INVESTMENT BANKING A D V A N C I N G I D E A S
Minneapolis
Menlo Park
Seattle
Chicago
San Francisco
Los Angeles
PROJECT FOREST New York
SEPTEMBER 29, 2000 London
Geneva
Tel Aviv
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TABLE OF CONTENTS
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Situation Overview 1
Selected Statistics 2
Valuation Matrix 3
APPENDICES
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Comparable Public Company Analysis Detail A
Comparable M&A Transactions B
Suitor Acquisition Histories C
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A D V A N C I N G I D E A S
SITUATION OVERVIEW
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SUMMARY OF DISCUSSIONS
--------------------------------------------------------------------------------
. Citigroup / Salomon Smith Barney
- Meetings held on September 20th and 21st, including one due diligence
(1/2 day) meeting.
- Non-disclosure agreement signed on September 20th.
- Potentially bidding on alternative market maker.
- Invitation to submit offer sent to SSMB on September 26.
- SSMB on September 27 indicated that they are not in a position to
submit an indication of interest, and that they are still reviewing
"build vs. buy" strategies internally.
. Deutsche Bank
- Announced closing of strategic investment with Swan on June 15, 2000 to
acquire 3,000,000 shares for $45.31, or 16% total interest of Swan.
- Several conversations with DB. Substantial due diligence conducted with
private placement.
- Non-disclosure agreement signed on September 25th.
- Indication from DB on September 28th regarding a submission of an offer
week of October 2nd.
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A D V A N C I N G I D E A S
SELECTED STATISTICS
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<TABLE>
<CAPTION>
SELECTED STATISTICS
($ in 000's, except per share data)
Swan Deutsche Bank (1) Citigroup
---- ------------- --- ---------
STOCK PRICE (AS OF 9/27/00)
<S> <C> <C> <C>
-- Last Close $28.94 $84.21 $52.38
-- 30 Day Average $33.69 $85.08 $55.46
-- 60 Day Average $34.22 $84.53 $55.16
-- 90 Day Average $34.30 $81.30 $53.41
-- 180 Day Average $33.34 $75.27 $49.85
IN THE 52 WEEK PERIOD ENDING 9/27/00, THE STOCK HAS TRADED AT:
-- A Low Of $20.38 $53.77 $31.55
-- A High Of $59.25 $90.53 $59.13
-- An Average Daily Volume Of (in 000s) 401 8,116 13,247
SUMMARY CAPITALIZATION:
Common Stock Outstanding (2) 21,371 616,581 4,608,255
Last Close $28.94 $84.21 $52.38
--------------------------------------------------
MARKET CAPITALIZATION $618,416 $51,922,610 $241,357,358
--------------------------------------------------
Less: Cash (2) $391,093 $18,615,789 $12,229,000
Plus: Debt and Preferred (2) $0 $161,104,386 $103,080,000
COMPANY VALUE $227,323 $194,411,207 $332,208,358
============ ============== ===============
ESTIMATES SUMMARY: (3)
LTM Revenue (4) $400,860 $24,579,825 $61,675,000
CY 2000 Revenue Estimate (5) $411,700 $20,705,412 $68,000,000
CY 2001 Revenue Estimate (5) $518,800 $21,604,096 $78,000,000
LTM EPS $1.76 $7.40 $2.51
CY 2000 EPS Estimate (5) $1.63 $4.27 $2.73
CY 2001 EPS Estimate (5) $1.84 $4.74 $3.04
Multiples:
LTM EPS 16.4x 11.4x 20.9x
CY 2000 EPS 17.8x 19.7x 19.2x
CY 2001 EPS 15.7x 17.8x 17.2x
Book Value 1.4x 2.3x 4.7x
Research Coverage
Number of Analysts 5 49 27
Strong Buys/Buys 3 31 23
Consensus 12-month Price Target $43.50 $87.72 $78.00
Institutional Ownership as a % of Common Shares Outstanding 46.0% 77.0% 45.4%
Approximate Number of Employees 900 94,000 109,000
Primary Stock Exchange NYSE Frankfurt NYSE
(1) Assumes Exchange rate on 9/27/00: U.S. $1.00 = 1.14 Euros.
(2) Fully diluted shares and balance sheet information per latest 10-Q filings; treasury method applied when data available.
(3) Revenue and EPS estimates for Swan per U.S. Bancorp Piper Jaffray; other Revenue and EPS estimates per consensus estimates.
(4) Includes net income from investments.
(5) Swan's fiscal year ends May 30; calendar year calculations for Swan are for twelve months ending November 30.
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RELATIVE PRICE INDEX CHART
9/27/99 - 9/27/00
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DEUTSCHE BANK SELECTED RESEARCH ANALYST COMMENTS
<TABLE>
<CAPTION>
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12-Month
Price
Investment Bank Analyst Name Rating Target Date
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Market $88 August 6
J.P. Morgan Stuart Graham Performer
"DEUTSCHE HAS BUILT THE CLOSEST THING TO A BULGE BRACKET
INVESTMENT BANKING FRANCHISE AT A EUROPEAN FIRM."
Neutral $88 April 6
BNP Paribas Group Michael Kunz
"DEUTSCHE AND DRESDNER ABANDONED THEIR ENVISAGED MERGER BECAUSE THEY COULD NOT
AGREE UPON THE INTEGRATION OF KLEINWORT BENSON. DEUTSCHE'S REPUTATION HAS
SUFFERED, SINCE A BANK THAT PRIDES ITSELF WITH EXPERTISE IN M&A ADVISORY
APPARENTLY HAS ANNOUNCED A MERGER THAT HAD NOT BEEN PLANNED THOROUGHLY."
Oppenheim Research (Gr.) Metehan Sen Buy $83 August 4
"AMONG ITS EUROPEAN RETAIL PEERS, DEUTSCHE BANK WILL BE THE RETAIL CHAMPION WITH
REGARD TO GEOGRAPHIC REACH AND STRATEGIC AMBITIONS, WITH OTHER BANKS BEING SET-
UP MORE OR LESS ON A NATIONAL BASIS."
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CITIGROUP SELECTED RESEARCH ANALYST COMMENTS
<TABLE>
<CAPTION>
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12-Month
Price
Investment Bank Analyst Name Rating Target Date
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Deutsche Bank Alex. Brown George A. Bicher Strong Buy $85 July 24
"WE EXPECT CITIGROUP TO SUSTAIN OPERATING PROFITABILITY
AND GROWTH AMONG THE HIGHEST LEVELS FOR ALL FINANCIAL
SERVICES COMPANIES."
"CITIGROUP CONTINUES TO ENJOY RISING OPERATING MARGINS ACROSS MOST BUSINESS
UNITS AS HIGHER REVENUES HAVE COMBINED WITH EXPENSE CONTROL AND STABLE CHARGE-
OFFS. IN OUR OPINION, THIS OPERATING PERFORMANCE WITH SIGNIFICANT REVENUE
VISIBILITY HAS SCARCITY VALUE AMONG FINANCIAL SERVICES STOCKS AND IS WHY THE
COMPANY IS LIKELY TO FURTHER ENHANCE ITS PREMIUM VALUATION."
Donaldson, Lufkin & Jenrette Joan S. Solotar Buy $72 June 15
"WE LOOK FOR CONTINUING MARGIN EXPANSION, MARKET SHARE
GAINS, AND OVERALL GROWTH OF THE MARKETS TO EQUATE TO
DOUBLE-DIGIT ORGANIC GROWTH FOR CITIGROUP".
ING Barings Ernest G. Jacob Strong Buy $78 June 12
"WE THINK THE MARKET IS LIKELY TO BECOME MORE CONFIDENT IN
THE COMPANY'S ABILITY TO PRODUCE CONSISTENT EPS GROWTH EVEN
THOUGH TWO PIECES OF ITS EARNINGS, SALOMON SMITH BARNEY AND
INVESTMENT ACTIVITIES, ARE INHERENTLY VOLATILE."
