-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DazHY1eFJJ95zCCUQ7nNQCdZdjOx9E21iQM9Lta0JjpsIBhXi+NykNzwqTlb0s0n crzKQZXg7L6QHmhOT5NI1A== 0000940180-97-000739.txt : 19970825 0000940180-97-000739.hdr.sgml : 19970825 ACCESSION NUMBER: 0000940180-97-000739 CONFORMED SUBMISSION TYPE: SC 13E3 PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19970822 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: RHONE POULENC RORER INC CENTRAL INDEX KEY: 0000217028 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 231699163 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E3 SEC ACT: 1934 Act SEC FILE NUMBER: 005-11847 FILM NUMBER: 97668370 BUSINESS ADDRESS: STREET 1: 500 ARCOLA RD STREET 2: P O BOX 1200 M/S 5B14 CITY: COLLEGEVILLE STATE: PA ZIP: 19426-0107 BUSINESS PHONE: 6104548000 FORMER COMPANY: FORMER CONFORMED NAME: RORER GROUP INC DATE OF NAME CHANGE: 19900731 FORMER COMPANY: FORMER CONFORMED NAME: RORER AMCHEM INC DATE OF NAME CHANGE: 19770604 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: RHONE POULENC S A CENTRAL INDEX KEY: 0000807198 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 000000000 STATE OF INCORPORATION: I0 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E3 BUSINESS ADDRESS: STREET 1: 25 QUAI PAUL DOUMER STREET 2: 92408 COURBEVOIE CEDEX CITY: FRANCE STATE: I0 BUSINESS PHONE: 33147681234 MAIL ADDRESS: STREET 1: 25 QUAI PAUL DOUMER STREET 2: 92408 COURBEVOIE CEDEX CITY: FRANCE STATE: I0 SC 13E3 1 SCHEDULE 13E3 - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------- SCHEDULE 13E-3 Rule 13E-3 Transaction Statement (Pursuant to Section 13(e) of the Securities Exchange Act of 1934) ---------------------------- RHONE-POULENC RORER INC. (Name of Issuer) ---------------------------- RHONE-POULENC RORER INC. RP VEHICLE, INC. RHONE-POULENC S.A. (Name of Person(s) Filing Statement) ---------------------------- Common Stock, Without Par Value (Title of Class of Securities) ---------------------------- 76242T 10 4 (CUSIP Number of Class of Securities) ---------------------------- Yves Brissy Richard T. Collier Rhone-Poulenc S.A. Rhone-Poulenc Rorer Inc. 25, quai Paul Doumer 500 Arcola Road 92408 Courbevoie Cedex, France Collegeville, PA 19426 011-331-47-68-12-34 (610) 454-3862 (Name, Address and Telephone Number of Persons Authorized to Receive Notices and Communications on Behalf of Person(s) Filing Statement) ---------------------------- With Copies to: Hubertus V. Sulkowski, Esq. Margaret L. Wolff, Esq. Shearman & Sterling Skadden, Arps, Slate, Meagher & Flom LLP 114, avenue des Champs-Elysees 919 Third Avenue 75008 Paris, France New York, NY 10022 011-331-53-89-70-00 (212) 735-3000 Creighton O'M. Condon, Esq. Shearman & Sterling 599 Lexington Avenue New York, New York (212) 848-4000 This statement is filed in connection with (check the appropriate box): a. [_] The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934. b. [_] The filing of a registration statement under the Securities Act of 1933. c. [X] A tender offer. d. [_] None of the above. Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: [_] CALCULATION OF FILING FEE
================================================================================ Transaction Valuation Amount of Filing Fee - -------------------------------------------------------------------------------- $4,846,433,601.00* $969,286.72** ================================================================================
* Calculated by multiplying $97, the per share tender offer price, by 49,963,233 the sum of the number of shares of Common Stock sought in the tender offer and the 4,439,111 shares of Common Stock subject to options which will be vested as of October 1, 1997. ** Calculated as 1/50 of 1% of the transaction value. [X] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: $969,286.72 Filing Party: Rhone-Poulenc, S.A. Form or Registration No.: Schedule 14D-1/Schedule 13D (Amendment No. 10) Date Filed: August 22, 1997. - -------------------------------------------------------------------------------- INTRODUCTION This Rule 13e-3 Transaction Statement on Schedule 13E-3 (the "Schedule 13E-3") is being filed by (i) Rhone-Poulenc S.A., a societe anonyme organized under the laws of the Republic of France ("Purchaser"), (ii) RP Vehicle, Inc., a Pennsylvania corporation ("Merger Subsidiary") and (iii) Rhone-Poulenc Rorer Inc., a Pennsylvania corporation (the "Company") pursuant to Section 13(e) of the Securities Exchange Act of 1934, as amended, and Rule 13e-3 thereunder in connection with the tender offer by Purchaser for all the issued and outstanding shares (the "Shares") of common stock, without par value, of the Company not already owned by Purchaser or any of its affiliates, upon the terms and subject to the conditions set forth in the Offer to Purchase dated August 22, 1997 (the "Offer to Purchase") and the related Letter of Transmittal (which together constitute the "Offer"), copies of which are filed as Exhibits (d)(1) and (d)(2) hereto, respectively. The following Cross Reference Sheet, prepared pursuant to General Instruction F to Schedule 13E-3, shows the location in the Tender Offer Statement on Schedule 14D-1 filed by Purchaser (the "Schedule 14D-1") with the Securities and Exchange Commission on the date hereof of the information required to be included in this Schedule 13E-3. The information set forth in the Schedule 14D-1, including all exhibits thereto, is hereby expressly incorporated herein by reference as set forth in the Cross Reference Sheet and the responses in this Schedule 13E-3, and such responses are qualified in their entirety by reference to the information contained in the Offer to Purchase and the annexes thereto. The information contained in this Schedule 13E-3 concerning the Company, including, without limitation, the information concerning the background of the transactions, the deliberations of the Company's Board of Directors in connection with the transaction, the opinion of the Company's financial advisor and the Company's capital structure and historical financial statements and projections, was supplied by the Company. Purchaser and Merger Subsidiary take no responsibility for the accuracy of such information. The information contained in this Schedule 13E-3 concerning Purchaser and Merger Subsidiary was supplied by Purchaser and Merger Subsidiary. The Company takes no responsibility for the accuracy of such information. Page 2 of 13 CROSS REFERENCE SHEET
