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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
UNDER SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
AXA FINANCIAL, INC.
(Name of Subject Company)
AXA FINANCIAL, INC.
(Name of Person Filing Statement)
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COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
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002451102
(CUSIP Number of Class of Securities)
------------------------
ROBERT E. GARBER
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
AXA FINANCIAL, INC.
1290 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10104
(212) 554-1234
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person Filing Statement)
------------------------
COPY TO:
MICHAEL W. BLAIR, ESQ.
DEBEVOISE & PLIMPTON
875 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 909-6000
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/ / CHECK THE BOX IF THE FILING RELATES SOLELY TO
PRELIMINARY COMMUNICATIONS MADE BEFORE THE
COMMENCEMENT OF A TENDER OFFER.
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ITEM 1. SUBJECT COMPANY INFORMATION.
NAME AND ADDRESS
The name of the subject company is AXA Financial, Inc., a Delaware
corporation (the "Company"). The address of the principal executive offices of
the Company is 1290 Avenue of the Americas, New York, New York 10104. The
telephone number of the Company at its principal executive offices is
(212) 554-1234.
SECURITIES
The title of the class of equity securities to which this Solicitation/
Recommendation Statement on Schedule 14D-9 (together with any Exhibits or
Annexes hereto, this "Statement") relates is the common stock, par value $0.01
per share, of the Company ("Common Stock"). As of November 10, 2000, there were
434,949,735 shares of Common Stock outstanding.
ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON.
NAME AND ADDRESS
The filing person is the subject company. The Company's name, business
address and business telephone number are set forth in Item 1 above.
TENDER OFFER
This Statement relates to the joint offer by AXA, a societe anonyme
organized under the laws of The Republic of France ("AXA"), and AXA Merger
Corp., a Delaware corporation and a wholly owned subsidiary of AXA ("Merger
Corp.," and together with AXA, the "Purchasers"), to exchange 0.295 of an
American Depositary Share of AXA, and $35.75 in cash, without interest, for each
of the issued and outstanding shares of Common Stock (the "Shares"), upon the
terms and subject to the conditions set forth in Purchasers' prospectus
constituting a part of a Registration Statement on Form F-4 filed with the
Securities and Exchange Commission on November 21, 2000 (the "Prospectus"), and
in the related Letter of Transmittal (which, together with any amendments or
supplements, collectively constitute the "Offer"), copies of which are filed as
Exhibits (a)(1) and (a)(2) to this Statement and are incorporated by reference
in their entirety in this response to this Item 2. The information incorporated
by reference is considered to be a part of this Statement, except for any
information that is superseded by information included directly in this
Statement. The Offer is described in the Prospectus filed as an exhibit to a
Tender Offer Statement on Schedule TO (as amended or supplemented from time to
time, the "Schedule TO"), filed by Purchasers with the Securities and Exchange
Commission on November 21, 2000, which includes the information required to be
reported under Rule 13e-3 under the Securities Exchange Act of 1934, as amended.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of October 17, 2000, among AXA, Merger Corp. and the Company (the "Merger
Agreement"). The Merger Agreement provides, among other things, that after the
purchase of Shares pursuant to the Offer and the satisfaction or, if
permissible, waiver of the other conditions set forth in the Merger Agreement
and in accordance with the relevant provisions of the Delaware General
Corporation Law (the "Delaware Law"), Merger Corp. will be merged with and into
the Company (the "Merger"). As a result, the Company will continue as the
surviving corporation (the "Surviving Corporation") and as a wholly owned
subsidiary of AXA. At the effective time of the Merger (the "Effective Time"),
each Share issued and outstanding immediately prior to the Effective Time (other
than Shares held in the treasury of the Company, Shares acquired in the Offer
and allocated to Merger Corp., or Shares held by AXA or any of its subsidiaries
that are deposited in the voting trust, and other than Shares held by
stockholders who will have demanded and perfected appraisal rights under
Delaware Law) will be
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converted automatically into the right to receive 0.295 of an American
Depositary Share of AXA, and $35.75 in cash, without interest (the "Merger
Consideration"). Stockholders who demand and fully perfect appraisal rights
under Delaware Law will be entitled to receive, in connection with the Merger,
cash for the fair value of their Shares as determined pursuant to the procedures
prescribed by Delaware Law. The Merger Agreement is summarized in the section
entitled "The Merger Agreement" of the Prospectus. A copy of the Merger
Agreement has been filed as Exhibit (e)(1) hereto and is incorporated herein by
reference in its entirety.
