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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13E-3/A
RULE 13E-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(e) OF THE SECURITIES EXCHANGE ACT OF 1934)
AMENDMENT NO. 4
NIHON AMWAY KABUSHIKI KAISHA
(Exact name of Issuer as Specified in Charter)
AMWAY JAPAN LIMITED
(Translation of Issuer's Name in English)
N.A.J. CO., LTD.
ALAP HOLD CO., LTD.
AMWAY JAPAN LIMITED
(Names of Persons Filing Statement)
COMMON STOCK, NO PAR VALUE
AMERICAN DEPOSITARY SHARES, EACH REPRESENTING ONE-HALF OF ONE SHARE
OF COMMON STOCK, EVIDENCED BY AMERICAN DEPOSITARY RECEIPTS
(Title of Class of Securities)
03 234 J 10 0
(CUSIP Number of ADSs)
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CRAIG N. MEURLIN, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
AMWAY CORPORATION
7575 FULTON STREET EAST
ADA, MICHIGAN 49355
(616) 787-6000
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Person(s) Filing Statement)
COPY TO:
THOMAS C. DANIELS, ESQ.
JONES, DAY, REAVIS & POGUE
NORTH POINT
901 LAKESIDE AVENUE
CLEVELAND, OHIO 44114
(216) 586-3939
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This statement is filed in connection with (check the appropriate box):
a. [ ] The filing of solicitation materials or an information statement subject
to Regulation 14A, Regulation 14C or Rule 13e-3(c) [sec. 240.13e-3(c)]
under the Securities Exchange Act of 1934.
b. [ ] The filing of a registration statement under the Securities Act of 1933.
c. [X] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies: [ ]
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CALCULATION OF FILING FEE
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<CAPTION>
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TRANSACTION VALUATION AMOUNT OF FILING FEE
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<S> <C>
$486,477,721.00 $97,294.00
</TABLE>
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[X] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
<TABLE>
<S> <C>
AMOUNT PREVIOUSLY PAID: $97,294.00 FILING PARTY: N.A.J., CO. LTD.
FORM OR REGISTRATION NO: SCHEDULE
14D-1 DATE FILED: NOVEMBER 18, 1999
</TABLE>
Page 1 of 13 Pages
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This Transaction Statement on Schedule 13E-3, filed on November 18, 1999
and amended on November 26, 1999, November 30, 1999 and December 7, 1999 (as
amended, the "Schedule 13E-3"), relating to the offer by N.A.J. Co., Ltd., a
joint stock corporation ("kabushiki kaisha") organized under the laws of Japan
("NAJ"), to purchase all outstanding shares of the Common Stock, no par value
(the "Common Stock"), and American Depositary Shares, each representing one-half
of one share of Common Stock, that are beneficially owned by shareholders of
Amway Japan Limited, a joint stock corporation ("kabushiki kaisha") organized
under the laws of Japan ("AJL"), is hereby amended and supplemented as set forth
in this Amendment No. 4. Capitalized terms used but not defined herein have the
meanings assigned to them in the Schedule 14D-1 of NAJ filed with the Securities
and Exchange Commission on November 18, 1999, as amended by Amendment No. 1 on
November 26, 1999, Amendment No. 2 on November 30, 1999, Amendment No. 3 on
December 7, 1999 and Amendment No. 4 on December 13, 1999.
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ITEM 2. IDENTITY AND BACKGROUND.
The information set forth in Item 2 is hereby amended to read as follows:
(a)-(d), (g) This Statement is filed by NAJ, ALAP Hold Co., Ltd. and
AJL. ALAP Hold Co., Ltd., a limited partnership organized under the laws of
Nevada ("ALAP"), is the parent of NAJ. ALAP was formed in September 1999
for the principal purpose of facilitating NAJ's acquisition of all of the
outstanding shares of AJL and has no prior operating history. The principal
executive offices of ALAP are currently located at One East First Street,
Suite 1600, Reno, Nevada 89501. ALAP does not have any significant assets
or liabilities and it has not engaged in activities other than those
incidental to its formation and capitalization, its execution of the
Agreement and preparation for the Offer. The general partner of ALAP is AP
New Co., LLC, a Nevada limited liability company ("AP New Co."). AP New Co.
is managed by Craig N. Meurlin and Lawrence M. Call. The business address
for each of the managers of AP New Co. is 7575 Fulton Street, East, Ada,
Michigan 49355. Messrs. Meurlin and Call are U.S. citizens. The information
set forth in "The Offer -- Certain Information Regarding Purchaser" and
"The Offer -- Certain Information Regarding AJL" in the Offer to Purchase
and in Schedule I -- "PURCHASER DIRECTORS; AJL EXECUTIVE OFFICERS AND
DIRECTORS" thereto is incorporated herein by reference. For purposes of
this Amendment No. 4 to the Schedule 13E-3, all references to Purchaser
shall mean, collectively, N.A.J. Co., Ltd. and ALAP Hold Co., Ltd.
(e)-(f) During the past five years, none of Purchaser's or AJL's
officers or directors (i) have been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors); or (ii) were a
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding were or are
subject to a judgment, decree or final order enjoining future violations
of, or prohibiting activities subject to, federal or state securities laws
or finding any violation of such laws.
ITEM 4. TERMS OF THE TRANSACTION.
The information set forth in Item 4 is hereby amended as follows:
(a) The information set forth on the cover page of the Offer to
Purchase and in "Introduction," "The Offer -- Number of Shares; Expiration
and Extension of Offer," "The Offer -- Procedure for Tendering Shares,"
"The Offer -- Withdrawal Rights," "The Offer -- Acceptance for Payment of
Shares and Payment of Purchase Price," "The Offer -- Market Information;
Exchange Rates; Dividends and Dividend Policy," "The Offer -- Certain Legal
Matters; Regulatory Approvals," "The Offer -- Extension of Offer;
Termination; Amendments," "The Offer -- Fees and Expenses" and "The
Offer -- Miscellaneous" in the Offer to Purchase is incorporated herein by
reference. The phrase "upon the terms and subject to the conditions of the
Offer" in the first sentence of the third full paragraph on page 3 of the
Offer to Purchase, the first sentence of "The Offer -- Number of Shares;
Expiration and Extension of Offer," the first sentence of "The
Offer -- Procedure for Tendering Shares -- Tender Constitutes and
Agreement" and the first sentence of "The Offer -- Acceptance for Payment
of Shares and Payment of Purchase Price," shall hereinafter read "upon the
terms relating to the tender offer process as described herein."
ITEM 8. FAIRNESS OF THE TRANSACTION.
The information set forth in Item 8 is hereby amended to read as follows:
(a) - (e) The information set forth in "Introduction," "Special
Factors -- Background of the Offer; Recommendation of Disinterested
Directors; Reasons for Recommendation; Opinion of Financial Advisor to the
Disinterested Directors" and "The Offer -- Position of Purchaser Regarding
Fairness of the Offer" in the Offer to Purchase is incorporated herein by
reference. In addition, the Disinterested Directors were also aware of, and
considered, the fact that the recent market price for the Shares
represented a historical low for the Shares.
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ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
The information set forth in Item 9 is hereby amended to read as follows:
(a) - (c) The information set forth in "Special Factors -- Background
of the Offer; Recommendation of the Disinterested Directors; Reasons for
the Recommendation; Opinion of the Financial Advisor to the Disinterested
Directors" and in Schedule II to the Offer to Purchase is incorporated
herein by reference.
Pursuant to an engagement letter dated September 1, 1999 (the "Letter
Agreement"), Morgan Stanley & Co. Incorporated ("Morgan Stanley") was engaged as
financial advisor to ALAP Hold Co., Ltd. and Apple Hold Co., Ltd. (together "The
Holdcos") in connection with the cash tender offers for the outstanding public
shares of Amway Japan Limited and Amway Asia Pacific Ltd., collectively "The
Companies." At a meeting on September 21, 1999, Morgan Stanley made a
presentation to the Holdcos regarding certain issues surrounding the
transactions. The purpose of the presentation was to provide guidance on the
process for the cash tender offers and to provide financial advice on the equity
valuation of The Companies but not on the fairness of the consideration that
might be offered for shares of either of The Companies. For the purposes of the
presentation, Morgan Stanley:
- reviewed certain publicly available financial statements and other
information of The Companies;
- reviewed certain internal financial statements and other financial
and operating data concerning The Companies prepared by the management of
The Companies;
- analyzed certain financial projections prepared by the management of
The Companies;
- discussed the past and current operations and financial condition
and the prospects of The Companies with senior executives of The Companies;
- reviewed the reported prices and trading activity for the common
stock of The Companies;
- compared the financial performance of The Companies and the prices
and trading activity of the common stock with that of certain other
comparable publicly-traded companies and their securities;
- reviewed other transactions (mostly in the United States) in which a
majority shareholder acquired all of the outstanding minority shares.
Morgan Stanley assumed and relied upon without independent verification the
accuracy and completeness of the information reviewed by Morgan Stanley. With
respect to the financial projections, Morgan Stanley assumed that they were
reasonably prepared on bases reflecting the best currently available estimates
and judgments of the future financial performance of The Companies. Morgan
Stanley did not make any independent valuation or appraisal of the assets or
liabilities of The Companies. Its analysis was necessarily based on economic,
market and other conditions as in effect on, and the information made available
to it as of, September 20, 1999.
Based on financial analysis including comparable company analysis,
discounted cash flow analysis and analysis of precedent transactions, it
discussed a per share offer of $15.00 for Amway Asia Pacific Ltd. and Y1,450 for
Amway Japan Limited. For further detail, please reference Exhibit (b)(3) to this
Schedule 13E-3.
The preparation of the presentation was a complex process and is not
necessarily susceptible to a partial analysis or summary description. In its
presentation, Morgan Stanley considered the results of all of its analyses as a
whole and did not attribute any particular weight to any particular analysis or
factor. Furthermore, Morgan Stanley believes that selecting any portion of its
analyses, without considering all analyses, would create an incomplete view of
the process underlying its presentation. In addition, Morgan Stanley may have
given various analyses and factors more or less weight than other analyses and
factors and may have deemed various assumptions more or less probable than other
assumptions, so that the ranges of valuations resulting from any particular
analysis described above should not be taken to be Morgan Stanley's view of the
actual value of The Companies.
In performing its analyses, Morgan Stanley made numerous assumptions with
respect to the industry performance, general business and economic conditions
and other matters, many of which are beyond the control of The Companies. Any
estimates contained in Morgan Stanley's analysis are not necessarily indicative
of future
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results or actual values, which may be significantly more or less favorable than
suggested by such estimates. The analyses do not purport to be appraisals or to
reflect the prices at which The Companies might actually trade in a public
market or in a private sale or merger transaction.
Morgan Stanley provided advice to The Holdcos during negotiations; however,
Morgan Stanley did not recommend any specific consideration to The Companies or
that any specific consideration constituted the only appropriate consideration
for the transactions. In addition, as described above, Morgan Stanley's
presentation. The Holdcos was one of the many factors taken into consideration
by The Holdcos in making their decisions to proceed with the transactions.
Consequently, the Morgan Stanley analyses as described above should not be
viewed as determinative of the opinion of The Holdcos with respect to the value
of The Companies or the fairness of the consideration offered. The purchase
price for all of the outstanding publicly traded shares of each of The Companies
was determined through arm's-length negotiations between The Holdcos and The
Companies and was approved by The Companies' respective Boards of Directors. The
presentation did not contain and Morgan Stanley did not deliver any opinion
relating to the fairness of the consideration offered for the shares of either
of the Companies.
The Holdcos engaged Morgan Stanley to advise it on strategic alternatives
and to provide Morgan Stanley's advice because of its experience and expertise.
Morgan Stanley is an internationally recognized investment banking and advisory
firm. Morgan Stanley, as part of its investment banking business, is continually
engaged in the valuation of businesses and securities in connection with mergers
and acquisitions, negotiated underwriting, competitive bidding, secondary
distributions of listed and unlisted securities, private placements and
valuation for estate, corporate and other purposes.
Pursuant to The Letter Agreement, Morgan Stanley provided financial
advisory services in connection with the transaction, and The Holdcos agreed to
pay Morgan Stanley a customary fee in connection therewith. The Holdcos have
also agreed to reimburse Morgan Stanley for its expenses incurred in performing
its services. In addition, The Holdcos have agreed to indemnify Morgan Stanley
and its affiliates, their respective directors, officers, agents and employees,
and each person, if any, controlling Morgan Stanley or any of its affiliates
against certain liabilities and expenses, including certain liabilities under
the federal securities laws related to or arising out of Morgan Stanley's
engagement and any related transactions.
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The following is a summary of financial projections provided to financial
advisors:
AMWAY JAPAN LIMITED FINANCIAL PROJECTIONS
KEY ASSUMPTIONS
- All financial projections have been provided by Amway Japan Limited
management
- The projections have been updated in October 1999 to reflect the current
outlook for the company
- FY2000 figures have been produced on a bottom-up, product-by-product,
cost item-by-cost item basis according to the annual budgeting process
- FY2001-FY2004 figures are produced by extrapolating FY2000, using
year-on-year net sales growth and margin ratios as key drivers
- FY2000-FY2004 figures reflect the following:
- Negative impact of recession and adverse publicity since 1997
bottoming out in 1999 and recovery thereafter
- Net sales showing steady growth at 4.0% CAGR but still 14% down on
1997 levels in 2004
- JPY120/US$ in first part of 2000 and JPY110/US$ kept constant
thereafter. Gross margin 69.9% in 2000 and 69% flat thereafter
- Margins altered in 2000 to reflect introduction of 3D Project and
transfer of magazine publishing costs from COS to SG&A. EBIT margin
improvement from 10.3% in 2000 to 14.1% in 2004 reflects the fact that
approximately 50% of SG&A and 40% of Distribution Expenses are fixed
costs
- Effective tax rate reduction in 2000 reflects cuts in Japanese
corporate tax rate; kept constant thereafter
- No significant capital expenditures assumed beyond recurring
maintenance items (HQ and distribution centers) and minor internet
investment
- Working capital requirement largely flat
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AMWAY JAPAN HISTORICAL AND PROJECTED
INCOME STATEMENT
(JPY IN MILLIONS)
<TABLE>
<CAPTION>
AUGUST 31,
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2000-
2004
1997A 1998A 1999A 2000E 2001E 2002E 2003E 2004E CAGR
------- ------- ------- ------- ------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET SALES............ 203,362 192,458 143,797 150,000 156,000 162,240 168,730 175,479 4.0%
Total Cost of
Sales.......... (57,279) (62,178) (47,738) (45,138) (48,360) (50,294) (52,306) (54,398) 4.8%
------- ------- ------- ------- ------- ------- ------- ------- ----
GROSS PROFIT......... 146,083 130,280 96,059 104,862 107,640 111,946 116,424 121,081 3.7%
------- ------- ------- ------- ------- ------- ------- ------- ----
Total Operating
Expenses....... (98,235) (99,853) (75,798) (89,452) (87,785) (90,537) (93,398) (96,374) 1.9%
------- ------- ------- ------- ------- ------- ------- ------- ----
EBIT................. 47,848 30,427 20,261 15,410 19,855 21,409 23,026 24,707 12.5%
Other
Income -- Net...... 3,299 (698) 746 100 0 0 0 0
Interest Expense..... 0 0 0 0 0 0 0 0
Income Before
Taxes.............. 51,147 29,729 21,007 15,510 19,855 21,409 23,026 24,707 12.3%
------- ------- ------- ------- ------- ------- ------- ------- ----
Income Taxes......... (28,030) (16,950) (10,500) (6,980) (8,935) (9,634) (10,362) (11,118)
Net Income........... 23,117 12,779 10,507 8,530 10,920 11,775 12,664 13,589 12.3%
======= ======= ======= ======= ======= ======= ======= ======= ====
Depreciation......... 1,650 2,046 1,956 2,841 2,850 2,850 2,850 2,850
Change in WC......... (5,138) (1,297) (5,426) (2,731) (328) 507 772 466
CapEx................ (8,254) (1,143) (10,790) (5,916) (1,804) (1,804) (1,804) (1,804)
Net Sales Growth..... (5.4)% (25.3)% 4.3% 4.0% 4.0% 4.0% 4.0%
Gross Margin......... 71.8% 67.7% 66.8% 69.9% 69.0% 69.0% 69.0% 69.0%
EBIT Margin.......... 23.5% 15.8% 14.1% 10.3% 12.7% 13.2% 13.6% 14.1%
Depreciation/Sales... 0.8% 1.1% 1.4% 1.9% 1.8% 1.8% 1.7% 1.6%
CapEx/Dep............ 5.0x 0.6x 5.3x 2.1x 0.6x 0.6x 0.6x 0.6x
</TABLE>
Source: Amway Japan management projections
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ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in Item 10 is hereby amended to read as follows:
(a) - (b) The information set forth in "Introduction," "Special
Factors -- The Offer, Related Transactions; Agreement," "Special Factors
-- Interests of Certain Persons," "The Offer -- Interests of Certain
Persons" and "The Offer -- Transactions and Agreements Concerning the
Shares" in the Offer to Purchase is incorporated herein by reference. As of
December 1, 1999, Craig N. Meurlin and Lawrence M. Call, each were the
beneficial owners of 1,000 Shares, which represents less than 0.01% of the
outstanding Shares. As of November 1, 1999, Mr. Richard M. DeVos, Jr. was
the beneficial owner of 26,752,811 Shares.
As of November 1, 1999, the following persons were the beneficial owners of
Shares:
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAMES AND ADDRESSES OF COMMON STOCK
OF BENEFICIAL OWNERS BENEFICIALLY OWNED
-------------------- ------------------
<S> <C>
Jay and Betty J. Van Andel 55,388,611(1)
David Van Andel 28,407,600(2)
Richard M. and Helen DeVos 27,488,300(3)
Richard M. DeVos, Jr. 26,752,811(4)
</TABLE>
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(1) Includes 27,614,311 shares of Common Stock held by the Jay Van Andel Trust,
25,787,300 shares of Common Stock held by Japan HC I, Inc. and 1,987,000
shares of Common Stock held by the Jay and Betty J. Van Andel Foundation
(the "Van Andel Foundation"). Under the terms of the Jay Van Andel Trust,
Jay Van Andel has sole voting and dispositive power with respect to the
shares of Common Stock held by such Trust. Jay Van Andel is a director of
Japan HC I, Inc. with shared voting and dispositive power with respect to
the shares of Common Stock held by Japan HC I, Inc., and a co-trustee of the
Van Andel Foundation with shared voting and dispositive power with respect
to the shares of Common Stock held by such Foundation. As the sole
beneficiary of the Betty J. Van Andel Trust, which is the sole shareholder
of Japan HC I, Inc., Betty J. Van Andel has shared voting and dispositive
power with respect to the shares of Common Stock held by Japan HC I, Inc.
due to her right to revoke such Trust. Jay Van Andel and Betty J. Van Andel
are married; as a consequence, each may be deemed to be the beneficial owner
of all of the shares listed.
(2) Includes 25,787,300 shares of Common Stock held by Japan HC I, Inc.,
1,987,000 shares of Common Stock held by the Van Andel Foundation, 536,000
shares of Common Stock held by the Van Andel Institute, 48,600 shares of
Common Stock held by the Van Andel Research Institute, and 48,700 shares of
Common Stock held by the Van Andel Education Institute. David Van Andel is a
director of Japan HC I, Inc. with shared voting and dispositive power with
respect to the shares of Common Stock held by Japan HC I, Inc., and a co-
trustee of the Van Andel Foundation with shared voting and dispositive power
with respect to the shares of Common Stock held by such Foundation, and a
co-trustee of the Van Andel Institute, the Van Andel Research Institute and
the Van Andel Education Institute with shared voting and dispositive power
with respect to the shares of Common Stock held by such Institutes.