ITEM IN WHERE LOCATED IN SCHEDULE 13E-3 SCHEDULE 14D-1 - -------------- -------------- Item 1(a)...........................................................................................Item 1(a) Item 1(b)...........................................................................................Item 1(b) Item 1(c)...........................................................................................Item 1(c) Item 1(d)...................................................................................................* Item 1(e)...................................................................................................* Item 1(f)...................................................................................................* Item 2(a)...........................................................................................Item 2(a) Item 2(b)...........................................................................................Item 2(b) Item 2(c)...........................................................................................Item 2(c) Item 2(d)...........................................................................................Item 2(d) Item 2(e)...........................................................................................Item 2(e) Item 2(f)...........................................................................................Item 2(f) Item 2(g)...........................................................................................Item 2(g) Item 3(a)..................................................................................Item 3(a) and 3(b) Item 3(b)...........................................................................................Item 3(b) Item 4 ...................................................................................................* Item 5 ..............................................................................................Item 5 Item 6(a)...........................................................................................Item 4(a) Item 6(b)...................................................................................................* Item 6(c)...........................................................................................Item 4(b) Item 6(d)...................................................................................................* Item 7(a)..............................................................................................Item 5 Item 7(b)...................................................................................................* Item 7(c)...................................................................................................* Item 7(d)...................................................................................................* Item 8 ...................................................................................................* Item 9 ...................................................................................................* Item 10(a)..........................................................................................Item 6(a) Item 10(b)..................................................................................................* Item 11 ..............................................................................................Item 7 Item 12(a)..................................................................................................* Item 12(b)..................................................................................................* Item 13 ...................................................................................................* Item 14 ...................................................................................................* Item 15(a)..................................................................................................* Item 15(b).............................................................................................Item 8 Item 16 ..........................................................................................Item 10(f) Item 17 .............................................................................................Item 11
* The Item is located in the Schedule 13E-3 only. Page 3 of 13 ITEM 1. Issuer and Class of Security Subject to the Transaction. (a)-(c) The response to Item 1(a)-(c) of the Schedule 14D-1 is incorporated herein by reference. (d) The information set forth in the Offer to Purchase under "THE TENDER OFFER -- Section 6. Price Range of Shares" is incorporated herein by reference. (e) Not applicable. (f) The information set forth in the Offer to Purchase under "SPECIAL FACTORS -- Beneficial Ownership of Common Stock" are incorporated herein by reference. ITEM 2. Identity and Background. (a)-(d) and (g) This Statement is being filed by Purchaser, Merger Subsidiary and the Company. The response to Item 2 of the Schedule 14D-1 is incorporated herein by reference as to Purchaser. The information concerning the name, state or other place of organization, principal business and address of the principal office of Merger Subsidiary and the Company, and the information concerning the name, business address, present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment or occupation is conducted, material occupations, positions, offices or employments during the last five years and citizenship of each of the executive officers and directors of Merger Subsidiary and the Company is set forth under "INTRODUCTION", "THE TENDER OFFER -- Section 7. Certain Information Concerning the Company", "THE TENDER OFFER -- Section 8. Certain Information Concerning Purchaser" and Schedule I of the Offer to Purchase and is incorporated herein by reference. (e)-(f) The response to Item 2 of the Schedule 14D-1 is incorporated herein by reference with respect to Purchaser. During the last five years, neither Merger Subsidiary or Company, nor, to the best knowledge of Merger Subsidiary or Company, any of the persons listed in Schedule I of the Offer to Purchase has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. ITEM 3. Past Contacts, Transactions or Negotiations. (a)-(b) The response to Item 3 of the Schedule 14D-1 is incorporated herein by reference. ITEM 4. Terms of The Transaction. (a) The information set forth in the Offer to Purchase on the cover page thereof and under "INTRODUCTION", "SPECIAL FACTORS -- Background of the Offer and the Merger", "SPECIAL FACTORS -- The Merger Agreement", "THE TENDER OFFER -- Section 1. Terms of the Offer; Expiration Date", "THE TENDER OFFER -- Section 2. Acceptance for Payment and Payment for Shares", "THE TENDER OFFER - --Section 3. Procedures for Accepting the Offer and Tendering Shares", "THE TENDER OFFER --Section 4. Withdrawal Rights", "THE TENDER OFFER -- Section 10. Dividends and Distributions", "THE TENDER OFFER -- Section 12. Certain Conditions of the Offer", "THE TENDER OFFER -- Section 13. Certain Legal Matters and Regulatory Approvals" and "THE TENDER OFFER -- Section 15. Miscellaneous" is incorporated herein by reference. (b) Not applicable. Page 4 of 13 ITEM 5. Plans or Proposals of the Issuer or Affiliate. (a)-(e) The response to Item 5(a)-(e) of the Schedule 14D-1 is incorporated herein by reference. (f)-(g) The