The Schedule TO states that the principal executive offices of AXA and
Merger Corp. are located at 25, avenue Matignon, 75008 Paris, France (in the
case of AXA) and 1209 Orange Street, Wilmington, DE 19801 (in the case of Merger
Corp.).
ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
CONFLICTS OF INTEREST
Except as described or referred to in this Item 3, to the knowledge of the
Company, as of the date of this Statement there exists no material agreement,
arrangement or understanding or any actual or potential conflict of interest
between the Company or its affiliates and (i) the Company or its executive
officers, directors or affiliates or (ii) Merger Corp., AXA or their respective
executive officers, directors or affiliates.
CERTAIN ARRANGEMENTS BETWEEN THE COMPANY AND ITS EXECUTIVE OFFICERS, DIRECTORS
AND AFFILIATES
The information set forth under "THE EXCHANGE OFFER--Beneficial Ownership of
Common Stock of AXA Financial by Directors and Officers of AXA Financial" in the
Prospectus is incorporated herein by reference.
Certain contracts, agreements, arrangements and understandings between the
Company and its executive officers, directors and affiliates are described under
the captions "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT,"
and "PROPOSAL 1. ELECTION OF DIRECTORS," in the Company's Definitive Proxy
Statement for the 2000 Annual Meeting of the Company's stockholders. Proxy
Statement information that appears under these captions is filed herewith as
Exhibit (e)(8) and is incorporated herein by reference.
CERTAIN ARRANGEMENTS BETWEEN THE COMPANY AND AXA
The information set forth under "RISK FACTORS--Risks Relating to
Operations--Significant shareholders of AXA may have interests conflicting with
your interests," "SPECIAL FACTORS--Background of the Offer; Contacts with AXA
Financial," "SPECIAL FACTORS--Reasons for the Offer and the Merger; Purpose and
Structure of the Offer and the Merger," "SPECIAL FACTORS--Recommendation of the
Special Committee and the Board of Directors of AXA Financial," "SPECIAL
FACTORS--Fairness of the Offer and the Merger," "SPECIAL FACTORS--Opinion of the
Financial Advisor of the Special Committee," "SPECIAL FACTORS--Plans for AXA
Financial After the Offer and the Merger," "SPECIAL FACTORS--Interests of
Certain Persons in the Offer and the Merger," "THE EXCHANGE OFFER--Sources and
Amount of Funds," "THE EXCHANGE OFFER--Transactions and Arrangements Concerning
Shares of AXA Financial Common Stock" and "THE COMPANIES--Related Party
Transactions" in the Prospectus is incorporated herein by reference.
INTERESTS OF CERTAIN PERSONS IN THE OFFER AND THE MERGER
In considering the recommendations of the Board of Directors of the Company
and the special committee of independent directors of the Board of Directors
(the "Special Committee") with respect to the Offer, the Merger and the Merger
Agreement, and the fairness of the consideration to be
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received in the Offer and the Merger, stockholders should be aware that certain
officers and directors of AXA, Merger Corp. and the Company have interests in
the Offer and the Merger which are described in the sections of the Prospectus
listed below and which may present them with certain potential conflicts of
interest.
The information contained under "RISK FACTORS--Risks Relating to
Operations--Significant shareholders of AXA may have interests conflicting with
your interests," "SPECIAL FACTORS--Background of the Offer; Contacts with AXA
Financial," "SPECIAL FACTORS--Interests of Certain Persons in the Offer and the
Merger," "THE EXCHANGE OFFER--Transactions and Arrangements Concerning Shares of
AXA Financial Common Stock," "THE EXCHANGE OFFER--Beneficial Ownership of Common
Stock of AXA Financial by Directors and Officers of AXA Financial," "THE MERGER
AGREEMENT--Indemnification" and "THE COMPANIES--Related Party Transactions" in
the Prospectus is incorporated herein by reference.
