
15-May-96 62.13 169200
16-May-96 62.63 177300
17-May-96 62.75 108300
20-May-96 62.75 114600
21-May-96 62.50 127700
22-May-96 62.88 47100
23-May-96 63.83 151700
24-May-96 64.00 66300
27-May-96 64.00
28-May-96 63.75 266600
29-May-96 63.50 158700
30-May-96 63.75 45000
31-May-96 64.75 122600
3-Jun-96 65.13 150300
4-Jun-96 65.75 131700
5-Jun-96 65.75 174200
6-Jun-96 66.25 209300
7-Jun-96 66.13 131000
10-Jun-96 66.25 83300
11-Jun-96 66.25 68400
12-Jun-96 65.50 22400
13-Jun-96 66.00 48600
14-Jun-96 67.75 250300
17-Jun-96 68.13 176800
18-Jun-96 67.38 86500
19-Jun-96 68.00 113800
20-Jun-96 67.38 196200
21-Jun-96 67.00 177800
24-Jun-96 66.88 68500
25-Jun-96 67.13 67600
26-Jun-96 67.13 65500
27-Jun-96 67.25 52500
28-Jun-96 67.13 103500
1-Jul-96 67.25 34300
2-Jul-96 67.00 138000
3-Jul-96 66.75 45900
4-Jul-96 66.75
5-Jul-96 66.63 70600
8-Jul-96 65.75 36100
9-Jul-96 66.13 49400
10-Jul-96 65.13 103400
11-Jul-96 64.88 231900
12-Jul-96 64.88 67100
15-Jul-96 64.50 123500
16-Jul-96 64.00 184800
17-Jul-96 65.13 126400
18-Jul-96 65.50 87600
</TABLE>
Page 5
<TABLE>
<CAPTION>
RPR RPR
DATE PRICE VOLUME
<S> <C> <C>
19-JUL-96 65.13 58700
22-JUL-96 64.88 44200
23-JUL-96 64.00 77700
24-JUL-96 63.38 72700
25-JUL-96 65.25 124200
26-JUL-96 64.88 69400
29-JUL-96 65.38 24400
30-JUL-96 65.50 40900
31-JUL-96 66.00 70600
1-AUG-96 67.25 116400
2-AUG-96 67.75 41900
5-AUG-96 67.50 39800
6-AUG-96 68.25 81000
7-AUG-96 67.25 30700
8-AUG-96 67.38 56300
9-AUG-96 67.25 54500
12-AUG-96 68.50 72700
13-AUG-96 69.63 234100
14-AUG-96 70.13 75500
15-AUG-96 70.63 115600
16-AUG-96 70.25 63000
19-AUG-96 70.25 28300
20-AUG-96 70.50 70400
21-AUG-96 71.13 78500
22-AUG-96 71.00 36500
23-AUG-96 72.13 52700
26-AUG-96 72.63 106800
27-AUG-96 72.75 109000
28-AUG-96 71.00 258000
29-AUG-96 70.75 25600
30-AUG-96 70.38 66500
2-SEP-96 70.38
3-SEP-96 70.38 39900
4-SEP-96 71.13 34200
5-SEP-96 70.63 126500
6-SEP-96 71.75 55000
9-SEP-96 72.13 49700
10-SEP-96 72.25 35900
11-SEP-96 73.50 83100
12-SEP-96 75.88 166700
13-SEP-96 77.50 230600
16-SEP-96 74.88 277900
17-SEP-96 74.50 240900
18-SEP-96 73.50 181300
19-SEP-96 72.25 239400
20-SEP-96 73.13 212300
23-SEP-96 72.25 49100
24-SEP-96 71.50 133900
25-SEP-96 72.63 216200
26-SEP-96 74.38 62200
</TABLE>
Page 6
<TABLE>
<CAPTION>
RPR RPR
DATE PRICE VOLUME
<S> <C> <C>
27-Sep-96 73.50 133800
30-Sep-96 73.63 53100
1-Oct-96 73.75 99700
2-Oct-96 73.63 74800
3-Oct-96 74.00 42700
4-Oct-96 74.63 33600
7-Oct-96 74.00 61900
8-Oct-96 74.50 37100
9-Oct-96 73.63 66300
10-Oct-96 70.50 709100
11-Oct-96 71.88 159200
14-Oct-96 71.75 63200
15-Oct-96 72.63 89400
16-Oct-96 72.13 69500
17-Oct-96 72.25 57700
18-Oct-96 72.88 54100
21-Oct-96 72.75 41100
22-Oct-96 73.00 47300
23-Oct-96 70.38 612900
24-Oct-96 67.63 537300
25-Oct-96 67.50 257100
28-Oct-96 67.38 297600
29-Oct-96 67.38 149400
30-Oct-96 67.00 114400
31-Oct-96 67.13 140300
1-Nov-96 67.50 104500
4-Nov-96 68.13 164500
5-Nov-96 68.88 241400
6-Nov-96 70.75 254000
7-Nov-96 70.00 162300
8-Nov-96 70.63 113600
11-Nov-96 70.50 36200
12-Nov-96 70.13 155600
13-Nov-96 69.75 332900
14-Nov-96 70.00 292600
15-Nov-96 70.25 117700
18-Nov-96 70.38 97600
19-Nov-96 70.25 118900
20-Nov-96 70.38 106400
21-Nov-96 71.13 77300
22-Nov-96 71.00 150400
25-Nov-96 72.50 100500
26-Nov-96 73.13 182800
27-Nov-96 73.63 154800
28-Nov-96 73.63
29-Nov-96 74.38 44700
</TABLE>
Page 7
<TABLE>
<CAPTION>
RPR RPR
DATE PRICE VOLUME
<S> <C> <C>
2-Dec-96 75.63 145400
3-Dec-96 77.13 227400
4-Dec-96 75.25 198100
5-Dec-96 75.50 103500
6-Dec-96 75.50 77600
9-Dec-96 76.25 153100
10-Dec-96 78.25 297400
11-Dec-96 77.50 78100
12-Dec-96 76.63 111400
13-Dec-96 75.75 125100
16-Dec-96 74.13 59500
17-Dec-96 74.38 112500
18-Dec-96 74.50 99600
19-Dec-96 76.63 308200
20-Dec-96 76.75 362200
23-Dec-96 77.25 48900
24-Dec-96 77.63 28800
25-Dec-96 77.63
26-Dec-96 77.50 72600
27-Dec-96 77.38 30000
30-Dec-96 77.00 86600
31-Dec-96 78.13 63000
1-Jan-97 78.13
2-Jan-97 77.63 102300
3-Jan-97 77.00 71200
6-Jan-97 77.13 93600
7-Jan-97 75.00 395600
8-Jan-97 73.63 287500
9-Jan-97 73.38 159900
10-Jan-97 73.88 195500
13-Jan-97 73.88 110000
14-Jan-97 75.00 134700
15-Jan-97 74.75 78500
16-Jan-97 75.00 214200
17-Jan-97 75.63 72700
20-Jan-97 75.88 40700
21-Jan-97 75.88 87500
22-Jan-97 76.13 137000
23-Jan-97 76.50 386300
24-Jan-97 76.00 98900
27-Jan-97 71.63 538800
28-Jan-97 71.50 393000
29-Jan-97 73.13 261000
30-Jan-97 73.75 197200
31-Jan-97 75.25 139100
3-Feb-97 74.75 46900
4-Feb-97 75.38 74200
5-Feb-97 73.13 168000
6-Feb-97 72.88 184600
7-Feb-97 72.75 266400
</TABLE>
Page 8
<TABLE>
<CAPTION>
RPR RPR
DATE PRICE VOLUME
<S> <C> <C>
10-Feb-97 73.50 75900
11-Feb-97 72.88 57700
12-Feb-97 73.50 132800
13-Feb-97 75.38 93800
14-Feb-97 74.00 87400
17-Feb-97 74.00
18-Feb-97 74.88 161100
19-Feb-97 75.00 106300
20-Feb-97 73.63 71000
21-Feb-97 73.88 70600
24-Feb-97 73.88 118200
25-Feb-97 73.50 332400
26-Feb-97 72.00 212500
27-Feb-97 71.13 125900
28-Feb-97 71.00 292000
3-Mar-97 70.50 37600
4-Mar-97 70.75 127200
5-Mar-97 71.25 187200
6-Mar-97 71.00 68900
7-Mar-97 72.13 503300
10-Mar-97 72.75 300800
11-Mar-97 74.13 834500
12-Mar-97 74.38 697500
13-Mar-97 74.25 170500
14-Mar-97 75.88 217200
17-Mar-97 76.00 260200
18-Mar-97 74.50 122900
19-Mar-97 74.50 110500
20-Mar-97 74.13 158800
21-Mar-97 73.88 94600
24-Mar-97 74.25 122300
25-Mar-97 75.50 175300
26-Mar-97 75.13 63000
27-Mar-97 75.13 64200
28-Mar-97 75.13
31-Mar-97 74.00 112900
1-Apr-97 74.00 112600
2-Apr-97 72.50 452300
3-Apr-97 69.75 2011800
4-Apr-97 69.75 629600
7-Apr-97 69.88 170800
8-Apr-97 69.75 170500
9-Apr-97 69.75 91300
10-Apr-97 70.00 304800
11-Apr-97 68.75 300900
14-Apr-97 68.38 139800
15-Apr-97 69.00 254600
16-Apr-97 69.50 98100
17-Apr-97 69.13 112000
18-Apr-97 68.88 82700
</TABLE>
Page 9
<TABLE>
<CAPTION>
RPR RPR
DATE PRICE VOLUME
<S> <C> <C>
21-Apr-97 68.50 159500
22-Apr-97 68.25 513600
23-Apr-97 68.63 485100
24-Apr-97 70.88 286800
25-Apr-97 71.00 195200
28-Apr-97 70.13 228200
29-Apr-97 71.38 161400
30-Apr-97 72.13 134000
1-May-97 71.88 47500
2-May-97 73.00 72200
5-May-97 73.88 89600
6-May_97 75.13 211200
7-May-97 74.13 57600
8-May-97 74.00 130700
9-May-97 72.88 175800
12-May-97 73.50 207000
13-May-97 73.88 109900
14-May-97 75.00 249800
15-May-97 75.88 271200
16-May-97 75.75 98300
19-May-97 75.38 188100
20-May-97 75.38 82100
21-May-97 76.88 269700
22-May-97 76.00 178000
23-May-97 76.50 151100
26-May-97 76.50
27-May-97 75.50 93600
28-May-97 74.13 162300
29-May-97 75.00 88600
30-May-97 75.50 74300
2-Jun-97 75.00 118500
3-Jun-97 76.00 39400
4-Jun-97 77.75 233900
5-Jun-97 78.63 537100
6-Jun-97 78.13 129800
9-Jun-97 78.88 353600
10-Jun-97 78.88 140600
11-Jun-97 78.63 105800
12-Jun-97 79.88 121100
13-Jun-97 80.88 262700
16-Jun-97 76.00 344000
17-Jun-97 78.75 312800
18-Jun-97 78.75 278000
19-Jun-97 79.00 171800
20-Jun-97 80.00 139000
23-Jun-97 79.13 127000
24-Jun-97 79.75 142900
25-Jun-97 79.44 211500
26-Jun-97 91.00 3844700
27-Jun-97 91.13 1483400
</TABLE>
Page 10
<TABLE>
<CAPTION>
RPR RPR
DATE PRICE VOLUME
<S> <C> <C>
30-Jun-97 90.88 1004100
1-Jul-97 91.19 676200
2-Jul-97 92.00 684000
3-Jul-97 93.00 276500
4-Jul-97 93.00
7-Jul-97 93.13 125800
8-Jul-97 93.63 169400
9-Jul-97 93.44 162600
10-Jul-97 93.75 118600
11-Jul-97 93.69 123600
14-Jul-97 93.50 363800
15-Jul-97 93.50 55600
16-Jul-97 93.56 133900
17-Jul-97 93.44 96300
18-Jul-97 92.81 514900
21-Jul-97 92.56 179900
22-Jul-97 93.75 265800
23-Jul-97 93.69 212400
24-Jul-97 93.38 450900
25-Jul-97 93.63 193300
28-Jul-97 93.94 154600
29-Jul-97 94.19 331500
30-Jul-97 94.31 142600
31-Jul-97 94.44 95800
1-Aug-97 94.75 146700
4-Aug-97 94.63 163800
5-Aug-97 95.94 165856
6-Aug-97 95.38 113100
7-Aug-97 95.50 319600
8-Aug-97 95.00 337700
11-Aug-97 95.25 125400
12-Aug-97 95.31 186100
13-Aug-97 95.50 137100
14-Aug-97 95.56 158700
15-Aug-97 94.75 216200
18-Aug-97 94.56 303900
</TABLE>
Page 11
DAILY FROM 8/14/95 TO 8/18/97
-- Closing Market Price [_] Volume (000)
GOLDMAN
SACHS
<PAGE>
RPR VS. PHARMA COMPOSITE SINCE CENTEON RECALL
<TABLE>
<CAPTION>
RPR US Pharmaceutical
DATE Composite
<S> <C> <C>
1-Oct-96 100.00 100.00
2-Oct-96 99.83 99.49
3-Oct-96 100.34 100.14
4-Oct-96 101.19 101.35
7-Oct-96 100.34 100.58
8-Oct-96 101.02 101.04
9-Oct-96 99.83 100.02
10-Oct-96 95.59 99.29
11-Oct-96 97.46 99.33
14-Oct-96 97.29 100.94
15-Oct-96 98.47 101.29
16-Oct-96 97.80 100.72
17-Oct-96 97.97 101.79
18-Oct-96 98.81 102.94
21-Oct-96 98.64 103.20
22-Oct-96 98.98 103.10
23-Oct-96 95.42 103.43
24-Oct-96 91.69 103.63
25-Oct-96 91.53 101.50
28-Oct-96 91.36 99.34
29-Oct-96 91.36 101.15
30-Oct-96 90.85 100.49