response to Item 5(f)-(g) of the Schedule 14D-1 is incorporated herein by reference. ITEM 6. Source and Amounts of Funds or Other Consideration. (a) The response to Item 4(a) of the Schedule 14D-1 is incorporated herein by reference. (b) The information set forth in the Offer to Purchase in "THE TENDER OFFER -- Section 14. Fees and Expenses" is incorporated herein by reference. (c) The response to Item 4(b) of the Schedule 14D-1 is incorporated herein by reference. (d) Not applicable. ITEM 7. Purpose(s), Alternatives, Reasons and Effects. (a) The response to Item 5 of the Schedule 14D-1 is incorporated herein by reference. (b) The information set forth in the Offer to Purchase under "SPECIAL FACTORS -- Recommendation of the Company Board; Fairness of the Offer and the Merger" and "SPECIAL FACTORS -- Purpose and Structure of the Offer and the Merger; Reasons of Purchaser for the Offer and the Merger" is incorporated herein by reference. (c)-(d) The information set forth in the Offer to Purchase under "INTRODUCTION", "SPECIAL FACTORS -- Background of the Offer and the Merger", "SPECIAL FACTORS -- Recommendation of the Company Board; Fairness of the Offer and the Merger", "SPECIAL FACTORS -- Purpose and Structure of the Offer and the Merger; Reasons of Purchaser for the Offer and the Merger", "SPECIAL FACTORS -- Plans for the Company After the Offer and the Merger; Certain Effects of the Offer", "THE TENDER OFFER -- Section 5. Certain U.S. Federal and French Income Tax Consequences" and "THE TENDER OFFER -- Section 11. Effect of the Offer on the Market for the Shares, the NYSE, the Paris Bourse and Exchange Act Registration" is incorporated herein by reference. ITEM 8. Fairness of the Transaction. (a)-(e) The information set forth in the Offer to Purchase under "INTRODUCTION", "SPECIAL FACTORS -- Background of the Offer and the Merger", "SPECIAL FACTORS -- Recommendation of the Company Board; Fairness of the Offer and the Merger", "SPECIAL FACTORS -- Position of Purchaser Regarding Fairness of the Offer and the Merger" and "SPECIAL FACTORS -- Purpose and Structure of the Offer and the Merger; Reasons of Purchaser for the Offer and the Merger" is incorporated herein by reference. (f) Not applicable. ITEM 9. Reports, Opinions, Appraisals And Certain Negotiations. (a)-(c) The information set forth in the Offer to Purchase under "SPECIAL FACTORS -- Background of the Offer and the Merger", "SPECIAL FACTORS -- Recommendation of the Company Board; Fairness of the Offer and the Merger", "SPECIAL FACTORS -- Opinion of Goldman, Sachs & Co.", "SPECIAL FACTORS -- Page 5 of 13 Position of Purchaser Regarding Fairness of the Offer and the Merger" and in Schedule II is incorporated herein by reference. ITEM 10. Interest in Securities of the Issuer. (a) The response to Item 6(a) of the Schedule 14D-1 is incorporated herein by reference. (b) The information set forth in the Offer to Purchase in "SPECIAL FACTORS -- Beneficial Ownership of Common Stock" is incorporated herein by reference. ITEM 11. Contracts, Arrangements or Understandings with Respect to the Issuer's Securities. The response to Item 7 of the Schedule 14D-1 and the information set forth in the Offer to Purchase under "SPECIAL FACTORS -- Beneficial Ownership of Common Stock" are incorporated herein by reference. ITEM 12. Present Intention and Recommendation of Certain Persons with Regard to the Offer and the Merger. (a)-(b) The information set forth in the Offer to Purchase under "INTRODUCTION", "SPECIAL FACTORS -- Background of the Offer and the Merger", "SPECIAL FACTORS -- Recommendation of the Company Board; Fairness of the Offer and the Merger", "SPECIAL FACTORS -- Interests of Certain Persons in the Offer and the Merger" and "SPECIAL FACTORS -- Beneficial Ownership of Common Stock" is incorporated herein by reference. ITEM 13. Other Provisions of the Offer and the Merger. (a) The information set forth in the Offer to Purchase under "SPECIAL FACTORS -- Rights of Shareholders in the Offer and the Merger", "SPECIAL FACTORS--The Merger Agreement" and in Schedule III is incorporated herein by reference. (b) Not applicable. (c) Not applicable. ITEM 14. Financial Information. (a) The information set forth in the Offer to Purchase under "THE TENDER OFFER -- Section 7. Certain Information Concerning the Company" is incorporated herein by reference. In addition, the Company's audited financial statements for the fiscal years ended December 31, 1995 and December 31, 1996, and the Company's unaudited financial statements for the period ended June 30, 1997, are attached to the Offer to Purchase as Schedules IV and V thereto, respectively. (b) Not applicable. ITEM 15. Persons and Assets Employed, Retained or Utilized. (a) The information set forth in the Offer to Purchase under "SPECIAL FACTORS -- Background of the Offer and the Merger", "SPECIAL FACTORS -- Recommendation of the Company Board; Fairness of the Offer and the Merger", "SPECIAL FACTORS -- Plans for the Company After the Offer and the Merger; Certain Effects of the Merger" and "THE TENDER OFFER -- Section 11. Effect of the Offer on the Market for the Shares, the NYSE, the Paris Bourse and Exchange Act Registration" is incorporated herein by reference. Page 6 of 13 (b) The response to Item 8 of the Schedule 14D-1 is incorporated herein by reference. ITEM 16. Additional Information. The response to Item 10(f) of the Schedule 14D-1 is incorporated herein by reference. ITEM 17. Material to Be Filed as Exhibits. (a)(1) Summary of Terms and Conditions (FF 2,500,000 Short Term Credit Facility) dated August 6, 1997 between Purchaser and *.+ (a)(2) Summary of Terms and Conditions (FF 2,000,000,000 Short Term Credit Facility) dated August 1, 1997 between Purchaser and *.+ (a)(3) Summary of Terms and Conditions (FF 1,500,000,000 Revolving Credit Loan Facility) dated August 6, 1997 between Purchaser and *.+ (a)(4) Summary of Terms and Conditions (FF 1,500,000,000 Revolving Credit Facility) dated August 1, 1997 between Purchaser and *.+ (a)(5) Summary of Terms and Conditions (FF 2,000,000,000 Revolving Credit Facility) dated August 4, 1997 between Purchaser and *.+ (a)(6) Summary of Terms and Conditions (FF 1,000,000,000 Revolving Credit Facility) dated August 1, 1997 between Purchaser and *.+ (a)(7) Summary of Terms and Conditions (FF 1,000,000,000 Revolving Credit Facility) dated August 5, 1997 between Purchaser and *.+ (a)(8) Summary of Terms and Conditions (FF 750,000,000 Revolving Credit Facility) dated August 1, 1997 between Purchaser and *.+ (a)(9) Summary of Terms and Conditions (FF 500,000,000 Revolving Credit Facility) dated July 31, 1997 between Purchaser and *.+ (a)(10) Summary of Terms and Conditions (USD 80,000,000 Five Year Bilateral Credit Facility) dated July 23, 1997 between Purchaser and *.+ (a)(11) Summary of Terms and Conditions (FF 500,000,000 Revolving Credit Facility) dated August 5, 1997 between Purchaser and *.