(3) Includes 24,868,000 shares of Common Stock held by RDV (AJL) Holdings, Inc.,
2,620,300 shares of Common Stock held by the Richard and Helen DeVos
Foundation (the "DeVos Foundation"). As directors of RDV (AJL) Holdings,
Inc., Richard and Helen DeVos have shared voting and dispositive power with
respect to the 24,868,000 shares of Common Stock held by RDV (AJL) Holdings,
Inc. Helen DeVos is a co-trustee of the DeVos Foundation and has shared
voting and dispositive power of the 2,620,300 shares of Common Stock held by
the DeVos Foundation.
(4) Includes 2,396,800 shares of Common Stock held by RDV GRIT Holdings, Inc.,
1,550,011 shares of Common Stock held by HDV GRIT Holdings, Inc., 20,510,000
shares of Common Stock held by HDV (AJL) Holdings, Inc. and 2,296,000 shares
of Common Stock held by RDV Capital Management L.P. II. As a director of HDV
(AJL) Holdings, Inc., Richard M. DeVos, Jr. shares voting and dispositive
power with respect to the 20,510,000 shares of Common Stock held by HDV
(AJL) Holdings, Inc. Richard M. DeVos, Jr. is a director of each of RDV GRIT
Holdings, Inc. and HDV GRIT Holdings, Inc. with shared voting and
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dispositive power of the shares of Common Stock held by such corporations.
RDV Corporation is the general partner of RDV Capital Management L.P. II.
As a director of RDV Corporation, Richard M. DeVos, Jr. shares voting and
dispositive power of the shares of Common Stock held by RDV Capital
Management L.P. II. Richard M. DeVos, who holds an indirect interest in RDV
GRIT Holdings, Inc., but has no voting or dispositive power with respect to
the shares of Common Stock held by such corporation, disclaims beneficial
ownership of such shares. Helen DeVos, who holds an indirect interest in
HDV GRIT Holdings, Inc., but has no voting or dispositive power with
respect to the shares of Common Stock held by such corporation, disclaims
beneficial ownership of such shares. Richard M. DeVos, Jr. is a trustee and
beneficiary of the Richard M. DeVos, Jr. Christmas Trust, which is a
shareholder of HDV (AJL) Holdings, Inc.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD TO
THE TRANSACTION.
The information set forth in Item 12 is hereby amended to read as follows:
(a) The information set forth in "Introduction" and "The
Offer -- Interests of Certain Persons" in the Offer to Purchase is
incorporated herein by reference. In addition, Purchaser has been informed
by the Principal Shareholders that they will not tender their Shares in
response to the Offer (other than 650,000 Shares owned by one of the
charitable foundations and certain institutes established by certain of the
Principal Shareholders).
(b) The information set forth in "Introduction" and "Special
Factors -- Background of the Offer; Recommendation of the Disinterested
Directors; Reasons for the Recommendation; Opinion of the Financial Advisor
to the Disinterested Directors" in the Offer to Purchase is incorporated
herein by reference. In addition, the Disinterested Directors were also
aware of, and considered, the fact that recent market prices for the Shares
represented a historical low for the Shares.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
The information in Item 17 is hereby amended by adding the following
exhibits:
<TABLE>
<S> <C> <C>
(a) (1) Form of Senior Bank Financing Commitment Letter among NAJ,
ALAP Apple Hold Co., L.P., New AAP Limited, Amway
Corporation and Morgan Guaranty Trust Company of New York,
Tokyo Branch, dated November 15, 1999 (incorporated herein
by reference to Exhibit (b)(1) of the Schedule 14D-1 of
N.A.J. Co., Ltd. and ALAP Hold Co., Ltd. filed with the
Commission on November 18, 1999 and amended on November 26,
1999, November 30, 1999, December 7, 1999 and December 13,
1999 (the "Schedule 14D-1")).**
(2) Form of Term Sheet Regarding Credit Facility (incorporated
herein by reference to Exhibit (b)(2) of the Schedule
14D-1).**
(b) (1) Fairness Opinion of Goldman, Sachs & Co., dated November 15,
1999.**
(2) Presentation Materials of Goldman Sachs & Co., dated
November 15, 1999.
(3) Presentation Materials of Morgan Stanley & Co. Incorporated,
dated September 21, 1999.
(c) (1) Form of Tender Offer Agreement, dated November 15, 1999 by
and among AJL, NAJ and ALAP (incorporated herein by
reference to Exhibit (c)(1) of the Schedule 14D-1).**
(2) Form of Shareholder and Voting Agreement, by and among ALAP,
NAJ and Certain Shareholders of AJL, dated as of November
15, 1999 (incorporated herein by reference to Exhibit (c)(2)
of the Schedule 14D-1).**
(3) Form of English translation of Memorandum Regarding Merger
between NAJ and AJL, dated November 15, 1999 (incorporated
herein by reference to Exhibit (c)(3) of the Schedule 14D-
1).**
(d) (1) Form of Offer to Purchase, dated November 18, 1999
(incorporated herein by reference to Exhibit (a)(1) of the
Schedule 14D-1).**
(2) Form of Letter of Transmittal (incorporated herein by
reference to Exhibit (a)(2) of the Schedule 14D-1).**
</TABLE>
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<TABLE>
<S> <C> <C>
(3) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees (incorporated herein by
reference to Exhibit (a)(3) of the Schedule 14D-1).**
(4) Form of Letter to Clients for Use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees
(incorporated herein by reference to Exhibit (a)(4) of the
Schedule 14D-1).**
(5) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 (incorporated
herein by reference to Exhibit (a)(5) of the Schedule
14D-1).**
(6) Form of Letter to AJL's Holders of Common Stock and ADSs
(incorporated herein by reference to Exhibit (a)(6) of the
Schedule 14D-1).**
(7) Form of Press Release "Amway Japan's Principal Shareholders
to Commence Tender Offer for Outstanding Public Shares"
issued by AJL and the Principal Shareholders on November 15,
1999 (incorporated herein by reference to Exhibit (a)(7) of
the Schedule 14D-1).**
(8) Form of English translation of Additional Information to the
Press Release on November 15, 1999 (incorporated herein by
reference to Exhibit (a)(8) of the Schedule 14D-1).**
(9) Form of English translation of Notice of Approval of Tender
Offer, dated November 15, 1999 (incorporated herein by
reference to Exhibit (a)(9) of the Schedule 14D-1).**
(10) Form of English translation of Announcement of Approval of
Tender Offer, dated November 15, 1999 (incorporated herein
by reference to Exhibit (a)(10) of the Schedule 14D-1).**
(11) Form of English translation of Announcement of Merger, dated
November 15, 1999 (incorporated herein by reference to
Exhibit (a)(11) of the Schedule 14D-1).**
(12) Form of Statement for AJL Distributors, dated November 15,
1999 (incorporated herein by reference to Exhibit (a)(12) of
the Schedule 14D-1).**
(13) Form of Statement for AJL Employees on Electronic Bulletin
Board, dated November 15, 1999 (incorporated herein by
reference to Exhibit (a)(13) of the Schedule 14D-1).**
(14) Form of Communications to Amway Distributors, dated November
15, 1999 (incorporated herein by reference to Exhibit
(a)(14) of the Schedule 14D-1).**
(15) Form of Tender Offer Announcement to Amway Management and
Employees, dated November 15, 1999 (incorporated herein by
reference to Exhibit (a)(15) of the Schedule 14D-1).**
(16) Form of Memorandum to Diamonds Direct Distributors, dated
November 16, 1999 (incorporated herein by reference to
Exhibit (a)(16) of the Schedule 14D-1).**
(17) Form of Press Release "Amway Japan's Principal Shareholders
Commence Tender Offer For Outstanding Public Shares" issued
by AJL and the Public Shareholders on November 18, 1999
(incorporated herein by reference to Exhibit (a)(17) of the
Schedule 14D-1).**
(18) Form of English translation of Report of Announcement of
Opinion, dated November 18, 1999 (incorporated herein by
reference to Exhibit (a)(18) of the Schedule 14D-1).**
(19) Form of English translation of the Public Notice, dated
November 18, 1999 (incorporated herein by reference to
Exhibit (a)(19) of the Schedule 14D-1).**
(20) Form of Summary Advertisement published on November 18, 1999
(incorporated herein by reference to Exhibit (a)(20) of the
Schedule 14D-1).**
(21) Form of English translations of Japanese Tender Offer
Explanatory Statement and Tender Offer Application Form,
dated November 18, 1999 (incorporated herein by reference to
Exhibit (a)(21) of the Schedule 14D-1).**
(22) Form of Trustee Direction Form from the 401(k) Trustee
(incorporated herein by reference to Exhibit (a)(22) of the
Schedule 14D-1).**
(23) Form of Letter to Participants of the 401(k) Plan
(incorporated herein by reference to Exhibit (a)(23) of the
Schedule 14D-1).**
</TABLE>
10
<PAGE> 11
<TABLE>
<S> <C> <C>
(24) Form of Letter to AJL Shareholders from AJL, dated November
1999 (incorporated herein by reference to Exhibit (a)(24) of
the Schedule 14D-1).**
(25) Form of Letter to AJL Shareholders from NAJ, dated November
1999 (incorporated herein by reference to Exhibit (a)(25) of
the Schedule 14D-1).**
(26) Form of Question and Answer Memorandum to Distributors,
dated December 2, 1999 (incorporated herein by reference to
Exhibit (a)(26) of the Schedule 14D-1).**
(27) Form of English translation of the Public Notice, dated
December 7, 1999 (incorporated herein by reference to
Exhibit (a)(27) of the Schedule 14D-1).**
(28) Form of English translation of Japanese Tender Offer
Registration Statement, amended on December 7, 1999
(incorporated herein by reference to Exhibit (a)(28) of the
Schedule 14D-1).**
(e) Not applicable.
(f) Not applicable.
(g) Consent of Deloitte Touche Tohmatsu (incorporated herein by
reference to Exhibit (g) of the Schedule 14D-1).**
(h) Power of Attorney for NAJ (incorporated herein by reference
to Exhibit (h) of the Schedule 14D-1).**
</TABLE>
** Previously filed as exhibits to the Transaction Statement on Schedule 13E-3
filed by NAJ on November 18, 1999 and amended on November 26, 1999, November
30, 1999 and December 7, 1999.
11
<PAGE> 12
SIGNATURES
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.
Dated: December 13, 1999 N.A.J. CO., LTD.
By: /s/ LAWRENCE M. CALL
------------------------------------
Name: Lawrence M. Call
Title: Attorney-in-Fact
ALAP HOLD CO., LTD.
By: AP NEW CO., LLC, as general
partner
By: /s/ CRAIG N. MEURLIN
------------------------------------
Name: Craig N. Meurlin
Title: Manager
AMWAY JAPAN LIMITED
By: /s/ RICHARD S. JOHNSON
------------------------------------
Name: Richard S. Johnson
Title: President and Representative
Director
12
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
(a) (1) Form of Senior Bank Financing Commitment Letter among NAJ,
ALAP Apple Hold Co., L.P., New AAP Limited, Amway
Corporation and Morgan Guaranty Trust Company of New York,
Tokyo Branch, dated November 15, 1999 (incorporated herein
by reference to Exhibit (b)(1) of the Schedule 14D-1 of
N.A.J. Co., Ltd. and ALAP Hold Co., Ltd. filed with the
Commission on November 18, 1999 and amended on November 26,
1999, November 30, 1999, December 7, 1999 and December 13,
1999 (the "Schedule 14D-1")).**
(2) Form of Term Sheet Regarding Credit Facility (incorporated
herein by reference to Exhibit (b)(2) of the Schedule
14D-1).**
(b) (1) Fairness Opinion of Goldman, Sachs & Co., dated November 15,
1999.**
(2) Presentation Materials of Goldman Sachs & Co., dated
November 15, 1999.
(3) Presentation Materials of Morgan Stanley & Co. Incorporated,
dated September 21, 1999.
(c) (1) Form of Tender Offer Agreement, dated November 15, 1999 by
and among AJL, NAJ and ALAP (incorporated herein by
reference to Exhibit (c)(1) of the Schedule 14D-1).**
(2) Form of Shareholder and Voting Agreement, by and among ALAP,
NAJ and Certain Shareholders of AJL, dated as of November
15, 1999 (incorporated herein by reference to Exhibit (c)(2)
of the Schedule 14D-1).**
(3) Form of English translation of Memorandum Regarding Merger
between NAJ and AJL, dated November 15, 1999 (incorporated
herein by reference to Exhibit (c)(3) of the Schedule
14D-1).**
(d) (1) Form of Offer to Purchase, dated November 18, 1999
(incorporated herein by reference to Exhibit (a)(1) of the
Schedule 14D-1).**
(2) Form of Letter of Transmittal (incorporated herein by
reference to Exhibit (a)(2) of the Schedule 14D-1).**
(3) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees (incorporated herein by
reference to Exhibit (a)(3) of the Schedule 14D-1).**
(4) Form of Letter to Clients for Use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees
(incorporated herein by reference to Exhibit (a)(4) of the
Schedule 14D-1).**
(5) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 (incorporated
herein by reference to Exhibit (a)(5) of the Schedule
14D-1).**
(6) Form of Letter to AJL's Holders of Common Stock and ADSs
(incorporated herein by reference to Exhibit (a)(6) of the
Schedule 14D-1).**
(7) Form of Press Release "Amway Japan's Principal Shareholders
to Commence Tender Offer for Outstanding Public Shares"
issued by AJL and the Principal Shareholders on November 15,
1999 (incorporated herein by reference to Exhibit (a)(7) of
the Schedule 14D-1).**
(8) Form of English translation of Additional Information to the
Press Release on November 15, 1999 (incorporated herein by
reference to Exhibit (a)(8) of the Schedule 14D-1).**
(9) Form of English translation of Notice of Approval of Tender
Offer, dated November 15, 1999 (incorporated herein by
reference to Exhibit (a)(9) of the Schedule 14D-1).**
(10) Form of English translation of Announcement of Approval of
Tender Offer, dated November 15, 1999 (incorporated herein
by reference to Exhibit (a)(10) of the Schedule 14D-1).**
(11) Form of English translation of Announcement of Merger, dated
November 15, 1999 (incorporated herein by reference to
Exhibit (a)(11) of the Schedule 14D-1).**
</TABLE>
13
<PAGE> 14
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
(12) Form of Statement for AJL Distributors, dated November 15,
1999 (incorporated herein by reference to Exhibit (a)(12) of
the Schedule 14D-1).**
(13) Form of Statement for AJL Employees on Electronic Bulletin
Board, dated November 15, 1999 (incorporated herein by
reference to Exhibit (a)(13) of the Schedule 14D-1).**
(14) Form of Communications to Amway Distributors, dated November
15, 1999 (incorporated herein by reference to Exhibit
(a)(14) of the Schedule 14D-1).**
(15) Form of Tender Offer Announcement to Amway Management and
Employees, dated November 15, 1999 (incorporated herein by
reference to Exhibit (a)(15) of the Schedule 14D-1).**
(16) Form of Memorandum to Diamonds Direct Distributors, dated
November 16, 1999 (incorporated herein by reference to
Exhibit (a)(16) of the Schedule 14D-1).**
(17) Form of Press Release "Amway Japan's Principal Shareholders
Commence Tender Offer For Outstanding Public Shares" issued
by AJL and the Public Shareholders on November 18, 1999
(incorporated herein by reference to Exhibit (a)(17) of the
Schedule 14D-1).**
(18) Form of English translation of Report of Announcement of
Opinion, dated November 18, 1999 (incorporated herein by
reference to Exhibit (a)(18) of the Schedule 14D-1).**
(19) Form of English translation of the Public Notice, dated
November 18, 1999 (incorporated herein by reference to
Exhibit (a)(19) of the Schedule 14D-1).**
(20) Form of Summary Advertisement published on November 18, 1999
(incorporated herein by reference to Exhibit (a)(20) of the
Schedule 14D-1).**
(21) Form of English translations of Japanese Tender Offer
Explanatory Statement and Tender Offer Application Form,
dated November 18, 1999 (incorporated herein by reference to
Exhibit (a)(21) of the Schedule 14D-1).**
(22) Form of Trustee Direction Form from the 401(k) Trustee
(incorporated herein by reference to Exhibit (a)(22) of the
Schedule 14D-1).**
(23) Form of Letter to Participants of the 401(k) Plan
(incorporated herein by reference to Exhibit (a)(23) of the
Schedule 14D-1).**
(24) Form of Letter to AJL Shareholders from AJL, dated November
1999 (incorporated by reference to Exhibit (a)(24) of the
Schedule 14D-1).**
(25) Form of Letter to AJL Shareholders from NAJ, dated November
1999 (incorporated herein by reference to Exhibit (a)(25) of
the Schedule 14D-1).**
(26) Form of Question and Answer Memorandum to Distributors,
dated December 2, 1999 (incorporated herein by reference to
Exhibit (a)(26) of the Schedule 14D-1).**
(27) Form of English translation of the Public Notice, dated
December 7, 1999 (incorporated herein by reference to
Exhibit (a)(27) of the Schedule 14D-1).**
(28) Form of English translation of Japanese Tender Offer
Registration Statement, amended on December 7, 1999
(incorporated herein by reference to Exhibit (a)(28) of the
Schedule 14D-1).**
(e) Not applicable.
(f) Not applicable.
(g) Consent of Deloitte Touche Tohmatsu (incorporated herein by
reference to Exhibit (g) of the Schedule 14D-1).**
(h) Power of Attorney for NAJ (incorporated herein by reference
to Exhibit (h) of the Schedule 14D-1).**
</TABLE>
** Previously filed as exhibits to the Transaction Statement on Schedule 13E-3
filed by NAJ on November 18, 1999 and amended on November 26, 1999, November
30, 1999 and December 7, 1999.
14
<PAGE> 1
Exhibit (b)(2)
[GOLDMAN HIGHLY CONFIDENTIAL
SACHS LOGO] -------------------
PROJECT JUNIPER
PRESENTATION TO THE DISINTERESTED DIRECTORS
GOLDMAN, SACHS & CO.
GOLDMAN SACHS (JAPAN) LTD.
NOVEMBER 12, 1999
<PAGE> 2
TABLE OF EXHIBITS
EXHIBIT
TRANSACTION SUMMARY 1
OVERVIEW OF JUNIPER 2
PUBLIC MARKET VALUATION 3
PRIVATE MARKET VALUATION 4
ANALYSIS OF PREMIA PAID IN SELECTED TENDER OFFERS AND MINORITY
BUYOUTS 5
DISCOUNTED CASH FLOW ANALYSIS 6
APPENDIX
DETAILED FINANCIALS A
[Goldman Sachs Logo]
<PAGE> 3
TAB 1
<PAGE> 4
TRANSACTION SUMMARY
JUNIPER
PURCHASER: |X| N.A.J. Co., Ltd. ("Purchaser") is a joint
stock corporation organized under the laws
of Japan. It is a wholly-owned subsidiary of
ALAP Hold Co., Ltd. ("ALAP"), a Nevada
limited partnership controlled by the
principal shareholders of Juniper (the
"Principal Shareholders")
TENDER OFFER PRICE: |X| Yen 1,490 per share, in cash
KEY STEPS: |X| Purchaser, ALAP and Juniper will enter into
a Tender Offer Agreement
|X| Tender Offer will remain open for 30 days
|X| The Principal Shareholders will not tender
but instead will transfer their shares in
Juniper to ALAP
-- Principal Shareholders own approximately
76.6% of the shares
-- An additional 3.2% of shares are owned by
charitable foundations established by the
Principal Shareholders - these will be
tendered in the Tender Offer
ADDITIONAL TRANSACTIONS: |X| Purchaser and Juniper will agree in
principle to enter into a merger after the
consummation of the Tender Offer
-- In the merger, any remaining Juniper
shareholders (including ALAP) would receive
shares in Purchaser, the surviving company,
in accordance with an exchange ratio that
has not yet been determined
-- Upon consummation of the merger, the shares
will be de-listed from the Japanese OTC and
the ADSs from the NYSE
-- Upon consummation of the merger, there will
be no public market for Purchaser shares. In
addition, a reverse stock split may be
effected, which would result in many
shareholders holding fractional shares.