31-Oct-96 91.02 101.12
1-Nov-96 91.53 101.16
4-Nov-96 92.37 102.24
5-Nov-96 93.39 103.42
6-Nov-96 95.93 106.98
7-Nov-96 94.92 107.10
8-Nov-96 95.76 108.80
11-Nov-96 95.59 108.15
12-Nov-96 95.08 106.41
13-Nov-96 94.58 107.77
14-Nov-96 94.92 108.38
15-Nov-96 95.25 108.55
18-Nov-96 95.42 107.71
19-Nov-96 95.25 107.59
20-Nov-96 95.42 107.97
21-Nov-96 96.44 108.55
22-Nov-96 96.27 108.94
25-Nov-96 98.31 110.92
26-Nov-96 99.15 110.48
27-Nov-96 99.83 110.38
28-Nov-96 99.83 110.38
29-Nov-96 100.85 110.42
2-Dec-96 102.54 109.67
3-Dec-96 104.58 108.67
4-Dec-96 102.03 107.44
5-Dec-96 102.37 105.91
6-Dec-96 102.37 105.46
9-Dec-96 103.39 108.47
</TABLE>
Page 1
<TABLE>
<CAPTION>
RPR US Pharmaceutical
DATE Composite
<S> <C> <C>
10-Dec-96 106.10 107.80
11-Dec-96 105.08 107.19
12-Dec-96 103.90 105.22
13-Dec-96 102.71 105.80
16-Dec-96 100.51 103.56
17-Dec-96 100.85 104.17
18-Dec-96 101.02 104.61
19-Dec-96 103.90 108.01
20-Dec-96 104.07 108.64
23-Dec-96 104.75 108.81
24-Dec-96 105.25 108.90
25-Dec-96 105.25 108.90
26-Dec-96 105.08 108.76
27-Dec-96 104.92 108.78
30-Dec-96 104.41 108.05
31-Dec-96 105.93 105.43
1-Jan-97 105.93 105.43
2-Jan-97 105.25 104.81
3-Jan-97 104.41 106.83
6-Jan-97 104.58 106.96
7-Jan-97 101.69 107.85
8-Jan-97 99.83 106.54
9-Jan-97 99.49 107.38
10-Jan-97 100.17 108.92
13-Jan-97 100.17 109.09
14-Jan-97 101.69 111.31
15-Jan-97 101.36 111.11
16-Jan-97 101.69 112.65
17-Jan-97 102.54 113.75
20-Jan-97 102.88 112.50
21-Jan-97 102.88 112.98
22-Jan-97 103.22 114.47
23-Jan-97 103.73 112.54
24-Jan-97 103.05 112.04
27-Jan-97 97.12 109.86
28-Jan-97 96.95 110.64
29-Jan-97 99.15 111.57
30-Jan-97 100.00 115.33
31-Jan-97 102.03 116.93
3-Feb-97 101.36 116.44
4-Feb-97 102.20 116.98
5-Feb-97 99.15 115.31
6-Feb-97 98.81 116.61
7-Feb-97 98.64 118.83
10-Feb-97 99.66 117.85
11-Feb-97 98.81 118.90
12-Feb-97 99.66 121.45
13-Feb-97 102.20 124.37
14-Feb-97 100.34 123.46
17-Feb-97 100.34 123.46
</TABLE>
Page 2
<TABLE>
<CAPTION>
RPR US Pharmaceutical
DATE Composite
<S> <C> <C>
18-Feb-97 101.53 125.00
19-Feb-97 101.69 124.26
20-Feb-97 99.83 122.43
21-Feb-97 100.17 121.34
24-Feb-97 100.17 124.04
25-Feb-97 99.66 123.89
26-Feb-97 97.63 122.78
27-Feb-97 96.44 119.75
28-Feb-97 96.27 118.59
3-Mar-97 95.59 120.45
4-Mar-97 95.93 117.59
5-Mar-97 96.61 122.19
6-Mar-97 96.27 119.96
7-Mar-97 97.80 121.79
10-Mar-97 98.64 125.14
11-Mar-97 100.51 123.59
12-Mar-97 100.85 121.74
13-Mar-97 100.68 119.03
14-Mar-97 102.88 118.18
17-Mar-97 103.05 121.74
18-Mar-97 101.02 120.09
19-Mar-97 101.02 120.41
20-Mar-97 100.51 118.95
21-Mar-97 100.17 119.12
24-Mar-97 100.68 120.59
25-Mar-97 102.37 121.17
26-Mar-97 101.86 120.96
27-Mar-97 101.86 118.27
28-Mar-97 101.86 118.27
31-Mar-97 100.34 112.97
1-Apr-97 100.34 114.41
2-Apr-97 98.31 112.71
3-Apr-97 94.58 113.41
4-Apr-97 94.58 115.80
7-Apr-97 94.75 115.90
8-Apr-97 94.58 115.39
9-Apr-97 94.58 112.86
10-Apr-97 94.92 113.60
11-Apr-97 93.22 111.15
14-Apr-97 92.71 112.23
15-Apr-97 93.56 115.05
16-Apr-97 94.24 118.21
17-Apr-97 93.73 117.81
18-Apr-97 93.39 117.76
21-Apr-97 92.88 117.68
22-Apr-97 92.54 120.29
23-Apr-97 93.05 118.83
24-Apr-97 96.10 118.21
25-Apr-97 96.27 117.03
28-Apr-97 95.08 117.97
</TABLE>
Page 3
<TABLE>
<CAPTION>
RPR US Pharmaceutical
DATE Composite
<S> <C> <C>
29-Apr-97 96.78 121.77
30-Apr-97 97.80 121.63
1-May-97 97.48 120.56
2-May-97 98.98 122.64
5-May-97 100.17 126.28
6-May-97 101.86 126.26
7-May-97 100.51 124.19
8-May-97 100.34 124.34
9-May-97 98.81 125.23
12-May-97 99.66 128.52
13-May-97 100.17 128.57
14-May-97 101.69 129.94
15-May-97 102.88 131.59
16-May-97 102.71 129.29
19-May-97 102.20 129.86
20-May-97 102.20 130.12
21-May-97 104.24 129.96
22-May-97 103.05 128.91
23-May-97 103.73 130.45
26-May-97 103.73 130.45
27-May-97 102.37 131.40
28-May-97 100.51 130.29
29-May-97 101.69 129.45
30-May-97 102.37 131.11
2-Jun-97 101.69 130.45
3-Jun-97 103.05 130.64
4-Jun-97 105.42 129.89
5-Jun-97 106.61 130.18
6-Jun-97 105.93 134.17
9-Jun-97 106.95 135.82
10-Jun-97 106.95 135.11
11-Jun-97 106.61 136.47
12-Jun-97 108.31 138.73
13-Jun-97 109.66 141.09
16-Jun-97 103.05 140.52
17-Jun-97 106.78 140.09
18-Jun-97 106.78 137.55
19-Jun-97 107.12 142.44
20-Jun-97 108.47 144.23
23-Jun-97 107.29 140.26
24-Jun-97 108.14 146.74
25-Jun-97 107.71 146.67
26-Jun-97 123.39 144.88
27-Jun-97 123.56 146.90
30-Jun-97 123.22 145.70
1-Jul-97 123.64 147.47
2-Jul-97 124.75 150.24
3-Jul-97 126.10 152.99
4-Jul-97 126.10 152.99
7-Jul-97 126.27 150.60
</TABLE>
Page 4
<TABLE>
<CAPTION>
RPR US Pharmaceutical
DATE Composite
<S> <C> <C>
8-Jul 97 126.95 152.00
9-Jul-97 126.70 149.85
10-Jul-97 127.12 152.43
11-Jul-97 127.03 151.91
14-Jul-97 126.78 152.88
15-Jul-97 126.78 153.13
16-Jul-97 126.87 151.18
17-Jul-97 126.70 151.55
18-Jul-97 125.85 148.71
21-Jul-97 125.51 149.55
22-Jul-97 127.12 152.49
23-Jul-97 127.03 153.89
24-Jul-97 126.61 153.95
25-Jul-97 126.95 151.81
28-Jul-97 127.37 149.16
29-Jul-97 127.71 149.85
30-Jul-97 127.88 150.87
31-Jul-97 128.05 152.52
1-Aug-97 128.47 150.20
4-Aug-97 128.31 150.48
5-Aug-97 130.09 152.10
6-Aug-97 129.32 150.97
7-Aug-97 129.49 149.30
8-Aug-97 128.81 147.06
11-Aug-97 129.15 144.13
12-Aug-97 129.24 140.83
13-Aug-97 129.49 138.93
14-Aug-97 129.58 142.27
15-Aug-97 128.47 137.12
18-Aug-97 128.22 139.82
</TABLE>
Page 5
DAILY FROM 10/1/96 TO 8/18/97
-- Rhone-Poulenc Rorer Inc. [_] US Pharmaceutical Composite (a)
(a) US Pharmaceutical Composite includes Abbott Laboratories, American Home
Products, Bristol-Myers Squibb, Eli Lilly, Merck, Pfizer, Pharmacia &
Upjohn, Schering-Plough, and Warner-Lambert.
<PAGE>
SHARES TRADED AT SPECIFIC PRICES
RHONE-POULENC RORER
CVR RETIREMENT TO DAY PRIOR TO BID ANNOUNCEMENT
<TABLE>
-------------------
CVR RETIREMENT TO
DAY PRIOR TO BID
ANNOUNCEMENT
-------------------
<S> <C>
30.00
to
33.99 6275600
34.00 32409800
38.00 18848100
42.00 11119700
46.00 9303700
50.00 2870400
54.00 601200
58.00 4357100
62.00 11451300
66.00 10735700
70.00 15030000
74.00 12513700
78.00
to
81.99 3394100
-------------------
</TABLE>
DAILY FROM 7/31/93 TO 6/25/97
Weighted Average Price: 52.31
Total Shares Traded as Percent of Shares Outstanding: 101.4%
Total Shares Traded as Percent of Public Float: 314.6%
ONE YEAR TO ONE DAY PRIOR TO BID ANNOUNCEMENT
<TABLE>
------------------
ONE YEAR TO ONE
DAY PRIOR TO BID
ANNOUNCEMENT
------------------
<S> <C>
63.00
to
64.49 805500
64.50 1739000
66.00 2727100
67.50 3762700
69.00 6575900
70.50 4958700
72.00 4662000
73.50 7178700
75.00 5381200
76.50 2892900
78.00 2728400
79.50
to
80.99 665700
------------------
</TABLE>
DAILY FROM 5/25/96 TO 6/25/97
Weighted Average Price: 72.22
Total Shares Traded as Percent of Shares Outstanding: 32.2%
Total Shares Traded as Percent of Public Float: 100.0%
CENTEON RECALL TO DAY PRIOR TO BID ANNOUNCEMENT
<TABLE>
-------------------
CENTEON RECALL TO
DAY PRIOR TO BID
ANNOUNCEMENT
-------------------
<S> <C>
67.00
to
67.99 1600600
68.00 2087500
69.00 3871600
70.00 3761500
71.00 2460000
72.00 2699700
73.00 3138200
74.00 3483300
75.00 4003900
76.00 2799500
77.00 1073400
78.00 2218100
79.00 774300
80.00
to
80.99 401700
-------------------
</TABLE>
DAILY FROM 10/10/96 TO 6/25/97
Weighted Average Price: 73.11
Total Shares Traded as Percent of Shares Outstanding: 25.1%
Total Shares Traded as Percent of Public Float: 77.9%
BID ANNOUNCEMENT TO YTD 1997
<TABLE>
------------------
BID ANNOUNCEMENT
TO YTD 1997
------------------
<S> <C>
90.70
to
91.14 6332200
91.15 676200
91.60 684000
92.05 0
92.50 694800
92.95 853200
93.40 1895300
93.85 486100
94.30 706100
94.75 700600
95.20 1040000
95.65
to
96.09 165856
------------------
</TABLE>
DAILY FROM 6/25/97 TO 8/18/97
Weighted Average Price: 92.48
Total Shares Traded as Percent of Shares Outstanding: 10.4%
Total Shares Traded as Percent of Public Float: 33.3%
<PAGE>
TAB 4
<PAGE>
DISCOUNTED CASH FLOW ANALYSIS SUMMARY
IMPLIED PER SHARE VALUATIONS
<TABLE>
<CAPTION>
MANAGEMENT CASE MANAGEMENT CASE + EXCLUDED PIPELINE (a)
--------------- --------------------------------------
- ------------------
5-Year Discount Rate Discount Rate
- ------------------ -------------------------------------- ------------------------------------
10.0% 10.5% 11.0% 10.0% 10.5% 11.0%
-------------------------------------- ------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
5.0% $ 91.71 $ 81.43 $ 72.88 $ 106.47 $ 94.59 $ 84.70
Perpetual Growth of FCF 5.5% 101.86 89.56 79.51 118.23 104.00 92.38
6.0% 114.54 99.49 87.46 132.93 115.51 101.60
</TABLE>
(a) Certain new products have been included in management's projections.