+ (a)(12) Summary of Terms and Conditions (FF 1,000,000,000 Revolving Credit Facility) dated August 4, 1997 between Purchaser and *.+ (a)(13) Summary of Terms and Conditions (FF 500,000,000 Revolving Credit Facility) dated August 4, 1997 between Purchaser and *.+ (a)(14) Summary of Terms and Conditions (USD 150,000,000 Revolving Credit Facility) dated August 7, 1997 between Purchaser and *.+ (a)(15) Summary of Terms and Conditions (FF 500,000,000 Revolving Credit Facility) dated August 7, 1997 between Purchaser and *.+ (a)(16) Summary of Terms and Conditions (FF 4,000,000,000 Short Term Credit Facility) dated August 8, 1997 between Purchaser and *.+ (a)(17) Summary of Terms and Conditions (FF 2,000,000,000 Revolving Credit Facility) undated between Purchaser and *.+ (a)(18) Summary of Terms and Conditions (USD 850,000,000 Bridge Loan Facility) dated August 8, 1997 between Purchaser and *.+ (b)(1) Opinion of Goldman, Sachs & Co. dated August 19, 1997 (attached as Schedule II to the Offer to Purchase).* (b)(2) Presentation of Goldman, Sachs & Co. dated August 19, 1997. (c)(1) Form of Stock Option Agreement.* (c)(2) Acquisition Agreement, dated as of March 12, 1990 between Purchaser and Rover Group Inc., predecessor in interest to the Company (incorporated by reference to the registration statement on Form F-4 of the Purchaser (Registration Number 33-35645)). (c)(3) Agreement and Plan of Merger, dated August 19, 1997 among Purchaser, Merger Subsidiary and the Company.* (d)(1) Form of Offer to Purchase dated August 22, 1997.* (d)(2) Form of Letter of Transmittal sent to holders of Shares.* (d)(3) Form of Notice of Guaranteed Delivery.* (d)(4) Form of Letter from Morgan Stanley & Co. Incorporated and UBS Securities LLC to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.* (d)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and Nominees to Clients.* (d)(6) Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.* (d)(7) Summary Advertisement as published in The Wall Street Journal on August 22, 1997.* (d)(8) Press Release issued by Purchaser on August 20, 1997.* Page 7 of 13 (d)(9) English translation of French-language Communique published in Les Echos and La Tribune on August 22, 1997.* (e) Sections 1930(a) and 1571-80 (Subchapter 15) of the Pennsylvania Business Corporation Law (attached as Schedule III to the Offer to Purchase).* (f) Not applicable. - ----------------------- * Incorporated by reference to the Statement on Schedule 14D-1 filed by Purchaser on August 22, 1997. + Request for Confidential Treatment filed by Purchaser on August 22, 1997. Page 8 of 13 After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. August 22, 1997 RHONE-POULENC S.A. By:/s/ Jean-Rene Fourtou ---------------------------------- Name: Jean-Rene Fourtou Title: Chairman and Chief Executive Officer Page 9 of 13 After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. August 22, 1997 RP VEHICLE, INC. By:/s/ Igor Landau ----------------------------------- Name: Igor Landau Title: President Page 10 of 13 After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. August 22, 1997 RHONE-POULENC RORER INC. By:/s/ Michel de Rosen ----------------------------------- Name: Michel de Rosen Title: Chairman and Chief Executive Officer Page 11 of 13
EXHIBIT INDEX Exhibit No. Description - ----------- ----------- (a)(1) Summary of Terms and Conditions (FF 2,500,000 Short Term Credit Facility) dated August 6, 1997 between Purchaser and *.+ (a)(2) Summary of Terms and Conditions (FF 2,000,000,000 Short Term Credit Facility) dated August 1, 1997 between Purchaser and *.+ (a)(3) Summary of Terms and Conditions (FF 1,500,000,000 Revolving Credit Loan Facility) dated August 6, 1997 between Purchaser and *.+ (a)(4) Summary of Terms and Conditions (FF 1,500,000,000 Revolving Credit Facility) dated August 1, 1997 between Purchaser and *.+ (a)(5) Summary of Terms and Conditions (FF 2,000,000,000 Revolving Credit Facility) dated August 4, 1997 between Purchaser and *.+ (a)(6) Summary of Terms and Conditions (FF 1,000,000,000 Revolving Credit Facility) dated August 1, 1997 between Purchaser and *.+ (a)(7) Summary of Terms and Conditions (FF 1,000,000,000 Revolving Credit Facility) dated August 5, 1997 between Purchaser and *.+ (a)(8) Summary of Terms and Conditions (FF 750,000,000 Revolving Credit Facility) dated August 1, 1997 between Purchaser and *.+ (a)(9) Summary of Terms and Conditions (FF 500,000,000 Revolving Credit Facility) dated July 31, 1997 between Purchaser and *.+ (a)(10) Summary of Terms and Conditions (USD 80,000,000 Five Year Bilateral Credit Facility) dated July 23, 1997 between Purchaser and *.+ (a)(11) Summary of Terms and Conditions (FF 500,000,000 Revolving Credit Facility) dated August 5, 1997 between Purchaser and *.+ (a)(12) Summary of Terms and Conditions (FF 1,000,000,000 Revolving Credit Facility) dated August 4, 1997 between Purchaser and *.+ (a)(13) Summary of Terms and Conditions (FF 500,000,000 Revolving Credit Facility) dated August 4, 1997 between Purchaser and *.+ (a)(14) Summary of Terms and Conditions (USD 150,000,000 Revolving Credit Facility) dated August 7, 1997 between Purchaser and *.+ (a)(15) Summary of Terms and Conditions (FF 500,000,000 Revolving Credit Facility) dated August 7, 1997 between Purchaser and *.+ (a)(16) Summary of Terms and Conditions (FF 4,000,000,000 Short Term Credit Facility) dated August 8, 1997 between Purchaser and *.+ (a)(17) Summary of Terms and Conditions (FF 2,000,000,000 Revolving Credit Facility) undated between Purchaser and *.+ (a)(18) Summary of Terms and Conditions (USD 850,000,000 Bridge Loan Facility) dated August 8, 1997 between Purchaser and *.+ (b)(1) Opinion of Goldman, Sachs & Co. dated August 19, 1997 (attached as Schedule II to the Offer to Purchase).* (b)(2) Presentation of Goldman, Sachs & Co. dated August 19, 1997. (c) Agreement and Plan of Merger, dated August 19, 1997 among Purchaser, Merger Subsidiary and the Company.* (d)(1) Form of Offer to Purchase dated August 22, 1997.* (d)(2) Form of Letter of Transmittal sent to holders of Shares.* (d)(3) Form of Notice of Guaranteed Delivery.* (d)(4) Form of Letter from Morgan Stanley & Co. Incorporated and UBS Securities LLC to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.* (d)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and Nominees to Clients.* (d)(6) Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.* (d)(7) Summary Advertisement as published in The Wall Street Journal on August 22, 1997.* (d)(8) Press Release issued by Purchaser on August 20, 1997.* (d)(9) English translation of French-language Communique published in Les Echos and La Tribune on August 22, 1997.*