</TABLE>
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<TABLE>
<CAPTION>
TOP MARKET MAKERS IN DEUTSCHE BANK AND CITIGROUP
9/27/99 - 9/27/00
DEUTSCHE BANK AG VOLUME % OF # OF CITIGROUP VOLUME % OF # OF
BROKER (000S) TOTAL TRD BROKER (000S) TOTAL TRD
<S> <C> <C> <C> <C> <C> <C>
DEUTSCHE BANC ALEX. BROWN. 649,272 60.74 253 MERRILL LYNCH, PIERCE FENNER & 253,172 11.33 2402
ABN-AMRO 59,059 5.53 1068 CREDIT SUISSE FIRST BOSTON 205,100 9.18 2634
DRESDNER KLEINWORT BENSON 57,467 5.38 148 MORGAN STANLEY & COMPANY, INC. 152,256 6.81 1320
LEHMAN BROTHERS, INC. 39,747 3.72 260 GOLDMAN, SACHS & COMPANY 135,076 6.05 1123
COMMERZ BANK 37,331 3.49 254 LEHMAN BROTHERS, INC. 108,787 4.87 660
GOLDMAN, SACHS & COMPANY 33,795 3.16 543 J.P. MORGAN SECURITIES INC. 101,281 4.53 872
HSBC SECURITIES 29,588 2.77 217 KNIGHT/TRIMARK GROUP INC. 98,734 4.42 2002
MERRILL LYNCH, PIERCE FENNER & 29,181 2.73 599 DONALDSON, LUFKIN & JENRETTE 98,346 4.4 1370
MORGAN STANLEY & COMPANY, INC. 25,527 2.39 67 DEUTSCHE BANC ALEX. BROWN. 88,168 3.95 956
SALOMON SMITH BARNEY INC. 18,605 1.74 73 UBS WARBURG 85,118 3.81 875
J.P. MORGAN SECURITIES INC. 17,223 1.61 101 LYNCH JONES & RYAN/INSTINET 76,645 3.43 338
DONALDSON, LUFKIN & JENRETTE 16,536 1.55 86 BEAR STEARNS AND COMPANY 75,855 3.4 2160
CREDIT SUISSE FIRST BOSTON 14,770 1.38 58 PAINEWEBBER INC. 67,272 3.01 922
UBS WARBURG 13,142 1.23 100 BANC OF AMERICA SECURITIES LLC 59,881 2.68 945
PARIBAS CORPORATION 11,014 1.03 87 CHASE H&Q 49,904 2.23 1070
BEAR STEARNS AND COMPANY 6,195 0.58 154 SG COWEN SECURITIES CORP. 47,471 2.12 1035
JEFFERIES & COMPANY, INC. 2,483 0.23 16 PRUDENTIAL SECURITIES, INC. 44,958 2.01 706
CANTOR, FITZGERALD & CO., INC. 1,776 0.17 32 SANFORD C. BERNSTEIN COMPANY, 41,308 1.85 860
WESTLB PANMURE LIMITED 1,410 0.13 25 ITG, INC. 30,178 1.35 442
TIR SECURITIES 1,293 0.12 41 ROBERTSON STEPHENS 28,836 1.29 530
SOCIETE GENERALE 1,050 0.1 77 OTA LIMITED PARTNERSHIP. 28,765 1.29 179
CREDIT LYONNAIS 957 0.09 85 FIDELITY CAPITAL MARKETS 25,647 1.15 186
ROBERT FLEMING, INC. 910 0.09 17 ING BARINGS LLC 24,000 1.07 330
INSTINET CORPORATION 226 0.02 1 CIBC WORLD MARKETS 17,990 0.81 493
SCHRODER & CO. 180 0.02 3 WIT SOUNDVIEW 14,538 0.65 227
ALL OTHER BROKERS = 7 173 0.02 63 ALL OTHER BROKERS = 126 274,935 12.31 6,876
TOTAL BROKERS = 32 1,068,908 100 4,428 TOTAL BROKERS = 151 2,234,218 100 31,513
</TABLE>
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Source: Autex/BlockDATA
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DEUTSCHE BANK PRICE VOLUME CHART
9/27/99 - 9/27/00
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CITIGROUP INC. PRICE VOLUME CHART
9/27/99 - 9/27/00
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A D V A N C I N G I D E A S
VALUATION MATRIX
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VALUATION MATRIX
<TABLE>
<CAPTION>
Acquisition Price
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$49.00 $50.00 $51.00 $52.00 $53.00 $54.00 $55.00 $56.00 $57.00 $58.00 $59.00 $60.00
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Premium to Swan
Stock Price (1)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 Day 69.3% 72.8% 76.2% 79.7% 83.2% 86.6% 90.1% 93.5% 97.0% 100.4% 103.9% 107.3%
1 Week 53.4% 56.6% 59.7% 62.8% 65.9% 69.1% 72.2% 75.3% 78.5% 81.6% 84.7% 87.9%
1 Month 35.4% 38.2% 40.9% 43.7% 46.5% 49.2% 52.0% 54.7% 57.5% 60.3% 63.0% 65.8%
10-Day Avg 47.8% 50.9% 53.9% 56.9% 59.9% 62.9% 65.9% 69.0% 72.0% 75.0% 78.0% 81.0%
20-Day Avg 46.4% 49.4% 52.4% 55.4% 58.4% 61.3% 64.3% 67.3% 70.3% 73.3% 76.3% 79.3%
% 52-Week High 82.7% 84.4% 86.1% 87.8% 89.5% 91.1% 92.8% 94.5% 96.2% 97.9% 99.6% 101.3%
Multiple of:
LTM Revenue 1.7x 1.7x 1.8x 1.8x 1.9x 2.0x 2.0x 2.1x 2.1x 2.2x 2.2x 2.3x
CY 2000 Revenue 1.6x 1.7x 1.7x 1.8x 1.8x 1.9x 2.0x 2.0x 2.1x 2.1x 2.2x 2.2x
CY 2001 Revenue 1.3x 1.3x 1.4x 1.4x 1.5x 1.5x 1.6x 1.6x 1.6x 1.7x 1.7x 1.8x
LTM EPS 27.8x 28.4x 29.0x 29.5x 30.1x 30.7x 31.3x 31.8x 32.4x 33.0x 33.5x 34.1x
CY 2000 EPS 30.1x 30.7x 31.3x 31.9x 32.5x 33.1x 33.7x 34.4x 35.0x 35.6x 36.2x 36.8x
CY 2001 EPS 26.6x 27.2x 27.7x 28.3x 28.8x 29.3x 29.9x 30.4x 31.0x 31.5x 32.1x 32.6x
Book Value 2.4x 2.4x 2.5x 2.5x 2.6x 2.6x 2.7x 2.7x 2.8x 2.8x 2.9x 2.9x
</TABLE>
(1) Swan's closing stock price on 9/27/00 = $28.94.
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HISTORICAL TRADING ANALYSIS OF SWAN
6/22/99 - 9/27/00 (1)
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Trading Data
--------------------------------------
Price Percentage
Range Traded
Less than $24.00 4%
Less than $28.00 23%
Less than $32.00 38%
Less than $36.00 58%
Less than $40.00 67%
Less than $44.00 70%
Less than $48.00 80%
Less than $52.00 84%
Less than $56.00 91%
Less than $60.00 100%
* The Weighted Average Stock Price is $37.59
[BAR GRAPH]
(1) 6/22/99 was the date of Swan's Secondary Offering
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A D V A N C I N G I D E A S
APPENDIX A:
PUBLIC COMPARABLE COMPANY ANALYSIS DETAIL
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PUBLIC COMPARABLE COMPANY ANALYSIS - SWAN
<TABLE>
<CAPTION>
----------------
Online Brokers/
Market Makers(1)
----------------
------------------
SWAN MEAN MEDIAN
------------------ ---- ------
SELECTED LTM OPERATING DATA:
<S> <C> <C> <C>
Revenues (in Millions) $400.9 $1,492.1 $904.5
Operating Margin 14.9% 27.8% 27.9%
Net Margin 7.7% 15.8% 17.5%
Historical Two-Year Revenue Growth 66.7% 65.7% 72.3%
Historical Two-Year EPS Growth 60.0% 32.9% 36.1%
Projected Five-Year EPS Growth 55.0% 26.7% 25.5%
Total Debt/Capital 0.0% 28.8% 28.4%
SELECTED VALUATION DATA:
P/E Ratios:
LTM 16.4x 28.8x 20.8x
2000 Calendar Estimate 17.8x 26.4x 19.1x
2001 Calendar Estimate 15.7x 26.3x 20.7x
P/B Ratio 1.4x 6.6x 5.3x
Company Value/LTM Operating Income 3.8x 18.8x 19.3x
Market Capitalization (in Millions) (2) $618.4 $8,718.6 $3,688.1
</TABLE>
(1) Comparable Companies Include: amtd, dir, egrp, itg, nite, lab, sch, twe
(2) Market capitalization is on a fully diluted basis; treasury stock
method applied.
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PUBLIC COMPARABLE COMPANY ANALYSIS - POTENTIAL BUYERS
<TABLE>
<CAPTION>
--------------------
Traditional
Brokers (1)
------------- --------- --------------------
DEUTSCHE BANK CITIGROUP MEAN MEDIAN
------------- --------- ---- ------
SELECTED LTM OPERATING DATA:
----------------------------
<S> <C> <C> <C> <C>
Revenues (in Millions) $24,579.8 $61,675.0 $16,983.4 $17,106.0
Operating Margin 29.6% 29.8% 27.4% 30.0%
Net Margin 16.4% 18.9% 16.3% 14.5%
Historical Two-Year Revenue Growth 95.8% 6.5% 16.4% 11.6%
Historical Two-Year EPS Growth 14.5% 28.3% 18.6% 12.7%
Projected Five-Year EPS Growth 10.9% 14.1% 13.1% 13.5%
Total Debt/Capital 87.5% 69.1% 86.0% 93.0%
SELECTED VALUATION DATA:
-------------------------
P/E Ratios:
LTM 11.4x 20.9x 17.7x 17.0x
2000 Calendar Estimate 19.7x 19.2x 17.3x 17.0x
2001 Calendar Estimate 17.8x 17.2x 16.1x 16.0x
P/B Ratio 2.3x 4.7x 4.1x 3.5x
Company Value/LTM Operating Income 26.7x 18.3x 24.3x 23.2x
Market Capitalization (in Millions) (2) $51,922.6 $241,357.4 $54,952.1 $53,785.6
</TABLE>
(1) Comparable Companies Include: axp, dlj, fbf, gs, leh, mer, mwd, wfc
(2) Market capitalization is on a fully diluted basis; treasury stock method
applied.