Excluded Pipeline refers to other specifically identified new products in
the Company's research and development pipeline that were not included in
management's projections.
<PAGE>
DISCOUNTED CASH FLOW ANALYSIS
MANAGEMENT CASE
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
MANAGEMENT PROJECTIONS 1997-
----------------------------------------------------------
REPORTED 2002
1997 1998 1999 2000 2001 2002 CAGR
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues $5,112 $5,262 $5,648 $6,071 $6,573 $7,001 6.5%
Growth 2.9% 7.3% 7.5% 8.3% 6.5%
EBIT 779 822 947 1,083 1,233 1,372 12.0%
Margin 15.2% 15.6% 16.8% 17.8% 18.8% 19.6%
Centeon Income (41) 55 75 120 150 180 34.5%
Taxes 225 281 329 379 436 489 16.8%
Rate 30.5% 32.0% 32.2% 31.5% 31.5% 31.5%
Tax Effected EBIT + Centeon 513 596 693 824 947 1,063 15.7%
+ Amortization 140 140 140 140 140 140 0.0%
As % of Revenues 2.7% 2.7% 2.5% 2.3% 2.1% 2.0%
+ (Increase)/Decrease in WC (140) (45) (120) (128) (192) (148) 1.1%
+ (Increase)/Decrease in Other (215) (136) (100) (100) (100) (100) -14.2%
- - CAPEX (310) (325) (325) (325) (350) (350) 2.5%
As % Revenues 6.1% 6.2% 5.8% 5.4% 5.3% 5.0%
+ Depreciation 192 205 210 215 220 225 3.2%
As % of Revenues 3.8% 3.9% 3.7% 3.5% 3.3% 3.2%
- --------------------------------------------------------------------------------------------
= Unlevered Free Cash Flow $ 180 $ 435 $ 498 $ 626 $ 665 $ 830 35.7%
Growth 141.3% 14.5% 25.7% 6.3% 24.8%
- --------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
DISCOUNTED CASH FLOW ANALYSIS
MANAGEMENT CASE
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Discount Rate
------------------------------------------------------------------------
9.0% 9.5% 10.0% 10.5% 11.0% 11.5% 12.0%
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PV of Future Cash Flows $ 2,408 $ 2,377 $ 2,346 $ 2,316 $ 2,287 $ 2,259 $ 2,231
+
PV of Terminal Value
Perpetual Growth
of FCF 5.0% $17,195 $14,955 $13,172 $11,719 $10,515 $ 9,501 $ 8,637
5.5% 19,651 16,825 14,635 12,891 11,470 10,293 9,301
6.0% 22,926 19,228 16,465 14,323 12,618 11,228 10,076
6.5% 27,511 22,433 18,817 16,114 14,019 12,351 10,992
7.0% 34,389 26,920 21,953 18,416 15,772 13,723 12,091
- -
Net Debt (a) $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290
=
Equity Consideration
5.0% $17,313 $15,043 $13,228 $11,746 $10,512 $ 9,470 $ 8,578
5.5% 19,769 16,912 14,692 12,918 11,468 10,262 9,242
6.0% 23,044 19,316 16,521 14,350 12,615 11,197 10,017
6.5% 27,630 22,520 18,873 16,141 14,017 12,320 10,933
7.0% 34,507 27,007 22,010 18,443 15,770 13,693 12,032
Consideration Per Share (b)
5.0% $120.03 $104.29 $ 91.71 $ 81.43 $ 72.88 $ 65.65 $ 59.47
5.5% 137.06 117.25 101.86 89.56 79.51 71.14 64.08
6.0% 159.76 133.91 114.54 99.49 87.46 77.63 69.45
6.5% 191.55 156.13 130.85 111.90 97.18 85.42 75.80
7.0% 239.24 187.24 152.59 127.86 109.33 94.93 83.42
</TABLE>
(a) 6/30/97 balance sheet: $158 mm ST debt, $2,432 mm LT debt, $187 mm notes
payable to RP, $175 mm preferred, $310 cash and $353 mm in cash proceeds
from the exercise of 6.8 mm options at a weighted average exercise price of
$51.65
(b) Number of fully diluted shares assumed to be 144.2 mm
<PAGE>
DISCOUNTED CASH FLOW ANALYSIS
MANAGEMENT CASE + EXCLUDED PIPELINE
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
MANAGEMENT PROJECTIONS 1997-
------------------------------------------------------- 2002
REPORTED CAGR
1997 1998 1999 2000 2001 2002
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues $5,112 $5,272 $5,831 $6,387 $7,147 $7,836 8.9%
Growth 3.1% 10.6% 9.5% 11.9% 9.6%
EBIT 779 824 990 1,161 1,384 1,602 15.5%
Margin 15.2% 15.6% 17.0% 18.2% 19.4% 20.4%
Centeon Income (41) 55 75 120 150 180 34.5%
Taxes 225 281 343 403 483 561 20.1%
Rate 30.5% 32.0% 32.2% 31.5% 31.5% 31.5%
Tax Effected EBIT + Centeon 513 598 722 877 1,051 1,221 18.9%
+ Amortization 140 140 140 140 140 140 0.0%
As % of Revenues 2.7% 2.7% 2.4% 2.2% 2.0% 1.8%
+ (Increase)/Decrease in WC (140) (48) (174) (168) (290) (238) 11.2%
+ (Increase)/Decrease in Other (215) (136) (100) (100) (100) (100) -14.2%
- - CAPEX (310) (325) (325) (325) (350) (350) 2.5%
As % of Revenues 6.1% 6.2% 5.6% 5.1% 4.9% 4.5%
+ Depreciation 192 205 210 215 220 225 3.2%
As % of Revenues 3.8% 3.9% 3.6% 3.4% 3.1% 2.9%
- ---------------------------------------------------------------------------------------------------
= Unlevered Free Cash Flow $ 180 $ 433 $ 474 $ 639 $ 671 $ 8971 37.9%
Growth 140.5% 9.3% 34.9% 5.0% 33.8%
- ----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
DISCOUNTED CASH FLOW ANALYSIS
MANAGEMENT CASE + EXCLUDED PIPELINE
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Discount Rate
----------------------------------------------------------------------------------
9.0% 9.5% 10.0% 10.5% 11.0% 11.5% 12.0%
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PV of Future Cash Flows $ 2,444 $ 2,412 $ 2,381 $ 2,350 $ 2,320 $ 2,290 $ 2,262
+
PV of Terminal Value
Perpetual Growth
of FCF 5.0% $ 19,929 $ 17,333 $ 15,266 $ 13,583 $ 12,186 $ 11,011 $ 10,010
5.5% 22,776 19,500 16,962 14,941 13,294 11,929 10,780
6.0% 26,572 22,286 19,083 16,601 14,624 13,014 11,678
6.5% 31,886 26,000 21,809 18,676 16,249 14,315 12,740
7.0% 39,857 31,200 25,444 21,344 18,280 15,905 14,014
- -
Net Debt (a) $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290
=
Equity Consideration
5.0% $ 20,083 $ 17,456 $ 15,357 $ 13,643 $ 12,217 $11,012 $ 9,982
5.5% 22,930 19,623 17,053 15,001 13,325 11,930 10,752
6.0% 26,726 22,408 19,174 16,661 14,654 13,014 11,650
6.5% 32,040 26,123 21,900 18,736 16,279 14,316 12,712
7.0% 40,012 31,323 25,535 21,404 18,310 15,906 13,986
Consideration Per Share (b)
5.0% $ 139.24 $ 121.02 $ 106.47 $ 94.59 $ 84.70 $ 76.35 $ 69.20
5.5% 158.97 136.04 118.23 104.00 92.38 82.71 74.54
6.0% 185.29 155.36 132.93 115.51 101.60 90.23 80.77
6.5% 222.13 181.11 151.83 129.90 112.86 99.25 88.13
7.0% 277.40 217.16 177.03 148.40 126.94 110.28 96.96
</TABLE>
(a) 6/30/97 balance sheet: $158 mm ST debt, $2,432 mm LT debt, $187 mm notes
payable to RP, $175 mm preferred, $310 cash and $353 mm in cash proceeds
from the exercise of 6.8 mm options at a weighted average exercise price of
$51.65
(b) Number of fully diluted shares assumed to be 144.2 mm
<PAGE>
TAB 5
<PAGE>
SUMMARY OF THEORETICAL ANALYSIS OF COMPONENTS OF LONG-TERM VALUE
[_] PHARMACEUTICAL OPERATIONS
-- Management projections for RPR Pharmaceutical Operations
(including Dermik and Industrial operations) for 1997-2002
[_] EXCLUDED PIPELINE PRODUCTS
-- DCF analysis of Excluded Pipeline Products
-- Three different approaches used
-- Substantial long-term potential value
-- Derived values not entirely incremental to Pharma Operations
DCF values
[_] CENTEON
-- Value as multiple of normalized earnings
[_] GENCELL
-- Substantial on-going investment in gene therapy technology
platform creates a "drag" on current earnings
-- No explicit future revenues/earnings attributed to provide
return on investment in DCF analysis, with the exception of
GOLDMAN P-53
SACHS -- Significant potential value on stand alone basis
<PAGE>
TAB 5a
<PAGE>
DISCOUNTED CASH FLOW ANALYSIS SUMMARY
IMPLIED PER SHARE VALUATIONS - WITHOUT CENTEON
<TABLE>
<CAPTION>
Management Case Management Case + Excluded Pipeline (a)
--------------- ---------------------------------------
- -----------------
5-Year Discount Rate Discount Rate
- ----------------- -------------------------------------------- -------------------------------------
10.0% 10.5% 11.0% 10.5% 10.5% 11.0%
-------------------------------------------- -------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
5.0% $ 79.46 $ 70.34 $ 62.76 $ 91.38 $80.97 $72.31
Perpetual Growth of FCF 5.5% 88.46 77.55 68.64 101.68 89.22 79.04
6.0% 99.72 86.36 75.70 114.56 99.30 87.11
</TABLE>
(a) Certain new products have been included in management's projections.
Excluded Pipeline refers to other specifically identified new products in
the Company's research and development pipeline that were not included in
management's projections.