Holders of fractional shares would face a
number of restrictions, including
non-transferability and lack of voting
rights
|X| The terms of the merger have not been
agreed-upon. Goldman Sachs cannot evaluate
the fairness of the merger transaction
CONDITIONS: |X| None.
EXPECTED FINANCING: |X| Morgan Guaranty bank facility
OTHER MATTERS: |X| Principal Shareholders will not sell their
shares to any third party
[GOLDMAN
SACHS LOGO]
<PAGE> 5
JUNIPER SUMMARY OF OFFER
(JPY IN MILLIONS, EXCEPT FOR PER SHARE DATA)
CURRENT PRICE AS OF NOVEMBER 10, 1999
<TABLE>
<CAPTION>
CURRENT INITIAL REVISED
PRICE OFFER OFFER
<S> <C> <C> <C> <C> <C>
PREMIUM TO MARKET PRICE 0.0 % 39.2 % 53.6 %
PURCHASE PRICE PER SHARE 970 1,350 1,490
PREMIUM TO 52-WEEK AVERAGE (17.8)% 14.5 % 26.3 %
INCREASE FROM INITIAL OFFER 10.4 %
Number of Shares Outstanding (MM) (a) 144.0 144.0 144.0
Number of Shares to be Purchased (MM): 23.44% 33.8 33.8 33.8
Transaction Size 32,750 45,580 50,307
Implied Equity Consideration - Basic 139,705 194,435 214,599
Implied Equity Consideration - Options (b) - - -
------------------------------
EQUITY CONSIDERATION - DILUTED (b) 139,705 194,435 214,599
Net Debt (c) (21,748) (21,748) (21,748)
ENTERPRISE VALUE 117,957 172,687 192,851
EV MULTIPLE OF SALES FY 1999A 143,797 0.8x 1.2x 1.3x
FY 2000E 150,000 0.8 1.2 1.3
FY 2001E 156,000 0.8 1.1 1.2
EV MULTIPLE OF EBITDA (d) FY 1999A 22,218 5.3x 7.8x 8.7x
FY 2000E 18,251 6.5 9.5 10.6
FY 2001E 22,705 5.2 7.6 8.5
EV MULTIPLE OF EBIT (d) FY 1999A 20,261 5.8x 8.5x 9.5x
FY 2000E 15,410 7.7 11.2 12.5
FY 2001E 19,855 5.9 8.7 9.7
EQUITY MULTIPLE OF NET INCOME (d) FY 1999A 10,507 13.3x 18.5x 20.4x
FY 2000E 8,530 16.4 22.8 25.2
FY 2001E 10,920 12.8 17.8 19.7
PREMIUM TO:
52-Week High 1,430 (32.2)% (5.6)% 4.2%
All-Time High 9,267 (89.5) (85.4) (83.9)
52-Week Low 970 0.0 39.2 53.6
</TABLE>
(a) As of August 31, 1999.
(b) Assumes 0.1 million options outstanding with a weighted average strike price
of 2,470. All are out of the money.
(c) Assumes net debt of (Yen)(21,748) million as of August 31, 1999.
(d) FY2000-2004E estimates by Juniper management
<PAGE> 6
TAB 2
<PAGE> 7
[Goldman Sachs Logo]
SWOT ANALYSIS
JUNIPER
STRENGTHS
- --------------------------------------------------------------------------------
[X] Japan one of the largest direct selling market in the world
[X] One of the longest established, largest direct selling companies in
Japan with a powerful sales force
[X] Japanese culture of extended family ties and lifelong close personal
relationships well-suited to Juniper Sales and Marketing Plan
[X] High quality products sold at a premium, mostly in third quartile price
range
[X] Well-recognized brand name
[X] Strong management team
[X] Healthy balance sheet with little fixed assets/capex needs
OPPORTUNITIES
- --------------------------------------------------------------------------------
[X] Economic recovery in Japan
[X] Recovering public image, with JCIC and press contained through
introduction of 3D Project, US government lobbying, sponsorship of
major sporting events
[X] Distributor morale recovering, supported by new incentive schemes
[X] New distributor recruiting initiatives
[X] 3D Project (direct fulfillment, direct marketing, distributor
communication) and better database management should improve
transparency and control of the distributor network, increasing
productivity in the long-term
[X] Internet strategy to be in place by 2000, involving a wholesale buying
club concept. Web already used to facilitate direct fulfillment
[X] New product launches targeted to the local market
[X] Scope for further alliances with other brands (e.g. DoCoMo, PerfecTV,
Rubbermaid)
[X] As Japan restructures and lifelong employment is threatened, Juniper's
entrepreneurial opportunities may become increasingly attractive
[X] Further cost cutting
WEAKNESSES
- -------------------------------------------------------------------------------
[X] Sustained recession in Japan resulting in:
-- Consumers being more selective in purchases and passing on high-ticket
items
-- Shrinking distributor force due to poor new application and renewal
rates
-- Foreign exchange fluctuations impacting gross margin as only partially
"hedged" and increased purchasing costs cannot be passed through to
consumers
[X] Suffers from poor public image of multi-level direct selling in general
[X] Distributor recruiting suffered particularly in last two years due to
debates in the Diet and pursuant attacks by JCIC and the press
[X] Juniper's complex distributor system inherently difficult to control
and monitor, exposing it to potential abuses
[X] Disproportionately dependent on a small number of distributor leaders
to run the network effectively
[X] High cost of sourcing from Ada, Michigan
THREATS
- -------------------------------------------------------------------------------
[X] Continued recessionary environment
[X] The current recession may have fundamentally altered consumer mentality
towards a more commoditized environment
[X] Increased competition from:
- -- New entrants in direct selling competing for distributors
- -- Consumer products manufacturers competing for end users
[X] Abuse by other direct selling companies tarnishing industry's, and
hence Juniper's, image
[X] Vulnerable to unexpected attacks by the public and any ensuing
regulatory tightening
[X] 3D Project would increase administration costs and product returns in
the short-term
[X] Continuing need to adapt business model to changes in environment
<PAGE> 8
RECENT EVENTS
JUNIPER
[Annotated Share Price Graph]
THE DROP IN JUNIPER'S SHARE PRICE IS ATTRIBUTABLE TO THE IMPACT OF THE RECESSION
ON EARNINGS AND NEGATIVE PRESS
Source: Mueller; news runs
[GOLDMAN
SACHS LOGO]
<PAGE> 9
SUMMARY OF HISTORICAL FINANCIALS [GOLDMAN
JUNIPER SACHS LOGO]
- -------------------------------------------------------------------------------
SALES
- -------------------------------------------------------------------------------
[GRAPH of 1995 - 2000E Sales and Year-on-Year Sales Growth]
1995 - 2000E CAGR: (3.4)%
- -------------------------------------------------------------------------------
GROSS PROFIT
- -------------------------------------------------------------------------------
[GRAPH of 1995 - 2000E Gross Profit and Gross Margin]
1995 - 2000E CAGR; (4.3)%
- -------------------------------------------------------------------------------
EBIT
- -------------------------------------------------------------------------------
[GRAPH of 1995 - 2000E EBIT and EBIT Margin]
1995 - 2000E CAGR; (20.9)%
- -------------------------------------------------------------------------------
NET INCOME
- -------------------------------------------------------------------------------
[GRAPH of 1995 - 2000E Net Income and Net Margin]
1995 - 2000E CAGR: (18.0)%
Source: 20-F, Juniper Management budget
<PAGE> 10
SHARE PRICE HISTORY [GOLDMAN
JUNIPER SACHS LOGO]
- -------------------------------------------------------------------------------
SINCE IPO (a)
- -------------------------------------------------------------------------------
[GRAPH of closing stock price and volume traded]
- -------------------------------------------------------------------------------
THREE YEARS (b)
- -------------------------------------------------------------------------------
[GRAPH of closing stock price and volume traded]
- -------------------------------------------------------------------------------
ONE YEAR (c)
- -------------------------------------------------------------------------------
[GRAPH of closing stock price and volume traded]
- -------------------------------------------------------------------------------
SIX MONTHS (d)
- -------------------------------------------------------------------------------
[GRAPH of closing stock price and volume traded]
Source: NIKKEI's NEEDS - Database
(a) Plotted monthly from 4/30/1991 to 10/29/1999
(b) Plotted weekly from 11/1/1996 to 10/29/1999
(c) Plotted daily from 10/29/1998 to 10/29/1999
(d) Plotted daily from 4/29/1999 to 10/29/1999
<PAGE> 11
SHARES TRADED AT VARIOUS PRICES(a)
JUNIPER
- -------------------------------------------------------------------------------
SINCE IPO (b)
- -------------------------------------------------------------------------------
[BAR CHART]
- -------------------------------------------------------------------------------
THREE YEARS (c)
- -------------------------------------------------------------------------------
[BAR CHART]
- -------------------------------------------------------------------------------
ONE YEAR (d)
- -------------------------------------------------------------------------------
[BAR CHART]
- -------------------------------------------------------------------------------
SIX MONTHS (e)
- -------------------------------------------------------------------------------
[BAR CHART]
% OF 1999 YTD TRADING VOLUME
[PIE CHART]
Source: NIKKEI's NEEDS - Database
(a) Japan OTC only
(b) From 4/30/1991 to 10/29/1999
(c) From 11/1/1996 to 10/29/1999
(d) From 10/29/1998 to 10/29/1999
(e) From 4/29/1999 to 10/29/1999
[Goldman Sachs Logo]
<PAGE> 12
HISTORICAL RELATIVE STOCK PRICE PERFORMANCE [GOLDMAN SACHS LOGO]
JUNIPER
Asian Direct Marketing Index
- ----------------------------
Apple
Cosway
Mango
US Direct Marketing Index
- -------------------------
Avon
Herbalife
Nu Skin
Rexall Sundown
Thomas Nelson
Tupperware
Japanese Direct Marketing Index
- -------------------------------
Avon Japan
Ivy Cosmetics
Noevir
Shaklee Japan
Nikkei 225 Stock Average Close
- ------------------------------
Juniper
- -------
- -------------------------------------------------------------------------------
SINCE IPO (a)
- -------------------------------------------------------------------------------
[GRAPH of Asia Direct Marketing Index, US Direct Marketing Index, Japanese
Direct Marketing Index, Nikkei 225 Stock Average Close, and Juniper relative
price performance]
- -------------------------------------------------------------------------------
THREE YEARS (b)
- -------------------------------------------------------------------------------
[GRAPH of Asia Direct Marketing Index, US Direct Marketing Index, Japanese
Direct Marketing Index, Nikkei 225 Stock Average Close, and Juniper relative
price performance]
- -------------------------------------------------------------------------------
ONE YEAR (c)
- -------------------------------------------------------------------------------
[GRAPH of Asia Direct Marketing Index, US Direct Marketing Index, Japanese
Direct Marketing Index, Nikkei 225 Stock Average Close, and Juniper relative
price performance]
- -------------------------------------------------------------------------------
SIX MONTHS (d)
- -------------------------------------------------------------------------------
[GRAPH of Asia Direct Marketing Index, US Direct Marketing Index, Japanese
Direct Marketing Index, Nikkei 225 Stock Average Close, and Juniper relative
price performance]
Source: Mueller
(a) Plotted monthly from 4/30/1991 to 10/29/1999
(b) Plotted weekly from 11/1/1996 to 10/29/1999
(c) Plotted daily from 10/29/1998 to 10/29/1999
(d) Plotted daily from 4/29/1999 to 10/29/1999
<PAGE> 13
Summary of Research Comments
Juniper
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Share
Date Company Price EPS Rating Comments
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
10/15/1999 Merrill Lynch & Co (Yen)1,000 (Yen)60.00 Long Term |X| The closing number of distributors declined 3.9%
(FY2000E) Neutral YoY to 1.1mm. Management notes that new
sign-ups were depressed. This points to
Int. Term further earnings weakness
Reduce |X| Improved non-operating items and a lower tax
rate hold the decline in after-tax earnings to
18% or (Yen)10.5bn vs. our (Yen)9.0bn estimate
- -----------------------------------------------------------------------------------------------------------------------------------
7/2/1999 Merrill Lynch & Co (Yen)1,220 (Yen)60.00 Long Term |X| Cost cutting is improving earnings, but the
(FY2000E) Neutral revenue outlook remains depressed as long as
the number of distributors is still declining
Int. Term |X| Until this trend reverses, our investment
Reduce opinion remains Reduce
- ---------------- -------------------- ----------- ------------- ------------- ------------------------------------------------------
4/10/1999 Merrill Lynch & Co (Yen)1,160 (Yen)60.00 Long Term |X| Core distributors dropped 5% YoY to 984,000 vs.
(FY2000E) Neutral our estimated 950,000
Int. Term |X| AJL is feeling the negative impact of lower
Reduce consumption, fewer distributors and the dearth
of new products. We believe this situation is
likely to continue throughout this year
- -----------------------------------------------------------------------------------------------------------------------------------
11/5/1998 Merrill Lynch & Co (Yen)1,420 (Yen)97.00 Long Term |X| The 3D Project will remake Juniper's multi-layer
(FY2000E) Accumulate organization into a tighter ship and possibly a
more effective one
Int. Term |X| Although the EPS estimates for FY8/99 and FY8/00
Neutral are lower than the indicated dividend of (Yen)100,
dividend level should hold given the
significant cash position
|X| Our long-term investment opinion of Accumulate is
based on the thesis that the dividend would hold;
the implied dividend yield is 7%
</TABLE>
[Goldman Sachs Logo]
<PAGE> 14
MACROECONOMIC ENVIRONMENT(a)(b)
JAPAN
[GRAPH of Year-on-Year GDP and private consumption growth rates 1995 - 2003E]
(a) Years ending on March 31 following of the calendar years.
(b) All data plotted yearly.
Source: Historical data from Economic Planning Agency.
Estimates by GS Research (Sept. 17, 1999) and Japan Center for
Economic Research (Dec. 3, 1998).
[Goldman Sachs Logo]
<PAGE> 15
OVERVIEW OF JAPANESE YEN EXCHANGE RATE HISTORY
YEN/$US
[GRAPH of Yen/$ US exchange rate 1997 - 2000E]
Source: Datastream (plotted daily from 1/01/1997 to 10/15/1999, projection by GS
Research (Sept. 28, 1999)
[Goldman Sachs Logo]
<PAGE> 16
DISTRIBUTOR FORCE AND PRODUCTIVITY ANALYSIS [Goldman Sachs Logo]
JUNIPER
- -------------------------------------------------------------------------------
DISTRIBUTOR FORCE
- -------------------------------------------------------------------------------
[Graph of number of distributors, new applicants, and renewal rate 1994 - 1999]
- -------------------------------------------------------------------------------
DISTRIBUTOR PRODUCTIVITY
- -------------------------------------------------------------------------------
[Graph of sales per distributor and ratio of new applicants 1994 - 1999]
Source: Juniper
<PAGE> 17
TAB 3
<PAGE> 18
COMPARISON OF SELECTED COMPANIES [Goldman Sachs Logo]
DIRECT SALES
(US$ IN MILLIONS, EXCEPT PER SHARE DATA)
MARKET DATA AS OF 11/10/99
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
BASIC ENTERPRISE VALUE
% OF 3 EQUITY LEVERED LTM MARGINS (b) MULTIPLES OF LTM (b)
COMPANY % OF 52 YEAR HIGH MARKET MARKET ----------------------- ------------------------
WEEK HIGH PRICE CAP CAP EBITDA EBIT SALES EBITDA EBIT
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JUNIPER (a) 68.3% 20.5% $ 1,324 $ 1,118 15.5% 14.1% 0.8X 5.3 5.8X
US DIRECT SALES COMPANIES
Avon (d) 51.2 51.2 7,498 7,941 13.4 11.9 1.5 11.3 12.7
Nu Skin 43.4 35.4 361 349 20.7 16.8 0.4 1.8 2.3
Tupperware (e) 73.8 34.4 1,084 1,417 17.5 11.5 1.3 7.7 11.7
Thomas Nelson 70.5 63.7 140 237 12.1 8.7 0.9 7.4 10.3
Herbalife 87.3 36.4 381 273 5.2 4.2 0.2 3.1 3.8
Rexall Sundown 48.2 28.3 704 713 19.6 17.5 1.2 6.2 6.9
Nature's Sunshine 39.8 24.7 124 99 13.6 11.8 0.3 2.5 2.9
USANA 41.0 32.4 94 92 15.8 13.2 0.8 5.1 6.0
- --------------------------------------------------------------------------------------------------------------------------------
MEAN 14.7% 12.0% 0.8X 5.6X 7.1X
MEDIAN 14.7 11.9 0.8 5.6 6.5
- --------------------------------------------------------------------------------------------------------------------------------
ASIAN DIRECT SALES COMPANIES
Apple (a) 80.1 23.4 653 545 7.8 5.2 1.1 13.9 20.7
Cosway Corp. Berhad 63.4 34.0 163 410 7.8 5.3 1.1 14.3 21.0
Mango 95.4 52.5 244 243 14.2 13.6 2.9 20.7 21.6
- --------------------------------------------------------------------------------------------------------------------------------
MEAN 9.9% 8.0% 1.7X 16.3X 21.1X
MEDIAN 7.8 5.3 1.1 14.3 21.0
- --------------------------------------------------------------------------------------------------------------------------------
JAPANESE DIRECT SALES COMPANIES
Avon Japan 73.7 62.3 144 140 4.1 1.8 0.5 11.5 26.4
Ivy Cosmetics 68.1 59.1 41 32 19.8 16.7 0.6 3.0 3.6
Noevir 69.0 41.9 400 280 7.4 4.1 0.7 10.1 18.4
Shaklee Japan 80.6 54.9 238 170 13.7 13.6 1.5 10.6 10.7
- --------------------------------------------------------------------------------------------------------------------------------
MEAN 11.2% 9.0% 0.8X 8.8X 14.8X
MEDIAN 10.6 8.8 0.7 10.4 14.6
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
CALENDARIZED
P/E
MULTIPLES (c) 5-YR EST.