The Special Committee and the Board of Directors were aware of these actual
and potential conflicts of interest and considered them along with the other
matters referred to in Item 4, "The Solicitation or Recommendation--Reasons for
the Recommendation."
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
SOLICITATION OR RECOMMENDATION
The Special Committee, at a meeting held on October 17, 2000, unanimously
determined that the terms of each of the Offer and the Merger and the other
transactions contemplated by the Merger Agreement, are fair to, and in the best
interests of, the Company and the holders of Shares (other than AXA and its
affiliates) and unanimously determined to recommend that the Board of Directors:
(i) approve the Merger Agreement, the Offer and the Merger, and the other
transactions contemplated by the Merger Agreement; (ii) determine that the terms
of the Offer and the Merger are fair to, and in the best interests of, the
Company and the holders of Shares (other than AXA and its affiliates);
(iii) declare the Merger Agreement advisable; (iv) recommend that holders of
Shares accept the Offer and tender their Shares pursuant to the Offer; and
(v) recommend that holders of Shares adopt the Merger Agreement, if such
adoption is necessary for the consummation of the Merger.
The Board of Directors, at a meeting held on October 17, 2000, acting on the
unanimous recommendation of the Special Committee and based on, among other
things, the Special Committee's recommendation, unanimously determined to accept
the Special Committee's recommendation and adopted resolutions (i) approving the
Merger Agreement, the Offer and the Merger, and the other transactions
contemplated by the Merger Agreement; (ii) determining that the terms of the
Offer and the Merger are fair to, and in the best interests of, the Company and
the holders of Shares (other than AXA and its affiliates); (iii) declaring the
Merger Agreement advisable; (iv) recommending that holders of Shares accept the
Offer and tender their Shares pursuant to the Offer; and (v) recommending that
holders of Shares adopt the Merger Agreement, if such adoption is necessary for
the consummation of the Merger.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT HOLDERS OF SHARES ACCEPT
THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
The Special Committee's recommendation is based in part on the written
opinion delivered on October 17, 2000 by Wasserstein Perella & Co., Inc.
("Wasserstein Perella") that, as of such date and based on and subject to the
assumptions and limitations described in the opinion, the Merger Consideration
to be received pursuant to the Offer and the Merger by the Company stockholders
(other than AXA and its affiliates) was fair to such stockholders from a
financial point of view. The full text of the written opinion, which sets forth
the assumptions made, the matters considered and the
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limitations on the review undertaken by Wasserstein Perella in connection with
the opinion, is filed as Exhibit (a)(18) to this Statement and is incorporated
in this Item 4 by reference.
A form of a letter to the stockholders of the Company, the Important
Information Cover Sheet, a letter to brokers, dealers, commercial banks, trust
companies and other nominees, a letter to clients for use by brokers, dealers,
commercial banks, trust companies and other nominees communicating the Board's
recommendation, related notices, instructions and forms and press releases
announcing the Offer and the Merger are filed as Exhibits (a)(3) through (a)(17)
to this Statement and are incorporated by reference in this Item 4.
REASONS FOR THE RECOMMENDATION
The reasons for the recommendation stated above in this Item 4 are set forth
under "SPECIAL FACTORS--Background of the Offer; Contacts with AXA Financial,"
"SPECIAL FACTORS--Recommendation of the Special Committee and the Board of
Directors of AXA Financial," "SPECIAL FACTORS--Fairness of the Offer and the
Merger," and "SPECIAL FACTORS--Opinion of the Financial Advisor of the Special
Committee," in the Prospectus and are incorporated in this Item 4 by reference.