Page 12 of 13 EX-99.(B)(2) 2 PRESENTATION OF GOLDMAN SACHS & CO. Exhibit (B)(2) GOLDMAN SACHS PRESENTATION TO THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF RHONE-POULENC RORER Goldman, Sachs & Co. August 19, 1997 TABLE OF EXHIBITS EXHIBIT IMPLIED TRANSACTION MULTIPLES 1 SUMMARY OF WORK PERFORMED TO DATE 2 STOCK PRICE & VOLUME HISTORY 3 DCF ANALYSIS - WHOLE COMPANY 4 SUMMARY OF COMPONENTS OF LONG-TERM VALUE 5 Pharmaceutical Operations A Excluded Pipeline B Centeon C COMPARISON OF SELECTED PUBLICLY TRADED COMPARABLE COMPANIES 6 IMPLIED VALUES OF FUTURE STOCK PRICE 7 MINORITY BUYOUT PREMIA ANALYSIS 8 ANALYSIS OF SELECTED CONTROL TRANSACTIONS IN THE PHARMACEUTICAL INDUSTRY 9 EFFECT ON RHONE-POULENC 10 TAB 1 IMPLIED TRANSACTION MULTIPLES (DOLLARS IN MILLIONS) ---------------------------------------- ------- PRICE PER SHARE $ 97.00 ----------------------------------------- ------- Premium to Pre-Bid Price (a) 22.1% Premium to 52-WK High (b) 19.9% Premium to 52-WK Low (c) 53.1% Premium to 8/18/97 Close (d) 2.6% Equity Value $13,987 Net Debt (e) 2,290 Levered Value 16,277 LEVERED MULTIPLE OF: w/ De-load w/o De-load ---------------------------------------- ------------------------ REVENUES (f) 1997E 3.2x 3.1x 1998E 3.1 3.1 1999E 2.9 2.8 EBITDA (f) 1997E 14.6x 13.8x 1998E 13.9 13.2 1999E 12.6 12.0 EPS (f) 1997E 29.6x 29.6x 1998E 28.3 25.9 1999E 23.4 21.8 (a) Pre-Bid Price on 6/25/97 (day prior to RP announcement) = $79.44. (b) 52-Wk High Closing Price prior to RP announcement on 6/13/97 = $80.88. (c) 52-Wk Low Closing Price prior to RP announcement on 7/24/96 = $63.38. (d) Closing Price as of 8/18/97 = $94.56. (e) Net Debt as of 6/30/97. GOLDMAN (f) 1997,1998, and 1999 estimates for Revenue, EBITDA and EPS are SACHS based on management projections. TAB 2 SUMMARY OF WORK PERFORMED TO DATE [_] OVERVIEW MEETING WITH SPECIAL COMMITTEE (JULY 21,1997) -- Meeting with Special Committee members and Skadden Arps to discuss work plan and timing [_] INITIAL DUE DILIGENCE (JULY 28-29, 1997) -- Discussed sales projections and year-to-date performance with Tim Rothwell, President of RPR -- Discussed methodology and assumptions behind P&L projections with Guillaume Prache, RPR's CFO and Philippe Maitre, RPR's Comptroller [_] CENTEON DUE DILIGENCE (JULY 30,1997) -- Met with John Sedor, CEO of Centeon and Perry Premdass, CFO of Centeon -- Discussed the rationale behind Centeon's formation, the events surrounding its product recall, measures taken to improve regulatory compliance and Centeon's latest projections [_] R&D PIPELINE DUE DILIGENCE (AUGUST 4, 1997) -- Met with Manfred Karobath in Paris to discuss disclosed and undisclosed pipeline products -- Discussed strategy of Gencell and products in its pipeline [_] FOLLOW-UP DUE DILIGENCE (AUGUST 4, 1997) -- Met with Tasos Konidaris and Philippe Maitre to discuss back-up behind projections model [_] MEETING WITH MICHEL DE ROSEN (AUGUST 8, 1997) -- Overview of RPR'S history and strategic positioning [_] FOLLOW-UP CONVERSATIONS WITH MEMBERS OF MANAGEMENT DURING THE WEEKS OF JULY 28 - AUGUST 11, 1997 [_] ATTENDED DUE DILIGENCE SESSIONS BETWEEN MORGAN STANLEY DEAN WITTER GOLDMAN DISCOVER BANKERS AND MANAGEMENT (MICHEL DE ROSEN, TIM ROTHWELL, SACHS GUILLAUME PRACHE, MANFRED KAROBATH, JOHN SEDOR AND PERRY PREMDASS) TAB 3 RHONE-POULENC RORER DAILY COMMON STOCK PRICE AND TRADING VOLUME HISTORY
RPR RPR DATE PRICE VOLUME 10-Aug-95 11-Aug-95 14-Aug-95 44.25 55500 15-Aug-95 44.25 32600 16-Aug-95 43.50 59600 17-Aug-95 43.38 24900 18-Aug-95 42.13 325700 21-Aug-95 43.88 509200 22-Aug-95 43.63 166100 23-Aug-95 43.50 56400 24-Aug-95 44.13 239900 25-Aug-95 44.25 217700 28-Aug-95 44.13 77200 29-Aug-95 44.00 91400 30-Aug-95 44.13 22300 31-Aug-95 44.25 62400 1-Sep-95 43.88 44400 4-Sep-95 43.88 5-Sep-95 43.63 73400 6-Sep-95 43.50 145800 7-Sep-95 42.75 127900 8-Sep-95 42.38 147800 11-Sep-95 43.00 130400 12-Sep-95 43.13 65900 13-Sep-95 43.38 69600 14-Sep-95 43.88 55900 15-Sep-95 44.25 107600 18-Sep-95 44.38 123700 19-Sep-95 44.25 129100 20-Sep-95 44.63 69400 21-Sep-95 45.88 173000 22-Sep-95 44.88 80300 25-Sep-95 44.38 58000 26-Sep-95 45.00 124400 27-Sep-95 45.00 85900 28-Sep-95 45.38 103500 29-Sep-95 45.50 137100 2-Oct-95 45.88 110000 3-Oct-95 44.88 241900 4-Oct-95 46.63 104300 5-Oct-95 46.63 121400 6-Oct-95 46.25 132000 9-Oct-95 44.38 83600 10-Oct-95 44.38 69100 11-Oct-95 45.38 95900 12-Oct-95 46.00 55000
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RPR RPR DATE PRICE VOLUME 13-Oct-95 46.88 83300 16-Oct-95 46.75 27100 17-Oct-95 47.88 225300 18-Oct-95 48.88 123100 19-Oct-95 49.00 102300 20-Oct-95 48.75 171300 23-Oct-95 49.00 204200 24-Oct-95 48.50 215600 25-Oct-95 48.50 238900 26-Oct-95 48.50 29200 27-Oct-95 48.63 81800 30-Oct-95 48.13 170900 31-Oct-95 47.13 148900 1-Nov-95 47.38 100900 2-Nov-95 46.50 95400 3-Nov-95 46.38 39300 6-Nov-95 46.00 41400 7-Nov-95 46.75 89800 8-Nov-95 47.13 104300 9-Nov-95 46.38 108000 10-Nov-95 45.63 158100 13-Nov-95 45.88 82600 14-Nov-95 46.00 152400 15-Nov-95 46.25 120200 16-Nov-95 46.38 82200 17-Nov-95 47.13 102800 20-Nov-95 46.50 108400 21-Nov-95 46.75 111500 22-Nov-95 46.50 28500 23-Nov-95 46.50 24-Nov-95 46.63 10200 27-Nov-95 46.50 43400 28-Nov-95 47.63 86800 29-Nov-95 48.25 88500 30-Nov-95 47.88 119800 1-Dec-95 48.50 110500 4-Dec-95 49.00 102600 5-Dec-95 49.13 123500 6-Dec-95 48.88 119100 7-Dec-95 49.38 62000 8-Dec-95 49.63 74900 11-Dec-95 49.88 101800 12-Dec-95 49.63 99500 13-Dec-95 50.00 134900 14-Dec-95 52.13 278700 15-Dec-95 54.00 247600 18-Dec-95 53.50 227800 19-Dec-95 52.50 134700 20-Dec-95 51.63 218700 21-Dec-95 51.75 215700
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RPR RPR DATE PRICE VOLUME 22-Dec-95 52.13 56700 25-Dec-95 52.13 26-Dec-95 52.00 65800 27-Dec-95 53.38 101200 28-Dec-95 53.13 105900 29-Dec-95 53.25 63000 1-Jan-96 53.25 2-Jan-96 52.13 92800 3-Jan-96 52.38 141900 4-Jan-96 52.13 90500 5-Jan-96 51.50 146100 8-Jan-96 52.00 28700 9-Jan-96 51.75 115800 10-Jan-96 51.25 63600 11-Jan-96 50.88 33500 12-Jan-96 51.63 43700 15-Jan-96 51.38 55500 16-Jan-96 52.13 87100 17-Jan-96 52.50 66700 18-Jan-96 53.13 75400 19-Jan-96 53.75 151600 22-Jan-96 53.88 74400 23-Jan-96 54.00 66800 24-Jan-96 54.00 106900 25-Jan-96 54.38 51900 26-Jan-96 55.25 128000 29-Jan-96 59.50 424800 30-Jan-96 63.63 652500 31-Jan-96 64.75 424800 1-Feb-96 63.25 324300 2-Feb-96 63.13 199800 5-Feb-96 62.75 217700 6-Feb-96 62.50 304500 7-Feb-96 61.13 495400 8-Feb-96 60.88 208900 9-Feb-96 61.00 163000 12-Feb-96 61.75 84300 13-Feb-96 61.75 169200 14-Feb-96 62.63 180300 15-Feb-96 63.75 236400 16-Feb-96 64.75 312700 19-Feb-96 64.75 20-Feb-96 64.38 318500 21-Feb-96 64.38 137000 22-Feb-96 66.75 140200 23-Feb-96 65.88 153400 26-Feb-96 65.38 147900 27-Feb-96 64.00 169600 28-Feb-96 64.13 321900 29-Feb-96 64.00 336200