COMPANY ---------------- EPS P/E TO GROWTH DIVIDEND
2000E 2001E GROWTH (c)(f) 2000E 2001E YIELD ROCE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
JUNIPER (a) 16.2X 15.3X 2.0% 8.1X 7.7X 10.3% 17.8%
US DIRECT SALES COMPANIES
Avon (d) 15.5 12.6 14.0 1.1 0.9 2.5 1.9
Nu Skin 8.5 7.1 20.0 0.4 0.4 N.A. 42.4
Tupperware (e) 10.8 9.7 11.0 1.0 0.9 4.7 55.6
Thomas Nelson 10.2 9.1 12.5 0.8 0.7 1.6 8.1
Herbalife 8.1 N.A. N.A. N.A. N.A. 4.5 25.8
Rexall Sundown 10.0 1.5 15.0 0.7 0.1 N.A. 28.3
Nature's Sunshine 6.5 5.7 N.A. N.A. N.A. 1.8 29.9
USANA 11.2 8.2 N.A. N.A. N.A. N.A. 35.0
- -------------------------------------------------------------------------------------------------------------
MEAN 10.1X 7.7X 14.5% 0.8X 0.6X 3.0% 28.4%
MEDIAN 10.1 8.2 14.0 0.8 0.7 2.5 29.1
- -------------------------------------------------------------------------------------------------------------
ASIAN DIRECT SALES COMPANIES
Apple (a) 46.3 12.5 17.5 2.6 1.0 N.A. 8.5
Cosway Corp. Berhad N.A. N.A. N.A. N.A. N.A. 1.6 (0.3)
Mango 19.2 15.9 6.0 3.2 2.7 2.7 18.5
- -------------------------------------------------------------------------------------------------------------
MEAN 32.7X 16.9X 11.8% 2.9X 1.8X 2.2 % 8.9%
MEDIAN 32.7 16.9 11.8 2.9 1.8 2.2 8.5
- -------------------------------------------------------------------------------------------------------------
JAPANESE DIRECT SALES COMPANIES
Avon Japan 30.4 N.A. N.A. N.A. N.A. 2.8 5.0
Ivy Cosmetics 8.7 N.A. 15.0 0.6 N.A. 1.8 9.7
Noevir 32.5 N.A. 17.6 1.8 N.A. 1.7 3.0
Shaklee Japan 29.1 N.A. 2.0 14.6 N.A. 3.1 6.4
- -------------------------------------------------------------------------------------------------------------
MEAN 25.2X N.M. 11.5% 5.7X N.M. 2.3% 6.0%
MEDIAN 29.8 N.M. 15.0 1.8 N.M. 2.3 5.7
- -------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------
5-YR NON-US SALES ASIAN AS
COMPANY SALES AS % OF % OF TOTAL
CAGR TOTAL SALES
- -------------------------------------------------------------------------
<S> <C> <C> <C>
JUNIPER (a) (1.8)% 100.0 % 100.0%
US DIRECT SALES COMPANIES
Avon (d) 6.3 60.7 12.4
Nu Skin 52.5 99.1 88.2
Tupperware (e) (1.6) 84.8 21.1
Thomas Nelson 12.8 N.A. N.A.
Herbalife 18.9 70.7 43.8
Rexall Sundown 41.6 N.A. N.A.
Nature's Sunshine 18.4 36.8 3.7
USANA 99.3 45.1 16.2
- -------------------------------------------------------------------------
MEAN 31.0% 66.2% 30.9%
MEDIAN 18.6 65.7 18.7
- -------------------------------------------------------------------------
ASIAN DIRECT SALES COMPANIES
Apple (a) (3.9)
Cosway Corp. Berhad 16.4
Mango 9.4
- -------------------------------------------------------------------------
MEAN 7.3%
MEDIAN 9.4
- -------------------------------------------------------------------------
JAPANESE DIRECT SALES COMPANIES
Avon Japan 8.6
Ivy Cosmetics 1.9
Noevir (3.4)
Shaklee Japan (4.8)
- -------------------------------------------------------------------------
MEAN 0.6%
MEDIAN (0.8)
- -------------------------------------------------------------------------
</TABLE>
(a) Financial Statement data as of 08/31/1999.
(b) Financial statement data as of latest twelve months available.
(c) Source: IBES estimates as of 11/10/99. Asia and Japan marketing
companies not calendarized.
(d) Excludes $105.2m and $70.5m in restructuring charges in 1999 & 1998
respectively.
(e) Excludes $15m re-engineering charge in 1998.
(f) Juniper growth estimate from Merrill Lynch Report dated 10/15/1999.
<PAGE> 19
SELECTED PERFORMANCE BENCHMARKS [Goldman Sachs Logo]
DIRECT MARKETING COMPANIES
- -------------------------------------------------------------------------------
HISTORICAL SALES GROWTH 5 YEAR CAGR
- -------------------------------------------------------------------------------
[GRAPH]
- -------------------------------------------------------------------------------
LTM GROSS AND EBIT MARGIN
- -------------------------------------------------------------------------------
[GRAPH]
- -------------------------------------------------------------------------------
PROJECTED 5 YEAR EPS GROWTH RATE
- -------------------------------------------------------------------------------
[GRAPH]
- -------------------------------------------------------------------------------
LTM RETURN ON COMMON EQUITY
- -------------------------------------------------------------------------------
[GRAPH]
Source: Historical figures from company reports;
projected 5 year EPS growth rates from IBES
<PAGE> 20
JUNIPER HISTORICAL PUBLIC MARKET VALUATION PERFORMANCE [Goldman Sachs Logo]
EV MULTIPLE OF TRAILING EBIT (a)
[GRAPH]
ONE YEAR FORWARD P/E MULTIPLE (b)
[GRAPH]
DIVIDEND YIELD (c)
[GRAPH]
Source: Factset
(a) Multiple of immediately proceeding fiscal year EBIT. Weekly closing price,
except current week for close November 10, 1999.
(b) IBES one year forward EPS estimates. Weekly closing price, except current
week for close November 10, 1999.
(c) In JPY yield. Weekly closing price, except current week for close November
10, 1999.
<PAGE> 21
FUTURE TRADING RANGE ANALYSIS [Goldman Sachs Logo]
JUNIPER
[GRAPH]
Source: EPS projections from Juniper management.
<PAGE> 22
FUTURE TRADING RANGE SENSITIVITY ANALYSIS (a)
JUNIPER
HYPOTHETICAL SHARE PRICE TODAY IF EXIT IN 4 YEARS AT:
VARIOUS EXIT FORWARD P/E MULTIPLES AND EXPECTED RETURNS (b)
<TABLE>
<CAPTION>
--------------------------------------------------------------
EXIT FWD P/E MULTIPLE IN 4 YEARS
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
6x 11x 16x 21x 26x
--------------------------------------------------------------
12.0% 387 709 1,031 1,353 1,676
Expected 10.0% 416 763 1,110 1,456 1,803
Equity 8.0% 448 822 1,196 1,569 1,943
Return 6.0% 484 887 1,290 1,694 2,097
4.0% 523 959 1,395 1,830 2,266
</TABLE>
<TABLE>
<CAPTION>
VARIOUS INCREMENTAL FY2004E EPS AND EXPECTED RETURNS (b)(c)
------------------------------------------------
INCREMENTAL FY2004E EPS
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
(20.0)% (10.0)% 0.0% 10.0% 20.0%
--------------------------------------------------------------
12.0% 825 928 1,031 1,134 1,237
Expected 10.0% 888 999 1,110 1,221 1,332
Equity 8.0% 957 1,076 1,196 1,315 1,435
Return 6.0% 1,032 1,161 1,290 1,419 1,549
4.0% 1,116 1,255 1,395 1,534 1,674
</TABLE>
(a) Asumes expected return for shareholders comprise dividend yield and share
price appreciation
(b) Assumes 2% dividend yield, consistent with dividend yield of selected
comparable publicly listed companies
(c) Assumes 16x forward P/E at time of exit
Source: FY2004E forecasts from Juniper management
[Goldman Sachs Logo]
<PAGE> 23
TAB 4
<PAGE> 24
MH MILLENNIUM ACQUISITION OF HERBALIFE
SEPTEMBER 17, 1999
Background (a)
- --------------------------------------------------------------------------------
- - MH Millennium Acquisition, a subsidiary of MH Millennium Holdings, tendered
for all outstanding shares of Herbalife it does not already own. The Tender
was effective on September 17, 1999 until October 15, 1999, however was
extended at the same price until November 24, 1999. The initial proposal of
$12.50 on August 11, 1999 was rejected by the Special Committee as being
unfair
- - The purchaser is the Company's founder, CEO, President and Chairman Mark
Hughes, who owns 100% of MH Millennium Holdings which beneficially owns
55.4% and 59.0% of outstanding Herbalife Class A and B Shares respectively
- - Herbalife is a network marketing company that sells a wide range of weight
management products, food and dietary products worldwide. Number of
worldwide distributors is 750,000. Japan accounted for 32% of 1998 sales
- - The motive for transaction was the deterioration in Herbalife's share
price, which was considered undervalued by the Company. Management wanted
the freedom to invest in long-term markets
- - Marketplace reaction (b): "Institutional shareholders who stood by founder
Mark Hughes . . . are crying foul over his plan to take the company
private." "I think the $17 price is ridiculous. The only ones making money
on this stock are insiders." - Richard Todaro, Kennedy Capital Management
<TABLE>
<CAPTION>
Transaction Summary (a)
- --------------------------------------------------------------------------------
<S> <C> <C>
Current Price of Tender: $17.00 Initial Price (non-public): $12.50
# of Shares Tendered for: Class A: 4.3m Class B: 7.3m
% of Total Shares O/S 42.9% 39.5%
Transaction Size (c): ($) 267.8m
Implied Equity Consideration (c): ($) 543.0m
Implied Enterprise Value (c) (d): ($) 415.5m
</TABLE>
<TABLE>
<CAPTION>
Multiple of Premium (Class A/B)
- -------------------------------------- --------------------------------------
<S> <C> <C> <C>
LTM Retail Sales: 0.2x 1 Day Prior: 39/84%
LTM EBIT: 5.0x 52 wk High: (41)/(38)%
LTM Net Income: 10.7x 52 wk Low: 127/183%
2000E Net Income (e) 10.3x
</TABLE>
<TABLE>
<CAPTION>
Summary Financials (a)
Financial Year ended December 31,
- -------------------------------------------------------------------------------
(US$mm) 1997 1998 LTM 9/1999
===============================================================================
<S> <C> <C> <C>
Retail Sales 1,490.7 1,644.8 1,746.1
Y-on-Y Growth (%) 24.2 10.3 7.6
Gross Profit 1,285.6 1,414.0 1,501.6
Gross Margin (%) 86.2 85.97 86.0
EBIT 86.0 78.3 83.0
Margin (%) 5.8 4.8 4.8
Net Income 54.7 48.5 50.8
Margin (%) 3.7 3.0 2.9
Net Debt (118.6) (100.9) (129.5)(d)
Fully Diluted EPS 1.72 1.60 1.30
</TABLE>
5 Year Share Price Performance (f)
- --------------------------------------------------------------------------------
[GRAPH]
(a) Source: Company filings (10K, 10Q, SC 14D1, LTM from unaudited company
release).
(b) Source: LA Times dated September 16,1999.
(c) Includes purchase of options.
(d) Net debt from 6/1999 10-Q, latest available.
(e) IBES Estimates.
(f) Source: Muller.
<PAGE> 25
INDUSTRI KAPITAL & JOCHNICK FAMILY ACQUISITION OF ORIFLAME
SEPTEMBER 7, 1999
Background
- --------------------------------------------------------------------------------
- - MBO bid by Oriflame Trading, a unit of Oriflame International will lead to
control by both the Industri Kapital Group and the Jochnick family. The two
groups launched a tender offer for 49.73m shares at 265p for a 27.7%
premium on the undisturbed market price. The stock delisted from the LSE on
10/14/1999
- - The bidders are the founding Jochnick family and the Anglo-Swedish private
equity group, Industri Kapitol. Each will own 50% of the ensuing privately
held corporation
- - A strong motivating factor for the tender offer was the need for the family
to be able to build a strong distribution system in those countries where
the economy was in depression
- - Oriflame International is a direct seller in 52 countries with over 750,000
distributors. It is one of the leading direct selling cosmetics companies
in the world. Oriflame utilizes retail outlets and pharmacies for some of
its brand name items
- - Oriflame has limited exposure to Asian Pacific countries, with a
distributor sales force only in Malaysia and Indonesia. Shelved plans to
grow presence in Asia until economic upturn begins
<TABLE>
<CAPTION>
Transaction Summary (a)(b)
- --------------------------------------------------------------------------------
<S> <C>
Price: 265p
# of Shares Tendered for: 49.7m
% of Total Shares O/S 50.1%
Transaction Size: (GBP) 131.8m
Implied Equity Consideration: (GBP) 265.5m
Implied Enterprise Value: (GBP) 290.1m
</TABLE>
<TABLE>
<CAPTION>
Multiple of Latest FYE Premium
- -------------------------------------- --------------------------------------
<S> <C> <C> <C>
Sales: 1.2x Undisturbed Price: 28%
EBIT: 9.6x 52 wk High: 0%
Net Income: 15.8x 52 wk Low: 121%
2000E Net Income: 12.6x
</TABLE>
<TABLE>
<CAPTION>
Financials (c)
- -------------------------------------------------------------------------------
Fiscal Year Ending Dec. 31,
===============================================================================
(GBPmm) 1997 1998
- --------------------------------------------------------------------------------
<S> <C> <C>
Sales 252.8 233.1
Y-on-Y Growth (%) 9.2 (7.8)
Gross Profit 176.6 162.3
Gross Margin (%) 69.9 69.6
EBIT 43.0 30.2
Margin (%) 17.0 13.0
Net Income 32.0 16.8
Margin (%) 12.7 7.2
Net Debt 3.1 24.7
EPS (Fully Diluted) 30.9 16.5
</TABLE>
5 Year Share Price Performance (d)
- --------------------------------------------------------------------------------
[GRAPH]
(a) All data in UK Pounds except per share, which is in pence; FDSO = 100.17MM
(b) IBES estimates.
(c) Financial data based on company reports as of calendar year end; 1998
before discontinued operations; 1997 before merger costs; LTM not
meaningful due to insufficient disclosure of interim effects of
discontinued operations
(d) Source: Mueller.
(e) Bloomberg.
<PAGE> 26
AVON INTERNATIONAL OPERATIONS TOB FOR AVON PRODUCTS
SEPTEMBER 14, 1992
Background
- - On September 14, 1992, Avon International Operations Inc., a subsidiary of
Avon (US), commenced a TOB to acquire shares it did not already own in Avon
Products Co., Ltd.
- - The buyer already held 60% of the outstanding common stock in Avon Products
Co., Ltd.
- - Although the purchase price was set at a 20% premium to the market price,
Avon International Operations Inc. was able to purchase only 5,757,000
shares, or approximately 42% of the shares it had tendered for
- - The primary reason for the lack of success was that many of the investors
had initially bought into the stock at prices significantly higher than the
offer price
<TABLE>
<CAPTION>
Transaction Summary (a)
- --------------------------------------------------------------------------------
(Yen mm)
Offer Price: (Yen)560
<S> <C>
# of Shares Tendered for: 13.6m (up to 20m)
% of Total Shares O/S: 20% (up to 29.4%)
Transaction Size: (Yen)7,616m
Implied Equity Consideration: (Yen)38,080m
Implied Enterprise Value: (Yen)47,891m
</TABLE>
<TABLE>
<CAPTION>
Multiple of Premium
- -------------------------------------- --------------------------------------
<S> <C> <C> <C>
FY 1991 Sales (x): 1.1x 1 Day Prior: 19.1%
FY 1991 EBIT: 12.9x 52 wk High: (27.9)%
FY 1991 Net Income: 24.7x 52 wk Low: 60.0%
FY 1992E Net Income: 22.4x
</TABLE>
<TABLE>
<CAPTION>
Summary Financials (a)
- --------------------------------------------------------------------------------
((Yen)MM) 11/1990 11/1991
- --------------------------------------------------------------------------------
<S> <C> <C>
Sales 39,382 40,885
Y-on-Y Growth (%) (1.9) (3.8)
Gross Profit 7,809 8,101
Margin (19.8) (19.8)
EBIT 3,685 3,708
Margin (9.4) (9.1)
Net Income 2,041 1,542
Margin (5.2) (3.8)
Net Debt 11,630 9,811
EPS 15.02 11.35
</TABLE>
5 Year Share Price Performance (b)
- --------------------------------------------------------------------------------
[GRAPH]
(a) Source: SDC, Japan Company Handbook, company disclosure material.
(b) Source: Nikkei-Needs Database.
<PAGE> 27
TAB 5
<PAGE> 28
PREMIA PAID IN SELECTED JAPANESE TENDER OFFERS
<TABLE>
<CAPTION>
ANNOUNCEMENT TARGET BUYER OFFER PRICE PREMIUM*
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
9/9/1999 Toho Rayon Teijin 7.8%
2/16/1999 Apollo Electronics Rohm 44.1%
11/10/1998 Komatsu Zenoah Komatsu 23.0%
11/2/1998 Torii Pharmaceutical Japan Tabacco 7.2%
10/16/1998 Tensho Electric Sanko 95.2%
8/31/1998 Daihatsu Co., Ltd. Toyota Motor Corp. 6.8%
4/21/1998 Japan Marine Technologies Ltd. TI Group PLC 56.8%
- ------------------------------------------------------------------------------------------------------------
4/17/1998 NCR Japan Ltd. NCR Holdings Ltd. 26.5%
- ------------------------------------------------------------------------------------------------------------
4/2/1998 Biotech K.K. Showa Denko K.K. 3.3%
11/26/1997 Unidux corp. Kanematsu Corp. 72.8%
9/24/1996 Royal Electric Co., Ltd. Ono Warehouse Co., Ltd. 14.0%
3/23/1993 Sakura Rubber Co., Ltd. Management 4.7%
Average 30.2%
Median 18.5%
* Premium over closing price 1 day prior to announcement.
Source: Press reports
</TABLE>
<PAGE> 29
PREMIA PAID IN RECENT ASIAN TENDER OFFERS
INCLUDES AUSTRALIA AND NEW ZEALAND (a)(b)(c)
[Mean: 23.0%]
[Median: 18.2%]
[GRAPH]
(a) Australia and New Zealand represent 75.6% of total deals.
(b) Premiums calculated to closing price 1 day prior to announcement.
(c) For deals where data available.
Source: SDC; last 5 years
[GOLDMAN SACHS LOGO]
<PAGE> 30
PREMIA PAID IN RECENT ASIAN TENDER OFFERS
EXCLUDES AUSTRALIA AND NEW ZEALAND (a)(b)(c)
[Mean: 8.6%]
[Median: 6.1%]
[GRAPH]
(a) Includes India, Indonesia, Hong Kong, Malaysia, Philippines,
Singapore and Thailand.
(b) Premiums calculated to closing price one day prior to announcement.
(c) For deals where data available.
Source: SDC; last 5 years.
[GOLDMAN SACHS LOGO]
<PAGE> 31
PREMIA PAID IN RECENT US TENDER OFFERS (a) (b)
[Mean: 29.2%]
[Median: 33.5%]
[GRAPH]
(a) Premium calculated to closing price 1 day prior to announcement.
(b) For deals where data available.
Source: SDC; all US tender offers launched since 10/1994
[GOLDMAN SACHS LOGO]
<PAGE> 32
[GOLDMAN SACHS LOGO]
COMPARISON OF SELECTED MINORITY BUYOUTS (a)
<TABLE>
<CAPTION>
Premium of Initial vs. Closing Premium of Final Price
Stock Price One Day Prior to Percent Increase in vs. Closing Stock Price
Announcement Final Price vs. Initial Bid One Day Prior to Announcement
<S> <C> <C>
[Mean: 17.4]% [Mean: 10.9%] [Mean: 26.0%]
[Median: 14.3%] [Median: 8.5%] [Median: 21.4%]
[Herbalife A: 2.0%(b)] [Herbalife A: 36.0%] [Herbalife: 38.8%]
[Herbalife B: 35.1%(b)] [Herbalife B: 36.0%] [Herbalife: 83.8%]
[GRAPH] [GRAPH] [GRAPH]
</TABLE>
(a) Represents transactions in excess of $100 million from 1989 to 1999 where
the acquiror had in excess of approximately 50% ownership prior to
transaction and increased to 100% ownership.
(b) Based on offer price of $12.50 per share. This initial offer was non-public.
(c) Based on offer price of $17 per share.