INTENT TO TENDER
To the best knowledge of the Company, after making reasonable inquiry, each
executive officer, director, affiliate and subsidiary of the Company who owns
Shares currently intends to tender in the Offer or sell or vote in favor of the
Merger all Shares that each such person owns of record or beneficially as of the
date of this Statement, other than tendering Shares, if any, that (i) if
tendered, would cause any of such persons to incur liability under the
short-swing profits provisions of the U.S. federal securities laws, (ii) are
restricted Shares or (iii) any of these individuals may intend to use for
charitable contributions. Shares deposited in the voting trust will not be
tendered in the Offer but the Company anticipates that they will be voted in
favor of the Merger.
ITEM 5. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.
The information contained under "SPECIAL FACTORS--Background of the Offer;
Contacts with AXA Financial," "SPECIAL FACTORS--Recommendation of the Special
Committee and the Board of Directors of AXA Financial," "SPECIAL
FACTORS--Fairness of the Offer and the Merger," "SPECIAL FACTORS--Opinion of the
Financial Advisor of the Special Committee" and "THE EXCHANGE OFFER--Fees and
Expenses" in the Prospectus are incorporated in this Item 5 by reference.
Except as set forth above in this Item 5, neither the Company nor any person
acting on its behalf has employed, retained or compensated, or currently intends
to employ, retain or compensate, any person to make solicitations or
recommendations to the stockholders of the Company on its behalf with respect to
the Offer or the Merger.
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ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
The information set forth under "THE EXCHANGE OFFER--Transactions and
Arrangements Concerning Shares of AXA Financial Common Stock" in the Prospectus
is incorporated in this Item 6 by reference.
Except as set forth in this Item 6, no transactions in Shares have been
effected during the past 60 days by the Company or, to the knowledge of the
Company, by any executive officer, director, affiliate or subsidiary of the
Company.
ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
Except as described or referred to in this Statement, the Company is not
currently undertaking or engaged in any negotiations in response to the Offer
that relate to (i) a tender offer for or other acquisition of the Company's
securities by the Company, any subsidiary of the Company or any other person;
(ii) an extraordinary transaction, such as a merger, reorganization or
liquidation, involving the Company or any subsidiary of the Company; (iii) a
purchase, sale or transfer of a material amount of assets of the Company or any
subsidiary of the Company; or (iv) any material change in the present dividend
rate or policy, or indebtedness or capitalization of the Company.
Except as described or referred to in this Statement, there are no
transactions, resolutions of the Company's Board, agreements in principle, or
signed contracts entered into in response to the Offer that relate to one or
more of the events referred to in the preceding paragraph of this Item 7.
ITEM 8. ADDITIONAL INFORMATION.
The information contained in the Prospectus filed as Exhibit (a)(1) is
incorporated by reference in this Item 8.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
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(a)(1) Prospectus, dated November 21, 2000 (incorporated by
reference to the AXA Form F-4 filed with the SEC on
November 21, 2000).
(a)(2) Letter of Transmittal (incorporated by reference to
Exhibit 99.2 to the AXA Form F-4).
(a)(3) Form of a letter to stockholders from Edward D. Miller,
President and Chief Executive Officer of the Company
(included with this Statement).
(a)(4) Important Information Cover Sheet (incorporated by reference
to Exhibit 99.4 to the AXA Form F-4).
(a)(5) Letter from the Dealer Manager to Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees
(incorporated by reference to Exhibit 99.5 to the AXA
Form F-4).
(a)(6) Notice of Guaranteed Delivery (incorporated by reference to
Exhibit 99.3 to the AXA Form F-4).
(a)(7) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees (incorporated by
reference to Exhibit 99.6 to the AXA Form F-4).
(a)(8) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 (incorporated by reference to
Exhibit 99.9 to the AXA Form F-4).
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
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<C> <S>
(a)(9) IRS Form W-8 Certificate of Foreign Status (incorporated by
reference to Exhibit 99.10 to the AXA Form F-4).
(a)(10) IRS Form W-8 BEN Certificate of Foreign Status of Beneficial
Ownership for United States Tax Withholding (incorporated by
reference to Exhibit 99.11 to the AXA Form F-4).