<PAGE>
DISCOUNTED CASH FLOW ANALYSIS - WITHOUT CENTEON
MANAGEMENT CASE
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
MANAGEMENT PROJECTIONS
-------------------------------------------------------------- 1997-
REPORTED 2002
1997E 1998E 1999E 2000E 2001E 2002E CAGR
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues $ 5,112 $ 5,262 $ 5,648 $ 6,071 $ 6,573 $ 7,001 6.5%
Growth 2.9% 7.3% 7.5% 8.3% 6.5%
EBIT 779 822 947 1,083 1,233 1,372 12.0%
Margin 15.2% 15.6% 16.8% 17.8% 18.8% 19.6%
Taxes 237 263 305 341 388 432 12.7%
Rate 30.5% 32.0% 32.2% 31.5% 31.5% 31.5%
Tax Effected EBIT 542 559 642 742 845 940 11.6%
+ Amortization 140 140 140 140 140 140 0.0%
As % of Revenues 2.7% 2.7% 2.5% 2.3% 2.1% 2.0%
+ (Increase)/Decrease in WC (140) (45) (120) (128) (192) (148) 1.1%
+ (Increase)/Decrease in Other (215) (136) (100) (100) (100) (100) -14.2%
- - CAPEX (310) (325) (325) (325) (350) (350) 2.5%
As % of Revenues 6.1% 6.2% 5.8% 5.4% 5.3% 5.0%
+ Depreciation 192 205 210 215 220 225 3.2%
As % of Revenues 3.8% 3.9% 3.7% 3.5% 3.3% 3.2%
- ----------------------------------------------------------------------------------------------
= Unlevered Free Cash Flow $ 209 $ 398 $ 447 $ 544 $ 563 $ 707 27.6%
Growth 90.5% 12.4% 21.6% 3.5% 25.6%
- ----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
DISCOUNTED CASH FLOW ANALYSIS - WITHOUT CENTEON
MANAGEMENT CASE
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Discount Rate
--------------------------------------------------------------------------------
9.0% 9.5% 10.0% 10.5% 11.0% 11.5% 12.0%
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PV of Future Cash Flows $ 2,115 $ 2,088 $ 2,062 $ 2,036 $ 2,011 $ 1,987 $ 1,962
+
PV of Terminal Value
Perpetual Growth
of FCF 5.0% $ 15,258 $ 13,271 $ 11,688 $ 10,399 $ 9,331 $ 8,431 $ 7,664
5.5% 17,438 14,930 12,987 11,439 10,179 9,133 8,254
6.0% 20,344 17,063 14,611 12,710 11,197 9,964 8,941
6.5% 24,413 19,907 16,698 14,299 12,441 10,960 9,754
7.0% 30,517 23,888 19,481 16,342 13,996 12,178 10,730
- -
Net Debt (a) $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290
=
Equity Consideration
5.0% $ 15,084 $ 13,070 $ 11,461 $ 10,146 $ 9,052 $ 8,128 $ 7,337
5.5% 17,263 14,729 12,760 11,186 9,900 8,831 7,927
6.0% 20,170 16,862 14,383 12,457 10,918 9,661 8,614
6.5% 24,239 19,706 16,470 14,046 12,162 10,657 9,427
7.0% 30,342 23,687 19,253 16,089 13,717 11,875 10,403
Consideration Per Share (b)
5.0% $ 104.57 $ 90.61 $ 79.46 $ 70.34 $ 62.76 $ 56.35 $ 50.87
5.5% 119.69 102.11 88.46 77.55 68.64 61.22 54.95
6.0% 139.84 116.90 99.72 86.36 75.70 66.98 59.72
6.5% 168.05 136.62 114.19 97.38 84.32 73.89 65.36
7.0% 210.36 164.22 133.48 111.54 95.10 82.33 72.12
</TABLE>
(a) 6/30/97 balance sheet: $158 mm ST debt, $2,432 mm LT debt, $187 mm notes
payable to RP, $175 mm preferred, $310 cash and $353 mm in cash proceeds
from the exercise of 6.8 mm options at a weighted average exercise price of
$51.65
(b) Number of fully diluted shares assumed to be 144.2 mm
<PAGE>
DISCOUNTED CASH FLOW ANALYSIS - WITHOUT CENTEON
MANAGEMENT CASE + EXCLUDED PIPELINE
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
MANAGEMENT PROJECTIONS 1997-
-----------------------------------------------------------
REPORTED 2002
1997E 1998E 1999E 2000E 2001E 2002E CAGR
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues $ 5,112 $ 5,272 $ 5,831 $ 6,387 $ 7,147 $ 7,836 8.9%
Growth 3.1% 10.6% 9.5% 11.9% 9.6%
EBIT 779 824 990 1,161 1,384 1,602 15.5%
Margin 15.2% 15.6% 17.0% 18.2% 19.4% 20.4%
Taxes 237 264 319 366 436 505 16.3%
Rate 30.5% 32.0% 32.2% 31.5% 31.5% 31.5%
Tax Effected EBIT 542 560 672 795 948 1,097 15.2%
+ Amortization 140 140 140 140 140 140 0.0%
As % of Revenues 2.7% 2.7% 2.4% 2.2% 2.0% 1.8%
+ (Increase)/Decrease in WC (140) (48) (174) (168) (290) (238) 11.2%
+ (Increase)/Decrease in Other (215) (136) (100) (100) (100) (100) -14.2%
- - CAPEX (310) (325) (325) (325) (350) (350) 2.5%
As % of Revenues 6.1% 6.2% 5.6% 5.1% 4.9% 4.5%
+ Depreciation 192 205 210 215 220 225 3.2%
As % of Revenues 3.8% 3.9% 3.6% 3.4% 3.1% 2.9%
- ----------------------------------------------------------------------------------------------------
= Unlevered Free Cash Flow $ 209 $ 396 $ 423 $ 557 $ 568 $ 774 30.0%
Growth 89.8% 6.7% 31.7% 2.0% 36.3%
- ----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
DISCOUNTED CASH FLOW ANALYSIS - WITHOUT CENTEON
MANAGEMENT CASE + EXCLUDED PIPELINE
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Discount Rate
-----------------------------------------------------------------------------
9.0% 9.5% 10.0% 10.5% 11.0% 11.5% 12.0%
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PV of Future Cash Flows $ 2,151 $ 2,124 $ 2,096 $ 2,070 $ 2,044 $ 2,018 $ 1,993
+
PV of Terminal Value
Perpetual Growth
of FCF 5.0% $ 17,458 $ 15,184 $ 13,373 $ 11,898 $ 10,675 $ 9,646 $ 8,769
5.5% 19,952 17,082 14,859 13,088 11,646 10,450 9,443
6.0% 23,277 19,522 16,716 14,542 12,810 11,400 10,230
6.5% 27,932 22,776 19,105 16,360 14,234 12,540 11,160
7.0% 34,915 27,331 22,289 18,697 16,013 13,933 12,276
- -
Net Debt (a) $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290
=
Equity Consideration
5.0% $ 17,319 $ 15,018 $ 13,180 $ 11,679 $ 10,430 $ 9,375 $ 8,472
5.5% 19,813 16,916 14,666 12,868 11,400 10,179 9,147
6.0% 23,138 19,356 16,523 14,323 12,565 11,129 9,934
6.5% 27,794 22,610 18,911 16,140 13,988 12,269 10,864
7.0% 34,777 27,165 22,095 18,478 15,767 13,662 11,980
Consideration Per Share (b)
5.0% $ 120.07 $ 104.12 $ 91.38 $ 80.97 $ 72.31 $ 65.00 $ 58.74
5.5% 137.36 117.28 101.68 89.22 79.04 70.57 63.42
6.0% 160.42 134.20 114.56 99.30 87.11 77.15 68.87
6.5% 192.69 156.75 131.11 111.90 96.98 85.06 75.32
7.0% 241.11 188.34 153.19 128.10 109.31 94.72 83.06
</TABLE>
(a) 6/30/97 balance sheet: $158 mm ST debt, $2,432 mm LT debt, $187 mm notes
payable to RP, $175 mm preferred, $310 cash and $353 mm in cash proceeds
from the exercise of 6.8 mm options at a weighted average exercise price of
$51.65
(b) Number of fully diluted shares assumed to be 144.2 mm
<PAGE>
TAB5b
<PAGE>
SUMMARY OF EXCLUDED PIPELINE VALUATION ANALYSIS
PER SHARE (a)
[_] Incremental NPV on DCF Analysis (b)
5-YEAR DCF ANALYSIS
DISCOUNT RATE
--------------------------------
PERPETUAL GROWTH OF FCF 10.0% 10.5% 11.0%
--------------------------------
5.0% $11.92 $10.63 $ 9.55
5.5% 13.22 11.67 10.40
6.0% 14.84 12.94 11.41
[_] Sum of RPR Development Pipeline Valuation Risk Adjusted NPVs by
Project ($19.25)
[_] DCF Analysis using Monte Carlo Simulation: $9.00 -$17.00 (c)
(a) Assumes 144.2 million shares outstanding on a fully diluted
basis.
(b) Calculated at the difference between the NPV figures for the
Management case + Excluded Pipeline and the Management case
GOLDMAN alone.
SACHS (c) + 1 standard deviation around the mean.
-
<PAGE>
PIPELINE PRODUCTS EXCLUDED IN MANAGEMENT'S FORECASTS
CATEGORY INDICATION
- -----------------------------------------------------
R Easi-breathe
R Eformoterol Ultrahaler
R Kestine D Combination
R Kestine Syrup
R LBLO31
R Salbutamol Ultrahaler
R TAA Ultrahaler
R Tilade HFA 227 MDI
R Tilade Ultrahaler
R Tilarin
R Tilavist
O Campto Adv Gastric Cancer
O Campto CRC 1st line Oral
O Campto CRC Adjuvant Oral
O Docetaxel Polymer Program
O GD-Tex
O New Taxoid Oral
H Estalis Aliatis Osteoporosis
H Menorest 2nd Generation
H Menorest Osteoporosis
H Single Entity Patch for NA
H Menorest PMS
CNS CCKb Antagonist
CNS Rilutek Huntington
CNS Rilutek Parkinson
C AMP 579
C Fibrinogen hist. ischemic vascular disease
C Lovenox AML
C Lovenox DVT Prevention in Stroke
C Lovenox Stent
C Lovenox Trauma
C Lovenox Unstable Angina (chronic phase)
AI Anti-CMV Oral
AI Oral Streptogramin DP1 Skin
<PAGE>
ASSUMPTIONS UNDERLYING EXCLUDED PIPELINE VALUATION
BASE CASE
[_] Cashflow numbers (1997 - 2013) from Company R&D projections with
the following exceptions:
-- Rilutek (Parkinson's) sales increased by 50% each year, with
corresponding increase in operating income, based on
Management's belief that peak sales could be substantially
higher than originally estimated
-- Lovenox (Chronic Unstable Angina) sales decreased by 50% each
year, with a corresponding decrease in operating income, as a
portion of this indication's sales are included in
Management's base case projections
-- Oral Streptogramin sales and operating income derived from
Company's projection of peak sales, using standard
pharmaceutical product lifecycle sales and cashflow curves
[_] Cashflow numbers (2014 - 2029) derived using standard
pharmaceutical product lifecycle sales and cashflow curve
[_] Tax rate =32%
[_] Working capital = 30% of probability-weighted sales
GOLDMAN
SACHS [_] WACC=15%
<PAGE>
EXCLUDED PIPELINE VALUATION
MONTE CARLO SIMULATION
[_] Simulates the net present value of total excluded pipeline
cashflows from 1997 - 2029 using probabilities of technical
success provided by the Company
[_] Each simulation "rolls a die" with 100 sides for each product and
based on result of the roll either includes the non-risk adjusted
cashflows or excludes all cashflows related to the specific
product in the calculation of the net present value of the
excluded pipeline
-- e.g., for a product with a probability of technical success of
70%, if the die rolls anything 70 or under, the non-risk
adjusted cashflows are included in the net present value
calculation of the excluded pipeline; if the die rolls greater
than 70, all cashflows related to this product are excluded in
the net present value calculation of the excluded pipeline
GOLDMAN [_] After 1,000 simulations, the model provides a distribution curve
SACHS of the total pipeline net present value, as well as several
statistical data points
<PAGE>
EXCLUDED PIPELINE VALUATION
<TABLE>
<S> <C>
less than or equal to 0 0
less than or equal to 1 0
less than or equal to 2 0
less than or equal to 3 0
less than or equal to 4 2
less than or equal to 5 4
less than or equal to 6 15
less than or equal to 7 23
less than or equal to 8 40
less than or equal to 9 48
less than or equal to 10 77
less than or equal to 11 89
less than or equal to 12 100
less than or equal to 13 100
less than or equal to 14 109
less than or equal to 15 102
less than or equal to 16 74
less than or equal to 17 53
less than or equal to 18 51
less than or equal to 19 24
less than or equal to 20 33
less than or equal to 21 23
less than or equal to 22 13
less than or equal to 23 7
less than or equal to 24 2
less than or equal to 25 4
less than or equal to 26 3
less than or equal to 27 1
less than or equal to 28 3
less than or equal to 29 0
less than or equal to 30 0
less than or equal to 31 0
less than or equal to 32 0
less than or equal to 33 0
less than or equal to 34 0
less than or equal to 35 0
less than or equal to 36 0
less than or equal to 37 0
less than or equal to 38 0
less than or equal to 39 0
less than or equal to 40 0
less than or equal to 41 0
less than or equal to 42 0
less than or equal to 43 0
less than or equal to 44 0
less than or equal to 45 0
less than or equal to 46 0
less than or equal to 47 0
less than or equal to 48 0
</TABLE>
Page 1
MONTE CARLO SIMULATION--INCLUDING R&D EXPENSES
STATISTICAL DATA
- ----------------------------
Mean: $13.22
Median: 13.03
Mode: 12.58
Standard Deviation: 4.11
Variance: 16.93
Kurtosis: 0.36
Skewness: 0.46
Range: 24.19
Min: 3.59
Max: 27.79
Sum: 13,222
Count: 1,000
<PAGE>
TAB5c
<PAGE>
STAND--ALONE CENTEON VALUATION
($ MILLION)
<TABLE>
<CAPTION>
1998 1999 2000
------ ------ ------
<S> <C> <C> <C>
Operating Income
RPR Case(a) $ 160 $ 200 $ 290
Sale Value @ lOx Operating Income
RPR Case $2,900
RPR Share of Value @ 50% (b)
RPR Case $1,245
RPR Share of AT Income
RPR Case $ 55 $ 75 $ 120
PV @ 12.0% of RPR Share of AT Income + Year 2000 Value
RPR Case $1,080
Per Share PV @ 12.0% of RPR Share of AT Income + Year 2000 Value
RPR Case $7.88
</TABLE>
(a) Based on RPR management projections.
(b) Assumes Centeon debt of $410 million.
<PAGE>
STAND--ALONE CENTEON VALUATION
($ MILLION)
<TABLE>
<CAPTION>
1998 1999 2000
------ ------ ------
<S> <C> <C> <C>
Operating Income
RPR Case (a) $ 160 $ 200 $ 290
Sale Value @ lOx Operating Income
RPR Case $2,900
RPR Share of Value @ 50% (b)
RPR Case $1,245
RPR Share of AT Income
RPR Case $ 55 $ 75 $ 120
PV @ 15.0% of RPR Share of AT Income + Year 2000 Value
RPR Case $1,002
Per Share PV @ 15.0% of RPR Share of AT Income + Year 2000 Value
RPR Case $7.31
</TABLE>
(a) Based on RPR management projections.
(b) Assumes Centeon debt of $410 million.