Source: SDC
<PAGE> 33
TAB 6
<PAGE> 34
JUNIPER DISCOUNTED CASH FLOW ANALYSIS
KEY ASSUMPTIONS
- - All financial projections have been provided by Juniper management
- - The projections have been updated in October to reflect the current outlook
for the company
- - FY2000 figures have been produced on a bottom-up, product-by-product, cost
item-by-cost item basis according to the annual budgeting process
- - FY2001-FY2004 figures are produced by extrapolating FY2000, using
year-on-year net sales growth and margin ratios as key drivers
- - FY2000-FY2004 figures reflect the following:
- Negative impact of recession and adverse publicity since 1997 bottoming
out in 1999 and recovery thereafter
- Net sales showing steady growth at 4.0% CAGR but still 14% down on 1997
levels in 2004
- JPY120/US$ in first part of 2000 and JPY110/US$ kept constant
thereafter. Gross margin 69.9% in 2000 and 69% flat thereafter
- Margins altered in 2000 to reflect introduction of 3D Project and
transfer of magazine publishing costs from COS to SG&A. EBIT margin
improvement from 10.3% in 2000 to 14.1% in 2004 reflects the fact that
approximately 50% of SG&A and 40% of Distribution Expenses are fixed
costs
- Effective tax rate reduction in 2000 reflects cuts in Japanese corporate
tax rate; kept constant thereafter
- No significant capex assumed beyond recurring maintenance items (HQ and
distribution centers) and minor internet investment
- Working capital requirement largely flat
<PAGE> 35
JAPAN ECONOMIC OUTLOOK
FACTORS OF RECOVERY
- -------------------
- - "The possibility of a self-sustaining, private sector demand-led recovery is
now in sight" (a)
- Conventional economic statistics have underestimated consumption in
areas such as cellular phones, internet usage, PCs, etc. --- growth of
which has been supported to a great extent by female demand
- The GS Research team recently raised its real GDP growth outlook for
fiscal 1999 and 2000 to 1.2% and 0.8%, respectively
- Impact of the yen appreciation should be mitigated by the progress made
by Japanese manufacturers in shifting production overseas and
restructuring, and the current environment of general economic expansion
at home and abroad
- - Restructuring-driven earnings rebound can be expected
- The GS Research team expects full-year 1999 recurring profits to grow
13.3%
- The emergence of the proposed "MegaBank" should serve as a catalyst for
more aggressive corporate restructuring, particularly in sectors such as
chemicals, steel, shipbuilding and oil
- Recently approved industrial revitalization measures such as share
exchange schemes should facilitate increased corporate reorganization
and M&A activity
RISKS AND THREATS
- -----------------
- - A sharper rise in yen than anticipated
- The corporate earnings forecast by the GS research already factors in
three-month and six-month currency forecasts of (Yen) 103/US$ and
(Yen) 93/US$, respectively
- However, a yen appreciation sharper than expected will dampen the
economy through reductions in exports and capital investment
- - An earlier-than expected termination of the BOJ's zero interest rate policy
instigated by the continued momentum in the economy would also prove
negative through pushing down profits of certain highly leveraged firms
Source: GS Research
(a) "The Bull Story: It's Only Just Begun," Oct. 7, 1999
<PAGE> 36
JUNIPER DISCOUNTED CASH FLOW ANALYSIS
MANAGEMENT CASE
(JPY IN MILLIONS)
<TABLE>
<CAPTION>
AUGUST 31,
2000-2004
1997A 1998A 1999A 2000E 2001E 2002E 2003E 2004E CAGR
----- ----- ----- ----- ----- ----- ----- ----- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET SALES 203,362 192,458 143,797 150,000 156,000 162,240 168,730 175,479 4.0%
Total Cost of Sales (57,278) (62,178) (47,738) (45,138) (48,360) (50,294) (52,306) (54,398) 4.8%
------------------------------------------------------------------------------------------------------
GROSS PROFIT 146,083 130,280 96,060 104,862 107,640 111,946 116,424 121,081 3.7%
---------------------------------------------------------------------------------------------
Total Operating Expenses (98,236) (99,853) (75,798) (89,452) (87,785) (90,537) (93,398) (96,374) 1.9%
------------------------------------------------------------------------------------------------------
EBIT 47,848 30,427 20,261 15,410 19,855 21,409 23,026 24,707 12.5%
Taxes (28,030) (16,950) (10,500) (6,935) (8,935) (9,634) (10,362) (11,118) 12.5%
------------------------------------------------------------------------------------------------------
EBIAT 19,818 13,477 9,761 8,475 10,920 11,775 12,664 13,589 12.5%
add: Depreciation 1,650 2,046 1,956 2,841 2,850 2,850 2,850 2,850
add: Decrease in WC (13,337) (7,881) (5,426) (2,731) (328) 507 772 466
less: CapEx (8,254) (1,143) (10,431) (5,916) (1,804) (1,804) (1,804) (1,804)
UNLEVERED FREE CASH FLOW (123) 6,499 (4,139) 2,669 11,638 13,328 14,482 15,101 54.2%
Net Sales Growth (5.4)% (25.3)% 4.3% 4.0% 4.0% 4.0% 4.0%
Gross Margin 71.8% 67.7% 66.8% 69.9% 69.0% 69.0% 69.0% 69.0%
EBIT Margin 23.5% 15.8% 14.1% 10.3% 12.7% 13.2% 13.6% 14.1%
Depreciation/Sales 0.8% 1.1% 1.4% 1.9% 1.8% 1.8% 1.7% 1.6%
CapEx/Dep 5.0x 0.6x 5.3x 2.1x 0.6x 0.6x 0.6x 0.6x
</TABLE>
Source: Juniper management projections
[Goldman Sachs Logo]
<PAGE> 37
JUNIPER DISCOUNTED CASH FLOW ANALYSIS
MANAGEMENT CASE
(JPY IN MILLIONS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
AUGUST 31,
2000E 2001E 2002E 2003E 2004E
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
UNLEVERED FCF (a) 2,669.0 11,638.3 13,328.4 14,482.1 15,101.4
NPV (b) 46,118.0 26%
PV OF TERMINAL VALUE (c) 132,328.2 74%
---------
ENTERPRISE VALUE 178,446.2
LESS: NET DEBT (d) (21,748.0)
----------
EQUITY VALUE 200,194.2
PER SHARE (e) 1,390
</TABLE>
(a) Projections from Juniper management.
(b) Assumes mid-year discounting convention; discounted to November 30, 1999.
Assumes discount rate of 8.0%.
(c) Terminal Value calculated using multiple of LTM EBIT (7.5x).
(d) As of August 31, 1999.
(e) Assumes 144.0MM shares outstanding.
[GOLDMAN SACHS LOGO]
<PAGE> 38
JUNIPER DISCOUNTED CASH FLOW ANALYSIS
SENSITIVITY ANALYSIS (a)
(JPY TO MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FINANCIAL SENSITIVITIES
ENTERPRISE VALUE
TERMINAL MULTIPLE OF 2004E EBIT
-----------------------------------------------
5.5 X 6.5 X 7.5 X 8.5 X 9.5 X
-----------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
DISCOUNT RATE 6.0% 153,869 173,016 192,164 211,311 230,458
7.0% 148,386 166,762 185,139 203,515 221,892
8.0% 143,159 160,802 178,446 196,090 213,734
9.0% 138,174 155,121 172,067 189,014 205,960
10.0% 133,418 149,701 165,964 182,267 198,549
</TABLE>
<TABLE>
<CAPTION>
EQUITY VALUE PER SHARE (b)(c)
TERMINAL MULTIPLE OF 2004E EBIT
---------------------------------------------
5.5 X 6.5 X 7.5 X 8.5 X 9.5 X
---------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
DISCOUNT RATE 6.0% 1,219 1,352 1,485 1,618 1,751
7.0% 1,181 1,309 1,436 1,564 1,692
8.0% 1,145 1,267 1,390 1,512 1,635
9.0% 1,110 1,228 1,346 1,463 1,581
10.0% 1,077 1,190 1,303 1,417 1,530
</TABLE>
<TABLE>
<CAPTION>
BUSINESS SENSITIVITIES
ENTERPRISE VALUE (d)
CHANGE IN SALES GROWTH
-----------------------------------------------
-3.0% -1.5% 0.0% 1.5% 3.0%
-----------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CHANGE IN -1.0% 144,698 154,726 165,326 176,523 188,341
EBIT MARGIN 0.0% 156,222 167,026 178,446 190,508 203,240
1.0% 167,746 179,327 191,566 204,494 218,138
2.0% 179,271 191,627 204,686 218,479 233,037
3.0% 190,795 203,927 217,806 232,465 247,936
</TABLE>
<TABLE>
<CAPTION>
EQUITY VALUE PER SHARE (b)(c)(d)
CHANGE IN SALES GROWTH
---------------------------------------------
-3.0% -1.5% 0.0% 1.5% 3.0%
-----------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CHANGE IN -1.0% 1,156 1,225 1,299 1,377 1,459
EBIT MARGIN 0.0% 1,236 1,311 1,390 1,474 1,562
1.0% 1,316 1,396 1,481 1,571 1,666
2.0% 1,396 1,482 1,572 1,668 1,769
3.0% 1,476 1,567 1,663 1,765 1,872
</TABLE>
(a) Based on Juniper management base case projections as of October, 1999;
figures discounted to end of November 1999.
(b) Assumes net debt of (Yen)(21,748) million as of November, 1999.
(c) Assumes 144.0 million primary shares outstanding.
(d) Assumes a 8.0% discount rate and a 7.5x EBIT terminal multiple.
<PAGE> 39
TAB A
<PAGE> 40
JUNIPER HISTORICAL FINANCIAL OVERVIEW
PROFIT AND LOSS STATEMENT
(JPY IN MILLIONS)
<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,
1994 1995 1996 1997 1998
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Total Net Sales 157,556 177,991 212,196 203,362 192,458
Cost of Sales 43,576 47,515 55,588 57,279 62,178
-----------------------------------------------------------------------------
Gross Profit 113,980 130,476 156,608 146,083 130,280
Operating Expenses
Distributor Incentives 42,652 47,885 57,044 56,904 57,781
Distribution Expenses 8,324 8,853 9,839 11,173 10,783
Total Selling & Administrative 19,616 24,022 28,355 30,158 31,289
-----------------------------------------------------------------------------
Total Operating Expenses 70,592 80,760 95,238 98,235 99,853
-----------------------------------------------------------------------------
Operating Profit 43,388 49,716 61,370 47,848 30,427
Other Income (Net) 2,557 1,733 1,309 3,299 (698)
-----------------------------------------------------------------------------
Income Before Income Taxes 45,945 51,449 62,679 51,147 29,729
-----------------------------------------------------------------------------
Net Income 20,604 23,062 28,081 23,117 12,779
Basic Earnings Per Share 138 154 189 159 89
Dividends Per Share 140 190 125 100 100
COMMON SIZE ANALYSIS
Cost of Sales 27.7% 26.7% 26.2% 28.2% 32.3%
Gross Profit 72.3% 73.3% 73.8% 71.8% 67.7%
EBIT Margin 27.5% 27.9% 28.9% 23.5% 15.8%
Net Income 13.1% 13.0% 13.2% 11.4% 6.6%
YEAR-ON-YEAR GROWTH RATES
Net Sales 13.0% 19.2% -4.2% -5.4%
Net Income 11.9% 21.8% -17.7% -44.7%
Source: 20-F
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,
CAGR
1999 94-99
-------- -------
<S> <C> <C>
Total Net Sales 143,797 -1.8%
Cost of Sales 47,738 1.8%
-------- -------
Gross Profit 96,059 -3.4%
Operating Expenses
Distributor Incentives 41,350 -0.6%
Distribution Expenses 8,278 -0.1%
Total Selling & Administrative 26,170 5.9%
-------- -------
Total Operating Expenses 75,798 1.4%
-------- -------
Operating Profit 20,261 -14.1%
Other Income (Net) 746 -21.8%
-------- -------
Income Before Income Taxes 21,007 -14.5%
-------- -------
Net Income 10,507 -12.6%
Basic Earnings Per Share 73 -11.9%
Dividends Per Share 100 -6.5%
COMMON SIZE ANALYSIS
Cost of Sales 33.2%
Gross Profit 66.8%
EBIT Margin 14.1%
Net Income 7.3%
YEAR-ON-YEAR GROWTH RATES
Net Sales -25.3%
Net Income -17.8%
Source: 20-F
</TABLE>
<PAGE> 41
JUNIPER HISTORICAL FINANCIAL OVERVIEW
CASH FLOW STATEMENT
(JPY IN MILLIONS)
<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,
1994 1995 1996 1997 1998 1999
-------- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Operating Activities
Net Income 20,604 23,062 28,081 23,117 12,779 10,507
Adjustments
Depreciation and Amort. 1,177 1,435 1,128 1,650 2,046 1,955
Other 7,043 6,708 5,936 (15,709) (7,661) (5,309)
Net Cash from
Operating Activities 28,824 31,205 35,145 9,058 7,164 7,153
Investing Activities
Purchase of PPE (961) (25,174) (5,359) (8,254) (1,143) (10,431)
(Inc)/Dec in Short-Term
Investments (a) (21,078) 692 29,856 (11,295) (1,710) 1,876
Other 1,948 (448) (622) 4,279 45 1,311
Net Cash from Investing
Activities (20,091) (24,930) 23,875 (15,270) (2,808) (7,244)
Financing Activities
Cash Dividends Paid (13,466) (26,183) (25,436) (14,682) (14,415) (14,421)
Repurchase of Common
Stock (15,000) (8,888) (826)
Net Cash from Financing
Activities (13,466) (26,183) (40,436) (23,570) (15,241) (14,421)
Net Increase (Decrease) in
Cash and Cash Equivalents (4,733) (19,908) 18,584 (29,782) (10,885) (14,512)
Cash and Cash Equivalents,
Beginning 66,281 61,548 41,640 60,224 30,442 19,557
Cash and Cash Equivalents,
End 61,548 41,640 60,224 30,442 19,557 5,045
</TABLE>
(a) Net cash flow from change in investment funds and short-term investments
Source: 20-F
<PAGE> 42
JUNIPER HISTORICAL FINANCIAL OVERVIEW
BALANCE SHEET
(JPY IN MILLIONS)
<TABLE>
<CAPTION>
YEARS ENDED AUGUST 31,
1994 1995 1996 1997 1998 1999
--------- --------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Current Assets
Cash and Cash Equivalents 61,548 41,640 60,224 30,442 19,557 5,045
Investments (a) 29,690 31,997 4,357 16,053 17,529 16,703
Inventory 10,936 11,397 12,476 16,707 16,640 9,191
Other Current Assets 4,042 2,460 2,303 5,577 6,054 5,938
Total Current Assets 106,216 87,494 79,360 68,779 59,780 36,877
Property, Plant and
Equipment 2,519 26,791 31,171 37,594 36,639 44,969
Other Assets 7,800 7,525 5,645 3,857 3,627 2,115
Total Assets 116,535 121,810 116,176 110,230 100,046 83,961
Current Liabilities
Accounts Payable 11,762 13,532 15,940 16,408 17,949 4,248
Income Taxes Payable 14,961 15,952 19,591 14,211 7,486 5,187
Other Current Liabilities 10,641 14,444 16,782 16,251 13,733 17,562
Total Current Liabilities 37,364 43,928 52,313 46,870 39,168 26,997
Shareholders' Equity 79,171 77,882 63,863 63,360 60,878 56,964
Total Liabilities and
Shareholders' Equity 116,535 121,810 116,176 110,230 100,046 83,961
</TABLE>
(a) Investment funds and short-term investments
Source: 20-F
<PAGE> 1
Exhibit (b)(3)
[GRAPHIC]
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Discussion Materials
September 21, 1999
MORGAN STANLEY DEAN WITTER
<PAGE> 2
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
Table of Contents
SECTION I EXECUTIVE SUMMARY
SECTION II STOCK PRICE PERFORMANCE
SECTION III PROJECTIONS AND DISCOUNTED CASH FLOW ANALYSIS
SECTION IV PRECEDENT TRANSACTIONS
SECTION V SHAREHOLDING AND TRADING ANALYSIS
SECTION VI ADDITIONAL PRICING CONSIDERATIONS
APPENDICES A SUMMARY TIMETABLE
B COMPARABLE COMPANY ANALYSIS
C PRECEDENT JAPANESE TRANSACTIONS
<PAGE> 3
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
EXECUTIVE SUMMARY
BACKGROUND
----------
- We have been asked to provide our views as to the appropriate price
that the families should be prepared to pay to acquire all of the
publicly held shares of Apple and Juniper
- We have reviewed forecasts for Apple and Juniper
-- based on the review of the forecasts and discussions with the
Apple and Juniper management teams, we believe the projections
have been prepared on a reasonable basis and reflect
management's best estimate of the future financial results of
Apple and Juniper
- Based on these forecasts, we have performed discounted cash flow
("DCF") analyses for both Apple and Juniper
- We have examined the trading performance of other publicly traded
companies that operate businesses similar to Apple and Juniper
- We have reviewed other transactions in which a majority shareholder
acquires all of the outstanding minority shares over the past
decade; most of those transactions have occurred in the United
States
- We have examined the trading prices and volume of Apple and Juniper
shares over the past several years
- We have examined the estimate of additional cash flow synergies
available to the families following the completion of Project
Powerhouse
- Acorn management has also outlined the strategies and financial
benefits of taking Apple and Juniper private as a precursor to a
potential public offering of a more comprehensive set of Acorn
assets
<PAGE> 4
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
EXECUTIVE SUMMARY (CONTINUED)
PRELIMINARY CONCLUSIONS
- -----------------------
- - The discounted cash flow analysis leads us to conclude that the Apple and
Juniper shares are trading at values in line with their DCF value
- - To acquire shares in the tender offer, the families will need to pay a
meaningful premium over the current trading prices
- - To justify paying a premium, the families must be willing to share a
portion of any expected financial benefits (i.e., synergies) derived from
taking the entities private
- - Morgan Stanley believes the families should be willing to share a
substantial portion of these benefits because of the overriding strategic
value of a Mothership transaction and the value which can be unlocked from
other Acorn assets
- - Additionally, the families should seek to pay a price that mitigates, to
the extent possible, negative reaction from shareholders and the press.
However, it is highly likely that some degree of negative
reaction/publicity will occur because of the nature of the transaction
-- there is greater likelihood of a negative reaction to the Juniper
transaction because even a price which is at a substantial premium
to the market is well below the IPO price and the prices where
secondary offerings were completed several years ago
<PAGE> 5
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
EXECUTIVE SUMMARY (CONTINUED)
RECOMMENDATION
- --------------
- - We recommend that the families make an initial offer that represents
roughly a 30% premium over the current trading prices for Apple and
Juniper. That premium is consistent with the median premia paid in similar
transactions since 1987. Specifically, we recommend per share offer prices
of:
Apple - $15.00, a 27.7% premium to the current price of $11.75
Juniper - 1450 YEN, a 33.0% premium to the current price of 1090 YEN
- - It is important to note that Apple shares have not closed above $15 per
share since July 31, 1998 and Juniper shares have not closed above 1450
YEN since August 26, 1998
EXPECTATION
- -----------
- - We would expect that the Apple and Juniper Boards, along with their
financial advisors, will argue that a higher price should be paid. Our
strategy is to maintain flexibility to increase the offer prices if
circumstances dictate that to be advisable.
<PAGE> 6
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
SECTION II
STOCK PERFORMANCE
- - Both Apple and Juniper stocks are well below their all-time highs
- - The stocks have underperformed broad market indices as well as a composite
of comparable companies
<PAGE> 7
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
Stock Price Performance for Apple
Since IPO
Graph displaying daily share price and trading volume for Amway Asia Pacific
from December 15, 1993 to September 17, 1999. Exhibit highlights the current
price of $11.75, 52-week high of $14.44 and 52-week low of $7.13.