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RPR DATE PRICE VOLUME 1-Mar-96 63.88 66500 4-Mar-96 64.25 206400 5-Mar-96 64.25 184400 6-Mar-96 64.38 332500 7-Mar-96 64.63 697400 8-Mar-96 62.38 499200 11-Mar-96 62.25 151500 12-Mar-96 61.50 522400 13-Mar-96 61.00 104100 14-Mar-96 61.38 128100 15-Mar-96 62.00 119700 18-Mar-96 62.13 620000 19-Mar-96 61.75 109500 20-Mar-96 61.88 53300 21-Mar-96 62.25 119000 22-Mar-96 63.13 169100 25-Mar-96 62.13 105800 26-Mar-96 63.13 70600 27-Mar-96 61.75 55100 28-Mar-96 61.50 37800 29-Mar-96 61.00 48100 1-Apr-96 63.75 122800 2-Apr-96 63.63 84100 3-Apr-96 63.75 62500 4-Apr-96 64.00 71200 5-Apr-96 64.00 8-Apr-96 62.75 139400 9-Apr-96 60.88 73700 10-Apr-96 61.50 146000 11-Apr-96 60.25 137400 12-Apr-96 61.63 123400 15-Apr-96 61.50 37000 16-Apr-96 61.38 68200 17-Apr-96 60.50 52400 18-Apr-96 60.50 53700 19-Apr-96 60.75 32400 22-Apr-96 60.25 28200 23-Apr-96 60.50 30400 24-Apr-96 61.38 166400 25-Apr-96 61.75 68100 26-Apr-96 62.00 48700 29-Apr-96 62.25 54300 30-Apr-96 62.00 53100 1-May-96 62.19 86900 2-May-96 60.50 97400 3-May-96 60.25 60400 6-May-96 60.00 55700 7-May-96 59.75 23800 8-May-96 59.00 79000 9-May-96 58.38 47300
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RPR RPR DATE PRICE VOLUME 10-May-96 59.13 218900 13-May-96 59.88 58500 14-May-96 61.25 94800 15-May-96 62.13 169200 16-May-96 62.63 177300 17-May-96 62.75 108300 20-May-96 62.75 114600 21-May-96 62.50 127700 22-May-96 62.88 47100 23-May-96 63.83 151700 24-May-96 64.00 66300 27-May-96 64.00 28-May-96 63.75 266600 29-May-96 63.50 158700 30-May-96 63.75 45000 31-May-96 64.75 122600 3-Jun-96 65.13 150300 4-Jun-96 65.75 131700 5-Jun-96 65.75 174200 6-Jun-96 66.25 209300 7-Jun-96 66.13 131000 10-Jun-96 66.25 83300 11-Jun-96 66.25 68400 12-Jun-96 65.50 22400 13-Jun-96 66.00 48600 14-Jun-96 67.75 250300 17-Jun-96 68.13 176800 18-Jun-96 67.38 86500 19-Jun-96 68.00 113800 20-Jun-96 67.38 196200 21-Jun-96 67.00 177800 24-Jun-96 66.88 68500 25-Jun-96 67.13 67600 26-Jun-96 67.13 65500 27-Jun-96 67.25 52500 28-Jun-96 67.13 103500 1-Jul-96 67.25 34300 2-Jul-96 67.00 138000 3-Jul-96 66.75 45900 4-Jul-96 66.75 5-Jul-96 66.63 70600 8-Jul-96 65.75 36100 9-Jul-96 66.13 49400 10-Jul-96 65.13 103400 11-Jul-96 64.88 231900 12-Jul-96 64.88 67100 15-Jul-96 64.50 123500 16-Jul-96 64.00 184800 17-Jul-96 65.13 126400 18-Jul-96 65.50 87600
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RPR RPR DATE PRICE VOLUME 19-JUL-96 65.13 58700 22-JUL-96 64.88 44200 23-JUL-96 64.00 77700 24-JUL-96 63.38 72700 25-JUL-96 65.25 124200 26-JUL-96 64.88 69400 29-JUL-96 65.38 24400 30-JUL-96 65.50 40900 31-JUL-96 66.00 70600 1-AUG-96 67.25 116400 2-AUG-96 67.75 41900 5-AUG-96 67.50 39800 6-AUG-96 68.25 81000 7-AUG-96 67.25 30700 8-AUG-96 67.38 56300 9-AUG-96 67.25 54500 12-AUG-96 68.50 72700 13-AUG-96 69.63 234100 14-AUG-96 70.13 75500 15-AUG-96 70.63 115600 16-AUG-96 70.25 63000 19-AUG-96 70.25 28300 20-AUG-96 70.50 70400 21-AUG-96 71.13 78500 22-AUG-96 71.00 36500 23-AUG-96 72.13 52700 26-AUG-96 72.63 106800 27-AUG-96 72.75 109000 28-AUG-96 71.00 258000 29-AUG-96 70.75 25600 30-AUG-96 70.38 66500 2-SEP-96 70.38 3-SEP-96 70.38 39900 4-SEP-96 71.13 34200 5-SEP-96 70.63 126500 6-SEP-96 71.75 55000 9-SEP-96 72.13 49700 10-SEP-96 72.25 35900 11-SEP-96 73.50 83100 12-SEP-96 75.88 166700 13-SEP-96 77.50 230600 16-SEP-96 74.88 277900 17-SEP-96 74.50 240900 18-SEP-96 73.50 181300 19-SEP-96 72.25 239400 20-SEP-96 73.13 212300 23-SEP-96 72.25 49100 24-SEP-96 71.50 133900 25-SEP-96 72.63 216200 26-SEP-96 74.38 62200
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RPR RPR DATE PRICE VOLUME 27-Sep-96 73.50 133800 30-Sep-96 73.63 53100 1-Oct-96 73.75 99700 2-Oct-96 73.63 74800 3-Oct-96 74.00 42700 4-Oct-96 74.63 33600 7-Oct-96 74.00 61900 8-Oct-96 74.50 37100 9-Oct-96 73.63 66300 10-Oct-96 70.50 709100 11-Oct-96 71.88 159200 14-Oct-96 71.75 63200 15-Oct-96 72.63 89400 16-Oct-96 72.13 69500 17-Oct-96 72.25 57700 18-Oct-96 72.88 54100 21-Oct-96 72.75 41100 22-Oct-96 73.00 47300 23-Oct-96 70.38 612900 24-Oct-96 67.63 537300 25-Oct-96 67.50 257100 28-Oct-96 67.38 297600 29-Oct-96 67.38 149400 30-Oct-96 67.00 114400 31-Oct-96 67.13 140300 1-Nov-96 67.50 104500 4-Nov-96 68.13 164500 5-Nov-96 68.88 241400 6-Nov-96 70.75 254000 7-Nov-96 70.00 162300 8-Nov-96 70.63 113600 11-Nov-96 70.50 36200 12-Nov-96 70.13 155600 13-Nov-96 69.75 332900 14-Nov-96 70.00 292600 15-Nov-96 70.25 117700 18-Nov-96 70.38 97600 19-Nov-96 70.25 118900 20-Nov-96 70.38 106400 21-Nov-96 71.13 77300 22-Nov-96 71.00 150400 25-Nov-96 72.50 100500 26-Nov-96 73.13 182800 27-Nov-96 73.63 154800 28-Nov-96 73.63 29-Nov-96 74.38 44700
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RPR RPR DATE PRICE VOLUME 2-Dec-96 75.63 145400 3-Dec-96 77.13 227400 4-Dec-96 75.25 198100 5-Dec-96 75.50 103500 6-Dec-96 75.50 77600 9-Dec-96 76.25 153100 10-Dec-96 78.25 297400 11-Dec-96 77.50 78100 12-Dec-96 76.63 111400 13-Dec-96 75.75 125100 16-Dec-96 74.13 59500 17-Dec-96 74.38 112500 18-Dec-96 74.50 99600 19-Dec-96 76.63 308200 20-Dec-96 76.75 362200 23-Dec-96 77.25 48900 24-Dec-96 77.63 28800 25-Dec-96 77.63 26-Dec-96 77.50 72600 27-Dec-96 77.38 30000 30-Dec-96 77.00 86600 31-Dec-96 78.13 63000 1-Jan-97 78.13 2-Jan-97 77.63 102300 3-Jan-97 77.00 71200 6-Jan-97 77.13 93600 7-Jan-97 75.00 395600 8-Jan-97 73.63 287500 9-Jan-97 73.38 159900 10-Jan-97 73.88 195500 13-Jan-97 73.88 110000 14-Jan-97 75.00 134700 15-Jan-97 74.75 78500 16-Jan-97 75.00 214200 17-Jan-97 75.63 72700 20-Jan-97 75.88 40700 21-Jan-97 75.88 87500 22-Jan-97 76.13 137000 23-Jan-97 76.50 386300 24-Jan-97 76.00 98900 27-Jan-97 71.63 538800 28-Jan-97 71.50 393000 29-Jan-97 73.13 261000 30-Jan-97 73.75 197200 31-Jan-97 75.25 139100 3-Feb-97 74.75 46900 4-Feb-97 75.38 74200 5-Feb-97 73.13 168000 6-Feb-97 72.88 184600 7-Feb-97 72.75 266400
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RPR RPR DATE PRICE VOLUME 10-Feb-97 73.50 75900 11-Feb-97 72.88 57700 12-Feb-97 73.50 132800 13-Feb-97 75.38 93800 14-Feb-97 74.00 87400 17-Feb-97 74.00 18-Feb-97 74.88 161100 19-Feb-97 75.00 106300 20-Feb-97 73.63 71000 21-Feb-97 73.88 70600 24-Feb-97 73.88 118200 25-Feb-97 73.50 332400 26-Feb-97 72.00 212500 27-Feb-97 71.13 125900 28-Feb-97 71.00 292000 3-Mar-97 70.50 37600 4-Mar-97 70.75 127200 5-Mar-97 71.25 187200 6-Mar-97 71.00 68900 7-Mar-97 72.13 503300 10-Mar-97 72.75 300800 11-Mar-97 74.13 834500 12-Mar-97 74.38 697500 13-Mar-97 74.25 170500 14-Mar-97 75.88 217200 17-Mar-97 76.00 260200 18-Mar-97 74.50 122900 19-Mar-97 74.50 110500 20-Mar-97 74.13 158800 21-Mar-97 73.88 94600 24-Mar-97 74.25 122300 25-Mar-97 75.50 175300 26-Mar-97 75.13 63000 27-Mar-97 75.13 64200 28-Mar-97 75.13 31-Mar-97 74.00 112900 1-Apr-97 74.00 112600 2-Apr-97 72.50 452300 3-Apr-97 69.75 2011800 4-Apr-97 69.75 629600 7-Apr-97 69.88 170800 8-Apr-97 69.75 170500 9-Apr-97 69.75 91300 10-Apr-97 70.00 304800 11-Apr-97 68.75 300900 14-Apr-97 68.38 139800 15-Apr-97 69.00 254600 16-Apr-97 69.50 98100 17-Apr-97 69.13 112000 18-Apr-97 68.88 82700