<PAGE>
TAB 6
<PAGE>
COMPARISON OF SELECTED PUBLICLY TRADED COMPARABLE COMPANIES
ENTERPRISE VALUE/LTM SALES
<TABLE>
<CAPTION>
- -------------------------------------------
<S> <C>
PNU 2.5x
RPR Pre-Bid 2.6x
RPR Current 3.1x
RPR Proposed 3.1x
AHP 3.8x
ABT 4.4x
BMY 4.7x
US Median 5.0x
WLA 5.0x
MRK 5.1x
PFE 5.9x
SGP 6.0x
LLY 7.4x
- ------------------------------------------
</TABLE>
ENTERPRISE VALUE/LTM EBIT
<TABLE>
<CAPTION>
- -------------------------------------------
<S> <C>
PNU 10.5x
AHP 15.9x
RPR Pre-Bid 17.0x
BMY 17.5x
ABT 18.0x
MRK 18.0x
US Median 18.0x
RPR Current 19.6x
RPR Proposed 20.0x
SGP 20.1x
PFE 21.4x
LLY 24.0x
WLA 32.9x
- ------------------------------------------
</TABLE>
1998 P/E
<TABLE>
<CAPTION>
- -------------------------------------------
<S> <C>
PNU 17.3x
RPR Pre-Bid 18.7x
AHP 19.1x
BMY 20.2x
ABT 20.3x
MRK 20.5x
US Median 20.5x
SGP 21.8x
RPR Current 22.3x
RPR Proposed 22.8x
PFE 25.0x
LLY 26.4x
WLA 29.6x
- ------------------------------------------
</TABLE>
PROJECTED LONG-TERM EPS GROWTH
<TABLE>
<CAPTION>
- -------------------------------------------
<S> <C>
PNU 10.0%
BMY 11.0%
ABT 12.5%
AHP 13.0%
SGP 13.0%
US Median 13.0%
MRK 14.0%
RPR Current 14.0%
RPR Pre-Bid 14.0%
RPR Proposed 14.0%
LLY 15.0%
PFE 15.7%
WLA 16.5%
- ------------------------------------------
</TABLE>
Goldman Sachs
<PAGE>
COMPARISON OF SELECTED PUBLICLY TRADED COMPARABLE COMPANIES
EQUITY MARKET CAPITALIZATION ($MM)
<TABLE>
<CAPTION>
- ----------------------------------
<S> <C>
RPR Pre-bid $10,915
RPR Current $12,993
RPR Proposed $13,328
PNU $17,516
WLA $35,469
SGP $35,943
ABT $48,042
AHP $48,223
US Median $48,223
LLY $57,362
PFE $67,781
BMY $74,383
MRK $112,627
- ---------------------------------
</TABLE>
LTM EBIT MARGINS
<TABLE>
<CAPTION>
- ----------------------------------
<S> <C>
WLA 15.3%
RPR Pre-bid 15.5%
RPR Current 15.5%
RPR Proposed 15.5%
PNU 23.6%
AHP 23.9%
ABT 24.2%
BMY 26.8%
US Median 26.8%
PFE 27.4%
MRK 28.6%
SGP 29.7%
LLY 31.0%
- ---------------------------------
</TABLE>
DEBT TO TOTAL CAPITALIZATION
<TABLE>
<CAPTION>
- ----------------------------------
<S> <C>
MRK 11.8%
PNU 16.5%
BMY 18.9%
PFE 19.1%
US Meridan 30.4%
SGP 30.4%
ABT 32.7%
LLY 39.7%
AHP 44.3%
WLA 49.7%
RPR Current 50.5%
RPR Pre-bid 50.5%
RPR Proposed 50.5%
- ---------------------------------
</TABLE>
NEW PRODUCT VERSUS PATENT VULNERABILITY
<TABLE>
<CAPTION>
PATENT PRODUCT
VULNERABILITY LEVERAGE
-----------------------------------------------
<S> <C> <C>
Astra 33% 9%
Glaxo Wellcome 7 33
Novartis 15 23
Rhone-Poulenc Rorer 10 23
Roche 14 23
Sanofi 10 22
Schering 14 17
Smithkline Beecham 16 22
Synthelabo 7 13
Zeneca 41 40
- ------------------------------------------------
</TABLE>
(a) Percentage of 1998 sales vulnerable to patent loss 1998-2002.
(b) Percentage of year 2000 sales derived from launches since 1994-1995.
Source: Goldman Sachs estimates.
<PAGE>
PHARMACEUTICAL COMPANY P/Es vs. EST. EPS GROWTH
1998 P/E VS. 5-YEAR EST. EPS GROWTH
<TABLE>
<CAPTION>
COMPANY EST. 5-YEAR GROWTH RATE 1998 P/E
- ---------------------------------------------------------
<S> <C> <C>
RPR Pre-Bid 14.0% 18.7x
RPR
Current 14.0% 22.5x
Abbott 12.5% 20.3x
AHP 13.0% 19.1x
Astra 12.0% 17.9x
BMY 11.0% 20.2x
Eli Lilly 15.0% 26.4x
GW 9.0% 20.6x
Merck 14.0% 20.5x
Novartis 18.7% 22.1x
Pfizer 15.7% 25.0x
PNY 10.0% 17.3x
Roche 17.0% 21.3x
Sanofi 17.0% 27.6x
SGP 13.0% 21.8x
SKB 16.0% 23.6x
Synthelabo 22.0% 25.2x
WLA 16.5% 29.6x
Zeneca 12.0% 23.3x
</TABLE>
- ---------------------------------------------------------
DIFFERENCE BETWEEN PREDICTED AND ACTUAL 1998 P/E
<TABLE>
<CAPTION>
- ----------------------------------
<S> <C>
WLA 6.0
Eli Lilly 3.8
Sanofi 3.7
Zeneca 2.6
Pfizer 1.9
GW 1.8
SGP 0.4
SKB 0.3
RPR Current 0.2
BMY 0.0
Abbott (0.8)
Merck (1.5)
Synthelabo (1.9)
PNU (2.2)
AHP (2.3)
Roche (2.7)
Astra (2.9)
Novartis (3.0)
RPR Pre-Bid (3.3)
- ---------------------------------
</TABLE>
GOLDMAN
SACHS
<PAGE>
PUBLIC MARKET VALUATION OF SELECTED COMPARABLE COMPANIES
WORLDWIDE PHARMACEUTICALS SECTOR (LTM 6/30/97)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
% OF 52- MARKET LEVERED LEV. MKT CAP AS MULTIPLE OF
AS OF SHARE WEEK CAP MKT CAP LTM (A) P/E
----------------------------- -------------------------
AUGUST 18, 1997 PRICE HIGH US$ M US$ M SALES EBITDA EBIT 1996 1997E 1998E
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
UNITED KINGDOM:
GlaxoWellcome (Pounds) 11.96 84.3% $ 68,608 $ 72,037 5.4 x 12.6 x 14.2 x 21.1 x 21.7 x 20.6 x
SmithKline Beecham 10.87 86.1% 48,302 50,938 4.0 16.8 19.3 28.7 27.2 23.6
Zeneca 18.90 82.5% 28,847 28,454 3.3 14.0 16.9 26.8 26.3 23.3
- ------------------------------------------------------------------------------------------------------------------------------------
UK MEDIAN 84.3% 4.0 X 14.0 X 16.9 X 26.8 X 26.3 X 23.3 X
UK MEAN 84.3% 4.2 14.5 16.8 25.5 25.1 22.5
====================================================================================================================================
CONTINENTAL EUROPE:
Astra SEK 132.50 82.8% $ 28,006 $ 27,154 5.3 x 14.6 x 16.8 x 23.0 x 20.7 x 17.9 x
Novartis SFr 2,140.00 84.4% 97,215 93,133 3.9 18.6 24.4 35.3 26.8 22.1
Roche SFr 13,315.00 88.8% 85,768 81,694 8.3 26.5 34.8 29.3 24.7 21.3
Sanofi FF 588.00 89.8% 8,652 8,990 2.8 13.6 17.9 35.0 32.3 27.6
Synthelabo FF 705.00 85.5% 4,766 4,645 3.1 19.4 24.0 35.8 30.3 25.2
- ------------------------------------------------------------------------------------------------------------------------------------
EUROPEAN MEDIAN 85.5% 3.9 X 18.6 X 24.0 X 35.0 X 26.8 X 22.1 X
EUROPEAN MEAN 86.3% 4.7 18.5 23.6 31.7 26.9 22.8
====================================================================================================================================
UNITED STATES:
Abbott Laboratories $ 62.44 90.6% $ 48,042 $ 50,291 4.4 x 14.6 x 18.0 x 25.9 x 23.0 x 20.3 x
American Home Products 74.38 87.6% 48,223 53,274 3.8 13.1 15.9 25.1 21.9 19.1
Bristol-Myers Squibb 74.63 84.2% 74,383 74,101 4.7 15.5 17.5 26.3 23.2 20.2
Eli Lilly 103.13 87.6% 57,362 58,094 7.4 19.6 24.0 37.1 32.2 26.4
Merck 93.25 86.2% 112,627 112,135 5.1 16.1 18.0 29.1 24.2 20.5
Pfizer 52.44 81.0% 67,781 69,253 5.9 18.7 21.4 35.0 30.8 25.0
Pharmacia & Upjohn 34.50 78.4% 17,516 17,359 2.5 8.2 10.5 18.2 20.3 17.3
Schering-Plough 49.06 89.6% 35,943 36,361 6.0 18.2 20.1 29.7 25.3 21.8
Warner-Lambert 130.44 88.6% 35,469 37,065 5.0 26.9 32.9 47.1 38.9 29.6
- ------------------------------------------------------------------------------------------------------------------------------------
US MEDIAN 87.6% 5.0 X 16.1 X 18.0 X 29.1 X 24.2 X 20.5 X
US MEAN 86.0% 5.0 16.8 19.8 30.4 26.6 22.2
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL PHARMA MEDIAN 86.1% 4.7 X 16.1 X 18.0 X 29.1 X 25.3 X 21.8 X
TOTAL PHARMA MEAN 85.8% 4.7 16.9 20.4 29.9 26.5 22.5
====================================================================================================================================
RHONE-POULENC RORER (B) $ 79.44 98.2% $ 10,915 $ 13,558 2.6 X 11.9 X 17.0 X 25.1 X 22.1 X 18.7 X
RHONE-POULENC RORER (C) 94.56 98.5% 12,993 15,636 3.1 13.8 19.6 29.9 26.3 22.3
RHONE-POULENC RORER (D) 97.00 101.0% 13,328 15,971 3.1 14.1 20.0 30.7 26.9 22.8
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1997 5 YR AVG- LTM 1997 PE/ LTM
RELATIVE EST EPS DIVIDEND TOTAL TOTAL 1997 PE/ 1999 PE/ LTM MARGINS R&D/
---------------------
P/E GROWTH YIELD RETURN RETURN GROWTH GROWTH EBITDA EBIT NET SALES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
UNITED KINGDOM:
GlaxoWellcome 131.0 % 9.0 % 3.5 % 12.5 % 1.7 x 2.4 x 2.3 x 42.7 % 37.8 % 24.3 13.9 %
SmithKline Beecham 163.7 16.0 % 2.1 18.1 1.5 1.7 1.5 23.8 20.6 14.2% 9.6
Zeneca 158.1 12.0 % 2.3 14.3 1.8 2.2 1.9 23.5 19.4 12.2 11.2
- ------------------------------------------------------------------------------------------------------------------------------------
UK MEDIAN 158.1 % 12.0 % 2.3 % 14.3 % 1.7 x 2.2 x 1.9 x 23.8 % 20.6 14.2% 11.2 %
UK MEAN 150.9 % 12.3 % 2.6 % 14.9 % 1.7 2.1 1.9 30.0 % 26.0% 16.9% 11.6 %
====================================================================================================================================
CONTINENTAL EUROPE:
Astra 93.3 % 12.0 % 3.0 % 15.0 % 1.4 x 1.7 x 1.5 x 36.0 % 31.2% 23.8% 13.3 %
Novartis 120.0 18.7 0.8 19.5 1.4 1.4 1.2 20.9 16.0 6.4 10.1
Roche 110.6 17.0 0.6 17.6 1.4 1.5 1.3 31.2 23.7 24.5 14.9
Sanofi 141.1 17.0 1.8 18.8 1.7 1.9 1.6 20.4 15.5 7.1 13.8
Synthelabo 132.1 22.0 1.1 23.1 1.3 1.4 1.1 16.2 13.1 7.9 12.9
- ------------------------------------------------------------------------------------------------------------------------------------
EUROPEAN MEDIAN 120.0 % 17.0 % 1.1 % 18.8 % 1.4 x 1.5 x 1.3 x 20.9 % 16.0% 7.9 % 13.3 %
EUROPEAN MEAN 119.4 % 17.3% 1.5 % 18.8 % 1.4 1.6 1.3 24.9 % 19.9% 13.9 % 13.0 %
====================================================================================================================================
UNITED STATES:
Abbott Laboratories 120.8 % 12.5 % 1.5 % 14.0 % 1.6 x 1.8 x 1.6 x 29.9 % 24.2% 17.2% 10.7 %
American Home Products 115.1 13.0 2.2 15.2 1.4 1.7 1.5 28.9 23.9 14.7 10.6
Bristol-Myers Squibb 122.0 11.0 4.0 15.0 1.5 2.1 1.8 30.2 26.8 19.1 8.3
Eli Lilly 169.6 15.0 1.3 16.3 2.0 2.1 1.8 38.1 31.0 20.8 16.2
Merck 127.5 14.0 1.8 15.8 1.5 1.7 1.5 31.9 28.6 19.3 7.1
Pfizer 162.3 15.7 2.3 18.0 1.7 2.0 1.6 31.3 27.4 17.6 15.0
Pharmacia & Upjohn 106.8 10.0 3.1 13.1 1.5 2.0 1.7 30.4 23.6 16.6 17.5
Schering-Plough 133.1 13.0 2.7 15.7 1.6 1.9 1.7 32.8 29.7 21.7 12.7
Warner-Lambert 204.9 16.5 1.1 17.6 2.2 2.4 1.8 18.8 15.3 10.3 8.0
- ------------------------------------------------------------------------------------------------------------------------------------
US MEDIAN 127.5 % 13.0 % 2.2 % 15.7 % 1.6 x 2.0 X 1.7 x 30.4 % 26.8% 17.6% 10.7 %
US MEAN 140.2 % 13.4 % 2.2 % 15.6 % 1.7 2.0 1.7 30.2 % 25.6% 17.5 % 11.8 %
====================================================================================================================================
TOTAL PHARMA MEDIAN 131.0 % 14.0 % 2.1 % 15.8 % 1.5 x 1.9 x 1.6 x 30.2 % 23.9% 17.2 % 12.7 %
TOTAL PHARMA MEAN 136.0 % 14.4 % 2.1 % 16.4 % 1.6 1.9 1.6 28.6 % 24.0% 16.3 % 12.1 %
====================================================================================================================================
RHONE-POULENC RORER (B) 116.1 % 14.0 % 1.6 % 15.6 % 1.4 x 1.6 x 1.3 x 22.2 % 15.5 7.6 % 17.0 %
RHONE-POULENC RORER (C) 138.2 % 14.0 % 1.3 % 15.3 % 1.7 1.9 1.6 22.2 % 15.5 % 7.6 % 17.0 %
RHONE-POULENC RORER (D) 141.8 % 14.0 % 1.3 % 15.3 % 1.8 1.9 1.6 22.2 % 15.5 % 7.6 % 17.0 %
</TABLE>
(a) LTM EBIT, net income and EPS have been adjusted to exclude exceptional
items.