<PAGE> 8
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
Apple Indexed Stock Price Performance
September 17, 1997 to September 17, 1999
Graph displaying indexed share price performance for Amway Asia Pacific from
September 17, 1997 to September 17, 1999. Graph compares Amway Asia Pacific
share price performance to the S&P 500, the Hang Seng Index and a market
capitalization weighted index of comparable companies including: Avon Products,
Blyth, Enesco Group, Fingerhut, Land's End, Nature's Sunshine, Newell
Rubbermaid, Nu Skin and Tupperware. Exhibit highlights the following rates of
return over the time period specified:
Amway Asia Pacific: (61.6%)
S&P 500: 41.6%
Hang Seng Index: (6.4%)
Comparable Companies: 3.4%
<PAGE> 9
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
Stock Price Performance for Juniper
Since IPO
Graph displaying daily share price and trading volume for Amway Japan from June
6, 1991 to September 17, 1999. Exhibit highlights the current price of 1,090
yen, 52-week high of 1,420 yen and 52-week low of 915 yen.
<PAGE> 10
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
Juniper Indexed Stock Price Performance
September 17, 1997 to September 17, 1999
Graph displaying indexed share price performance for Amway Japan from September
17, 1997 to September 17, 1999. Graph compares Amway Japan share price
performance to the Nikkei Index, S&P 500, and a market capitalization weighted
index of Japanese comparable companies including: Senshukai, Cecile, Nissen,
Mutow, Charle, Shaklee and Avon Products. Exhibit highlights the following rates
of return over the time period specified:
Amway Japan: (67.9%)
Nikkei Index: (1.9%)
S&P 500: 41.6%
Comparable Companies: 80.0%
<PAGE> 11
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
Section III
PROJECTIONS AND DISCOUNTED CASH FLOW ANALYSIS
- - Our discounted cash flow analysis is based on the projections provided by
management
- - For the Apple DCF, we used a weighted average cost of capital range of
10-12%
- - For the Juniper DCF, we used a weighted average cost of capital range of
9-11%
- - Using these projections and discount rates produces values for Apple and
Juniper in line with current prices
<PAGE> 12
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
Overview of Apple Historical and Projected Financials
<TABLE>
<CAPTION>
OVERVIEW OF APPLE HISTORICAL AND PROJECTED FINANCIALS
- ----------------------------------------------------------------------------------------------------------------------
ACTUAL PROJECTED
---------------------------------------------------------------- --------------------------------
1995 1996 1997 1998 1999 2000
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Sales ($MM) 718.3 716.8 845.2 587.6 497.6 582.9
% Growth (0.2%) 17.9% (30.5%) (15.3%) 17.2%
EBITDA ($MM) 138.0 137.3 161.6 38.8 33.4 53.3
% Margin 19.2% 19.2% 19.1% 6.6% 6.7% 9.1%
OVERVIEW OF APPLE HISTORICAL AND PROJECTED FINANCIALS
- ---------------------------------------------------------------------------------
PROJECTED
-----------------------------------------------
2001 2002 2003
-------------- -------------- ---------------
<S> <C> <C> <C> <C>
Sales ($MM) 626.6 661.6 700.7
% Growth 7.5% 5.6% 5.9%
EBITDA ($MM) 63.9 65.3 68.6
% Margin 10.2% 9.9% 9.8%
</TABLE>
Note: (1) Based on management projections.
<PAGE> 13
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
Overview of Juniper Historical and Projected Financials
<TABLE>
<CAPTION>
OVERVIEW OF JUNIPER HISTORICAL AND PROJECTED FINANCIALS
ACTUAL PROJECTED
---------------------------------------------------------------- -------------------------------
1995 1996 1997 1998 1999 2000
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Sales ((Y)Bn) 178.0 212.2 203.4 184.5 153.5 150.0
% Growth 19.2% (4.2%) (5.4%) (16.8%) (2.3%)
EBITDA ((Y)Bn) 51.2 62.5 49.5 32.9 20.9 18.3
% Margin 28.7% 29.5% 24.3% 6.6% 13.6% 12.2%
OVERVIEW OF JUNIPER HISTORICAL AND PROJECTED FINANCIALS
PROJECTED
-------------------------------------------------
2001 2002 2003
--------------- -------------- ---------------
<S> <C> <C> <C>
Sales ((Y)Bn) 155.3 160.7 166.3
% Growth 3.5% 3.5% 3.5%
EBITDA ((Y)Bn) 21.4 23.2 25.1
% Margin 13.8% 14.5% 15.1%
</TABLE>
Note: (1) Based on management projections that assume an exchange rate of 120
YEN/ $.
<PAGE> 14
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
10-Year DCF
($MM, except per share amounts)
<TABLE>
<CAPTION>
APPLE TOTAL COMPANY
- -------------------
Valuation Matrix as of October 1, 1999
- -------------------- -------------------------------- -------------------------------- --------------------------------
EXIT EBITDA MULTIPLE 7.5 8.5 9.5
-------------------------------- -------------------------------- --------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DISCOUNT RATE 10.0% 11.0% 12.0% 10.0% 11.0% 12.0% 10.0% 11.0% 12.0%
PV of 1st Year Cash Flow $ 21.9 $ 21.8 $ 21.7 $ 21.9 $ 21.8 $ 21.7 $ 21.9 $ 21.8 $ 21.7
PV of Cash Flows 2 Through 10 270.2 257.7 246.0 270.2 257.7 246.0 270.2 257.7 246.0
Terminal Value 805.3 805.3 805.3 912.7 912.7 912.7 1,020.1 1,020.1 1,020.1
Implied EBIT Multiple 10.4 10.4 10.4 11.8 11.8 11.8 13.2 13.2 13.2
Implied Perpetual Growth Rate 1.3% 2.2% 3.1% 2.3% 3.2% 4.1% 3.1% 4.0% 4.9%
PV of Terminal Value 313.0 286.1 261.7 354.7 324.2 296.6 396.4 362.4 331.5
AGGREGATE VALUE 605.0 565.6 529.4 646.7 603.7 564.3 688.5 641.8 599.2
Less Total Debt & Preferred Stock 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Less Minority Interest 114.5 114.5 114.5 114.5 114.5 114.5 114.5 114.5 114.5
Plus Cash 137.3 137.3 137.3 137.3 137.3 137.3 137.3 137.3 137.3
Plus Option Proceeds 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
EQUITY VALUE $ 627.8 $ 588.4 $ 552.3 $ 669.6 $ 626.5 $ 587.2 $ 711.3 $ 664.7 $ 622.1
EQUITY VALUE PER SHARE $ 11.12 $ 10.42 $ 9.78 $ 11.86 $ 11.10 $ 10.40 $ 12.60 $ 11.78 $ 11.02
% Value in Terminus 51.7% 50.6% 49.4% 54.8% 53.7% 52.6% 57.6% 56.5% 55.3%
% Value in Cash Flows 48.3% 49.4% 50.6% 45.2% 46.3% 47.4% 42.4% 43.5% 44.7%
-------------------------------------------
Equity Value $588.4 -- $664.7
Equity Value Per Share $10.42 -- $11.78
-------------------------------------------
---------
Current Price $11.75
---------
<FN>
(1) Minority interest calculated as 49% of Malaysian current market
capitalization of $234MM.
</TABLE>
<PAGE> 15
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
10-Year DCF
($MM, except per share amounts)
<TABLE>
<CAPTION>
JUNIPER TOTAL COMPANY
- ---------------------
VALUATION MATRIX AS OF OCTOBER 1, 1999
- --------------------- -------------------------------- --------------------------------- --------------------------------
PERPETUAL GROWTH RATE 1.0% 2.0% 3.0%
-------------------------------- --------------------------------- --------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DISCOUNT RATE 9.0% 10.0% 11.0% 9.0% 10.0% 11.0% 9.0% 10.0% 11.0%
PV of 1st Year Cash Flow $ 44.7 $ 44.6 $ 44.4 $ 44.7 $ 44.6 $ 44.4 $ 44.7 $ 44.6 $ 44.4
PV of Cash Flows 2 Through 10 644.4 615.4 588.3 644.4 615.4 588.3 644.4 615.4 588.3
Terminal Value 1,673.3 1,494.2 1,350.8 1,931.3 1,697.6 1,515.8 2,275.2 1,959.1 1,722.0
Implied EBITDA Multiple 6.4 5.8 5.2 7.4 6.5 5.8 8.8 7.5 6.6
Implied EBIT Multiple 7.1 6.3 5.7 8.2 7.2 6.4 9.6 8.3 7.3
PV of Terminal Value 711.9 580.7 479.9 821.7 659.7 538.5 968.0 761.3 611.8
AGGREGATE VALUE 1,401.0 1,240.6 1,112.6 1,510.8 1,319.7 1,171.2 1,657.1 1,421.3 1,244.5
Less Total Debt & Preferred Stock 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Plus Cash 169.7 169.7 169.7 169.7 169.7 169.7 169.7 169.7 169.7
Plus Option Proceeds 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
EQUITY VALUE $ 1,570.7 $ 1,410.4 $ 1,282.3 $ 1,680.5 $ 1,489.4 $ 1,340.9 $ 1,826.8 $ 1,591.0 $ 1,414.2
EQUITY VALUE PER SHARE $ 10.89 $ 9.78 $ 8.89 $ 11.65 $ 10.32 $ 9.29 $ 12.66 $ 11.03 $ 9.80
% Value in Terminus 50.8% 46.8% 43.1% 54.4% 50.0% 46.0% 58.4% 53.6% 49.2%
% Value in Cash Flows 49.2% 53.2% 56.9% 45.6% 50.0% 54.0% 41.6% 46.4% 50.8%
--------------------------------------
Equity Value $1,410.4 -- $1,591.0
$ Per Share $9.78 -- $11.03
Yen Per Share (1) 1,045 -- 1,179
--------------------------------------
------
Current Price (Yen Per Share) (1) 1,090
------
<FN>
(1) Based on an exchange rate of 107 Yen per USD.
</TABLE>
<PAGE> 16
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
Section IV
PRECEDENT TRANSACTIONS
- - Precedent transactions, where a principal shareholder acquires all of the
outstanding minority shares, consist primarily of U.S. based transactions
and have been done at an average 28% premium to the unaffected stock
price
- - Only a few public precedent transactions have occurred in Japan
- - In a recent and relevant transaction, the founder of Herbalife has
offered to repurchase the outstanding minority interest private at a 42%
premium to the Class A (voting) share price
<PAGE> 17
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
Summary of Precedent Transactions
Premium to Unaffected Price (1)
[GRAPH]
[Median
1987 to Date
28%]
1987-1990 1991-1993 1994-1996 1997-1999 YTD
- --------- --------- --------- -------------
33% 20% 26% 28%
Note: (1) Represents median tender offer price for transactions during the
specified period as a premium to the market price one month prior to
announcement.
<PAGE> 18
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
Section IV (continued)
JAPANESE CASE STUDIES
- - There are a limited number of precedent transactions in Japan
- - The sample size makes it difficult to draw any meaningful conclusions
- - Three deals (NCR Japan, Japan Marine Technologies and SDS Biotech) were
all cash tender offers
- - The most recent transactions, involving three Sony subsidiaries, involved
a stock for stock offer
- - The premiums paid over unaffected market prices have ranged from 12% to
62%
<PAGE> 19
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
Herbalife International Case Study
TRANSACTION BACKGROUND
- - On September 14, 1999, CEO Mark Hughes announced the intention to repurchase
the remaining 46% of Class A shares and 42% of Class B shares which he did
not already own.
- - Herbalife stock had been under significant pressure due to Russian exposure,
Asian uncertainty, currency risks and negative publicity associated with
specific herbal products. Hughes was disappointed in the stock's performance
and taking the company private seemed like a logical next step.
- - In February of 1997, the stock had foundered after Hughes had indicated the
desire to sell 1/4 of his shareholdings in a DECS security. This sale of the
stock was not completed and the stock rebounded soon thereafter.
- - The Company recapitalized with a new Class B non-voting stock in December of
1997, the same year the stock reached its all-time high at $37 3/8, a 120%
premium to the $17 repurchase price.
PRICE VOLUME GRAPHS
Graphs depicting daily share prices and trading volumes for Herbalife
Class A and Class B stock.
<TABLE>
<CAPTION>
KEY VALUATION STATISTICS
Equity Value (MM) (1): $561.0
Aggregate Value(2): $428.3
LTM 1999E
--- -----
<S> <C> <C>
Agg. Val/Sales 0.52 0.51x
Agg. Val/EBITDA 5.2x 4.2x
Agg. Val/EBIT 6.4x 4.9x
P/E NR 9.2x
<FN>
(1) Includes options (net of exercise proceeds).
(2) Aggregate value defined as equity market value plus debt and minority
interest less cash.
<CAPTION>
KEY TRADING STATISTICS
Class A Class B
------- -------
<S> <C> <C>
Total Shares Outstanding (MM) 9.982 18.605
Average Daily Trading Volume (1) 47,152 91,419
Unaffected Premium (2) 38.1% 76.6%
Premium to Prior Day 41.7% 85.7%
Discount to All Time High (54.5%) (36.4%)
<FN>
(1) Average over last 4 weeks.
(2) Unaffected premium defined as stock price
one month prior.
</TABLE>
<PAGE> 20
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
Section V
Shareholding and Trading Analysis
- - Institutional shareholders comprise approximately 18% of the Apple public
float and 19% of the Juniper public float
- - Institutional investors appear to be largely value investors
- - The balance of shares are held by retail investors
- - Historical price/volume analysis is often used to try to assess the
shareholders' basis in the stock
- - Since July 1, 1998, shares representing greater than 100% of the
outstanding float have traded in both Apple and Juniper shares
- - Since July 1, 1998, 100% of the trading in Apple shares occurred below
$16 and 100% of the trading in Juniper shares occurred below the 1650 YEN
level
<PAGE> 21
<TABLE>
<CAPTION>
PROJECT POWERHOUSE
- -----------------------------------------------------------------------------------------------------------------------------------
Apple Analysis of Institutional Shareholdings
TOTAL ASSETS UNDER CURRENT CUMULATIVE % REPORT
INSTITUTION EQUITY ORIENTATION MANAGEMENT CHANGE HOLDINGS % FLOAT OF FLOAT DATE
- ---------------------------------- -------------------- ----------- --------- ----------- ------- ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
PPM America Inc. Value 29.8 1,117,000 1,117,000 13.2% 13.2% 6/30/99
Cazenove Unit Trust Management Ltd. n/a n/a (30,000) 81,100 1.0% 14.2% 11/30/98
Fidelity Management & Research Co. Growth, Value, Income 433.8 52,000 52,000 0.6% 14.8% 6/30/99
World Asset Management Index 9.9 0 42,400 0.5% 15.3% 6/30/99
Comerica Bank - Detroit Growth n/a (400) 41,800 0.5% 15.8% 6/30/99
Prudential Securities Inc. n/a n/a (26,000) 26,600 0.3% 16.1% 6/30/99
Smith Barney Asset Management Growth, Value 13.0 (2,632) 26,567 0.3% 16.4% 6/30/99
GAMCO Investors, Inc. Value 5.4 24,000 24,000 0.3% 16.7% 6/30/99
Van Kampen n/a n/a 0 22,742 0.3% 16.9% 6/30/99
C. Blair Asset Management, L.P. n/a n/a 20,500 20,500 0.2% 17.2% 6/30/99
Caxton Associates, L.L.C n/a n/a (11,300) 14,800 0.2% 17.4% 6/30/99
Old Kent Bank (MI) Value, Growth 10.4 12,020 12,020 0.1% 17.5% 6/30/99
Banco Fonder n/a n/a 0 12,000 0.1% 17.6% 3/31/99
Global Assets Advisors, Inc. n/a 0.0 10,000 10,000 0.1% 17.8% 6/30/98
Morgan Stanley Dean Witter Growth, Value n/a (7,100) 8,200 0.1% 17.9% 6/30/99
INVESCO Capital Management Inc. Value, Income 43.8 (12,000) 3,000 0.0% 17.9% 6/30/99
Westport Resources Management, Inc. Growth,Value 0.1 (500) 2,600 0.0% 17.9% 12/31/98
Mercantile Bank, N.A Value 0.3 0 2,000 0.0% 17.9% 6/30/99
Legg Mason Wood Walker, Inc. Value n/a 600 1,000 0.0% 18.0% 6/30/99
Fleet Investment Advisors (Mass) Growth, Income, Index 42.2 0 570 0.0% 18.0% 6/30/99
Bear, Stearns Asset Management Inc. Value n/a 0 300 0.0% 18.0% 6/30/99
Total Institutional Holdings 1,032,760 1,521,199 18.0%
========= ---------
Other Holdings 6,944,801 82.0%
--------- ----
Total Public Float 8,466,000 100.0%
========= =====
<FN>
Summary of Latest 13F Reports
7 Institutions increased holdings, of which 6 were new investors or first time
filers
17 Institutions decreased holdings, of which 8 eliminated their positions
6 Institutions held their positions.
</TABLE>
<PAGE> 22
<TABLE>
<CAPTION>
PROJECT POWERHOUSE
- ------------------------------------------------------------------------------------------------------------------------------------
Juniper (OTC) Analysis of Institutional Shareholdings
Total Assets
Under Current Cumulative % Report
Institution Equity Orientation Management Change Holdings % Float of Float Date
- ---------------------------------- -------------------- ---------- ------ --------- ------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Harris Associates L.P. Value 9.6 (236,400) 1,630,300 4.8% 4.8% 9/30/98
INVESCO Asset Management (Japan) Growth n/a (201,060) 755,810 2.2% 7.0% 2/28/99
New Jersey Division of Investment n/a n/a 0 683,300 2.0% 9.0% 9/30/98
Foreign & Colonial Management Ltd. Growth 34.0 250,000 350,000 1.0% 10.0% 12/31/98
INVESCO Asset Management Ltd. Growth n/a 26,400 323,900 0.9% 11.0% 9/30/98
Schroder Investment Mgmt. (Jpn) Ltd. n/a n/a (86,000) 251,000 0.7% 11.7% 2/28/99
ING Investment Management (Neth.) n/a n/a 56,000 192,500 0.6% 12.3% 12/31/98
Global Asset Management (UK) Ltd. n/a n/a (266,000) 171,700 0.5% 12.8% 6/30/99
Merrill Lynch Asset Management (US) Value 212.9 (155,700) 89,600 0.3% 13.0% 1/31/99
Kokusai Asset Management Co., Ltd. n/a n/a (1,000) 54,000 0.2% 13.2% 3/31/99
Nikko Asset Management Co., Ltd. n/a n/a (15,000) 51,000 0.1% 13.3% 2/28/99
Fidelity Management & Research Co. Growth, Value, Income 433.8 (193,300) 36,600 0.1% 13.4% 4/30/99