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RPR RPR DATE PRICE VOLUME 21-Apr-97 68.50 159500 22-Apr-97 68.25 513600 23-Apr-97 68.63 485100 24-Apr-97 70.88 286800 25-Apr-97 71.00 195200 28-Apr-97 70.13 228200 29-Apr-97 71.38 161400 30-Apr-97 72.13 134000 1-May-97 71.88 47500 2-May-97 73.00 72200 5-May-97 73.88 89600 6-May_97 75.13 211200 7-May-97 74.13 57600 8-May-97 74.00 130700 9-May-97 72.88 175800 12-May-97 73.50 207000 13-May-97 73.88 109900 14-May-97 75.00 249800 15-May-97 75.88 271200 16-May-97 75.75 98300 19-May-97 75.38 188100 20-May-97 75.38 82100 21-May-97 76.88 269700 22-May-97 76.00 178000 23-May-97 76.50 151100 26-May-97 76.50 27-May-97 75.50 93600 28-May-97 74.13 162300 29-May-97 75.00 88600 30-May-97 75.50 74300 2-Jun-97 75.00 118500 3-Jun-97 76.00 39400 4-Jun-97 77.75 233900 5-Jun-97 78.63 537100 6-Jun-97 78.13 129800 9-Jun-97 78.88 353600 10-Jun-97 78.88 140600 11-Jun-97 78.63 105800 12-Jun-97 79.88 121100 13-Jun-97 80.88 262700 16-Jun-97 76.00 344000 17-Jun-97 78.75 312800 18-Jun-97 78.75 278000 19-Jun-97 79.00 171800 20-Jun-97 80.00 139000 23-Jun-97 79.13 127000 24-Jun-97 79.75 142900 25-Jun-97 79.44 211500 26-Jun-97 91.00 3844700 27-Jun-97 91.13 1483400
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RPR RPR DATE PRICE VOLUME 30-Jun-97 90.88 1004100 1-Jul-97 91.19 676200 2-Jul-97 92.00 684000 3-Jul-97 93.00 276500 4-Jul-97 93.00 7-Jul-97 93.13 125800 8-Jul-97 93.63 169400 9-Jul-97 93.44 162600 10-Jul-97 93.75 118600 11-Jul-97 93.69 123600 14-Jul-97 93.50 363800 15-Jul-97 93.50 55600 16-Jul-97 93.56 133900 17-Jul-97 93.44 96300 18-Jul-97 92.81 514900 21-Jul-97 92.56 179900 22-Jul-97 93.75 265800 23-Jul-97 93.69 212400 24-Jul-97 93.38 450900 25-Jul-97 93.63 193300 28-Jul-97 93.94 154600 29-Jul-97 94.19 331500 30-Jul-97 94.31 142600 31-Jul-97 94.44 95800 1-Aug-97 94.75 146700 4-Aug-97 94.63 163800 5-Aug-97 95.94 165856 6-Aug-97 95.38 113100 7-Aug-97 95.50 319600 8-Aug-97 95.00 337700 11-Aug-97 95.25 125400 12-Aug-97 95.31 186100 13-Aug-97 95.50 137100 14-Aug-97 95.56 158700 15-Aug-97 94.75 216200 18-Aug-97 94.56 303900
Page 11 DAILY FROM 8/14/95 TO 8/18/97 -- Closing Market Price [_] Volume (000) GOLDMAN SACHS RPR VS. PHARMA COMPOSITE SINCE CENTEON RECALL
RPR US Pharmaceutical DATE Composite 1-Oct-96 100.00 100.00 2-Oct-96 99.83 99.49 3-Oct-96 100.34 100.14 4-Oct-96 101.19 101.35 7-Oct-96 100.34 100.58 8-Oct-96 101.02 101.04 9-Oct-96 99.83 100.02 10-Oct-96 95.59 99.29 11-Oct-96 97.46 99.33 14-Oct-96 97.29 100.94 15-Oct-96 98.47 101.29 16-Oct-96 97.80 100.72 17-Oct-96 97.97 101.79 18-Oct-96 98.81 102.94 21-Oct-96 98.64 103.20 22-Oct-96 98.98 103.10 23-Oct-96 95.42 103.43 24-Oct-96 91.69 103.63 25-Oct-96 91.53 101.50 28-Oct-96 91.36 99.34 29-Oct-96 91.36 101.15 30-Oct-96 90.85 100.49 31-Oct-96 91.02 101.12 1-Nov-96 91.53 101.16 4-Nov-96 92.37 102.24 5-Nov-96 93.39 103.42 6-Nov-96 95.93 106.98 7-Nov-96 94.92 107.10 8-Nov-96 95.76 108.80 11-Nov-96 95.59 108.15 12-Nov-96 95.08 106.41 13-Nov-96 94.58 107.77 14-Nov-96 94.92 108.38 15-Nov-96 95.25 108.55 18-Nov-96 95.42 107.71 19-Nov-96 95.25 107.59 20-Nov-96 95.42 107.97 21-Nov-96 96.44 108.55 22-Nov-96 96.27 108.94 25-Nov-96 98.31 110.92 26-Nov-96 99.15 110.48 27-Nov-96 99.83 110.38 28-Nov-96 99.83 110.38 29-Nov-96 100.85 110.42 2-Dec-96 102.54 109.67 3-Dec-96 104.58 108.67 4-Dec-96 102.03 107.44 5-Dec-96 102.37 105.91 6-Dec-96 102.37 105.46 9-Dec-96 103.39 108.47
Page 1
RPR US Pharmaceutical DATE Composite 10-Dec-96 106.10 107.80 11-Dec-96 105.08 107.19 12-Dec-96 103.90 105.22 13-Dec-96 102.71 105.80 16-Dec-96 100.51 103.56 17-Dec-96 100.85 104.17 18-Dec-96 101.02 104.61 19-Dec-96 103.90 108.01 20-Dec-96 104.07 108.64 23-Dec-96 104.75 108.81 24-Dec-96 105.25 108.90 25-Dec-96 105.25 108.90 26-Dec-96 105.08 108.76 27-Dec-96 104.92 108.78 30-Dec-96 104.41 108.05 31-Dec-96 105.93 105.43 1-Jan-97 105.93 105.43 2-Jan-97 105.25 104.81 3-Jan-97 104.41 106.83 6-Jan-97 104.58 106.96 7-Jan-97 101.69 107.85 8-Jan-97 99.83 106.54 9-Jan-97 99.49 107.38 10-Jan-97 100.17 108.92 13-Jan-97 100.17 109.09 14-Jan-97 101.69 111.31 15-Jan-97 101.36 111.11 16-Jan-97 101.69 112.65 17-Jan-97 102.54 113.75 20-Jan-97 102.88 112.50 21-Jan-97 102.88 112.98 22-Jan-97 103.22 114.47 23-Jan-97 103.73 112.54 24-Jan-97 103.05 112.04 27-Jan-97 97.12 109.86 28-Jan-97 96.95 110.64 29-Jan-97 99.15 111.57 30-Jan-97 100.00 115.33 31-Jan-97 102.03 116.93 3-Feb-97 101.36 116.44 4-Feb-97 102.20 116.98 5-Feb-97 99.15 115.31 6-Feb-97 98.81 116.61 7-Feb-97 98.64 118.83 10-Feb-97 99.66 117.85 11-Feb-97 98.81 118.90 12-Feb-97 99.66 121.45 13-Feb-97 102.20 124.37 14-Feb-97 100.34 123.46 17-Feb-97 100.34 123.46
Page 2
RPR US Pharmaceutical DATE Composite 18-Feb-97 101.53 125.00 19-Feb-97 101.69 124.26 20-Feb-97 99.83 122.43 21-Feb-97 100.17 121.34 24-Feb-97 100.17 124.04 25-Feb-97 99.66 123.89 26-Feb-97 97.63 122.78 27-Feb-97 96.44 119.75 28-Feb-97 96.27 118.59 3-Mar-97 95.59 120.45 4-Mar-97 95.93 117.59 5-Mar-97 96.61 122.19 6-Mar-97 96.27 119.96 7-Mar-97 97.80 121.79 10-Mar-97 98.64 125.14 11-Mar-97 100.51 123.59 12-Mar-97 100.85 121.74 13-Mar-97 100.68 119.03 14-Mar-97 102.88 118.18 17-Mar-97 103.05 121.74 18-Mar-97 101.02 120.09 19-Mar-97 101.02 120.41 20-Mar-97 100.51 118.95 21-Mar-97 100.17 119.12 24-Mar-97 100.68 120.59 25-Mar-97 102.37 121.17 26-Mar-97 101.86 120.96 27-Mar-97 101.86 118.27 28-Mar-97 101.86 118.27 31-Mar-97 100.34 112.97 1-Apr-97 100.34 114.41 2-Apr-97 98.31 112.71 3-Apr-97 94.58 113.41 4-Apr-97 94.58 115.80 7-Apr-97 94.75 115.90 8-Apr-97 94.58 115.39 9-Apr-97 94.58 112.86 10-Apr-97 94.92 113.60 11-Apr-97 93.22 111.15 14-Apr-97 92.71 112.23 15-Apr-97 93.56 115.05 16-Apr-97 94.24 118.21 17-Apr-97 93.73 117.81 18-Apr-97 93.39 117.76 21-Apr-97 92.88 117.68 22-Apr-97 92.54 120.29 23-Apr-97 93.05 118.83 24-Apr-97 96.10 118.21 25-Apr-97 96.27 117.03 28-Apr-97 95.08 117.97
Page 3
RPR US Pharmaceutical DATE Composite 29-Apr-97 96.78 121.77 30-Apr-97 97.80 121.63 1-May-97 97.48 120.56 2-May-97 98.98 122.64 5-May-97 100.17 126.28 6-May-97 101.86 126.26 7-May-97 100.51 124.19 8-May-97 100.34 124.34 9-May-97 98.81 125.23 12-May-97 99.66 128.52 13-May-97 100.17 128.57 14-May-97 101.69 129.94 15-May-97 102.88 131.59 16-May-97 102.71 129.29 19-May-97 102.20 129.86 20-May-97 102.20 130.12 21-May-97 104.24 129.96 22-May-97 103.05 128.91 23-May-97 103.73 130.45 26-May-97 103.73 130.45 27-May-97 102.37 131.40 28-May-97 100.51 130.29 29-May-97 101.69 129.45 30-May-97 102.37 131.11 2-Jun-97 101.69 130.45 3-Jun-97 103.05 130.64 4-Jun-97 105.42 129.89 5-Jun-97 106.61 130.18 6-Jun-97 105.93 134.17 9-Jun-97 106.95 135.82 10-Jun-97 106.95 135.11 11-Jun-97 106.61 136.47 12-Jun-97 108.31 138.73 13-Jun-97 109.66 141.09 16-Jun-97 103.05 140.52 17-Jun-97 106.78 140.09 18-Jun-97 106.78 137.55 19-Jun-97 107.12 142.44 20-Jun-97 108.47 144.23 23-Jun-97 107.29 140.26 24-Jun-97 108.14 146.74 25-Jun-97 107.71 146.67 26-Jun-97 123.39 144.88 27-Jun-97 123.56 146.90 30-Jun-97 123.22 145.70 1-Jul-97 123.64 147.47 2-Jul-97 124.75 150.24 3-Jul-97 126.10 152.99 4-Jul-97 126.10 152.99 7-Jul-97 126.27 150.60
Page 4