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PUBLIC COMPARABLE COMPANY ANALYSIS DETAIL - SWAN
<TABLE>
<CAPTION> ---------------------------------------------------------
Latest Twelve Months ("LTM") Data
--------------------------------------------------------- AVERAGE
LTM OPERATING NET MARKET DAILY
TICKER QUARTER OPERATING MARGIN NET MARGIN VALUE VOLUME
SYMBOL COMPANY DATE REVENUES INCOME (1) (%) INCOME (%) OF EQUITY (000S)
------ ------- ---- -------- ---------- --- ------ --- --------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ONLINE BROKERS / MARKET MAKERS
amtd Ameritrade Hldg Corp -Cl A 6/00 $586.8 $47.2 8.0 ($23.1) NM $2,985.9 2,890.7
dir Dljdirect 6/00 $329.4 $13.1 4.0 $1.7 0.5 $ 648.0 336.2
egrp E Trade Group Inc 6/00 $1,587.1 $308.1 19.4 ($49.0) NM $5,066.3 6,393.0
itg Investment Technology Gp Inc 6/00 $281.7 $109.0 38.7 $62.3 22.1 $1,271.6 154.2
nite Knight Trading Group Inc 6/00 $1,222.3 $474.9 38.8 $284.0 23.2 $4,390.2 4,588.8
lab Labranche & Co Inc 6/00 $263.9 $152.8 57.9 $ 63.4 24.0 $1,414.6 112.7
sch Schwab (Charles) Corp 6/00 $6,196.6 $2,004.8 32.4 $732.2 11.8 $47,083.2 5,710.3
twe Td Waterhouse Grp Inc 7/00 $1,469.1 $345.9 23.5 $189.1 12.9 $6,888.6 567.7
--------------------------------------------------------------------------------------------------------------------
Mean 27.8 15.8
Median 27.9 17.5
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Swan 8/00 $400.9 $59.8 14.9 $30.9 7.7 $618.4 401.1
<CAPTION>
9/27/00
STOCK -------------------
LTM STOCK PRICE AS 52 WEEK PRICE RANGE
TICKER QUARTER PRICE A % OF 52 -------------------
SYMBOL COMPANY DATE 9/27/00 WEEK HIGH LOW HIGH
------ ------- ---- ------- --------- --- ----
<S> <C> <C> <C> <C> <C>
ONLINE BROKERS / MARKET MAKERS
amtd Ameritrade Hldg Corp -Cl A 6/00 $16.94 54.6% $10.50 - $31.00
dir Dljdirect 6/00 $6.31 31.7% $6.06 - $19.94
egrp E Trade Group Inc 6/00 $16.00 40.0% $13.13 - $40.00
itg Investment Technology Gp Inc 6/00 $38.88 73.8% $17.81 - $52.69
nite Knight Trading Group Inc 6/00 $33.81 56.3% $21.69 - $60.06
lab Labranche & Co Inc 6/00 $29.06 77.5% $9.06 - $37.50
sch Schwab (Charles) Corp 6/00 $33.00 73.7% $17.96 - $44.75
twe Td Waterhouse Grp Inc 7/00 $18.13 67.1% $11.44 - $27.00
----------------------------------------------------------------
Mean 59.3%
Median 61.7%
----------------------------------------------------------------
Swan 8/00 $28.94 48.8% $20.38 - $59.25
</TABLE>
Financial data provided by Compustat Data Service.
(1) Operating Income is figured after Depreciation and Amortization
Analyst: DC
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PUBLIC COMPARABLE COMPANY ANALYSIS DETAIL - SWAN
<TABLE>
<CAPTION>
------------------------------- ------------ ---------------------------------------
P/E Ratios P/B Ratio Revenue Multiples
------------------------------- ------------ ---------------------------------------
FISCAL LATEST 2000 2001 MARKET "COMPANY "COMPANY "COMPANY
YEAR TWELVE CALENDAR CALENDAR CAP / BOOK VALUE"/ LTM VALUE"/ VALUE"/
COMPANY END MONTHS YEAR YEAR VALUE REVENUE CY 2000 CY 2001
------- --- ------ ---- ---- ----- ------- ------- -------
ONLINE BROKERS / MARKET MAKERS
------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ameritrade Hldg Corp -Cl A 9/99 NEG NM 16.3x 13.9x 5.2x 4.9x 3.3x
Dljdirect 12/99 NM NM 39.5x 2.6x 1.3x 1.2x 0.9x
E Trade Group Inc 9/99 NEG NEG 43.2x 2.7x 5.3x 6.0x 4.2x
Investment Technology Gp Inc 12/99 20.8x 19.1x 16.1x 7.6x 4.1x 3.8x 3.2x
Knight Trading Group Inc 12/99 14.5x 13.5x 12.2x 6.2x 3.0x 2.7x 2.3x
Labranche & Co Inc 12/99 20.3x 17.5x 15.8x 4.3x 6.2x NA NA
Schwab (Charles) Corp 12/99 56.7x 50.4x 42.3x 12.4x 7.3x 7.8x 6.8x
Td Waterhouse Grp Inc 10/99 31.8x 31.8x 25.2x 3.1x 4.5x 4.2x 3.7x
------------------------------------------------------------------------------------------------------------------------------
MEAN 28.8x 26.4x 26.3x 6.6x 4.6x 4.4x 3.5x
MEDIAN 20.8x 19.1x 20.7x 5.3x 4.9x 4.2x 3.3x
------------------------------------------------------------------------------------------------------------------------------
Swan (2) 5/00 16.4x 17.8x 15.7x 1.4x 0.6x 0.6x 0.4x
<CAPTION>
------------------------------ --------------------
Actual and Projected EPS (1) Revenue Estimates
"COMPANY ------------------------------ --------------------
FISCAL VALUE"/ LTM 2000 2001 2000 2001
YEAR OPERATING EPS CALENDAR CALENDAR CALENDAR CALENDAR
COMPANY END INCOME (LTM) YEAR YEAR YEAR YEAR
------- --- ------ ----- ---- ---- ---- ----
Online Brokers / Market Makers
------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ameritrade Hldg Corp -Cl A 9/99 NM ($0.12) $0.04 $1.04 $623 $924
Dljdirect 12/99 33.6x $0.02 $0.02 $0.16 $378 $477
E Trade Group Inc 9/99 27.3x ($0.25) ($0.14) $0.37 $1,403 $2,020
Investment Technology Gp Inc 12/99 10.6x $1.87 $2.04 $2.42 $300 $358
Knight Trading Group Inc 12/99 7.8x $2.33 $2.51 $2.77 $1,382 $1,613
Labranche & Co Inc 12/99 10.7x $1.43 $1.66 $1.84 NA NA
Schwab (Charles) Corp 12/99 22.5x $0.58 $0.66 $0.78 $5,751 $6,647
Td Waterhouse Grp Inc 10/99 19.3x $0.57 $0.57 $0.72 $1,582 $1,827
--------------------------------------------------------
MEAN 18.8x
MEDIAN 19.3x
--------------------------------------------------------
Swan (2) 5/00 3.8x $1.76 $1.63 $1.84 $412 $519
</TABLE>
(1) Estimates provided as of 9/27/00 by IBES.
(2) Estimates provided by U.S. Bancorp Piper Jaffray Research.
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PUBLIC COMPARABLE COMPANY ANALYSIS DETAIL - SWAN
<TABLE>
<CAPTION>
FISCAL YEAR END
COMPOUND
----------------------------------- REVENUE %
Revenues GROWTH RATES (1)
LATEST ----------------------------------- (-2 YEARS TO
COMPANY YEAR -2 YEARS -1 YEAR LATEST YEAR LATEST YEAR)
------- ---- -------- ------- ----------- ------------
ONLINE BROKERS / MARKET MAKERS
<S> <C> <C> <C> <C> <C>
Ameritrade Hldg Corp -Cl A 9/99 $92.2 $158.3 $315.2 84.9
Dljdirect 12/99 $67.2 $117.9 $238.1 88.2
E Trade Group Inc 9/99 $234.1 $335.8 $694.8 72.3
Investment Technology Gp Inc 12/99 $137.0 $212.2 $232.0 30.1
Knight Trading Group Inc 12/99 $226.6 $355.8 $800.8 88.0
Labranche & Co Inc 12/99 $ 67.6 $126.4 $201.0 72.4
Schwab (Charles) Corp 12/99 $2,845.2 $3,388.1 $4,713.2 28.7
Td Waterhouse Grp Inc 10/99 $446.6 $614.5 $1,153.1 60.7
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Mean 65.7
Median 72.3
----------------------------------------------------------------------------------------------------------
Swan 5/00 $ 138.8 $ 207.9 $ 385.8 66.7
<CAPTION>
FISCAL YEAR END
------------------------------- COMPOUND 5-YEAR
Earnings Per Share GROWTH RATES(1) ESTIMATED
LATEST ------------------------------- (-2 YEARS TO EPS%
COMPANY YEAR -2 YEARS -1 YEAR LATEST YEAR LATEST YEAR) GROWTH RATE
------- ---- -------- ------- ----------- ------------ -----------
Online Brokers / Market Makers
<S> <C> <C> <C> <C> <C> <C>
Ameritrade Hldg Corp -Cl A 9/99 $0.08 $0.00 $0.07 -8.3 34.8
Dljdirect 12/99 NA NA $0.07 NA 33.0
E Trade Group Inc 9/99 $0.10 ($0.01) ($0.23) NM 35.3
Investment Technology Gp Inc 12/99 $0.93 $1.48 $1.48 26.3 21.0
Knight Trading Group Inc 12/99 $0.54 $0.70 $1.52 67.8 28.3
Labranche & Co Inc 12/99 NA $0.06 $0.72 NA 17.3
Schwab (Charles) Corp 12/99 $0.23 $0.29 $0.49 45.8 21.5
Td Waterhouse Grp Inc 10/99 NA $0.15 $0.28 NA 22.6
------------------------------------------------------------------------------------------------------------------------
Mean 32.9 26.7
Median 36.1 25.5
------------------------------------------------------------------------------------------------------------------------
Swan 5/00 $0.75 $1.30 $1.92 60.0 55.0
</TABLE>
(1) Calculated using three data
points.
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<PAGE>
PUBLIC COMPARABLE COMPANY ANALYSIS DETAIL - SWAN
<TABLE>
<CAPTION>
--------------------------
Book Value
--------------------------
QUARTERLY QUARTERLY RECENT FULLY DILUTED
INTANGIBLE STOCKHOLDERS' PRICE SHARES MARKET
COMPANY ASSETS EQUITY 9/27/00 X (000S) (1) = CAPITALIZATION +
------- ------ ------ ------- ---------- --------------
ONLINE BROKERS / MARKET MAKERS
------------------------------
<S> <C> <C> <C> <C> <C>
Ameritrade Hldg Corp -Cl A $12.8 $215.4 $16.94 176,289 $2,985.9
Dljdirect $0.0 $245.4 $6.31 102,650 $648.0
E Trade Group Inc $0.0 $1,859.6 $16.00 316,647 $5,066.3
Investment Technology Gp Inc $0.8 $167.3 $38.88 32,710 $1,271.6
Knight Trading Group Inc $18.5 $706.1 $33.81 129,841 $4,390.2
Labranche & Co Inc $170.3 $326.5 $29.06 48,675 $1,414.6
Schwab (Charles) Corp $45.1 $3,798.7 $33.00 1,426,763 $47,083.2
Td Waterhouse Grp Inc $654.1 $2,187.6 $18.13 380,059 $6,888.6
Swan $0.0 $450.8 $28.94 21,371 $618.4
<CAPTION>
-------------------------------------------------------------
Latest Quarterly Data
-------------------------------------------------------------
LONG-TERM SHORT-TERM PREFERRED CASH ON "COMPANY
COMPANY DEBT + DEBT + STOCK - BALANCE SHEET = VALUE"
------- ---- ---- ----- --------------- - ------
ONLINE BROKERS / MARKET MAKERS
------------------------------
<S> <C> <C> <C> <C> <C>
Ameritrade Hldg Corp -Cl A $200.0 $35.0 $0.0 $147.4 $3,073.5
Dljdirect $0.0 $0.0 $0.0 $208.5 $439.5
E Trade Group Inc $3,538.6 $0.0 $0.0 $178.9 $8,426.1
Investment Technology Gp Inc $0.0 $0.0 $0.0 $121.1 $1,150.5
Knight Trading Group Inc $0.0 $0.0 $0.0 $701.5 $3,688.7
Labranche & Co Inc $361.7 $46.5 $0.0 $193.6 $1,629.2
Schwab (Charles) Corp $829.1 $269.1 $0.0 $3,117.2 $45,064.2
Td Waterhouse Grp Inc $1,148.8 $0.0 $11.9 $1,367.3 $6,682.0
Swan $0.0 $0.0 $0.0 $391.1 $227.3
</TABLE>
(1) Fully diluted shares calculated using the treasury stock method.