Nomura Asset Management Co., Ltd. n/a n/a (20,000) 33,000 0.1% 13.5% 7/31/98
Templeton Investment Mgmt. Co. (HK) n/a n/a 26,400 33,000 0.1% 13.6% 12/31/98
Fidelity Investments Japan Ltd. Growth n/a (197,400) 31,700 0.1% 13.7% 10/31/98
Dresdner RCM Global Asia Ltd. n/a n/a 22,000 29,000 0.1% 13.8% 9/15/98
Clay Finlay Inc. Growth n/a (26,700) 23,000 0.1% 13.9% 6/30/98
Victoire Asset Management n/a n/a (20,000) 22,000 0.1% 14.0% 6/30/99
Lazard Asset Management (US) Value 35.4 12,000 21,000 0.1% 14.0% 3/31/98
Aberdeen Asset Management (Asia) Ltd n/a n/a (26,700) 9,300 0.0% 14.0% 6/19/98
SPARX Asset Management Co., Ltd. n/a n/a (30,700) 6,500 0.0% 14.1% 12/31/98
Schroder Investment Management (UK) n/a n/a (74,300) 6,000 0.0% 14.1% 2/15/99
Citibank Global Asset Management Growth 71.0 (17,829) 2,968 0.0% 14.1% 12/31/98
Rothschild Asset Management (UK) Value 4.1 0 2,000 0.0% 14.1% 3/31/99
NPI n/a n/a (4,600) 2,000 0.0% 14.1% 1/21/99
Universal Investment Trust Mgmt. Co. n/a n/a (8,000) 2,000 0.0% 14.1% 3/15/98
Fidelity Investment Services Ltd. Growth n/a (500) 1,600 0.0% 14.1% 10/31/97
Donaldson Lufkin & Jenrette, Inc. n/a n/a 200 200 0.0% 14.1% 6/30/99
Top Institutions (1,188,189) 4,814,978 14.1%
Remaining Institutions (621,460) 0 0.0%
---------- ---------- ------
Total Institutional Holdings (1,809,649) 4,814,978 14.1%
==========
Other Holdings 29,315,022 85.9%
---------- ------
Total Public Float 34,130,000 100.0%
========== ======
<FN>
Summary of Latest 13F Reports
7 Institutions increased holdings, of which 1 were new investors or first time
filers
31 Institutions decreased holdings, of which 12 eliminated their
positions
2 Institutions held their positions.
</TABLE>
<PAGE> 23
<TABLE>
<CAPTION>
PROJECT POWERHOUSE
- ------------------------------------------------------------------------------------------------------------------------------------
Juniper (ADS) Analysis of Institutional Shareholdings
Total Assets
Under Current Cumulative % Report
Institution Equity Orientation Management Change Holdings % Float of Float Date
- ------------------------------------ ---------------------- ---------- ------ -------- ------- ----------- ------
<S> <C> <C> <C> <C> <C>
Orbis Investment Management Ltd. Value 0.6 46,300 1,479,100 2.2% <C> <C>
Capital Research & Management Co. Growth, Value 177.5 (50) 581,250 0.9% 2.2% 6/30/99
Fidelity Management & Research Co. Growth, Value, Income 433.8 105,000 355,000 0.5% 3.0% 6/30/99
Royce & Associates, Inc. Value 2.0 0 234,500 0.3% 3.5% 6/30/99
MacKay-Shields Financial Corporation Growth, Value 22.2 0 227,148 0.3% 3.9% 6/30/99
World Asset Management Index 9.9 0 212,104 0.3% 4.2% 6/30/99
JMG Capital Partners, L.P. n/a n/a 108,749 108,749 0.2% 4.5% 6/30/99
Financial & Investment Management n/a n/a (3,855) 78,245 0.1% 4.7% 3/31/99
Merrill Lynch Capital Markets Growth n/a 603 73,787 0.1% 4.8% 6/30/99
Global Assets Advisors, Inc. n/a 0.0 64,300 64,300 0.1% 4.9% 6/30/99
Boston Partners Asset Management Value 6.3 18,400 46,100 0.1% 5.0% 6/30/98
GAMCO Investors, Inc. Value 5.4 5,000 35,641 0.1% 5.1% 6/30/99
Shufro, Rose & Co., LLC Income n/a (900) 26,574 0.0% 5.1% 6/30/99
Goldman Sachs Asset Management (US) Growth, Value 77.8 0 12,500 0.0% 5.2% 6/30/99
Connor Clark & Company Ltd. n/a n/a 12,000 12,000 0.0% 5.2% 6/30/99
Old Kent Bank (MI) Value, Growth 10.4 11,250 11,250 0.0% 5.2% 6/30/99
The Northern Trust Company Value, Growth 124.3 10,000 10,000 0.0% 5.2% 6/30/99
5.2% 6/30/99
Top Institutions 376,797 3,568,248 5.2%
Remaining Institutions (878,945) 0 0.0%
-------- ---------- ------
Total Institutional Holdings (502,148) 3,568,248 5.2%
========
Other Holdings 64,691,752 94.8%
---------- ------
Public Float 68,260,000 100.0%
========== ======
<FN>
Summary of Latest 13F Reports
10 Institutions increased holdings, of which 5 were new investors or first time
filers
12 Institutions decreased holdings, of which 9 eliminated their positions
4 Institutions held their positions.
Index funds representing 5.9% of Total Institutional Shares Outstanding.
</TABLE>
<PAGE> 24
<TABLE>
<CAPTION>
PROJECT POWERHOUSE
- ------------------------------------------------------------------------------------------------------------------------------------
Historical Price / Volume Analysis - Apple (1)
Percentage of Share Traded Below a Specified Price
Price 1994 1995 1996 1997-1H 1997-2H 1998-1H 1998-2H 1999YTD 1994 to Date
----- ---- ---- ---- ------- ------- ------- ------- ------- ------------
($)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 100.0% -- -- 100.0% 100.0% -- -- -- 100.0%
45 98.2% 100.0% 100.0% 72.1% 97.0% -- -- -- 96.5%
40 83.3% 87.7% 85.2% 17.9% 82.8% -- -- -- 82.0%
35 44.3% 44.8% 70.9% 0.0% 68.5% -- -- -- 56.8%
30 18.9% 1.6% 27.1% -- 52.5% -- -- -- 33.5%
25 0.0% 0.0% 0.0% -- 28.1% 100.0% -- -- 14.7%
20 -- -- -- -- 12.3% 80.6% -- -- 11.8%
19 -- -- -- -- 9.1% 71.5% -- -- 11.0%
18 -- -- -- -- 3.6% 67.1% -- -- 9.8%
17 -- -- -- -- 0.0% 57.2% -- -- 9.1%
16 -- -- -- -- -- 44.9% 100.0% -- 8.1%
15 -- -- -- -- -- 39.0% 85.6% 100.0% 7.4%
14 -- -- -- -- -- 17.2% 57.3% 90.2% 5.5%
13 -- -- -- -- -- 6.0% 55.2% 66.5% 4.2%
12 -- -- -- -- -- 2.5% 42.9% 43.3% 3.1%
11 -- -- -- -- -- 0.0% 39.1% 39.9% 2.5%
10 -- -- -- -- -- -- 24.2% 28.2% 1.6%
9 -- -- -- -- -- -- 6.7% 24.7% 1.1%
8 -- -- -- -- -- -- 0.0% 3.0% 0.6%
7 -- -- -- -- -- -- -- 0.0% 0.0%
- --------------------------------------------------------------------------------------------------------------------------------
% of Total Shares
Publicly Traded (2) 216.4% 107.5% 83.7% 56.5% 114.4% 80.5% 86.2% 65.1% 810.4%
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Last Date Traded
Price at or Above Price
----- -----------------
($)
<S> <C>
50 1/21/1997
45 7/11/1997
40 7/24/1997
35 8/27/1997
30 10/14/1997
25 10/24/1997
20 3/11/1998
19 3/20/1998
18 3/25/1998
17 4/21/1998
16 7/23/1998
15 7/31/1998
14 7/29/1999
13 9/7/1999
12 9/13/1999
11 9/17/1999
10 9/17/1999
9 9/17/1999
8 9/17/1999
7 9/17/1999
</TABLE>
Note : (1) Using volume weighted closing prices as of 9/17/99.
(2) Based on public float of 8.5MM shares outstanding.
<PAGE> 25
<TABLE>
<CAPTION>
PROJECT POWERHOUSE
- ------------------------------------------------------------------------------------------------------------------------------------
Historical Price / Volume Analysis - Juniper (OTC)(1)
Percentage of Share Traded Below a Specified Price
Price 1994 1995 1996 1997-1H 1997-2H 1998-1H 1998-2H 1999YTD
----- ---- ---- ---- ------- ------- ------- ------- -------
(YEN)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
5500 -- -- 100.0% -- -- -- -- --
5000 100.0% 100.0% 62.2% 100.0% -- -- -- --
4500 83.0% 93.9% 14.1% 94.1% -- -- -- --
4000 67.9% 58.4% 4.6% 74.4% 100.0% -- -- --
3500 36.6% 31.9% 0.0% 31.4% 65.8% -- -- --
3000 4.0% 8.2% -- 0.0% 26.9% 100.0% -- --
2500 0.0% 0.0% -- -- 17.7% 88.3% -- --
2400 -- -- -- -- 10.8% 76.6% -- --
2300 -- -- -- -- 5.6% 65.9% -- --
2200 -- -- -- -- 0.0% 64.5% -- --
2100 -- -- -- -- -- 59.1% -- --
2000 -- -- -- -- -- 46.9% -- --
1900 -- -- -- -- -- 32.4% -- --
1800 -- -- -- -- -- 25.1% -- --
1700 -- -- -- -- -- 17.4% 100.0% --
1600 -- -- -- -- -- 9.0% 91.5% --
1500 -- -- -- -- -- 4.0% 69.1% --
1400 -- -- -- -- -- 0.0% 49.3% 100.0%
1300 -- -- -- -- -- -- 40.6% 95.2%
1200 -- -- -- -- -- -- 22.1% 52.4%
1100 -- -- -- -- -- -- 11.9% 28.3%
1000 -- -- -- -- -- -- 5.6% 0.0%
900 -- -- -- -- -- -- 0.0% --
- ------------------------------------------------------------------------------------------------------------------------------------
% of Total Shares
Publicly Traded (2) 36.6% 108.5% 72.7% 37.5% 18.8% 22.0% 29.7% 63.0%
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Last Date Trade
Price 1994 to Date at or Above Price
----- ------------ -----------------
(YEN)
<S> <C> <C>
5500 100.0% 7/31/1996
5000 90.1% 8/21/1996
4500 74.3% 6/13/1997
4000 56.4% 6/20/1997
3500 35.9% 10/27/1997
3000 20.8% 11/16/1997
2500 15.7% 3/5/1998
2400 14.3% 3/9/1998
2300 13.8% 3/16/1998
2200 13.4% 3/17/1998
2100 13.0% 3/23/1998
2000 12.3% 4/9/1998
1900 11.7% 4/22/1998
1800 11.4% 5/20/1998
1700 11.0% 6/5/1998
1600 10.5% 8/12/1998
1500 9.5% 8/25/1998
1400 9.0% 11/5/1998
1300 8.2% 8/24/1999
1200 4.2% 9/3/1999
1100 2.4% 9/16/1999
1000 0.1% 9/17/1999
900 0.0% 9/17/1999
- ------------------------------------
% of Total Shares
Publicly Traded (2) 299.1%
- ------------------------------------
<FN>
Note : (1) Using volume weighted closing prices as of 9/17/99.
(2) 1999YTD based on public float of 34.1MM shares outstanding. Prior
years based on 24.7MM shares outstanding.
</TABLE>
<PAGE> 26
<TABLE>
<CAPTION>
PROJECT POWERHOUSE
- ------------------------------------------------------------------------------------------------------------------------------------
Historical Price / Volume Analysis -- Juniper (ADS) (1)
Percentage of Share Traded Below a Specified Price
Price 1994 1995 1996 1997-1H 1997-2H 1998-1H 1998-2H 1999YTD 1994 to Date
----- ---- ---- ---- ------- ------- ------- ------- ------- ------------
($)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
26 -- -- 100.0% -- -- -- -- -- 100.0%
25 -- -- 96.9% 100.0% -- -- -- -- 98.4%
24 -- -- 74.4% 94.1% -- -- -- -- 94.7%
23 -- 100.0% 63.9% 74.4% -- -- -- -- 93.0%
22 -- 95.1% 44.5% 31.4% -- -- -- -- 88.3%
21 -- 89.8% 27.6% 0.0% 100.0% -- -- -- 84.4%
20 -- 75.1% 15.5% -- 96.9% -- -- -- 78.9%
19 100.0% 57.8% 9.6% -- 93.8% -- -- -- 72.3%
18 75.4% 35.1% 6.8% -- 73.4% -- -- -- 54.2%
17 56.8% 27.0% 3.0% -- 56.9% -- -- -- 48.8%
16 16.6% 16.9% 0.0% -- 50.4% -- -- -- 37.0%
15 2.9% 6.2% -- -- 48.7% -- -- -- 30.1%
14 0.0% 0.0% -- -- 43.8% -- -- -- 26.4%
13 -- -- -- -- 31.7% -- -- -- 25.0%
12 -- -- -- -- 3.6% 100.0% -- -- 24.9%
11 -- -- -- -- 0.0% 96.8% -- -- 24.4%
10 -- -- -- -- -- 88.1% -- -- 22.7%
9 -- -- -- -- -- 73.8% -- -- 19.8%
8 -- -- -- -- -- 61.9% -- -- 18.7%
7 -- -- -- -- -- 37.5% 100.0% -- 16.8%
6 -- -- -- -- -- 14.5% 82.6% 100.0% 14.4%
5 -- -- -- -- -- 0.0% 27.9% 26.9% 4.6%
4 -- -- -- -- 1.9% 0.0% 4.0%
3 -- -- -- -- -- -- 0.0% -- 0.0%
- ------------------------------------------------------------------------------------------------------------------------------------
% of Total Shares
Publicly Traded (2) 16.8% 11.2% 11.3% 10.2% 7.9% 11.4% 16.8% 14.9% 77.0%
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Last Date Trade
Price at or Above Price
----- -----------------
($)
<S> <C>
26 5/1/1996
25 7/2/1996
24 8/1/1996
23 8/26/1996
22 9/19/1996
21 11/12/1996
20 6/13/1997
19 6/16/1997
18 6/16/1997
17 7/3/1997
16 7/31/1997
15 10/20/1997
14 10/27/1997
13 11/5/1997
12 11/7/1997
11 2/12/1998
10 3/3/1998
9 3/16/1998
8 4/13/1998
7 5/12/1998
6 1/15/1999
5 9/17/1999
4 9/17/1999
3 9/17/1999
Note : (1) Using volume weighted closing prices as of 9/17/99.
(2) 1999YTD based on public float of 68.2MM ADS equivalents. Prior
years based on 24.7MM shares outstanding.
</TABLE>
<PAGE> 27
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
Section VI
PRICING CONSIDERATIONS
- - Determining the appropriate value to pay to Apple and Juniper
shareholders will be a function of the intrinsic value of the entities
and the value of expected synergies that may be realized
<PAGE> 28
<TABLE>
<CAPTION>
PROJECT POWERHOUSE
- ------------------------------------------------------------------------------------------------------------------------------------
Relative Premium Analysis
Juniper
- ------------------------------------------------------------------------------------------------------------------------------------
Last Date Total Volume % of
Purchase 1 Month 2 Month 3 Month 6 Month 1 Year 2 Year Stock Closed Public Float Since
Price Current Price Average Average Average Average Average Average At or Above Last Day Traded
----- ------------- ------- ------- ------- ------- ------- ------- ----------- ------------------
(Yen) 1090 1197 1209 1213 1183 1191 1700
----- ----- ----- ----- ----- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1400 28.4% 16.9% 15.8% 15.4% 18.3% 17.5% (17.6%) 11/25/98 87.2%
1450 33.0% 21.1% 19.9% 19.5% 22.6% 21.7% (14.7%) 8/26/98 102.0%
1500 37.6% 25.3% 24.1% 23.7% 26.8% 25.9% (11.8%) 8/25/98 102.1%
1600 46.8% 33.6% 32.3% 31.9% 35.3% 34.3% (5.9%) 8/12/98 104.9%
1700 56.0% 42.0% 40.6% 40.1% 43.7% 42.7% 0.0% 6/5/98 119.1%
1800 65.1% 50.3% 48.9% 48.4% 52.2% 51.1% 5.9% 5/20/98 121.2%
1900 74.3% 58.7% 57.1% 56.6% 60.6% 59.5% 11.8% 4/22/98 124.5%
2000 83.5% 67.0% 65.4% 64.9% 69.1% 67.9% 17.7% 4/9/98 126.2%
Apple
- ------------------------------------------------------------------------------------------------------------------------------------
Last Date Total Volume % of
Purchase 1 Month 2 Month 3 Month 6 Month 1 Year 2 Year Stock Closed Public Float Since
Price Current Price Average Average Average Average Average Average At or Above Last Day Traded
----- ------------- ------- ------- ------- ------- ------- ------- ----------- ------------------
($) $11.75 $12.58 $13.03 $12.83 $11.17 $10.45 $14.18
----- ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$15.00 27.7% 19.2% 15.1% 16.9% 34.3% 43.6% 5.8% 7/31/98 117.2%
16.00 36.2% 27.2% 22.7% 24.7% 43.3% 53.1% 12.9% 7/23/98 123.9%
17.00 44.7% 35.1% 30.4% 32.5% 52.2% 62.7% 19.9% 4/21/98 192.6%
18.00 53.2% 43.1% 38.1% 40.3% 61.2% 72.3% 27.0% 3/25/98 201.9%
19.00 61.7% 51.0% 45.8% 48.1% 70.2% 81.8% 34.0% 3/20/98 202.6%
20.00 70.2% 59.0% 53.4% 55.9% 79.1% 91.4% 41.1% 3/11/98 205.4%
</TABLE>
<PAGE> 29
<TABLE>
<CAPTION>
PROJECT POWERHOUSE
- ------------------------------------------------------------------------------------------------------------------------------------
Cost to Effect Powerhouse (1)
09/17 Closing Price Public Float (Thousands)
------------------- ------------------------
Apple $11.75 8,466
Juniper 1090 YEN 34,130
APPLE
TENDER PRICE JUNIPER TENDER PRICE
- --------------------------------------------------------------------------------------------------------------
1400 YEN 1500 YEN 1600 YEN 1700 YEN 1800 YEN 1900 YEN 2000 YEN
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$14.00 $565.6 $597.5 $629.4 $661.4 $693.3 $725.2 $757.2
15.00 574.0 606.0 637.9 669.8 701.8 733.7 765.6
16.00 582.5 614.4 646.4 678.3 710.2 742.2 774.1
17.00 591.0 622.9 654.8 686.8 718.7 750.6 782.6
18.00 599.4 631.4 663.3 695.2 727.2 759.1 791.0
19.00 607.9 639.8 671.8 703.7 735.6 767.6 799.5
20.00 616.4 648.3 680.2 712.2 744.1 776.0 808.0
<FN>
(1) Based on an exchange rate of 106.9 Yen per USD.