(a)(11) Press Release issued by AXA on August 30, 2000 (incorporated
by reference to Form 425 filed by AXA on August 30, 2000).
(a)(12) Presentation to analysts on August 30, 2000 (incorporated by
reference to Form 425 filed by AXA on August 30, 2000).
(a)(13) Press Release issued by the Company on August 30, 2000
(incorporated by reference to press release under cover of
Schedule 14D-9C filed by the Company on August 30, 2000).
(a)(14) Presentation to investors dated September 2000 (incorporated
by reference to Form 425 filed by AXA on September 12,
2000).
(a)(15) Press Release issued by the Company on October 18, 2000
(incorporated by reference to press release under cover of
Schedule 14D-9C filed by the Company on October 18, 2000).
(a)(16) Press Release issued by AXA on October 18, 2000
(incorporated by reference to Form 425 filed by AXA on
October 18, 2000).
(a)(17) Form of a Summary Advertisement (incorporated by reference
to Exhibit 99.17 to the AXA Form F-4).
(a)(18) Opinion of Wasserstein Perella & Co., Inc., to the Special
Committee of Board of Directors of the Company, dated
October 17, 2000 (included as Annex A to this Statement).
(e)(1) Agreement and Plan of Merger, dated as of October 17, 2000,
among AXA, Merger Corp. and the Company (incorporated by
reference to Exhibit 2.1 to the AXA Form F-4).
(e)(2) Voting Agreement, dated as of October 17, 2000, by certain
Voting Trustees under a Voting Trust Agreement, dated as of
May 12, 1992, as amended, to and for the benefit of the
Company (incorporated by reference to Exhibit 9.1 to the AXA
Form F-4).
(e)(3) Voting Trust Agreement, dated as of May 12, 1992, by and
among AXA and the designated Voting Trustees, as amended
(incorporated by reference to Exhibit 9.2 to the AXA
Form F-4).
(e)(4) Standstill and Registration Rights Agreement dated as of
July 18, 1991 between The Equitable Companies Incorporated,
The Equitable Life Assurance Society of the United States
and AXA, as amended by Amendment No. 1 dated as of
November 27, 1991 and Amendment No. 2 dated as of March 15,
1992 (incorporated by reference to Exhibit 10.1 to the AXA
Form F-4).
(e)(5) Cooperation Agreement dated as of July 18, 1991 among The
Equitable Life Assurance Society of the United States, The
Equitable Companies Incorporated and AXA, as amended by
Amendment No. 1 dated as of November 27, 1991 (incorporated
by reference to Exhibit 10.2 to the AXA Form F-4).
(e)(6) Letter Agreement dated as of May 12, 1992 between AXA, The
Equitable Companies Incorporated and The Equitable Life
Assurance Society of the United States (incorporated by
reference to Exhibit 10.3 to the AXA Form F-4).
(e)(7) Letter Agreement dated as of May 12, 1992 between AXA and
the Superintendent of Insurance of the State of New York
Insurance Department (incorporated by reference to
Exhibit 10.4 to the Form F-4).
(e)(8) Sections entitled "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT," and "PROPOSAL 1. ELECTION OF
DIRECTORS," in the Company's Definitive Proxy Statement for
the 2000 Annual Meeting of the Company's stockholders (filed
herewith).
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
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<C> <S>
(e)(9) Continuity Agreement, dated September 29, 2000, between the
Company and Edward Miller (incorporated by reference to
Exhibit 10.6 to the AXA Form F-4).
(e)(10) Continuity Agreement, dated September 29, 2000, between the
Company Michael Hegarty (incorporated by reference to
Exhibit 10.5 to the AXA Form F-4).
(e)(11) Continuity Agreement, dated September 29, 2000, between the
Company and Stanley B. Tulin (incorporated by reference to
Exhibit 10.7 to the AXA Form F-4).
</TABLE>
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SIGNATURE
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.