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<PAGE>
<TABLE>
<CAPTION>
PUBLIC COMPARABLE COMPANY ANALYSIS DETAIL - POTENTIAL BUYERS
-------------------------------------------------------------------------
Latest Tweleve Months ("LTM") Data
-------------------------------------------------------------------------
LTM OPERATING NET MARKET
TICKER QUARTER OPERATING MARGIN NET MARGIN VALUE
SYMBOL COMPANY DATE REVENUES INCOME (1) (%) INCOME (%) OF EQUITY
------- ------------------ ---------- ---------- ---------- --------- ------ ------ ---------
TRADITIONAL BROKERS
-------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
axp American Express 6/00 $21,430.0 $3,706.0 17.3 $2,650.0 12.4 $78,672.8
dlj Donaldson Lufkin & Jenrette 6/00 $ 6,430.2 $1,144.2 17.8 $ 720.8 11.2 $15,044.7
fbf Fleetboston Financial Corp 6/00 $15,495.0 $4,336.0 28.0 $2,481.0 16.0 $35,756.3
gs Goldman Sachs Group Inc 8/00 $16,648.0 $5,319.0 31.9 $1,676.2 10.1 $53,603.8
leh Lehman Brothers Holdings Inc 5/00 $ 6,724.0 $2,208.0 32.8 $1,511.0 22.5 $19,274.7
mer Merrill Lynch & 6/00 $25,107.0 $5,004.0 19.9 $3,275.0 13.0 $53,967.3
mwd Morgan Stanley Dean Witter 8/00 $26,469.0 $9,272.0 35.0 $5,881.0 22.2 $105,547.1
wfc Wells Fargo & Co 6/00 $17,564.0 $6,360.0 36.2 $3,981.0 22.7 $77,749.9
MEAN 27.4 16.3
MEDIAN 30.0 14.5
c Citigroup Inc (Salomon Smith Barney) 6/00 $61,675.0 $18,361.0 29.8 $11,652.0 18.9 $241,357.4
dbk gr Deutsche Bank (2) 6/00 $24,579.8 $7,274.6 29.6 $4,024.6 16.4 $51,922.6
<CAPTION>
Public Comparable Company Analysis Detail - Potential Buyers
9/27/00
AVERAGE STOCK
LTM DAILY STOCK PRICE AS 52 WEEK PRICE RANGE
TICKER QUARTER VOLUME PRICE A % OF 52 --------------------
SYMBOL COMPANY DATE (000S) 9/27/00 WEEK HIGH LOW HIGH
------- -------------------- ------- -------- ------- --------- ------- -----------
TRADITIONAL BROKERS
-------------------
<S> <C> <C> <C> <C> <C> <C> <C>
asp American Express 5,537.4 $58.63 94.2% $39.83 - $62.25
dlj Donaldson Lufkin & Jenrette 597.4 $89.06 99.5% $36.50 - $89.50
fbf Fleetboston Financial Corp 2,570.8 $38.94 88.4% $25.13 - $44.06
gs Goldman Sachs Group Inc. 1,448.8 $107.06 80.1% $57.94 - $133.63
leh Lehman Brothers Holdings Inc 1,217.2 $140.81 87.9% $53.56 - $160.25
mer Merrill Lynch & Co 5,739.4 $63.50 85.1% $31.19 - $74.63
mwd Morgan Stanley Dean Witter 3,741.7 $86.81 78.9% $42.97 - $110.00
wfc Wells Fargo & Co 4,123.7 $46.31 92.7% $31.38 - $49.94
MEAN 88.4%
MEDIAN 88.1%
c Citigroup Inc. (Salomon Smith Barney) 13,238.1 $52.38 88.6% $31.55 - $59.13
dbk gr Deutsche Bank (2) 6,370.9 $84.21 93.0% $53.77 - $90.53
Financial data provided by Compustat Data Service.
(1) Operating Income is figured after Depreciation and Amortization
(2) Exchange rate of 1.14 euros per dollar applied for Deutsche Bank.
</TABLE>
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<PAGE>
PUBLIC COMPARABLE COMPANY ANALYSIS DETAIL - POTENTIAL BUYERS
<TABLE>
<CAPTION>
--------------------------- --------- -------------------------------
P/E Ratios P/B Ratio Revenue Multiples
--------------------------- --------- -------------------------------
FISCAL LATEST 2000 2001 MARKET "COMPANY "COMPANY "COMPANY
YEAR TWELVE CALENDAR CALENDAR CAP / BOOK VALUE"/ LTM VALUE"/ VALUE"/
COMPANY END MONTHS YEAR YEAR VALUE REVENUE CY 2000 CY 2001
----------------------------------------- ------ ------ -------- -------- ------ ------- ------- -------
TRADITIONAL BROKERS
-------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
American Express 12/99 30.1 28.3x 24.9x 7.5x 4.8x 4.6x 4.2x
Donaldson Lufkin & Jenrette 12/99 17.9x 18.4x 17.8x 3.5x 12.2x 12.7x 11.8x
Fleetboston Financial Corp 12/99 12.3x 11.5x 10.5x 2.3x 4.3x 4.4x 4.2x
Goldman Sachs Group Inc 11/99 16.7 16.8x 15.9x 4.5x 13.6x 13.5x 12.3x
Lehman Brothers Holdings Inc 11/99 11.6x 11.5x 11.3x 2.7x 32.3x 27.4x 25.1x
Merrill Lynch & Co 12/99 16.9x 16.3x 16.0x 3.4x 10.0x 9.4x 8.7x
Morgan Stanley Dean Witter 11/99 17.0x 17.3x 16.3x 5.8x 12.4x 11.6x 9.8x
Wells Fargo & Co 12/99 19.4 18.3x 16.0x 3.4x 6.7x 6.6x 6.1x
------------------------------------------------------------------------------------------------------------------------------
MEAN 17.7X 17.3X 16.1X 4.1X 12.0X 11.3X 10.3X
MEDIAN 17.0X 17.0X 16.0X 3.5X 11.1X 10.5X 9.3X
------------------------------------------------------------------------------------------------------------------------------
Citigroup Inc (Salomon Smith Barney) 12/99 20.9x 19.2x 17.2x 4.7x 5.4x 4.9x 4.3x
Deutsche Bank (2) 12/99 11.4x 19.7x 17.8x 2.3x 7.9x 9.4x 9.0x
<CAPTION>
--------------------------------- ----------------------
Actual and Projected EPS(1) Revenue Estimates
"COMPANY --------------------------------- ----------------------
VALUE"/ LTM 2000 2001 2000 2001
OPERATING EPS CALENDAR CALENDAR CALENDAR CALENDAR
COMPANY INCOME (LTM) YEAR YEAR YEAR YEAR
------------------------------------ --------- -------- -------- -------- --------- ---------
TRADITIONAL BROKERS
-------------------
<S> <C> <C> <C> <C> <C> <C>
American Express 27.9x $ 1.95 2.07 $ 2.35 $ 22,357 $ 24,895
Donaldson Lufkin & Jenrette NM $ 4.98 4.85 $ 5.00 $ 6,167 $ 6,620
Fleetboston Financial Corp 15.4x $ 3.16 3.39 $ 3.73 $ 15,065 $ 15,888
Goldman Sachs Group Inc NM $ 6.40 6.39 $ 6.72 $ 16,700 $ 18,300
Lehman Brothers Holdings Inc NM $ 12.12 12.22 $ 12.50 $ 7,926 $ 8,667
Merrill Lynch & Co NM $ 3.75 3.89 $ 3.98 $ 26,630 $ 28,582
Morgan Stanley Dean Witter 35.5x $ 5.11 5.03 $ 5.34 $ 28,338 $ 33,480
Wells Fargo & Co 18.5x $ 2.39 2.53 $ 2.90 $ 17,913 $ 19,222
----------------------------------------------
MEAN 24.3X
MEDIAN 23.2X
----------------------------------------------
Citigroup Inc (Salomon Smith Barney) 18.1x $ 2.51 $ $2.73 $ 3.04 $ 68,000 $ 78,000
Deutsche Bank (2) 26.7x $ 7.40 $ $4.27 $ 4.74 $ 20,705 $ 21,604
</TABLE>
(1) Estimates provided as of 9/27/00 by IBES.
(2) Exchange rate of 1.14 euros per dollar applied for Deutsche Bank.