(b) Price as of 6/25/97 before RP announcement.
(c) Price as of 8/18/97.
(d) At proposed price of $97.00.
<PAGE>
TAB 7
<PAGE>
IMPLIED STOCK PRICE UNDER VARIOUS FORECASTED AND P/E SCENARIOS
BASED ON A 10.5% DISCOUNT RATE
MANAGEMENT CASE W/ DE-LOAD
<TABLE>
<CAPTION>
1997 1998 1999 2000 2001
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Stock Price @23x $78.89 $95.22 $117.53 $137.31 $158.24
Stock Price @21x 72.03 86.94 107.31 125.37 144.48
PV @ 23x 78.89 87.70 99.12 106.11 112.03
PV @ 21x 72.03 80.21 90.75 97.26 102.80
</TABLE>
MANAGEMENT CASE W/O DE-LOAD
<TABLE>
<CAPTION>
1997 1998 1999 2000 2001
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Stock Price @23x $86.02 $102.35 $124.66 $137.31 $158.24
Stock Price @21x 78.54 93.45 113.82 125.37 144.48
PV @ 23x 86.02 94.28 105.19 106.40 112.32
PV @ 21x 78.54 86.23 96.31 97.55 103.09
</TABLE>
MANAGEMENT CASE + EXCLUDED PIPELINE
<TABLE>
<CAPTION>
1997 1998 1999 2000 2001
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Stock Price @23x $79.12 $100.05 $126.27 $154.33 $184.00
Stock Price @21x 72.24 91.35 115.29 140.91 168.00
PV @ 23x 79.12 92.09 106.38 118.95 129.74
PV @ 21x 72.24 84.22 97.38 109.00 119.01
</TABLE>
MANAGEMENT CASE + EXCLUDED PIPELINE W/O DE-LOAD
<TABLE>
<CAPTION>
1997 1998 1999 2000 2001
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Stock Price @23x $86.25 $107.18 $133.40 $154.33 $184.00
Stock Price @21x 78.75 97.86 121.80 140.91 168.00
PV @ 23x 86.25 98.68 112.44 119.24 130.04
PV @ 21x 78.75 90.24 102.94 109.30 119.30
</TABLE>
<PAGE>
IMPLIED STOCK PRICE UNDER VARIOUS FORECASTED AND P/E SCENARIOS
BASED ON 14% DISCOUNT RATE
MANAGEMENT CASE W/ DE-LOAD
<TABLE>
<CAPTION>
1997 1998 1999 2000 2001
-----------------------------------------
<S> <C> <C> <C> <C> <C>
Stock Price @ 23x $78.89 $95.22 $117.53 $137.31 $158.24
Stock Price @21x 72.03 86.94 107.31 125.37 144.48
PV @ 23x 78.89 85.03 93.21 96.81 99.21
PV @ 21x 72.03 77.77 85.35 88.75 91.06
</TABLE>
MANAGEMENT CASE W/O DE-LOAD
<TABLE>
<CAPTION>
1997 1998 1999 2000 2001
------------------------------------------
<S> <C> <C> <C> <C> <C>
Stock Price @ 23x $86.02 $102.35 $124.66 $137.31 $158.24
Stock Price @21x 78.54 93.45 113.82 125.37 144.48
PV @ 23x 86.02 91.41 98.92 97.09 99.49
PV @ 21x 78.54 83.61 90.58 89.04 91.34
</TABLE>
MANAGEMENT CASE + EXCLUDED PIPELINE
<TABLE>
<CAPTION>
1997 1998 1999 2000 2001
------------------------------------------
<S> <C> <C> <C> <C> <C>
Stock Price @ 23x $79.12 $100.05 $126.27 $154.33 $184.00
Stock Price @21x 72.24 91.35 115.29 140.91 168.00
PV @ 23x 79.12 89.29 100.03 108.51 114.86
PV @ 21x 72.24 81.65 91.58 99.46 105.39
</TABLE>
MANAGEMENT CASE + EXCLUDED PIPELINE W/O DE-LOAD
<TABLE>
<CAPTION>
1997 1998 1999 2000 2001
------------------------------------------
<S> <C> <C> <C> <C> <C>
Stock Price @ 23x $86.25 $107.18 $133.40 $154.33 $184.00
Stock Price @21x 78.75 97.86 121.80 140.91 168.00
PV @ 23x 86.25 95.67 105.74 108.79 115.14
PV @ 21x 78.75 87.50 96.81 99.74 105.67
</TABLE>
<PAGE>
TAB 8
<PAGE>
SUMMARY STATISTICS FOR MINORITY BUYOUT ANALYSIS
Initial Premium over Market Price
One Month Prior to Announcement
Mean 27.0 %
Median 20.0 %
Final Premium over Market Price
One Month Prior to Announcement
Mean 34.2 %
Median 26.1 %
% Increase in Offer
Mean 7.0 %
Median 5.0 %
% LESS THAN 5 47.9%
% LESS THAN 10 64.8%
% LESS THAN 15 80.3%
% LESS THAN 20 84.5%
<PAGE>
COMPARISON OF SELECTED BUYOUTS BY
SIGNIFICANT EXISTING SHAREHOLDERS
<TABLE>
<CAPTION>
STOCK STOCK AGGREGATE
PRICE PRICE CONSIDERATION
ONE ONE 52 WEEK INSIDE FOR
MONTH DAY HIGH OWNERSHIP AMOUNT INITIAL
ACQUIRING COMPANY/ PRIOR PRIOR DATE PRIOR TO BEFORE THE ACQUIRED BID
DATE ACQUIRED COMPANY TO ANN. TO ANN. OF ANN. ANN. TRANSACTION (000'S) PER SHARE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
4/97 Zeneca Group PLC/ $ 22.5 $ 29.25 12/22/94 $ 29.25 50.0% $ 234,000 $ 41.15
Salick Health Care
3/97 Tembec Inc./ 6.25 7.00 1/23/97 N.A. 51.0 175,000 10.00
Spruce Falls
2/97 Hoechst AG/ 231.53 243.10 12/10/96 266.72 56.5 3,500,000 266.55
Roussel-Uclaf (a)
9/96 Chemed Corp./ 34.13 36.50 6/10/96 41.50 58.1 88,250 41.00
Roto-Rooter Inc.
(Chemed Corp.)
4/96 BHP/ 2.50 2.80 12/18/95 2.81 49.5 446,900 3.06
Tubemaker
1/96 Berkshire Hathaway 55.63 55.75 8/25/95 68.63 52.4 2,347,000 70.00
Inc./
GEICO Corp
(Berkshire
Hathaway)
12/95 COBE Laboratories/ 14.75 15.75 7/14/95 19.38 53.0 177,700 18.00
REN-Corp-USA (COBE
Labs)
12/95 BIC SA/ 31.13 35.75 5/19/95 38.88 78.0 212,600 36.50
Bic Corp (BIC SA)
10/95 McCaw Cellular/ 128.25 109.88 4/7/95 140.50 52.0 3,323,400 127.50
LIN Bdcstg (McCaw
Cellular)
9/95 PacifiCorp/ 24.75 24.25 11/2/94 29.50 86.6 159,000 28.00
Pacific Telecom
(PacifiCorp)
8/95 Societe BIC/ 31.13 35.75 5/19/95 37.50 78.0 219,000 36.50
BIC Corp
6/95 Club Mediterranee 22.25 22.63 4/5/95 26.00 70.8 135,600 26.50
SA/
Club Med
5/95 GTE Corp/ 18.25 17.75 9/8/94 21.25 90.0 254,300 22.50
Contel Cellular
Inc.
3/95 Siemens AG/ 10.75 12.25 1/9/95 16.00 14.2 261,700 15.00
Pyramid Technology
3/95 Proventus AB/ 3.52 3.70 12/15/94 4.29 78.2 141,300 4.38
Aritmos AB
3/95 Dole Food Co. Inc./ 10.50 11.63 8/24/94 15.38 82.8 81,500 14.00
Castle & Cooke
Homes, Inc.
1/95 WMX Technologies 8.63 8.00 7/28/94 10.88 78.5 397,400 7.80
Inc./
Chemical Waste
Management
1/95 Adia SA/ 24.00 26.50 3/23/94 33.25 81.0 83,639 35.02
Adia Services Inc. (b)
<CAPTION>
INITIAL FINAL
INITIAL PREMIUM INITIAL PREMIUM FINAL
PREMIUM OVER ONE PREMIUM OVER ONE PREMIUM
OVER 52 MONTH OVER MONTH OVER PERCENT
ACQUIRING COMPANY/ WEEK PRIOR MARKET FINAL BID PRIOR MARKET INCREASE
DATE ACQUIRED COMPANY HIGH PRICE PRICE PER SHARE PRICE PRICE IN OFFER
<S> <C> <C> <C> <C> <C> <C> <C> <C>
4/97 Zeneca Group PLC/ 40.7% 82.9% 40.7% $ 41.15 82.9% 40.7% 0.0%
Salick Health Care
3/97 Tembec Inc./ N.A. 60.0 42.9 10.00 60.0 42.9 0.0
Spruce Falls
2/97 Hoechst AG/ (0.0) 15.1 9.6 266.55 15.1 9.6 0.0
Roussel-Uclaf
9/96 Chemed Corp./ (0.0) 20.1 12.3 41.00 20.1 12.3 0.0
Roto-Rooter Inc.
(Chemed Corp.)
4/96 BHP/ 8.9% 22.4 9.3 3.10 24.0 10.7 1.3
Tubemaker
1/96 Berkshire Hathaway 2.0% 25.8 25.6 70.00 25.8 25.6 0.0
Inc./
GEICO Corp
(Berkshire
Hathaway)
12/95 COBE Laboratories/ (7.1) 22.0 14.3 20.00 35.6 27.0 11.1
REN-Corp-USA (COBE
Labs)
12/95 BIC SA/ (6.1) 17.3 2.1 40.50 30.1 13.3 11.0
Bic Corp (BIC SA)
10/95 McCaw Cellular/ (9.3) (0.6) 16.0 129.90 1.3 18.2 1.9
LIN Bdcstg (McCaw
Cellular)
9/95 PacifiCorp/ (5.1) 13.1 15.5 30.00 21.2 23.7 7.1
Pacific Telecom
(PacifiCorp)
8/95 Societe BIC/ (2.7) 17.3 2.1 40.50 30.1 13.3 11.0
BIC Corp
6/95 Club Mediterranee 1.0 19.1 17.1 32.00 43.8 41.4 20.8
SA/
Club Med
5/95 GTE Corp/ 5.9 23.3 26.8 25.50 39.7 43.7 13.3
Contel Cellular
Inc.
