EX-99.C.4 2 y48260a1exv99wcw4.htm EX-99.C.4: DISCUSSION MATERIALS OF J.P. MORGAN SECURITIES INC. EX-99.C.4
 

EXHIBIT (c)(4)
D I S C U S S I O N M A T E R I A L S

 

 

Real Estate & Lodging Investment BankingMerger & AcquisitionsTom GrierBen LettManaging DirectorManaging DirectorEmail:thomas.grier@jpmorgan.comEmail:ben.lett@jpmorgan.comTel:1-212-622-4423Tel:1-212-622-2439Fax:1-646-534-0406Fax:1-646-534-1120John Scott TrotterJames RoddyAssociateVice PresidentEmail:john.s.trotter@jpmorgan.comEmail:james.roddy@jpmorgan.comTel:1-212-622-4296Tel:1-212-622-0638Fax:1-646-534-0406Fax:1-917-546-24 72Justin WooAnalystFinancial Institutions GroupEmail:justin.p.woo@jpmorgan.comTel:1-212-622-0248Walter SchusterFax:1-646-792-4855Managing DirectorEmail:walter.schuster@jpmorgan.comTel:44 207 3255809Fax:44 207 3258256Michael MarekExecutive DirectorEmail:michael.marek@jpmorgan.comTel:1-212-622-6109Fax:1-917-546-2586P R O J E C T B A L L A C K1

 

 

Situation observations Go private transactions with affiliated companies are highly scrutinized and can potentially become contentious JPMorgan believes that given Ballack’s position it should consider the following actions After October 4th, approach Target’s Chairman to express “potential” desire to acquire the Target Communicate willingness to participate in process and even discuss ability to vote shares for superior all cash offers (subject to negotiations) from competing bidders Give Target flexibility to choose process P R O J E C T B A L L A C K2

 

 

Overview of various alternatives for engaging the Target Potential approaches Alternative 1: Alternative 2: Alternative 3: Preemptive tender offer Negotiated transaction Request auction process
P R O J E C T B A L L A C K3

 

 

Potential auction process timeline (alternative 3) —Pre-announcement phase timeline
P R O J E C T B A L L A C K4

 

 

Analysis at various pricesAnalysis at various prices($mm, except per share data)Current1Share price$9.53$10.00$11.00$12.00$13.00$14.00$15.00Implied premium0.0%4.9%15.4%25.9%36.4%46.9%57.4%Basic shares (mm)25.72225.72225.72225.72225.72225.72225.722Dilutive effect of options0.00.00.00.00.00.00.0Fully diluted shares (mm)25.72225.72225.72225.72225.72225.72225.722Equity value$245.1$257.2$282.9$308.7$334.4$360.1$385.8Plus: Total debt312.2312.2312 .2312.2312.2312.2312.2Less: Cash(40.5)(40.5)(40.5)(40.5)(40.5)(40.5)(40.5)Total firm value$516.9$529.0$554.7$580.5$606.2$631.9$657.6MultiplesMetric2008E EBITDA2$132.23.9x4.0x4.2x4.4x4.6x4.8x5.0x2008E FFO3$1.386.9x7.2x8.0x8.7x9.4x10.1x10.9xPrice/book4$360.50.7x0.7x0.8x0.9x0.9x1.0x1.1xSource: Company filings; Factset; SNL; Wall Street equity research1As of 9/28/072Wall Street equity research consensus; Factset3Wall Street equity research consensus; SNL4Calculated as equity value / total shareholders 46; equity; as of 6/30/07P R O J E C TB A L L A C K5

 

 

Precedent M&A advisory fees$500mm-$700mm firm value — 2002-1Q2007AnnouncedTargetAcquirorFirm valueAdvisor totalFees as % firm value3/2/2007Bristol West Holdings IncFarmers Group Inc$687.8$7.81.13%2/21/2007Wild Oats Markets IncWhole Foods Market Inc565.02.90.51%11/13/2006Eddie Bauer Holdings IncEddie B Holding Corp522.46.31.21%11/8/2006Essex CorpNorthrop Grumman Corp542.46.61.22%10/23/2006Connetics CorpStiefel Laboratories Inc693.18.61.24%10/9/2 006CNS IncGlaxoSmithKline PLC502.06.01.20%8/31/2006BNP Residential Properties IncBabcock & Brown Real Estate697.55.50.79%8/18/2006Lone Star Steakhouse,SaloonLone Star Funds575.64.70.82%8/7/2006McDATA CorpBrocade Commun Sys Inc682.48.51.25%8/3/2006MRO Software IncIBM Corp611.510.51.72%7/31/2006ConAgra Foods Inc-Branded MeatSmithfield Foods Inc571.04.30.74%6/19/2006Sally Beauty Supply CoClayton Dubilier & Rice Inc575.016.52.87%6/12/2006Pacific Energy Partners LPPlains All American Pipeline700.012.51 .79%6/5/2006Laserscope IncAmerican Med Sys Holdings Inc647.56.51.00%5/2/2006Advanced Digital Infon CorpQuantum Corp509.45.81.14%4/6/2006Riviera Holdings CorpRIV Acquisition Holdings Inc617.84.20.67%3/3/2006iVillage IncNBC Universal Inc607.37.11.17%12/16/2005Animas CorpJohnson & Johnson Inc501.15.11.02%12/15/2005Collegiate Funding Svcs LLCJPMorgan Chase Bank687.87.61.10%7/18/2005Intermix Media IncNews Corp Inc582.36.51.12%6/1/2005Shopping com LtdeBay Inc524.36.51.24%5/4/2005Bone Care Intl IncGenzyme Cor p594.67.41.24%3/14/2005Ascential Software CorpIBM Corp639.88.01.25%2/17/2005Prime Group Realty TrustLightstone Group LLC559.73.80.68%11/8/2004Infonet Services CorpBT Group PLC573.77.11.24%9/15/2004American Medical Security GrpPacifiCare Health Systems Inc506.75.51.09%6/16/2004Exult IncHewitt Associates LLC613.55.00.82%4/6/2004Barra IncMorgan Stanley621.06.61.06%3/15/2004Xicor IncIntersil Corp506.74.50.89%2/4/2004Cable Design Technologies CorpBelden Inc508.33.30.64%12/10/2003Right Mgmt Consultants IncManpowe r Inc598.68.51.42%5/19/2003Pacific Northwest Bancorp,WAWells Fargo & Co,California622.44.90.78%2/18/2003Allen Telecom IncAndrew Corp577.66.21.08%7/17/2002EG&G Technical ServicesURS Corp500.04.00.80%7/10/2002Kiewit Materials CoRinker Materials Corp555.73.00.54%5/29/2002EEX Corp(ENSERCH Corp)Newfield Exploration Co577.65.30.91%4/29/2002HNC Software IncFair Isaac & Co Inc688.95.20.75%4/11/2002Herbalife International IncInvestor Group521.411.62.22%2/18/2002ONI Systems CorpCIENA Corp603.28.01.33%2 /15/2002NRG Energy IncXcel Energy Inc672.64.00.59%Median$580.0$6.31.09%Mean$591.1$6.51.11%Top-half median$631.1$7.71.24%Top-half mean$643.5$8.41.40%Top-quartile median$687.8$8.61.37%Top-quartile mean$679.7$10.01.63%