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<PAGE>
PUBLIC COMPARABLE COMPANY ANALYSIS DETAIL - POTENTIAL BUYERS
<TABLE>
<CAPTION>
FISCAL YEAR END
COMPOUND
------------------------------------------- REVENUE %
Revenues GROWTH RATES (1)
LATEST -------------------------------------------- (-2 YEARS TO
COMPANY YEAR -2 YEARS -1 YEAR LATEST YEAR LATEST YEAR)
--------------------------------------------- ------ ------------- ---------- ------------ -----------------
<S> <C> <C> <C> <C> <C>
TRADITIONAL BROKERS
-------------------
American Express 12/99 $ 17,760.0 $ 19,072.0 $ 22,405.0 12.3
Donaldson Lufkin & Jenrette 12/99 $ 7,499.5 $ 8,452.4 $ 10,395.8 17.7
Fleetboston Financial Corp 12/99 $ 8,095.0 $ 10,002.0 $ 19,976.0 57.1
Goldman Sachs Group Inc 11/99 $ 20,433.0 $ 22,478.0 $ 25,363.0 11.4
Lehman Brothers Holdings Inc 11/99 $ 16,883.0 $ 19,894.0 $ 18,989.0 6.1
Merrill Lynch & Co 12/99 $ 31,209.0 $ 34,436.0 $ 34,879.0 5.7
Morgan Stanley Dean Witter 11/99 $ 27,132.0 $ 31,131.0 $ 33,928.0 11.8
Wells Fargo & Co 12/99 $ 13,183.0 $ 13,872.0 $ 15,730.0 9.2
----------------------------------------------------------------------------------------------------------------------------
MEAN 16.4
MEDIAN 11.6
-----------------------------------------------------------------------------------------------------------------------------
Citigroup Inc (Salomon Smith Barney) 12/99 $ 72,306.0 $ 76,431.0 $ 82,005.0 6.5
Deutsche Bank (2) 12/99 $ 4,858.8 $ 11,672.8 $ 18,631.6 95.8
<CAPTION>
FISCAL YEAR END
COMPOUND
------------------------------------------- REVENUE %
Earnings Per Share GROWTH RATES (1)
LATEST -------------------------------------------- (-2 YEARS TO
COMPANY YEAR -2 YEARS -1 YEAR LATEST YEAR LATEST YEAR)
--------------------------------------------- ------ ------------- ---------- ------------ -----------------
<S> <C> <C> <C> <C> <C>
Traditional Brokers
-------------------
American Express 12/99 $ 1.43 $ 1.57 $ 1.85 13.6
Donaldson Lufkin & Jenrette 12/99 $ 3.59 $ 2.93 $ 4.03 6.0
Fleetboston Financial Corp 12/99 $ 2.45 $ 2.61 $ 2.91 9.1
Goldman Sachs Group Inc 11/99 NA $ 2.62 $ 5.69 NA
Lehman Brothers Holdings Inc 11/99 $ 4.72 $ 5.37 $ 8.53 34.4
Merrill Lynch & Co 12/99 $ 2.82 $ 1.72 $ 3.50 11.5
Morgan Stanley Dean Witter 11/99 $ 2.13 $ 2.90 $ 4.33 42.7
Wells Fargo & Co 12/99 $ 1.78 $ 1.18 $ 2.26 12.7
---------------------------------------------------------------------------------------------------------------------------------
MEAN 18.6
MEDIAN 12.7
---------------------------------------------------------------------------------------------------------------------------------
Citigroup Inc (Salomon Smith Barney) 12/99 $ 1.35 $ 1.25 $ 2.21 28.3
Deutsche Bank (2) 12/99 $ 2.84 $ 2.78 $ 3.73 14.5
<CAPTION>
5-YEAR
ESTIMATED
LATEST EPS %
COMPANY YEAR GROWTH RATE
--------------------------------------------- ------ -----------
<S> <C> <C>
Traditional Brokers
-------------------
American Express 12/99 13.6
Donaldson Lufkin & Jenrette 12/99 10.8
Fleetboston Financial Corp 12/99 13.9
Goldman Sachs Group Inc 11/99 13.3
Lehman Brothers Holdings Inc 11/99 11.7
Merrill Lynch & Co 12/99 13.6
Morgan Stanley Dean Witter 11/99 14.3
Wells Fargo & Co 12/99 13.4
-------------------------------------------------------------------------
MEAN 13.1
MEDIAN 13.5
---------------------------------------------------------------------------
Citigroup Inc (Salomon Smith Barney) 12/99 14.1
Deutsche Bank (2) 12/99 10.9
</TABLE>
(1) Calculated using three data points.
(2) Exchange rate of 1.14 euros per dollar applied for Deutsche Bank.
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<PAGE>
PUBLIC COMPARABLE COMPANY ANALYSIS DETAIL - POTENTIAL BUYERS
<TABLE>
<CAPTION>
------
Book Value
------
QUARTERLY QUARTERLY RECENT FULLY DILUTED
INTANGIBLE STOCKHOLDERS' PRICE SHARES MARKET
COMPANY ASSETS EQUITY 9/27/00 X (000S) (1) = CAPITALIZATION
------- ------ ------ --------- ---------- --------------
TRADITIONAL BROKERS
-------------------
<S> <C> <C> <C> <C> <C>
American Express $17.0 $10,509.0 $58.63 1,341,966 $78,672.8
Donaldson Lufkin & Jenrette $0.0 $4,317.2 $89.06 168,923 $15,044.7
Fleetboston Financial Corp $7,489.0 $15,217.0 $38.94 918,300 $35,756.3
Goldman Sachs Group Inc $1,604.0 $11,905.0 $107.06 500,678 $53,603.8
Lehman Brothers Holdings Inc $138.0 $7,096.0 $140.81 136,882 $19,274.7
Merrill Lynch & Co $4,952.0 $15,727.0 $63.50 849,879 $53,967.3
Morgan Stanley Dean Witter $0.0 $18,110.0 $86.81 1,215,806 $105,547.1
Wells Fargo & Co $13,701.0 $23,127.0 $46.31 1,678,810 $77,749.9
Citigroup Inc (Salomon Smith Barney) $3,126.0 $51,576.0 $52.38 4,608,255 $241,357.4
Deutsche Bank (2) $2,113.2 $23,047.4 $84.21 616,581 $51,922.6
<CAPTION>
---------------------------------------------------------
Latest Quarterly Data
---------------------------------------------------------
LONG-TERM SHORT-TERM PREFERRED CASH ON "COMPANY
DEBT + DEBT + STOCK - BALANCE SHEET = VALUE"
---- ---- ----- ------------- ------
TRADITIONAL BROKERS
-------------------
<S> <C> <C> <C> <C> <C>
American Express $ 5,336.0 $ 26,170.0 $ 0.0 $ 6,841.0 $ 103,337.8
Donaldson Lufkin & Jenrette $ 7,558.5 $ 67,285.8 $ 375.0 $ 12,021.8 $ 78,242.2
Fleetboston Financial Corp $ 27,733.0 $ 15,578.0 $ 566.0 $ 12,755.0 $ 66,878.3
Goldman Sachs Group Inc $ 24,734.0 $157,033.0 $ 0.0 $ 9,543.0 $ 225,827.8
Lehman Brothers Holdings Inc $ 34,243.0 $169,061.0 $ 850.0 $ 5,991.0 $ 217,437.7
Merrill Lynch & Co $ 64,211.0 $158,500.0 $ 425.0 $ 27,039.0 $ 250,064.3
Morgan Stanley Dean Witter $ 28,844.0 $211,731.0 $ 490.0 $ 17,856.0 $ 328,756.1
Wells Fargo & Co $ 27,424.0 $ 26,304.0 $ 265.0 $ 14,168.0 $ 117,574.9
Citigroup Inc (Salomon Smith Barney) $ 56,216.0 $ 45,089.0 $ 1,775.0 $ 12,229.0 $ 332,208.4
Deutsche Bank (2) $ 161,104.4 $0.0 $ 0.0 $ 18,615.8 $ 194,411.2
</TABLE>
(1) Fully diluted shares calculated using the
treasury stock method.
(2) Exchange rate of 1.14 euros per dollar applied
for Deutsche Bank.
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<PAGE>
A D V A N C I N G I D E A S
APPENDIX B:
COMPARABLE M&A TRANSACTIONS
<PAGE>
COMPARABLE M&A ANALYSIS - FINANCIAL SERVICES/E-FINANCE
<TABLE>
<CAPTION>
DATE DATE
ANNOUNCED EFFECTIVE TARGET NAME TARGET BUSINESS DESCRIPTION ACQUIROR NAME
--------- --------- ----------- --------------------------- -------------
<S> <C> <C> <C> <C>
09/11/2000 Pending Spear Leeds & Kellogg Securities brokerage Goldman Sachs Group Inc
08/30/2000 Pending Donaldson Lufkin & Jenrette Investment bank and securities processing Credit Suisse First Boston
06/05/2000 Pending Herzog Heine Geduld Security brokers, dealers Merrill Lynch & Co Inc
02/02/2000 03/31/2000 CyBerCorp Pvd online day-trading svcs Charles Schwab Corp
11/18/1999 01/12/2000 Arbitrade Holdings LLC Pvd options market svcs Knight Trimark Group
06/01/1999 01/13/2000 TeleBanc Financial Corp,VA Savings and loan holding co E*Trade Group Inc
<CAPTION>
----------------------------------------------------
Valuation Metrics
----------------------------------------------------
TARGET TARGET
NET NET
VALUE OF SALES INCOME BOOK TRANSACTION TRANSACTION TRANSACTION
DATE TRANSACTION LTM LTM VALUE VALUE / LTM VALUE / LTM VALUE / 1 DAY
ANNOUNCED ($ MIL) ($MIL) ($MIL) ($MIL) SALES NET INCOME BOOK PREMIUM
--------- ------- ------ ------ ------ ----- ---------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
09/11/2000 $ 6,324.5 $3,600.00 (1) $1,171.20 (1) $1,916.5 1.8x 5.4x 3.3x NA
08/30/2000 $18,312.5 $8,710.7 (2) $ 720.8 (2) $4,317.2 2.1x 25.4x 4.2x 9.9%
06/05/2000 $ 913.8 $ 476.2 (3) $ 80.0 (3) NA 1.9x 11.4x NA NA
02/02/2000 $ 488.1 $ 25.0 $ 4.0 NA 19.5x NM NA NA
11/18/1999 $ 458.1 $ 98.9 (4) $ 52.5 (4) NA 4.6x 8.7x NA NA
06/01/1999 $ 1,474.6 $ 74.0 (5) ($0.4) (5) $ 118.9 19.9x NEG 12.4x 40.5%
--------------------------------------------------------------
High 19.9x 25.4x 12.4x 40.5%
Mean 8.3x 12.7x 6.6x 25.2%
Median 3.4x 10.1x 4.2x 25.2%
Low 1.8x 5.4x 3.3x 9.9%
--------------------------------------------------------------
<CAPTION>
------------------------------------
Valuation Metrics
------------------------------------
ACQUISITION
PRICE AS %
DATE 1 WEEK 1 MONTH 52-WEEK
ANNOUNCED PREMIUM PREMIUM HIGH
--------- ------- ------- ----
<S> <C> <C> <C>
09/11/2000 NA NA NA
08/30/2000 49.2% 70.4% 109.3%
06/05/2000 NA NA NA
02/02/2000 NA NA NA
11/18/1999 NA NA NA
06/01/1999 37.4% -14.0% 123.2%
--------------------------------------------------
High 49.2% 70.4% 123.2%
Mean 43.3% 28.2% 116.2%
Median 43.3% 28.2% 116.2%
Low 37.4% -14.0% 109.3%
--------------------------------------------------
</TABLE>
(1) Financial data for Spear Leeds & Kellogg per Prudential equity research,
for twelve months ended September 30, 2000.