3/95 Siemens AG/ (6.3) 39.5 22.4 16.00 48.8 30.6 6.7
Pyramid Technology
3/95 Proventus AB/ 2.1 24.4 18.4 4.38 24.4 18.4 0.0
Aritmos AB
3/95 Dole Food Co. Inc./ (8.9) 33.3 20.4 15.75 50.0 35.4 12.5
Castle & Cooke
Homes, Inc.
1/95 WMX Technologies (28.3) (9.6) (2.5) 8.85 2.5 10.6 13.5
Inc./
Chemical Waste
Management
1/95 Adia SA/ 5.3 45.9 32.2 35.02 45.9 32.2 0.0
Adia Services Inc. (b)
</TABLE>
<PAGE>
COMPARISON OF SELECTED BUYOUTS BY
SIGNIFICANT EXISTING SHAREHOLDERS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
STOCK STOCK INSIDE AGGREGATE
PRICE ONE PRICE ONE 52 WEEK OWNERSHIP CONSIDERATION FOR INITIAL
ACQUIRING COMPANY/ MONTH PRIOR DAY PRIOR DATE HIGH PRIOR TO BEFORE THE AMOUNT ACQUIRED BID
DATE ACQUIRED COMPANY TO ANN. TO ANN. OF ANN. ANN. TRANSACTION (000'S) PER SHARE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12/94 Ogden Comp/ $ 15.25 $ 17.36 6/6/94 $ 24.25 83.2% $119,000 $ 17.16
Ogden Services
10/94 National Intergroup Inc./ 13.00 13.50 3/1/94 13.75 80.5 84,028 14.75
FoxMeyer
9/94 EW Scripps Co./ 75.00 78.50 2/17/94 86.00 86.0 125,386 84.75
Scripps Howard Broadcasting
7/94 Burlington Resources/ 4.13 4.63 4/26/94 6.75 87.1 42,600 4.49
Diamond Shamrock Offshore
6/94 Colonia Konzern AG/ 1,133.16 1,309.00 2/28/94 1,335.00 57.9 520,969 1,713.00
Nordstern Allgemeine (e) (f)
4/94 Triarc Cos/ 15.50 15.50 4/26/93 16.50 71.0 86,140 16.90
Southeastern Public Service Co.
4/94 Medco Containment Services/ 29.75 25.75 10/13/93 36.50 54.2 122,510 27.25
Medical Marketing Group
4/94 Quartex Corp/CMS/ N.A. 1.63 7/1/93 2.13 65.0 26,740 6.52
Data Corp
2/94 Holderbank Financiere Glaros/ 7.25 6.75 1/7/94 7.75 95.0 51,700 7.65
Holnam Inc.
1/94 Standard Industries Inc./ 7.00 7.00 5/19/93 9.75 88.4 3,683 7.25
Wellington Leisure Products, Inc.
12/93 Valley Fashions Corp./West 48.63 48.88 9/20/93 51.13 95.0 66,300 46.00
Point-Pepperell Inc.
10/93 Torchmark/ 27.38 26.88 2/22/93 30.25 83.0 216,591 30.50
United Investors Management
5/93 Rust International Inc./ N.A. 17.88 11/13/92 23.88 56.0 185,000 17.88
Brand Cos Inc.
7/92 BLV Acquisition Corp./ 4.88 4.38 3/20/92 5.38 54.8 16,900 6.00
Belvedere Corp.
7/92 W.R. Grace & Company/ 11.89 15.25 3/2/92 19.00 83.4 77,501 16.50
Grace Energy Corporation
5/92 Unocal Corp./ 9.75 9.88 2/24/92 12.00 95.3 120,418 11.68
Unocal Exploration Corp.
5/92 Envirosource Inc./ N.A. 9.00 8/2/91 15.00 62.5 14,400 9.79
Envirosafe Services Inc.
1/92 Arkla Inc./ N.A. 14.25 9/18/91 20.88 82.0 92,640 14.18
Arkla Exploration Co.
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INITIAL INITIAL PREMIUM FINAL PREMIUM
PREMIUM OVER ONE INITIAL PREMIUM OVER ONE FINAL PREMIUM PERCENT
ACQUIRING COMPANY/ OVER 52 MONTH PRIOR OVER MARKET FINAL BID MONTH PRIOR OVER MARKET INCREASE
DATE ACQUIRED COMPANY WEEK HIGH PRICE PRICE PER SHARE PRICE PRICE IN OFFER
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12/94 Ogden Comp/ 29.2% 12.5 % (1.3)% $ 18.48 21.2% 6.3% 7.7%
Ogden Services
10/94 National Intergroup Inc./ 7.3 13.5 9.3 14.46 11.2 7.1 (2.0)
FoxMeyer (c)
9/94 EW Scripps Co./ 0.7 13.0 8.0 82.8 10.4 5.5 (2.3)
Scripps Howard Broadcasting (d) 26.9
7/94 Burlington Resources/ (33.6) 8.7 (3.0) 4.48 8.5 (3.2) (0.2)
Diamond Shamrock Offshore
6/94 Colonia Konzern AG/ 28.3 51.2 30.9 1,713.00 51.2 30.9 0.0
Nordstern Allgemeine (f)
4/94 Triarc Cos/ 2.6 9.0 9.0 25.60 65.2 65.2 51.5
Southeastern Public Service Co. (g)
4/94 Medco Containment Services/ (25.3) (8.4) 5.8 27.75 (6.7) 7.8 1.8
Medical Marketing Group
4/94 Quartex Corp/CMS/ 30.8 N.A. 300.0 7.00 N.A. 329.4 7.4
Data Corp
2/94 Holderbank Financiere Glaros/ (0.0) 5.5 13.3 7.65 5.5 13.3 0.0
Holnam Inc.
1/94 Standard Industries Inc./ (25.6) 3.6 3.6 7.63 9.0 9.0 5.2
Wellington Leisure Products, Inc.
12/93 Valley Fashions Corp./West (10.0) (5.4) (5.9) 46.00 (5.4) (5.9) 0.0
Point-Pepperell Inc.
10/93 Torchmark/ 0.8 11.4 13.5 31.25 14.1 16.3 2.5
United Investors Management
5/93 Rust International Inc./ (25.1) N.A. 0.0 18.75 N.A. 4.9 4.9
Brand Cos Inc.
7/92 BLV Acquisition Corp./ 17.1 29.1 37.0 6.30 29.1 43.8 5.0
Belvedere Corp.
7/92 W.R. Grace & Company/ (13.2) 38.9 8.2 19.00 59.9 24.6 15.2
Grace Energy Corporation
5/92 Unocal Corp./ (9.8) 19.8 18.2 11.68 19.8 18.2 0.0
Unocal Exploration Corp. (h)
5/92 Envirosource Inc./ (24.3) N.A. 8.8 11.69 N.A. 29.9 19.4
Envirosafe Services Inc.
1/92 Arkla Inc./ (12.3) N.A. (0.5) 15.44 N.A. 8.4 8.9
Arkla Exploration Co. (i)
</TABLE>
<PAGE>
COMPARISON OF SELECTED BUYOUTS BY
SIGNIFICANT EXISTING SHAREHOLDERS
<TABLE>
<CAPTION>
STOCK STOCK INSIDE AGGREGATE
PRICE ONE PRICE ONE 52 WEEK OWNERSHIP CONSIDERATION FOR
ACQUIRING COMPANY/ MONTH PRIOR DAY PRIOR DATE HIGH PRIOR BEFORE THE AMOUNT ACQUIRED INITIAL BID
DATE ACQUIRED COMPANY TO ANN. TO ANN. OF ANN. ANN. TRANSACTION (000'S) PER SHARE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12/91 Siemens AG/ $131.77 $120.62 10/21/91 $209.35 78.0% $1,302,423 $147.52
Siemens Nixdorf (j) (k)
Information Systems
12/91 Tele-Communications Inc./ 12.50 13.50 5/1/91 16.50 57.2 1,189,000 15.20
United Artists
Entertainment Co.
10/91 LAC Minerals/ 4.50 3.87 2/8/91 6.25 64.7 85,000 6.40
Bond International
10/91 Air & Water 15.50 15.25 3/1/91 31.50 82.0 42,000 18.70
Technologies/
Metcalf & Eddy Cos.
4/91 Murphy Oil Corp/ 18.38 16.63 4/6/89 22.63 61.0 366,242 19.13
Ocean Drilling &
Exploration
4/91 Ogden Corp./ 12.00 11.00 10/23/90 14.75 68.3 38,000 14.75
ERC Environmental
& Energy Services
3/91 BHP Holdings/ 33.00 33.75 2/6/91 44.50 50.1 530,000 40.00
Hamilton Oil Corp.
2/91 Paramount Comm./ 5.06 7.50 7/12/90 7.50 74.6 46,576 7.50
TVX Broadcast Group
11/90 National 3.50 2.62 12/20/89 6.75 44.1 59,063 4.00
Intergroup Inc./
Permian Partners (o)
L.P.
11/90 Pier 1 Imports 8.38 8.75 9/25/90 9.38 50.4 20,704 12.00
Inc. (of
Intermarke Inc.)/
Sunbelt Nursery
Group Inc.
11/90 Freeport-McMoRan 7.38 8.00 7/31/90 11.13 81.5 239,161 10.70
Inc./
Freeport-McMoRan
Oil & Gas
10/90 Primerica Corp./ N.A. 9.75 4/18/89 11.38 82.6 48,752 11.50
American Capital
Mgmt. & Research
10/90 Renault Vehicules 5.13 5.25 7/6/90 21.13 44.5 103,145 6.00
Industrial/
Mack Trucks Inc. (s)
9/90 Kansas City 10.25 12.75 5/17/90 15.00 87.1 35,000 14.00
Southern
Industries, Inc./
DST Systems Inc.
9/90 Fuji Heavy 5.88 5.13 1/16/90 8.50 49.5 208,414 6.00
Industries/
Subaru of America
8/90 Imetal S.A./ N.A. 11.50 1/24/90 16.0 55.6 781,571 15.5
Copperweld Corp.
Steel
8/90 American Express 12.00 13.00 3/2/90 N.A. 68.4 393,515 11.71
Company/
Shearson Lehman (t)
Brothers
6/90 DeGeorges/ 17.25 19.50 3/19/90 27.25 51.0 37,500 24.00
LPL Technologies, Inc.
<CAPTION>
INITIAL INITIAL PREMIUM FINAL PREMIUM
PREMIUM OVER ONE INITIAL PREMIUM OVER ONE FINAL PREMIUM PERCENT
ACQUIRING COMPANY/ OVER 52 MONTH PRIOR OVER MARKET FINAL BID- MONTH PRIOR OVER MARKET INCREASE
DATE ACQUIRED COMPANY WEEK HIGH PRICE PRICE PER SHARE PRICE PRICE IN OFFER
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12/91 Siemens AG/ (29.5)% 12.0% 22.3% $147.52 12.0% 22.3% 0.0
Siemens Nixdorf
Information Systems
12/91 Tele-Communications In (20.4) 21.6 12.6 16.19 29.5 19.9 6.5
United Artists (l)
Entertainment Co.
10/91 LAC Minerals/ 2.4 42.2 65.3 3.60 (20.0) (7.0) (43.8)
Bond International
10/91 Air & Water (37.0) 20.6 22.6 19.25 24.2 26.2 2.9
Technologies/
Metcalf & Eddy Cos. (m)
4/91 Murphy Oil Corp/ (0.2) 4.1 15.0 19.39 5.5 16.6 1.4
Ocean Drilling & (n)
Exploration
4/91 Ogden Corp./ 0.0 22.9 34.1 15.13 26.1 37.5 2.6
ERC Environmental
& Energy Services
3/91 BHP Holdings/ (10.1) 21.2 18.5 40.00 21.2 18.5 0.0
Hamilton Oil Corp.
2/91 Paramount Comm./ 0.0 48.2 0.0 9.50 87.8 26.7 26.7
TVX Broadcast Group
11/90 National 40.7 14.3 52.7 4.43 26.4 68.9 10.5
Intergroup Inc./
Permian Partners (p)
L.P.
11/90 Pier 1 Imports 27.9 43.2 37.1 12.00 43.2 37.1 0.0
Inc. (of
Intermarke Inc.)/
Sunbelt Nursery
Group Inc.
11/90 Freeport-McMoRan (5.7) 45.0 33.8 10.88 47.4 37.5 1.7
Inc./
Freeport-McMoRan (q)
Oil & Gas
10/90 Primerica Corp./ 10.3 N.A. 17.9 11.50 N.A. 37.5 0.0
American Capital (r)
Mgmt. & Research
10/90 Renault Vehicules (71.6) 17.0 14.3 6.25 21.8 19.0 4.2
Industrial/
Mack Trucks Inc.
9/90 Kansas City (6.7) 36.6 9.8 15.85 54.6 24.3 13.2
Southern
Industries, Inc./
DST Systems Inc.
9/90 Fuji Heavy (29.4) 2.0 17.0 8.50 44.6 65.7 41.7
Industries/
Subaru of America
8/90 Imetal S.A./ (3.1) N.A. 34.8 17.00 N.A. 47.8 9.7
Copperweld Corp.
Steel
8/90 American Express N.A. (2.4) (9.9) 12.90 7.5 (0.8) 10.2
Company/
Shearson Lehman (u)
Brothers
6/90 DeGeorges/ (0.1) 39.1 23.1 25.00 44.9 28.2 4.2
LPL Technologies, Inc.