</TABLE>
<PAGE> 30
<TABLE>
<CAPTION>
PROJECT POWERHOUSE
- ------------------------------------------------------------------------------------------------------------------------------------
Apple Valuation Matrix
($MM)
VALUATION
-------------------------------------------------------------------------------------------------------------------------
Eq. Val. / Agg. Val./
Price Premium Equity Aggregate ---------------------- -----------------
Per Share to Current Value Value 99E NI 00E NI '99E Sales
--------- ---------- ----- ----- ------ ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Statistics: $11.3 $27.9 $497.6
====================================================================================================================================
$11.75 0.00% $663 $608 58.6 x 23.8 x 1.22 x
$12.00 2.13% $677 $508 59.8 24.3 1.02
$12.50 6.38% $706 $536 62.3 25.3 1.08
$13.00 10.64% $734 $564 64.8 26.3 1.13
$13.50 14.89% $762 $592 67.3 27.3 1.19
$14.00 19.15% $790 $620 69.8 28.3 1.25
$14.50 23.40% $818 $649 72.3 29.3 1.30
$15.00 27.66% $847 $677 74.8 30.4 1.36
$15.50 31.91% $875 $705 77.3 31.4 1.42
$16.00 36.17% $903 $733 79.8 32.4 1.47
$16.50 40.43% $931 $762 82.3 33.4 1.53
$17.00 44.68% $960 $790 84.7 34.4 1.59
$17.50 48.94% $988 $818 87.2 35.4 1.64
$18.00 53.19% $1,016 $846 89.7 36.4 1.70
$18.50 57.45% $1,044 $874 92.2 37.4 1.76
$19.00 61.70% $1,072 $903 94.7 38.4 1.81
$19.50 65.96% $1,101 $931 97.2 39.5 1.87
$20.00 70.21% $1,129 $959 99.7 40.5 1.93
<CAPTION>
VALUATION
-------------------------------------------------------------------------------------------------------------------------
Agg. Val. /
--------------------------------------------------------------------------------------------------
'00E Sales '99E EBITDA '00E EBITDA '99E EBIT '00E EBIT
---------- ----------- ----------- --------- ---------
Statistics: $582.9 $33.4 $53.3 $21.3 $40.0
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
1.04 x 18.2 x 11.4 x 28.5x 15.2x
0.87 15.2 9.5 23.8 12.7
0.92 16.0 10.1 25.1 13.4
0.97 16.9 10.6 26.5 14.1
1.02 17.7 11.1 27.8 14.8
1.06 18.6 11.6 29.1 15.5
1.11 19.4 12.2 30.4 16.2
1.16 20.2 12.7 31.8 16.9
1.21 21.1 13.2 33.1 17.6
1.26 21.9 13.8 34.4 18.3
1.31 22.8 14.3 35.7 19.1
1.35 23.6 14.8 37.1 19.8
1.40 24.5 15.4 38.4 20.5
1.45 25.3 15.9 39.7 21.2
1.50 26.2 16.4 41.0 21.9
1.55 27.0 16.9 42.4 22.6
1.60 27.8 17.5 43.7 23.3
1.65 28.7 18.0 45.0 24.0
</TABLE>
<PAGE> 31
<TABLE>
<CAPTION>
PROJECT POWERHOUSE
- ------------------------------------------------------------------------------------------------------------------------------------
Juniper Valuation Matrix
(Bn YEN)
VALUATION
----------------------------------------------------------------------------------------------
Eq. Val. /
-------------------------
Price Premium Equity Aggregate
Per Share to Current Value Value 99E NI 00E NI
--------- ---------- ----- ----- ------ ------
- ------------------------------------------------------------------------------------------------------------------------------------
Statistics: 9,596 8,531
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
1,090 0.00% 157,250 136,883 16.4 x 18.4 x
1,150 5.50% 165,906 145,539 17.3 19.4
1,200 10.09% 173,119 152,752 18.0 20.3
1,250 14.68% 180,333 159,966 18.8 21.1
1,300 19.27% 187,546 167,179 19.5 22.0
1,350 23.85% 194,759 174,392 20.3 22.8
1,400 28.44% 201,972 181,606 21.0 23.7
1,450 33.03% 209,186 188,819 21.8 24.5
1,500 37.61% 216,399 196,032 22.6 25.4
1,550 42.20% 223,612 203,245 23.3 26.2
1,600 46.79% 230,826 210,459 24.1 27.1
1,650 51.38% 238,039 217,672 24.8 27.9
1,700 55.96% 245,252 224,885 25.6 28.8
1,750 60.55% 252,466 232,099 26.3 29.6
1,800 65.14% 259,679 239,312 27.1 30.4
1,850 69.72% 266,892 246,525 27.8 31.3
1,900 74.31% 274,105 253,739 28.6 32.1
1,950 78.90% 281,319 260,952 29.3 33.0
<CAPTION>
VALUATION
------------------------------------------------------------------------------------------------------------------
Agg. Val. /
---------------------------------------------------------------------------------------------
'99E Sales '00E Sales '99E EBITDA '00E EBITDA '99E EBIT '00E EBIT
---------- ---------- ----------- ----------- --------- ---------
- -----------------------------------------------------------------------------------------------------------------------------------
Statistics: 153,500 150,000 20,890 18,260 18,790 15,410
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
0.89 x 0.91 x 6.6 x 7.5 x 7.3 x 8.9 x
0.95 0.97 7.0 8.0 7.7 9.4
1.00 1.02 7.3 8.4 8.1 9.9
1.04 1.07 7.7 8.8 8.5 10.4
1.09 1.11 8.0 9.2 8.9 10.8
1.14 1.16 8.3 9.6 9.3 11.3
1.18 1.21 8.7 9.9 9.7 11.8
1.23 1.26 9.0 10.3 10.0 12.3
1.28 1.31 9.4 10.7 10.4 12.7
1.32 1.35 9.7 11.1 10.8 13.2
1.37 1.40 10.1 11.5 11.2 13.7
1.42 1.45 10.4 11.9 11.6 14.1
1.47 1.50 10.8 12.3 12.0 14.6
1.51 1.55 11.1 12.7 12.4 15.1
1.56 1.60 11.5 13.1 12.7 15.5
1.61 1.64 11.8 13.5 13.1 16.0
1.65 1.69 12.1 13.9 13.5 16.5
1.70 1.74 12.5 14.3 13.9 16.9
</TABLE>
<PAGE> 32
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
Summary Timeline - Juniper Transaction
Date Activity
- ---- --------
September 21 Decision by families to proceed
September 28 Juniper Board Meeting, retain financial and legal advisors
for Juniper
October 15 Fourth quarter earnings release, negotiations with Juniper
Representatives
October 22, 23 Juniper Board Meeting, approval of proposed transaction
October 25 Public announcement, commencement of tender offer
November 5 Distribute proxy materials for Annual Shareholder Meeting
November 30 Annual Shareholder Meeting
December 8 Accept shares for payment
February 14 Juniper and Japanese Newco Shareholder Meetings to approve
merger of Juniper into Japanese Newco
March 27 Initiate process to deregister and delist in Japan
<PAGE> 33
PROJECT POWERHOUSE
- --------------------------------------------------------------------------------
Summary Timeline - Apple Transaction
Date Activity
September 21 Decision by families to proceed
September 28 Apple Board Meeting, retain financial and legal advisor for
Apple
October 12 Fourth quarter earnings release, negotiations with Apple
Committee ongoing
October 22 Apple Committee and Board Meetings to consider transaction
October 25 Public announcement, commencement of tender offer
December 8 Accept shares for payment
January 10 Apple Shareholder Meeting to approve merger of Apple with
and into Bermuda Newco, initiate process to delist shares on
NYSE and ASE
<PAGE> 34
<TABLE>
<CAPTION>
PROJECT POWERHOUSE
- ------------------------------------------------------------------------------------------------------------------------------------
Trading Statistics of Selected Comparable Companies (1)
Share Price /
----------------
Market Value Equity / Projected 99E P/E /
Share ---------------------- EPS (3) Book 5-Year 5-Year
Company Price Equity Aggregate (2) 1999E 2000E Value Growth (3) Growth (3)
- ------- ----- ------ ------------- ----- ----- ----- ---------- ----------
(9/17/99) ($MM) ($MM)
DIRECT MARKETERS
- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Avon Products $39.938 $10,415 $10,859 23.4 x 20.3 x NM x 15.0% 1.4 x
Blyth Industries 31.125 1,509 1,631 16.8 14.0 4.6 20.0% 0.7
Nature's Sunshine Products 9.438 165 141 8.7 7.6 2.2 NA NA
Nu Skin Enterprises 12.938 1,134 1,122 11.9 10.2 3.9 20.0% 0.5
Tupperware 20.750 1,196 1,529 13.8 12.2 9.3 11.0% 1.1
-------------------------------------------------------------------------------------------------------
MEAN 14.9 x 12.8 x 5.0 x 16.5% 0.9 x
MEDIAN 13.8 12.2 4.3 17.5% 0.9
-------------------------------------------------------------------------------------------------------
CONSUMER PRODUCTS
- -----------------
Land's End 59.438 1,792 1,810 30.2 25.6 7.0 15.0% 1.7
Newell Rubbermaid 31.313 8,828 10,889 18.6 14.9 3.3 15.0% 1.0
Enesco Group (5) 16.875 233 264 11.6 9.1 2.1 10.0% 0.9
-------------------------------------------------------------------------------------------------------
MEAN 20.2 x 16.5 x 4.1 x 13.3% 1.2 x
MEDIAN 18.6 14.9 3.3 15.0% 1.0
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
MEAN 16.9 x 14.2 x 4.6 x 15.1% 1.0 x
MEDIAN 15.3 13.1 3.9 15.0% 1.0
-------------------------------------------------------------------------------------------------------
Apple (6) 11.750 663 562 NM 24.1 3.6 17.5% 1.4
Juniper (6) 10.198 1,472 1,302 16.8 16.4 3.2 2.0% 8.2
<CAPTION>
AGGREGATE VALUE (2) /
-----------------------------------------------------------------------------
REVENUES (4) EBITDA (4) EBIT (4)
----------------- ------------------- ---------------- DIVIDEND
COMPANY LTM 1999E LTM 1999E LTM 1999E YIELD
- ------- ----- ------- ------- -------- ----- ----- --------
DIRECT MARKETERS
- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Avon Products 2.1 x 2.0 x 15.4 x 13.3 x 17.3 x 14.8 x 1.8%
Blyth Industries 1.8 1.5 10.4 9.1 12.1 10.5 0.0%
Nature's Sunshine Products 0.5 NA 3.6 NA 4.1 NA 1.4%
Nu Skin Enterprises 1.2 1.3 6.3 6.9 7.2 8.1 0.0%
Tupperware 1.5 1.4 8.3 7.9 12.7 12.0 4.2%
----------------------------------------------------------------------------------------
MEAN 1.4 x 1.5 x 8.8 x 9.3 x 10.7 x 11.3 x 1.5%
MEDIAN 1.5 1.5 8.3 8.5 12.1 11.2 1.4%
----------------------------------------------------------------------------------------
CONSUMER PRODUCTS
- -----------------
Land's End 1.3 1.2 18.0 15.3 22.3 18.8 0.0%
Newell Rubbermaid 1.7 1.7 12.7 8.8 15.4 11.5 2.6%
Enesco Group (5) 0.7 0.7 5.9 5.7 7.0 6.5 6.6%
----------------------------------------------------------------------------------------
MEAN 1.2 x 1.2 x 12.2 x 9.9 x 14.9 x 12.3 x 3.1%
MEDIAN 1.3 1.2 12.7 8.8 15.4 11.5 2.6%
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
MEAN 1.3 x 1.4 x 10.1 x 9.6 x 12.3 x 11.7 x 2.1%
MEDIAN 1.4 1.4 9.4 8.8 12.4 11.5 1.6%
----------------------------------------------------------------------------------------
Apple (6) 1.1 1.1 16.8 14.0 26.4 20.4 0.0%
Juniper (6) 1.0 1.0 7.5 7.8 8.3 8.8 9.2%
<FN>
- ---------------------------------
Notes: (1) All financial data is for continuing operations before extraordinary
and non-recurring items and cumulative effect of accounting changes.
(2) Aggregate value defined as equity market value plus total debt, minority
interest and preferred stock at book value less cash & cash equivalents
(3) Median I/B/E/S estimates as of 9/17/99
(4) Estimates based on most recent Value Line and analyst research
(5) Earnings projections based on Value Line.
(6) Projections based on management Juniper EPS based on
Merrill Lynch report dated 7/2/99.
</TABLE>
<PAGE> 35
<TABLE>
<CAPTION>
PROJECT POWERHOUSE
- ------------------------------------------------------------------------------------------------------------------------------------
Trading Statistics for Selected Comparable Companies(1)
Market Equity/
% Change from Market Net Income(3)
Ticker Share Price 52 Week Equity Aggregate ---------------------------
Number Company 36411 High Value Value (2) FY98 FY99E FY00E
------ ------- ----- ---- ----- --------- ---- ----- -----
(YEN) (%) (YEN MM) (YEN MM)
Catalogue Sales
- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
8165 Senshukai 1,984 YEN -1.0% 94,499 76,496 67.4 x 53.5 x 48.5 x
9937 Cecile 3540 -0.3% 142,839 131,511 NM 51.9 24.8
8248 Nissen 475 -26.9% 11,653 54,764 18.8 20.9 9.0
8005 Mutow 710 -2.7% 19,093 22,227 13.4 23.4 NA
----------------------------------------------
Mean: 33.2 x 37.4 x 27.5 x
Median: 18.8 37.6 24.8
----------------------------------------------
Direct (Door-to-Door) Sales
- ---------------------------
9885 Charle 1,381 -13.7% 29,049 11,537 13.4 x 15.4 x 14.5 x
8205 Shaklee 985 -17.9% 25,531 18,224 30.9 30.0 29.7
4915 Avon Products 280 -12.5% 16,996 16,587 NM 127.3 42.4
----------------------------------------------
Mean: 22.2 x 57.6 x 28.9 x
Median: 22.2 30.0 29.7
----------------------------------------------
----------------------------------------------
Total Mean: 28.8 x 46.1 x 28.2 x
Total Median: 18.8 30.0 27.3
----------------------------------------------
<CAPTION>
PROJECT POWERHOUSE
- ------------------------------------------------------------------------------------------------------------------------------------
Trading Statistics for Selected Comparable Companies(1)
Market Equity/
-------------------- Aggregate Value/ LTM 2 Yrs. Est.
Ticker CE(4) Book ---------------------------------- Earnings
Number Company FY98 Equity EBIT(5) EBITDA(6) Sales Growth (7)
------ ------- ---- ------ ------- --------- ----- ----------
Catalogue Sales
---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
8165 Senshukai 20.2 x 1.4 x 22.3 x 11.4 x 0.5 x 17.9%
9937 Cecile NM 3.5 43.7 32.1 0.8 NM
8248 Nissen 4.4 0.7 29.7 14.2 0.4 44.1%
8005 Mutow 8.6 1.0 14.7 9.7 0.3 NA
----------------------------------------------------------------------------------------------
MEAN: 11.1 x 1.7 x 27.6 x 16.9 x 0.5 x 31.0%
MEDIAN: 8.6 1.2 26.0 12.8 0.4 31.0%
----------------------------------------------------------------------------------------------
Direct (Door-to-Door) Sales
- ---------------------------
9885 Charle 11.8 x 1.1 x 2.5 x 2.4 x 0.2 x -3.8%
8205 Shaklee 20 1.9 10.1 8.0 1.5 NA
4915 Avon Products 29 3.0 28.5 12.6 0.5 NM
----------------------------------------------------------------------------------------------
MEAN: 20.2 x 2.0 x 13.7 x 7.6 x 0.7 x -3.8%
MEDIAN: 19.5 1.9 10.1 8.0 0.5 -3.8%
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
MEAN: 15.6 x 1.8 x 21.7 x 12.9 x 0.6 x 19.4%
MEDIAN: 15.7 1.4 22.3 11.4 0.5 17.9%
----------------------------------------------------------------------------------------------
====================================================================================================================================
<FN>
- -------------------------------------------------
Notes: (1) Source: FY1998 Yuka Shoken Hokokusyo (consolidated except for Cecile, Shaklee, Avon Products)
Fiscal Year ends in 3/99 except for Nissen and Avon Products
(2) Aggregate Value = Market Equity Value + Total Debt - Cash
(3) EPS Estimates from IBES except for Kao which is based on Morgan Stanley Dean Witter Research Estimate
(4) CE = Net Income + Depreciation & Amortization.
(5) EBIT = Recurring Profit + Interest Expense
(6) EBITDA = EBIT + Depreciation & Amortization
</TABLE>
<PAGE> 36
PROJECT JUMPSTART
- --------------------------------------------------------------------------------
TENDER OFFER CASE STUDIES
- --------------------------------------------------------------------------------
NCR JAPAN, INC.
- --------------------------------------------------------------------------------
Business Description
- --------------------
NCR Corporation's largest subsidiary and its only publicly traded regional unit.
NCR Japan is engaged in imports and sales of large computers produced at NCR.
NCR Corporation is a manufacturer of automated teller machines and point-of-sale
terminals. The Company also provides financial transaction services.
NCR Corporation acquired 97.7% of NCR Japan, Ltd.
<TABLE>
<CAPTION>
Transaction Detail Premium Offered Over Market
- -------------------------------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C>
Date of Announcement 4/16/98 Unaffected Day Prior to LTM LTM
Shares Outstanding as of 12/97:220.0MM Price(1) Announcement High Low
Tender Offer Price: 607 YEN ---------- ------------ ------ -----
35.2% 26.5% (37.7)% 69.6%
Initial Ownership Position: 70.0%
Ownership Sought in Tender: 30.0%
</TABLE>
- --------------------------------------------------------------------------------
JAPAN MARINE TECHNOLOGIES
- --------------------------------------------------------------------------------
Business Description
- --------------------
Japanese Marine Technologies is the Japanese base for TI Group of the United
Kingdom. The Company produces stern tube sealing for ships, waste disposal
handling equipment for nuclear power stations and tilted pad bearing systems for
high speed handling of heavy loads. JMT also imports products from other TI
Group companies.
TI Group acquired 91.3% of Japan Marine Technologies.
<TABLE>
<CAPTION>
Transaction Detail Premium Offered Over Market
- -------------------------------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C>
Date of Announcement 4/20/98 Unaffected Day Prior to LTM LTM
Shares Outstanding as of 12/97 9.8MM Price(1) Announcement High Low
Tender Offer Price: 580 YEN ---------- ------------ ------- -----
62.5% 56.8% (31.3)% 87.1%
Initial Ownership Position: 50.1%
Ownership Sought in Tender: 49.9%
</TABLE>
- --------------------------------------------------------------------------------
NCR JAPAN, INC.
- --------------------------------------------------------------------------------
[SHARE PRICE PERFORMANCE SUMMARY CHART]
- --------------------------------------------------------------------------------
JAPAN MARINE TECHNOLOGIES
- --------------------------------------------------------------------------------
[SHARE PRICE PERFORMANCE SUMMARY CHART]
Notes: (1) Unaffected price represents market price one month prior to
announcement date.
(2) Central Bank in Thailand stopped defending baht's fixed value
against the dollar.
<PAGE> 37
PROJECT JUMPSTART
- --------------------------------------------------------------------------------
TENDER OFFER CASE STUDY - SDS BIOTECH
[SHARE PRICE PERFORMANCE SUMMARY CHART]
- --------------------------------------------------------------------------------
TRANSACTION DETAIL
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Summary Tender Offer Terms
- --------------------------
<S> <C>
Date of Announcement: 2/2/98
Date of Completion: 4/23/98
Shares Outstanding as of 12/97: 9.0MM
Tender Offer Price: 1550 YEN
Initial Ownership Position: 33.8%
Ownership Sought in Tender: 66.2%
Ownership Following Tender 97.8%
</TABLE>
Comments
- --------
- -- Novartis' 4.9MM shares accounted for 54.8% of the total shares outstanding
- -- The remaining 11.4% of the shares outstanding were held mainly by Japanese
banks
- --------------------------------------------------------------------------------
PREMIUM PAID
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Premium Offered Over Market
- ---------------------------------------------------------------
Unaffected Day Prior to LTM LTM
Price(1) Announcement High Low
- ------------- ------------ ---- -----
<S> <C> <C> <C>
62.5% 74.2% 5.4% 80.9%
</TABLE>
Notes: (1) Unaffected price represents market price one month prior to
announcement date.
(2) Central Bank in Thailand stopped defending baht's fixed value
against the dollar.
<PAGE> 38
PROJECT JUMPSTART
- --------------------------------------------------------------------------------
SONY CASE STUDY - TRANSACTION OVERVIEW
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Description: - Privatization of three listed subsidiaries, Sony Music Entertainment (SMEJ), Sony Chemicals
Corporation (SC), and Sony Precision Technology (SPT) by Sony
Structure: - 100% stock transaction
- Fixed exchange ratio
-- 0.835 SMEJ share, 0.565 SC share, and 0.203 SPT share for each Sony share
Total Transaction Size: - JPY 330BN ($2.8BN)
Premium: Premium to Marker SMEJ SC SPT
----------------- ---- -- ---
3 Months Before Announcement 29% 2% 14%
1 Month Before Announcement 21% 12% 14%
1 Day Before Announcement 16% 19% 18%
Conditions to Close: - Approval of Sony and subsidiary boards (expected in Oct. 1999)
- Approval of Sony and subsidiary shareholders (expected in Nov. 1999)
- Implementation of the stock-for-stock provision in the revised Commercial Code for 100% stock
transaction.
Expected Closing: - January 2000
</TABLE>