(2) Net Sales and Net Income reflect the last twelve months ending June 30,
2000.
(3) Financial data for Herzog Heine Geduld per Salomon Smith Barney equity
research, for twelve months ended December 31, 1999 and 2000; assumes a 40%
tax rate.
(4) Assumes Arbitrade's nine months revenue of $74.2 MM and net income of $39.4
MM on an annualized basis.
(5) Revene and Net Income data for twelve months ended June 30, 1999.
Data Source: SDC Platinum
1/1/96 - 9/28/00
MARKET MAKERS ONLY
<TABLE>
<CAPTION>
VALUE OF
DATE DATE TRANSACTION
ANNOUNCED EFFECTIVE TARGET NAME TARGET BUSINESS DESCRIPTION ACQUIROR NAME ($ MIL)
--------- --------- ----------- --------------------------- ------------- -------
<S> <C> <C> <C> <C> <C>
09/11/2000 Pending Spear Leeds & Kellogg Securities brokerage Goldman Sachs Group Inc $ 6,324.5
06/05/2000 Pending Herzog Heine Geduld Security brokers, dealers Merrill Lynch & Co Inc $ 913.8
11/18/1999 01/12/2000 Arbitrade Holdings LLC Pvd options market svcs Knight Trimark Group $ 458.1
<CAPTION>
-------------------------
Valuation Metrics
-------------------------
AVG. DAILY
NET NET NET NET SHARE
SALES SALES INCOME INCOME TRADING TRANSACTION TRANSACTION
DATE LTM CY 1E LTM CY 1E BOOK VALUE VOLUME VALUE / LTM VALUE / CY
ANNOUNCED ($MIL) ($MIL) ($MIL) ($MIL) ($MIL) LTM (MIL) SALES '00E SALES
--------- ------ -------- ------ ------ ------ --------- ----- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
09/11/2000 $ 3,600.00 NA (1) $1,171.20 NA $ 1,916.52 (1) 96.8 (4) 1.8x NA
06/05/2000 $ 476.2 $ 553.6 (2) $ 80.0 $ 93.0 NA (2) 149.1 (4) 1.9x 1.7x
11/18/1999 $ 98.9 NA (3) $ 52.5 NA NA (3) NA (4) 4.6x NA
---------------------------------------
High 4.6x 1.7x
Mean 2.8x 1.7x
Median 1.9x 1.7x
Low 1.8x 1.7x
---------------------------------------
<CAPTION>
----------------------------------------------------------
Valuation Metrics
----------------------------------------------------------
TRANSACTION
TRANSACTION VALUE / AVG.
TRANSACTION VALUE / CY DAILY SHARE
DATE VALUE / LTM '00E NET TRANSACTION TRADING
ANNOUNCED NET INCOME INCOME VALUE / BOOK VOLUME
--------- ---------- ------ ------------ ------
<S> <C> <C> <C> <C>
09/11/2000 5.4x NA 3.3x 65.4x
06/05/2000 11.4x 9.8x NA 6.1x
11/18/1999 8.7x NA NA NA
----------------------------------------------------------------------------
High 11.4x 9.8x 3.3x 65.4x
Mean 8.5x 9.8x 3.3x 35.7x
Median 8.7x 9.8x 3.3x 35.7x
Low 5.4x 9.8x 3.3x 6.1x
----------------------------------------------------------------------------
</TABLE>
(1) Financial data for Spear Leeds & Kellogg per Prudential equity research,
for twelve months ended September 30, 2000.
(2) Financial data for Herzog Heine Geduld per Salomon Smith Barnety equity
research, for twelve months ended December 31, 1999 and 2000; Assumes a 40%
tax rate.
(3) Assumes Arbitrade's nine months revenue of $74.2 MM and net income of $39.4
MM on an annualized basis.
(4) Per Autex/BlockDATA; assumes 250 market trading days in one calendar year.
Data Source: SDC Platinum
1/1/96 - 9/28/00
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<PAGE>
COMPARABLE M&A ANALYSIS - TRADITIONAL BROKER/DEALERS
<TABLE>
VALUE OF
DATE DATE TRANSACTION
ANNOUNCED EFFECTIVE TARGET NAME TARGET BUSINESS DESCRIPTION ACQUIROR NAME ($MIL)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
09/28/2000 Pending Dain Rauscher Corp Securities brokerage firm Royal Bank of Canada $ 1,456.0
07/12/2000 Pending PaineWebber Group Inc Investment bank holding co UBS AG $ 20,976.1 (1)
4/28/20000 06/12/2000 JC Bradford & Co Securities brokerage firm PaineWebber Group Inc $ 620.0
02/17/2000 Pending Tokai Maruman
Securities Co Securities brokerage firm Tokyo Securities Co Ltd $ 686.3
09/28/1999 12/10/1999 Hambrecht & Quist
Group Inc Securities brokerage firm Chase Manhattan Corp, NY $ 1,368.0
09/28/1999 03/16/2000 Ragen MacKenzie
Group Inc Pvd securities & invest svcs Wells Fargo & Co, California $ 259.0
08/31/1999 12/01/1999 OLDE Financial Corp Securities brokerage firm H&R Block Inc $ 850.0
06/17/1999 08/13/1999 First Marathon Inc Securities brokerage firm National Bank of Canada $ 465.3
04/26/1999 10/01/1999 EVEREN Capital Corp Securities brokerage firm First Union Corp, Charlotte, NC $ 1,444.5 (4)
10/27/1998 04/01/1999 Interstate/Johnson
Lane Inc Investment banking holding co Wachovia Corp, Winston-Salem, NC $ 230.0
08/20/1998 12/01/1998 Hilliard-Lyons Inc Securities brokerage firm PNC Bank Corp Pittsburgh, PA $ 275.0
06/22/1998 08/27/1998 Midland Walwyn Inc Securities brokers, holding co Merrill Lynch & Co. Inc $ 806.3
06/12/1998 10/26/1998 McDonald & Co
Investments Inc Investment bank KeyCorp, Cleveland, Ohio $ 577.4
12/15/1997 05/01/1998 Piper Jaffray Cos Investment bank, holding co US Bancorp, Minneapolis, MN $ 767.8
09/24/1997 11/28/1997 Salomon Inc Investment bank, final advisory Travelers Group Inc $ 8,852.1
09/16/1997 02/02/1998 Quick & Reilly
Group Inc Securities brokerage firm Fleet Financial Group Inc, MA $ 1,525.5
02/05/1997 05/31/1997 Morgan Stanley
Group Inc Investment bank Dean Witter Discover & Co. $ 10,573.0
04/10/1996 10/15/1996 Waterhouse Investor
Services Discount brokerage holding co Toronto-Dominion Bank $ 547.9
<CAPTION>
---------------------
TARGET TARGET VALUATION METRICS
NET NET ---------------------
SALES INCOME TRANSACTION
DATE DATE LTM LTM BOOK VALUE VALUE / LTM
ANNOUNCED EFFECTIVE TARGET NAME ($MIL) ($MIL) ($MIL) SALES
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
09/28/2000 Pending Dain Rauscher Corp $1,091.4 $ 87.2 $ 469.0 1.3x
07/12/2000 Pending PaineWebber Group Inc $8,168.2 $ 537.6 $ 3,191.0 2.6x
4/28/20000 06/12/2000 JC Bradford & Co $540.0 (2) NA $ 178.0 1.1x
02/17/2000 Pending Tokai Maruman Securities Co $158.5 $ 5.8 NA 4.3x
09/28/1999 12/10/1999 Hambrecht & Quist Group Inc $502.5 $ 78.7 $ 78.6 2.7x
09/28/1999 03/16/2000 Ragen MacKenzie Group Inc $102.4 $ 16.4 $ 28.8 2.5x
08/31/1999 12/01/1999 OLDE Financial Corp $348.6 (3) $ 46.6(3) NA 18.2x
06/17/1999 08/13/1999 First Marathon Inc $166.6 $ 47.6 NA 2.8x
04/26/1999 10/01/1999 EVEREN Capital Corp $817.3 $ 69.2 $ 420.0 1.8x
10/27/1998 04/01/1999 Interstate/Johnson Lane Inc $279.1 $ 14.7 $ 14.2 0.8x
08/20/1998 12/01/1998 Hilliard-Lyons Inc $197.2 NA NA 1.4x
06/22/1998 08/27/1998 Midland Walwyn Inc $473.6 $ 36.0 NA 1.7x
06/12/1998 10/26/1998 McDonald & Co Investments Inc $333.3 $ 36.8 $ 55.5 1.7x
12/15/1997 05/01/1998 Piper Jaffray Cos $601.9 $ 1.0 $ 84.4 1.3x
09/24/1997 11/28/1997 Salomon Inc $8,823.0 $ 767.0 $ 5,088.0 1.0x
09/16/1997 02/02/1998 Quick & Reilly Group Inc $558.7 $ 86.6 $ 429.0 2.7x
02/05/1997 05/31/1997 Morgan Stanley Group Inc $13,144 $ 1,029.0 $ 314.7 0.8x
04/10/1996 10/15/1996 Waterhouse Investor Services $164.9 $ 21.9 $ 81.1 3.3x
--------------------------
High 18.2x
Mean 2.9x
Median 1.7x
Low 0.8x
--------------------------
<CAPTION>
-------------------------------------------
Valuation Metrics
-------------------------------------------
TRANSACTION TRANSACTION
DATE DATE VALUE/LTM VALUE/ 1 DAY 1 WEEK 1 MONTH
ANNOUNCED EFFECTIVE TARGET NAME NET INCOME BOOK PREMIUM PREMIUM PREMIUM
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
09/28/2000 Pending Dain Rauscher Corp 16.7x 3.1x 18.9% 24.0% 18.3%
07/12/2000 Pending PaineWebber Group Inc 39.0x 6.6x 47.2% 64.0% 50.8%
4/28/20000 06/12/2000 JC Bradford & Co NA 3.5x NA NA NA
02/17/2000 Pending Tokai Maruman Securities Co NM NA -2.1% -5.4% -1.5%
09/28/1999 12/10/1999 Hambrecht & Quist Group Inc 17.4x 17.4x 27.4% 26.2% 30.9%
09/28/1999 03/16/2000 Ragen MacKenzie Group Inc 15.8x 9.0x 8.7% 4.5% 40.8%
08/31/1999 12/01/1999 OLDE Financial Corp NA 13.8x NA NA NA
06/17/1999 08/13/1999 First Marathon Inc 9.8x NA 0.0% -5.1% 0.0%
04/26/1999 10/01/1999 EVEREN Capital Corp 20.9x 3.4x 28.5% 34.1% 52.1%