</TABLE>
<PAGE>
COMPARISON OF SELECTED BUYOUTS BY
SIGNIFICANT EXISTING SHAREHOLDERS
<TABLE>
<CAPTION>
STOCK STOCK AGGREGATE
PRICE PRICE CONSIDERATION
ONE ONE 52 WEEK INSIDE FOR
MONTH DAY HIGH OWNERSHIP AMOUNT INITIAL
ACQUIRING COMPANY/ PRIOR PRIOR DATE PRIOR TO BEFORE THE ACQUIRED BID
DATE ACQUIRED COMPANY TO ANN. TO ANN. OF ANN. ANN. TRANSACTION (000'S) PER SHARE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6/90 Esselte A.B./ $33.50 $37.44 10/3/89 $38.00 78.5 $219,298 $43.50
Esselte Business
Systems, Inc.
5/90 Montedison S.p.A./ N.A. 31.12 7/31/89 32.13 71.3 465,904 35.00
Erbamont
4/90 Anderson Group PLC/ 7.88 7.38 2/16/90 8.38 51.2 21,000 8.50
National Mine
Service Co.
3/90 Heritage Media 6.00 7.88 12/1/88 9.50 57.0 32,243 20.50
Corp./
Pop Radio Corp.
2/90 Carlson Companies, 13.00 13.25 5/19/89 13.75 68.0 53,525 14.50
Inc./
TGI Friday's Inc.
1/90 Dow Jones & Co. 16.13 15.13 9/21/89 16.38 66.2 657,394 18.00
Inc./
Telerate, Inc.
1/90 Montedison S.P.A./ N.A. 44.13 7/31/89 46.00 81.0 653,811 47.00
HIMONT Inc.
1/90 Tele-Communications Inc. 20.75 27.00 5/24/89 24.00 75.0 209,625 31.75
WestMarc
Communications
12/89 General Accident 0.34 0.28 6/16/89 1.38 51.0 175,000 N.A
Fire & Life/
NZI Corp. Ltd.
11/89 Primerica N.A. 17.88 6/9/89 21.25 69.8 532,795 19.40
Corporation/
The A.L. Williams
Corporation
11/89 Mayfair 18.75 17.25 4/3/89 25.25 71.0 193,600 23.50
Acquisition Corp/
Mayfair Super
Markets, Inc.
10/89 ENSERCH Corp./ 9.63 11.25 2/15/89 12.75 87.4 151,194 10.38
ENSERCH
Exploration
Partners
9/89 United Meridian 6.25 6.13 1/27/89 9.00 60.1 26,341 8.00
Corporation/
Ensource Inc.
8/89 The Henley Group, 19.50 19.25 6/8/89 21.38 80.2 119,801 20.50
Inc./
Fisher Scientific
Group, Inc.
6/89 Zayre Corp./ 13.31 26.38 12/5/88 27.13 83.0 314,081 35.60
The TJX Companies,
Inc.
6/89 Allied Irish Banks 25.13 25.00 9/12/88 27.68 49.7 365,000 35.25
plc/
First Maryland
Bancorp.
5/89 Investors 5.38 5.25 12/6/88 8.50 69.0 22,083 5.88
(Private-USA)/
Sage Energy Co.
MEAN
MEDIAN
<CAPTION>
INITIAL FINAL
PREMIUM INITIAL PREMIUM FINAL
INITIAL OVER ONE PREMIUM OVER ONE PREMIUM
PREMIUM MONTH OVER MONTH OVER PERCENT
ACQUIRING COMPANY/ OVER 52 PRIOR MARKET FINAL BID PRIOR MARKET INCREASE
DATE ACQUIRED COMPANY WEEK HIGH PRICE PRICE PER SHARE PRICE PRICE IN OFFER
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6/90 Esselte A.B./ 14.5% 29.9% 16.2% $48.06 43.5 % 28.4 % 10.5 %
Esselte Business
Systems, Inc.
5/90 Montedison S.p.A./ 15.2 N.A. 12.5 37.00 N.A. 18.9 5.7
Erbamont (v)
4/90 Anderson Group PLC/ 1.5 7.9 15.2 8.88 12.7 20.3 4.5
National Mine
Service Co.
3/90 Heritage Media 115.8 241.7 160.2 20.50 241.7 160.2 0.0
Corp./
Pop Radio Corp.
2/90 Carlson Companies, 5.5 11.5 9.4 14.88 14.5 12.3 2.6
Inc./
TGI Friday's Inc.
1/90 Dow Jones & Co. 9.8 11.6 19.0 21.00 30.2 38.8 16.7
Inc./
Telerate, Inc.
1/90 Montedison S.P.A./ 6.5 N.A. 6.5 51.00 N.A. 15.6 8.5
HIMONT Inc. (v)
1/90 Tele-Communications In 32.3 53.0 17.6 32.25 55.4 19.4 1.6
WestMarc
Communications
12/89 General Accident N.A. N.A. N.A. 0.37 8.8 32.1 N.A.
Fire & Life/
NZI Corp. Ltd.
11/89 Primerica (5.9) N.A. 8.5 22.24 N.A. 24.4 14.6
Corporation/
The A.L. Williams (w)
Corporation
11/89 Mayfair (6.9) 25.3 36.2 24.70 31.7 43.2 5.1
Acquisition Corp/
Mayfair Super
Markets, Inc.
10/89 ENSERCH Corp./ (13.6) 7.8 (7.7) 13.53 40.6 20.3 30.3
ENSERCH (x)
Exploration
Partners
9/89 United Meridian (11.1) 28.0 30.5 10.50 68.0 71.3 31.3
Corporation/
Ensource Inc.
8/89 The Henley Group, (4.1) 5.1 6.5 22.25 14.1 15.6 8.5
Inc./
Fisher Scientific
Group, Inc.
6/89 Zayre Corp./ 0.3 167.4 32.2 34.80 161.4 0.4 (2.2)
The TJX Companies, (x)
Inc.
6/89 Allied Irish Banks 27.3 40.3 41.0 39.25 56.2 57.0 11.3
plc/
First Maryland
Bancorp.
5/89 Investors (30.9) 9.3 12.0 6.50 20.8 23.8 10.5
(Private-USA)/
mean 27.0 % 34.2 % 7.0 %
median (0.2)% 26.1 % 5.0 %
</TABLE>
<PAGE>
COMPARISON OF SELECTED BUYOUTS BY
SIGNIFICANT EXISTING SHAREHOLDERS
Footnotes
(a) Closing date $/Ff exchange rate of 0.17422 used to calculate all premiums.
(b) Represents combined share/cash offer.
(c) Received principal amount in 8.25% senior notes due 2004.
(d) 3.45 acquiror shares.
(e) Purchased 37.35% stake from Union des Assurances de Paris; increased
ownership to 95.4%.
(f) $/DM exchange rate = 1.5356; DM 630 million to UAP for 37.35% stake and a
further DM 170 million in cash (DM 2,630 per share) to Nordstern
independent shareholders.
(g) 0.80 acquiror shares.
(h) 0.54 acquiror shares.
(i) 0.95 acquiror shares.
(j) 91% of voting Interest.
(k) $/DM exchange rate = 1.5356.
(l) 1.02 acquiror shares.
(m) 0.88 acquiror shares.
(n) 0.55 acquiror shares.
(o) 99.7% voting interest.
(p) Final bid $3.5625 received in tender offer plus three distributions
comprised of $.2875 prior to the closing of the tender.
(q) 0.283 to 0.345 acquiror shares, upper end of range valued at nearly $11.00.
(r) 0.32 acquiror shares.
(s) 61.1% ownership on a fully diluted basis.
(t) 60% voting interest.
(u) 0.48 acquiror shares.
(v) Includes a warrant valued at $2.00.
(w) 0.82 to 0.85 acquiror shares.
(x) Share/cash offer.
(y) 1.95 acquiror shares.
<PAGE>
TAB 9
<PAGE>
COMPARISON OF SELECTED CONTROL ACQUISITIONS OF
PUBLICLY TRADED PHARMACEUTICAL COMPANIES
<TABLE>
<CAPTION>
MULTIPLES
----------------------------------------
TOTAL PREMIUM TO
ENTITY NET PRICE 4 WEEKS PRIOR
DATE TARGET ACQUIROR VALUE SALES EBIT INCOME (%)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
2/95 Marion-Merrell Dow Hoechst $ 7,254 2.4x 12.3x 15.8x 11.4
1/95 Wellcome Glaxo 12,844 3.6 11.4 22.1 45.9
8/94 American Cyanamid American Home 9,604 2.0 21.2 26.0 80.8
Products
5/94 Syntex Roche 5,300 2.5 10.2 18.4 79.4
1/90 Rorer Group (68%) Rhone-Poulenc 3,367 3.2 23.4 38.7 75.3
Mean 2.7x 15.7x 24.2x 58.6
Median 2.5 12.3 22.1 75.3
High 3.6 23.4 38.7 80.8
Low 2.0 10.2 15.8 11.4
8/97 Rhone-Poulenc Rhone-Poulenc $ 4,534 3.2x 20.4x 35.8x 30.8 (b)
Rorer (a)
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total Entity Value represents fully-diluted consideration paid to
RPR minority shareholders less cash proceeds from the exercise of
6.8 mm options at a weighted average exercise price of $51.65;
levered multiples calculated from fully diluted shares outstanding
of 144.2 mm plus net debt of $2,290 mm after proceeds of $353 mm
from the exercise of options.
Goldman
Sachs (b) Represents premium over share price four weeks prior to 6/26/97
announcement.
<PAGE>
TAB 10
<PAGE>
MERGER ANALYSIS - RP ACQUIRES RPR (31.7%)
ASSUMES APPROXIMATELY FF 7 BILLION RP EQUITY OFFERING
(FF IN MILLIONS, EXCEPT PER SHARE AND EQUITY CONSIDERATION DATA)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PREMIUM PER SHARE 15.8% 18.3% 20.8% 22.1% 23.4% 25.9% 28.4% 30.9%
PRICE PER SHARE ($) $ 92.00 $ 94.00 $ 96.00 $ 97.00 $ 98.00 $100.00 $ 102.00 $104.00
EQUITY CONSIDERATION ($) $ 4,283 $ 4,384 $ 4,485 $ 4,535 $ 4,585 $ 4,686 $ 4,787 $ 4,888
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCREMENTAL INTEREST CHARGE (AFTER TAX) 664 679 695 703 710 726 742 757
TRANSACTION GOODWILL CHARGE PER YEAR 629 647 665 673 682 700 718 736
MINORITY CHARGE REDUCTION (ADDITION
TO NET INCOME)
1998 1,148 1,148 1,148 1,148 1,148 1,148 1,148 1,148
1999 1,291 1,291 1,291 1,291 1,291 1,291 1,291 1,291
RP PRO-FORMA NET INCOME
1998 3,888 3,855 3,821 3,804 3,788 3,754 3,721 3,687
1999 5,248 5,214 5,181 5,164 5,147 5,114 5,080 5,047
CONSIDERATION IN STOCK ISSUED 6,639 6,795 6,951 7,029 7,107 7,264 7,420 7,576
NEW SHARES ISSUED 28 29 29 30 30 31 31 32
PRO-FORMA SHARES OUTSTANDING RP 361 362 362 363 363 364 364 365
RP PRO-FORMA EPS -----
1998 12.10 10.76 10.65 10.54 10.49 10.43 10.32 10.21 10.10
1999 15.75 14.53 14.41 14.29 14.23 14.17 14.06 13.94 13.82
ACCRETION/DILUTION TO RP
1998 (11.0)% (12.0)% (12.9)% (13.3)% (13.8)% (14.7)% (15.6)% (16.5)%
1999 (7.8)% (8.5)% (9.3)% (9.6)% (10.0)% (10.8)% (11.5)% (12.2)%
PRE-TAX SYNERGIES TO BREAKEVEN
1998 689 748 807 837 866 926 985 1,044
1999 630 692 755 786 818 880 943 1,005
PRE-TAX SYNERGIES TO BREAKEVEN AS %
OF RPR 1996 SALES
1997 16.2% 17.3% 18.3% 18.9% 19.4% 20.4% 21.5% 22.5%
1998 12.7% 13.8% 14.9% 15.4% 16.0% 17.1% 18.2% 19.3%
1999 11.6% 12.8% 13.9% 14.5% 15.1% 16.2% 17.4% 18.5%
P/E FOR BREAK-EVEN STOCK PRICE RP RPR
1998 -------------- 22.1 x 22.3 x 22.6 x 22.7 x 22.8 x 23.1 x 23.3 x 23.6 x
1999 19.7 x 21.6 x 16.4 16.5 16.7 16.7 16.8 16.9 17.1 17.2
15.1 19.2
RP Pro-Forma Debt/Total Capital 53.8% 53.9% 54.0% 54.1% 54.1% 54.2% 54.3% 54.4%
Total Debt/1997 EBITDA 3.8 x 3.9 x 3.9 x 3.9 x 3.9 x 4.O x 4.O x 4.O x
1997 EBIT/Interest Expense 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9
1997 EBITDA/Interest Expense 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.2
</TABLE>