<TABLE>
<S> <C> <C>
AXA FINANCIAL, INC.
By: /s/ STANLEY B. TULIN
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Name: Stanley B. Tulin
Title: Vice Chairman of the Board and
Chief Financial Officer
</TABLE>
Dated: November 21, 2000
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ANNEX A
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<S> <C>
[Wasserstein Logo] Wasserstein Perella & Co.,
Inc.
31 West 52nd Street
New York, New York 10019-6118
Telephone 212-969-2700
Fax 212-969-7836
</TABLE>
October 17, 2000
Special Committee of the Board of Directors
AXA Financial, Inc.
1290 Avenue of the Americas
New York, NY 10104
Members of the Special Committee of the Board:
You have asked us to advise you with respect to the fairness, from a
financial point of view, to the holders (other than AXA ("Purchaser") or any of
its affiliates) of the common stock, par value 0.01 per share (the "Shares") of
AXA Financial, Inc., a Delaware corporation (the "Company"), of the
consideration to be received by such holders pursuant to the terms of the
Agreement and Plan of Merger, dated as of October 17, 2000 (the "Merger
Agreement"), among the Company, Purchaser and AXA Merger Corp ("Sub"). The
Merger Agreement provides for, among other things, a tender offer (the "Tender
Offer") by Purchaser and Sub to acquire all of the outstanding Shares (other
than Shares held in treasury by the Company or Shares owned by Purchaser and its
subsidiaries held in the voting trust (the "Voting Trust") established pursuant
to a Voting Trust Agreement, dated as of May 12, 1992, by and among Purchaser
and the voting trustees named therein, as amended) at a price per Share equal to
$35.75 in cash and 0.2950 American Depositary Shares of Purchaser (collectively,
the "Consideration"), and for a subsequent merger (the "Merger" and, together
with the Tender Offer, the "Transaction") of Sub with and into the Company
pursuant to which each remaining outstanding Share not purchased in the Tender
Offer (other than Shares held in treasury by the Company or Shares owned by
Purchaser and its subsidiaries held in the Voting Trust) will be converted into
the right to receive the Consideration. The terms and conditions of the
Transaction are set forth in more detail in the Merger Agreement. We understand
that Purchaser directly and indirectly through subsidiaries owns, through the
Voting Trust, approximately 60.3% of the outstanding shares of common stock of
the Company.
In connection with rendering our opinion, we have reviewed a draft of the
Merger Agreement, and for purposes hereof, we have assumed that the terms and
conditions of the final form of the Merger Agreement will not differ in any
material respect from the draft provided to us. We have also reviewed and
analyzed certain publicly available business and financial information relating
to the Company and Purchaser for recent years and interim periods to date, as
well as certain internal financial and operating information relating to the
Company, including financial forecasts, analyses and projections prepared by or
on behalf of the Company and provided to us for purposes of our analysis. We
have met with management of the Company and Purchaser to review and discuss such
information and, among other matters, each of the Company's and Purchaser's
business, operations, assets, financial
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condition and future prospects. As you know, we did not receive financial
forecasts and projections of Purchaser.
We have reviewed and considered certain financial and stock market data
relating to the Company and Purchaser, and we have compared that data with
similar data for certain other companies, the securities of which are publicly
traded, that we believe may be relevant or comparable in certain respects to the
Company and Purchaser or one or more of their respective businesses or assets,
and we have reviewed and considered the financial terms of certain recent
acquisitions and business combination transactions in certain industries that we
believe to be reasonably comparable to the Transaction or otherwise relevant to
our inquiry. We have also taken into consideration that Purchaser directly and
indirectly through subsidiaries owns, through the Voting Trust, approximately
60.3% of the outstanding shares of common stock of the Company, and we have
reviewed and considered the financial terms of certain recent transactions in
which a majority shareholder of an entity has purchased the interests held by
the minority shareholders. In addition to the foregoing, we have performed such
other financial studies, analyses, and investigations and reviewed such other
information as we considered appropriate for purposes of this opinion.