10/27/1998 04/01/1999 Interstate/Johnson Lane Inc 15.6x 16.2x -5.9% 12.3% 5.8%
08/20/1998 12/01/1998 Hilliard-Lyons Inc NA NA NA NA NA
06/22/1998 08/27/1998 Midland Walwyn Inc 22.4x NA 23.9% 37.2% 37.2%
06/12/1998 10/26/1998 McDonald & Co Investments Inc 15.7x 10.4x 0.7% 2.8% 10.2%
12/15/1997 05/01/1998 Piper Jaffray Cos NM 9.1x 25.2% 24.2% 56.0%
09/24/1997 11/28/1997 Salomon Inc 11.5x 1.7x 21.4% 24.1% 34.6%
09/16/1997 02/02/1998 Quick & Reilly Group Inc 17.6x 3.6x 18.2% 33.1% 69.6%
02/05/1997 05/31/1997 Morgan Stanley Group Inc 10.3x 33.6x 11.1% 12.8% 13.8%
04/10/1996 10/15/1996 Waterhouse Investor Services 25.0x 6.8x 15.2% 19.7% 65.2%
---------------------------------------------------------------------------------------------
High 39.0x 33.6x 47.2% 64.0% 69.6%
Mean 18.3x 9.9x 15.9% 20.6% 32.3%
Median 16.7x 7.9x 18.2% 24.0% 34.6%
Low 9.8x 1.7x -5.9% -5.4% -1.5%
---------------------------------------------------------------------------------------------
<CAPTION>
ACQUISITION
PRICE AS %
DATE DATE 52-WEEK
ANNOUNCED EFFECTIVE TARGET NAME HIGH
-----------------------------------------------------------------------------------
<S> <C> <C> <C>
09/28/2000 Pending Dain Rauscher Corp 110.7%
07/12/2000 Pending PaineWebber Group Inc 139.7%
4/28/20000 06/12/2000 JC Bradford & Co NA
02/17/2000 Pending Tokai Maruman Securities Co NA
09/28/1999 12/10/1999 Hambrecht & Quist Group Inc 112.0%
09/28/1999 03/16/2000 Ragen MacKenzie Group Inc 101.7%
08/31/1999 12/01/1999 OLDE Financial Corp NA
06/17/1999 08/13/1999 First Marathon Inc 71.1%
04/26/1999 10/01/1999 EVEREN Capital Corp 104.6%
10/27/1998 04/01/1999 Interstate/Johnson Lane Inc 77.6%
08/20/1998 12/01/1998 Hilliard-Lyons Inc NA
06/22/1998 08/27/1998 Midland Walwyn Inc 126.6%
06/12/1998 10/26/1998 McDonald & Co Investments Inc 97.6%
12/15/1997 05/01/1998 Piper Jaffray Cos 119.2%
09/24/1997 11/28/1997 Salomon Inc 113.9%
09/16/1997 02/02/1998 Quick & Reilly Group Inc 94.6%
02/05/1997 05/31/1997 Morgan Stanley Group Inc 105.1%
04/10/1996 10/15/1996 Waterhouse Investor Services 112.2%
--------------------------------------------------
High 139.7%
Mean 106.2%
Median 107.9%
Low 71.1%
--------------------------------------------------
</TABLE>
(1) Assumes 147.8 million common shares and 41.9 million CSEs at $73.50 per
share.
(2) Per CIBC's report, directly informed by PaineWebber; CIBC believes only
half of this revenue was from personal investing.
(3) Revenue and Net Income data for twelve months ended April 30, 1999.
(4) Assumes 35.2 million common shares and 3.0 million CSEs at $30.53 per
share.
Data Source: SDC Platinum
1/1/96 - 9/28/00
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<PAGE>
A D V A N C I N G I D E A S
APPENDIX C:
POTENTIAL BUYER ACQUISITION HISTORY
<PAGE>
ACQUISITION HISTORY - DEUTSCHE BANK
--------------------------------------------------------------------------------
JUNE 28, 2000 Deutsche Bank AG of Germany agreed to acquire a 22.2% stake,
in Moneyextra PLC, provider of on-line financial services,
from Apax Partners & Co Ltd. Terms were not disclosed
--------------------------------------------------------------------------------
APRIL 27, 2000 Deutsche Bank AG agreed to acquire a 40% stake in Bender
Securities, securities broker. Terms were not disclosed.
--------------------------------------------------------------------------------
APRIL 26, 2000 Deutsche Bank AG of Germany increased its holding to 90.59%
from 89.2% by acquiring shares, in Polish bank Bank
Wspolpracy Regionalnej SA, for $240,000, via its tender
offer to acquire the remaining shares.
--------------------------------------------------------------------------------
MARCH 29, 2000 Deutsche Bank AG raised its stake to 16.3% in National
Discount Brokers Group Inc. by acquiring 3.278 million
common shares. The total transaction value is approximately
$136 million.
--------------------------------------------------------------------------------
MARCH 17, 2000 Deutsche Bank AG acquired an undisclosed majority interest
in Germany company Fuerst Fugger International Trade
Management GmbH, a provider of trade management services.
Terms were not disclosed.
--------------------------------------------------------------------------------
MARCH 9, 2000 Dresdner Bank AG withdrew its plans to merge with Deutsche
Bank AG. The merger was to be a merger of equals via a stock
swap transaction. Dresdner was to have held 36% of the
combined and restructured entity, with Deustche Bank holding
the remaining 64%. Dresdner's stake was valued at an
estimated $29 billion. Dresdner Bank AG's board decided
unanimously to abandon the merger due to persistent conflict
with Deutsche Bank regarding the divestiture of Dresdner
Kleinwort Benson, the investment banking arm of Dresdner
Bank AG.
--------------------------------------------------------------------------------
JANUARY 24, 2000 Deutsche Bank announced that it has raised its stake in
Greek bank Ergobank S.A., Athens, to 9.99% by purchasing a
further 4.99% interest for $204.3 million from EFG
Consolidated Holdings S.A. The total transaction value was
1.3x Ergobank's net income (LTM).
--------------------------------------------------------------------------------
DECEMBER 20, 1999 Deutsche Bank AG acquired a 50% interest in German company
PAGO International Transaktion GmbH & Co KG, a unit of the
BHS Holding subsidiary of Metro Holding AG's Metro AG unit.
PAGO is a provider of ecommerce information services. Terms
were not disclosed.
--------------------------------------------------------------------------------
NOVEMBER 11, 1999 Deutsche Bank AG acquired a 9.74% stake in the consortium
that owns a 54.4% controlling interest in Tradepoint
Financial Networks PLC. Tradepoint is an open market for
U.K. securities. Terms were not disclosed.
--------------------------------------------------------------------------------
OCTOBER 25, 1999 Deutsche Bank AG acquired the Dutch Auction business of
Chase Manhattan Corp. Terms were not disclosed.
--------------------------------------------------------------------------------
OCTOBER 5, 1999 Deutsche Bank AG of Germany acquired an 89.2% interest in
Polish bank Wspolpracy Regionalny (BWR), via a capital
increase valued $ 57.6 million.
--------------------------------------------------------------------------------
SEPTEMBER 16, 1999 Deutsche Bank SpA, a unit of Deutsche Bank AG, acquired a
57.23% interest in Fraer Leasing from Caer Group. Fraer
Leasing provides financial leasing services. Terms were not
disclosed.
--------------------------------------------------------------------------------
JUNE 8, 1999 Deutsche Bank AG acquired a 5% stake in Ergobank SA from EFG
Eurobank SA, a majority-owned unit of Latsis International
Group's Consolidated Eurofinance Holdings unit for $240.7
million. Concurrently, EFG Eurobank raised its interest in
Ergobank to 15.57% and announced a tender offer to increase
its interest further. The transaction value was 1.8x
Ergobank's net income (LTM).
--------------------------------------------------------------------------------
MAY 13, 1999 Deutsche Bank AG acquired the remaining 50% interest, which
it did not already own, in TransAtlantic Capital Co LLC.
TransAtlantic is a mortgage security finance company. Terms
were not disclosed.
--------------------------------------------------------------------------------
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<PAGE>
ACQUISITION HISTORY - DEUTSCHE BANK
--------------------------------------------------------------------------------
APRIL 29, 1999 Deutsche Bank AG increased its stake to 13% from
9.9% in Polish bank BIG Bank Gdanski by acquiring
additional shares in open market transactions.
Terms were not disclosed.
--------------------------------------------------------------------------------
APRIL 14, 1999 Deutsche Bank agreed to acquire a 20% stake in
Italian Bank Cassadi Risparmio di Asti. Terms
were not disclosed.
--------------------------------------------------------------------------------
APRIL 12, 1999 Deutsche Bank AG acquired a 9.9% stake in Polish
bank BIG Bank Gdanski SA in open market
transactions. Terms were not disclosed.
--------------------------------------------------------------------------------
MARCH 3, 1999 Morgan Grenfell Private Equity Ltd, a unit of
Deutsche Bank AG, acquired Neda. Neda is a
domestic and international wholesale trading
company. Terms were not disclosed.
--------------------------------------------------------------------------------
FEBRUARY 4, 1999 Deutsche Bank AG acquired a 41% stake in Newcourt
Credit Group USA Inc, a unit of Newcourt Credit
Group Inc (NCG). Subsequently, CIT Group Inc
agreed to acquire NCG in a stock swap
transaction. Newcourt Credit is a provider of
investment management services. Terms were not
disclosed.
--------------------------------------------------------------------------------
JANUARY 6, 1999 Deutsche Bank AG acquired a 0.75% stake in
Italian bank Unicredito Italiano from Cariverona
(0.7%) and Cassamarca (0.05%). Terms were not
disclosed.
--------------------------------------------------------------------------------
DECEMBER 1, 1998 Deutsche Bank AG acquired a 10% stake in EFG
Eurobank SA, a unit of Latsis International
Group. Terms were not disclosed.
--------------------------------------------------------------------------------
NOVEMBER 30, 1998 Deutsche Bank AG acquired all the outstanding
common stock of BankersTrust New York Corp, a
bank holding company, for $ 93 per share in cash
(approximately $9.1 billion).
--------------------------------------------------------------------------------
JULY 8, 1998 Deutsche Bank acquired a 4.5% in Banca
Commerciale Italiana, a bank holding company, for
a total value of $ 422.8 million in open market
and privately negotiated transactions. The
transaction value was 1.7x Banco Commerciale's
net income (LTM).
--------------------------------------------------------------------------------
JULY 2, 1998 Deutsche Bank acquired Credit Lyonnais Belgium, a
unit of French majority state-owned Credit
Lyonnais SA $593.812 million in cash. Upon
completion, Credit Lyonnais Belgium was renamed
Deutsche Bank SA/NV.
--------------------------------------------------------------------------------
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<PAGE>
ACQUISITION HISTORY - CITIGROUP
--------------------------------------------------------------------------------
SEPTEMBER 13, 2000 Salomon Smith Barney, a member of Citigroup,
announced an agreement to purchase Geneva Group,
Inc., which owns and operates The Geneva
Companies, a U.S. financial advisory firm
specializing in the sale of privately-held,
middle market companies. Terms were not
disclosed.
--------------------------------------------------------------------------------
SEPTEMBER 6, 2000 Citigroup will acquire Associates First Capital
Corp., a consumer finance company, in a merger
under which Associates shareholders will receive
Citigroup common stock. Based on closing prices
on September 5, 2000, the value of the
transaction to Associates shareholders is
approximately $31.1 billion. The transaction is
expected to close on or about year end, and will
be accounted for using the pooling-of-interests
method. The transaction value was 20.6x of
Associate's net income (LTM).
--------------------------------------------------------------------------------
AUGUST 15, 2000 Citigroup announced an agreement to purchase AST
StockPlan Inc., an independent, full-service
provider of stock benefit plan services. AST
currently services over 545 corporate clients,
providing stock benefit administration to more
than 645,000 participants, with a focus on high
tech companies. AST StockPlan will remain a
separate entity servicing its current clients.
Financial terms were not disclosed.
--------------------------------------------------------------------------------
MAY 15 1999 Citigroup Inc. increased its holdings in Polish
bank Handlowy SA to 66% for a total value of
$610.92 million via a tender offer. The
transaction value was 5.6x of Handlowy's net
income (LTM).
--------------------------------------------------------------------------------
MAY 5, 2000 Citigroup Inc. planned to acquire a 15% stake
each of Fubon Securities Co. Ltd., a securities
brokerage firm, Fubon Insurance Co. Ltd., an
insurance company, Fubon Commercial Bank, Fubon
Life Insurance and Fubon Asset Management, a
provider of fund management services. The five
transactions have a combined value of $750
million.
--------------------------------------------------------------------------------
APRIL 6, 2000 Citigroup announced that it has increased the
purchase price being offered in its cash tender
offer for all the publicly-held shares of
Travelers Property Casualty, from $41.50 to
$41.95 per share in cash. The cash consideration
for shares purchased in the subsequent merger
will likewise be increased. All those who have
previously tendered their shares in connection
with the tender offer will receive the higher
price for their shares.
--------------------------------------------------------------------------------
MARCH 21, 1999 Citigroup Inc. completed its tender offer to
acquire the remaining 15% stake that it did not
already own in Travelers Property Casualty Corp.
bringing the transaction value to a total of
$2.449 billion. The transaction value is 1.7x of
Traveler's Property Casualty Corp.'s net income
(LTM).
--------------------------------------------------------------------------------
JANUARY 18, 2000 Salomon Smith Barney Holdings, a unit of
Citigroup Inc.'s Travelers Group, acquired the
worldwide investment banking business of
Schroders PLC for $2.21 billion in cash.
--------------------------------------------------------------------------------
DECEMBER 3, 1999 Citibank Mexico SA, a majority-owned unit of
Citicorp's Citibank subsidiary, exercised its
option to raise its interest to 91% in Afore
Garante, a Mexican closed-end investment fund, by
acquiring shares for $179 million.
--------------------------------------------------------------------------------
NOVEMBER 1, 1999 Citigroup announced that it has reached an
agreement to acquire 19% of Nikko Beans, Inc, an
online securities firm, as part of a strategic
alliance with the Tokyo-based firm recently
formed to offer financial services to consumers
via E-commerce. Terms were not disclosed.
--------------------------------------------------------------------------------
AUGUST 19, 1999 Salomon Smith Barney Inc., a unit of Citigroup
Inc.'s Travelers Group Inc. subsidiary, raised
its interest in KEB Salomon Smith Barney
Securities, a Korean securities brokerage firm,
to 80% by acquiring a 30% stake from its joint
venture partner Korea Exchange Bank. Terms were
not disclosed.
--------------------------------------------------------------------------------
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<PAGE>
ACQUISITION HISTORY - CITIGROUP
--------------------------------------------------------------------------------
AUGUST 17, 1999 An investor group including e-Citi, a unit of
Citigroup Inc., acquired a 40% stake in 724
Solutions Inc. 724 Solutions Inc. provides an
Internet infrastructure solution to financial
institutions that enables them to offer
personalized and secure on line banking,
brokerage and e-commerce services across a wide
range of Internet-enabled wireless and consumer
electronic devices. Further terms were not
disclosed.
--------------------------------------------------------------------------------
APRIL 7, 1999 Citicorp International Finance Corp of the US, a
unit of Citigroup's Citibank NA subsidiary,
agreed to acquire a 7.328% stake in Turkish
investment firm Merko Gida Sanayi Ve Ticaret AS.
Terms were not disclosed.
--------------------------------------------------------------------------------
MARCH 23, 1999 Citigroup announced that Commercial Credit, a
Citigroup affiliate, signed an agreement to
acquire a $558 million loan portfolio and 128
consumer finance branch offices from Associates
First Capital Corporation. The Company also
announced Citibank completed the acquisition of
Santiago, Chile-based Financiero Atlas, a
consumer finance company with 65 branches
throughout Chile and $460 million in assets.
Separately, Citigroup announced the completion of
the sale of its Newbridge Securities unit, a
correspondent securities business, to Donaldson,
Lufkin & Jenrette. Terms of the acquisitions, as
well as the divestiture, were not disclosed.
--------------------------------------------------------------------------------
NOVEMBER 17, 1998 Citibank NA, a unit of Citicorp, agreed to
acquire the entire share capital of Financiera
Atlas, a provider of financial services, for $
69.15 million. Related thereto, on December 20,
1998, Citibank NA acquired a 99.9% interest in
Atlas Corredores de Seguros SA, a securities
brokerage firm, for $13.16 million. Further terms
were not disclosed.
--------------------------------------------------------------------------------
OCTOBER 9, 1998 Citibank Argentina, a unit of Citigroup Inc.,
acquired Provencred from Banco Mayo Cooperative
Ltda for $90 million. Provencred is a provider of
credit card services.
--------------------------------------------------------------------------------
SEPTEMBER 10, 1998 Citibank NA, a unit of Citicorp, acquired a 19.9%
stake in Bhutan state-owned Bhutan National Bank.
Terms were not disclosed.
--------------------------------------------------------------------------------
MAY 29, 1998 Salomon Smith Barney Holdings, a unit of
Travelers Group Inc., acquired a 9.5% stake in
Nikko Securities Co. Ltd. for $504 million in a
privately negotiated transaction. Concurrently,
Salomon acquired newly issued convertible bonds
in Nikko Securities for $1 billion, raising its
stake in Nikko Securities to 25%. Nikko
Securities merged its capital markets and
international businesses with the Japanese
business of Salomon.
--------------------------------------------------------------------------------
MAY 6, 1998 Citibank, a unit of Citicorp, acquired Abaco
Grupo Financiero, a bank and provider of lending
services. Terms were not disclosed.
--------------------------------------------------------------------------------
APRIL 6, 1998 Travelers Group Inc. merged with Citigroup to
form Citigroup Inc. in a merger-of-equals stock
swap transaction valued at $ 72.558 billion. The
transaction was accounted for as a pooling of
interest. The transaction value was 19.8x of
Citicorp's net income (LTM).
--------------------------------------------------------------------------------
FEBRUARY 9, 1998 Salomon Smith Barney Holdings, a unit of
Travelers Inc, acquired the Australian and New
Zealand securities and investment banking
business of County NatWest Ltd (CNW), a unit of
National Westminster Bank, for an estimated $87
million. Upon completion, CNW was renamed Salomon
Smith Barney Australia.
--------------------------------------------------------------------------------
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