In our review and analysis and in formulating our opinion, we have assumed
and relied upon the accuracy and completeness of all of the historical financial
and other information provided to or discussed with us or publicly available,
and we have not assumed any responsibility for independent verification of any
of such information. We have also assumed and relied upon the reasonableness and
accuracy of the financial projections, forecasts and analyses provided to us,
and we have assumed that such projections, forecasts and analyses were
reasonably prepared in good faith and on bases reflecting the best currently
available judgments and estimates of the Company's management. We express no
opinion with respect to such projections, forecasts and analyses or the
assumptions upon which they are based. We are not actuaries and our advisory
services did not include actuarial determinations or evaluations by us or an
attempt to evaluate actuarial assumptions. In addition, we have not reviewed any
of the books and records of the Company or Purchaser, or assumed any
responsibility for conducting a physical inspection of the properties or
facilities of the Company or Purchaser, or for making or obtaining an
independent valuation or appraisal of the assets or liabilities or adequacy of
the reserves of the Company or Purchaser, and no such independent valuation or
appraisal was provided to us. We also have (i) assumed that, in all respects
material to our analysis, the disposition by Purchaser, the Company and their
affiliates of their respective interests in Donaldson, Lufkin & Jenrette, Inc.
("DLJ") will be consummated substantially on the terms and conditions publicly
announced by the Company and described to us and (ii) assumed that the
transactions described in the Merger Agreement will be consummated without
waiver or modification of any of the material terms or conditions contained
therein by any party thereto. Our opinion is necessarily based on economic and
market conditions and other circumstances as they exist and can be evaluated by
us as of the date hereof. We are not expressing any opinion herein as to the
prices at which any securities of the Company or Purchaser will actually trade
at any time.
It should be noted that in the context of our engagement by the Special
Committee of the Board of Directors of the Company, we were not authorized to
and did not solicit third party indications of interest in acquiring all or any
part of the Company, or investigate any alternative transactions that may be
available to the Company.
In the ordinary course of our business, we may actively trade the debt and
equity securities of the Company and Purchaser for our own account and for the
accounts of customers and, accordingly, may at any time hold a long or short
position in such securities.
We are acting as financial advisor to the Special Committee of the Board of
Directors of Company in connection with the proposed Transaction and will
receive a fee for our services, including rendering this opinion, a significant
portion of which is contingent upon the consummation of the Transaction. In
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addition, we have performed investment banking services for the Special
Committee in connection with the disposition of DLJ.
Our opinion addresses only the fairness from a financial point of view to
the holders of the Shares (other than Purchaser or any of its affiliates) of the
Consideration to be received by such holders pursuant to the Transaction, and we
do not express any views on any other terms of the Transaction. Specifically,
our opinion does not address the Special Committee's or the Company's underlying
business decision to recommend the transactions contemplated by the Merger
Agreement. In addition, our opinion does not address the solvency of the Company
or Purchaser following consummation of the Transaction or at any time.
It is understood that this letter is for the benefit and use of the Special
Committee of the Board of Directors of the Company in its consideration of the
Transaction and, except for inclusion in its entirety in any proxy statement or
Schedule 13E-3 statement required to be circulated to shareholders of the
Company relating to the Merger or tender offer recommendation statement on
Schedule 14D-9 from the Company to holders of Shares relating to the
Transaction, may not be used for any other purpose or quoted, referred to,
disseminated or reproduced at any time or in any manner without our prior
written consent. This opinion does not constitute a recommendation to any holder
of Shares with respect to whether such holder should tender Shares pursuant to
the Tender Offer or as to how such holder should vote with respect to the
Merger, and should not be relied upon by any holder as such.
Based upon and subject to the foregoing, including the various assumptions
and limitations set forth herein, it is our opinion that as of the date hereof,
the Consideration to be received by the holders of the Shares (other than
Purchaser or any of its affiliates) pursuant to the Tender Offer and the Merger
is fair to such holders from a financial point of view.
Very truly yours,
WASSERSTEIN PERELLA & CO., INC.
/s/
A-3