RPR US Pharmaceutical DATE Composite 8-Jul 97 126.95 152.00 9-Jul-97 126.70 149.85 10-Jul-97 127.12 152.43 11-Jul-97 127.03 151.91 14-Jul-97 126.78 152.88 15-Jul-97 126.78 153.13 16-Jul-97 126.87 151.18 17-Jul-97 126.70 151.55 18-Jul-97 125.85 148.71 21-Jul-97 125.51 149.55 22-Jul-97 127.12 152.49 23-Jul-97 127.03 153.89 24-Jul-97 126.61 153.95 25-Jul-97 126.95 151.81 28-Jul-97 127.37 149.16 29-Jul-97 127.71 149.85 30-Jul-97 127.88 150.87 31-Jul-97 128.05 152.52 1-Aug-97 128.47 150.20 4-Aug-97 128.31 150.48 5-Aug-97 130.09 152.10 6-Aug-97 129.32 150.97 7-Aug-97 129.49 149.30 8-Aug-97 128.81 147.06 11-Aug-97 129.15 144.13 12-Aug-97 129.24 140.83 13-Aug-97 129.49 138.93 14-Aug-97 129.58 142.27 15-Aug-97 128.47 137.12 18-Aug-97 128.22 139.82
Page 5 DAILY FROM 10/1/96 TO 8/18/97 -- Rhone-Poulenc Rorer Inc. [_] US Pharmaceutical Composite (a) (a) US Pharmaceutical Composite includes Abbott Laboratories, American Home Products, Bristol-Myers Squibb, Eli Lilly, Merck, Pfizer, Pharmacia & Upjohn, Schering-Plough, and Warner-Lambert. SHARES TRADED AT SPECIFIC PRICES RHONE-POULENC RORER CVR RETIREMENT TO DAY PRIOR TO BID ANNOUNCEMENT ------------------- CVR RETIREMENT TO DAY PRIOR TO BID ANNOUNCEMENT ------------------- 30.00 to 33.99 6275600 34.00 32409800 38.00 18848100 42.00 11119700 46.00 9303700 50.00 2870400 54.00 601200 58.00 4357100 62.00 11451300 66.00 10735700 70.00 15030000 74.00 12513700 78.00 to 81.99 3394100 -------------------
DAILY FROM 7/31/93 TO 6/25/97 Weighted Average Price: 52.31 Total Shares Traded as Percent of Shares Outstanding: 101.4% Total Shares Traded as Percent of Public Float: 314.6% ONE YEAR TO ONE DAY PRIOR TO BID ANNOUNCEMENT ------------------ ONE YEAR TO ONE DAY PRIOR TO BID ANNOUNCEMENT ------------------ 63.00 to 64.49 805500 64.50 1739000 66.00 2727100 67.50 3762700 69.00 6575900 70.50 4958700 72.00 4662000 73.50 7178700 75.00 5381200 76.50 2892900 78.00 2728400 79.50 to 80.99 665700 ------------------
DAILY FROM 5/25/96 TO 6/25/97 Weighted Average Price: 72.22 Total Shares Traded as Percent of Shares Outstanding: 32.2% Total Shares Traded as Percent of Public Float: 100.0% CENTEON RECALL TO DAY PRIOR TO BID ANNOUNCEMENT ------------------- CENTEON RECALL TO DAY PRIOR TO BID ANNOUNCEMENT ------------------- 67.00 to 67.99 1600600 68.00 2087500 69.00 3871600 70.00 3761500 71.00 2460000 72.00 2699700 73.00 3138200 74.00 3483300 75.00 4003900 76.00 2799500 77.00 1073400 78.00 2218100 79.00 774300 80.00 to 80.99 401700 -------------------
DAILY FROM 10/10/96 TO 6/25/97 Weighted Average Price: 73.11 Total Shares Traded as Percent of Shares Outstanding: 25.1% Total Shares Traded as Percent of Public Float: 77.9% BID ANNOUNCEMENT TO YTD 1997 ------------------ BID ANNOUNCEMENT TO YTD 1997 ------------------ 90.70 to 91.14 6332200 91.15 676200 91.60 684000 92.05 0 92.50 694800 92.95 853200 93.40 1895300 93.85 486100 94.30 706100 94.75 700600 95.20 1040000 95.65 to 96.09 165856 ------------------
DAILY FROM 6/25/97 TO 8/18/97 Weighted Average Price: 92.48 Total Shares Traded as Percent of Shares Outstanding: 10.4% Total Shares Traded as Percent of Public Float: 33.3% TAB 4 DISCOUNTED CASH FLOW ANALYSIS SUMMARY IMPLIED PER SHARE VALUATIONS
MANAGEMENT CASE MANAGEMENT CASE + EXCLUDED PIPELINE (a) --------------- -------------------------------------- - ------------------ 5-Year Discount Rate Discount Rate - ------------------ -------------------------------------- ------------------------------------ 10.0% 10.5% 11.0% 10.0% 10.5% 11.0% -------------------------------------- ------------------------------------ 5.0% $ 91.71 $ 81.43 $ 72.88 $ 106.47 $ 94.59 $ 84.70 Perpetual Growth of FCF 5.5% 101.86 89.56 79.51 118.23 104.00 92.38 6.0% 114.54 99.49 87.46 132.93 115.51 101.60
(a) Certain new products have been included in management's projections. Excluded Pipeline refers to other specifically identified new products in the Company's research and development pipeline that were not included in management's projections. DISCOUNTED CASH FLOW ANALYSIS MANAGEMENT CASE (DOLLARS IN MILLIONS)
MANAGEMENT PROJECTIONS 1997- ---------------------------------------------------------- REPORTED 2002 1997 1998 1999 2000 2001 2002 CAGR ------------------------------------------------------------------ Revenues $5,112 $5,262 $5,648 $6,071 $6,573 $7,001 6.5% Growth 2.9% 7.3% 7.5% 8.3% 6.5% EBIT 779 822 947 1,083 1,233 1,372 12.0% Margin 15.2% 15.6% 16.8% 17.8% 18.8% 19.6% Centeon Income (41) 55 75 120 150 180 34.5% Taxes 225 281 329 379 436 489 16.8% Rate 30.5% 32.0% 32.2% 31.5% 31.5% 31.5% Tax Effected EBIT + Centeon 513 596 693 824 947 1,063 15.7% + Amortization 140 140 140 140 140 140 0.0% As % of Revenues 2.7% 2.7% 2.5% 2.3% 2.1% 2.0% + (Increase)/Decrease in WC (140) (45) (120) (128) (192) (148) 1.1% + (Increase)/Decrease in Other (215) (136) (100) (100) (100) (100) -14.2% - - CAPEX (310) (325) (325) (325) (350) (350) 2.5% As % Revenues 6.1% 6.2% 5.8% 5.4% 5.3% 5.0% + Depreciation 192 205 210 215 220 225 3.2% As % of Revenues 3.8% 3.9% 3.7% 3.5% 3.3% 3.2% - -------------------------------------------------------------------------------------------- = Unlevered Free Cash Flow $ 180 $ 435 $ 498 $ 626 $ 665 $ 830 35.7% Growth 141.3% 14.5% 25.7% 6.3% 24.8% - --------------------------------------------------------------------------------------------
DISCOUNTED CASH FLOW ANALYSIS MANAGEMENT CASE (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
Discount Rate ------------------------------------------------------------------------ 9.0% 9.5% 10.0% 10.5% 11.0% 11.5% 12.0% ------------------------------------------------------------------------ PV of Future Cash Flows $ 2,408 $ 2,377 $ 2,346 $ 2,316 $ 2,287 $ 2,259 $ 2,231 + PV of Terminal Value Perpetual Growth of FCF 5.0% $17,195 $14,955 $13,172 $11,719 $10,515 $ 9,501 $ 8,637 5.5% 19,651 16,825 14,635 12,891 11,470 10,293 9,301 6.0% 22,926 19,228 16,465 14,323 12,618 11,228 10,076 6.5% 27,511 22,433 18,817 16,114 14,019 12,351 10,992 7.0% 34,389 26,920 21,953 18,416 15,772 13,723 12,091 - - Net Debt (a) $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290 = Equity Consideration 5.0% $17,313 $15,043 $13,228 $11,746 $10,512 $ 9,470 $ 8,578 5.5% 19,769 16,912 14,692 12,918 11,468 10,262 9,242 6.0% 23,044 19,316 16,521 14,350 12,615 11,197 10,017 6.5% 27,630 22,520 18,873 16,141 14,017 12,320 10,933 7.0% 34,507 27,007 22,010 18,443 15,770 13,693 12,032 Consideration Per Share (b) 5.0% $120.03 $104.29 $ 91.71 $ 81.43 $ 72.88 $ 65.65 $ 59.47 5.5% 137.06 117.25 101.86 89.56 79.51 71.14 64.08 6.0% 159.76 133.91 114.54 99.49 87.46 77.63 69.45 6.5% 191.55 156.13 130.85 111.90 97.18 85.42 75.80 7.0% 239.24 187.24 152.59 127.86 109.33 94.93 83.42
(a) 6/30/97 balance sheet: $158 mm ST debt, $2,432 mm LT debt, $187 mm notes payable to RP, $175 mm preferred, $310 cash and $353 mm in cash proceeds from the exercise of 6.8 mm options at a weighted average exercise price of $51.65 (b) Number of fully diluted shares assumed to be 144.2 mm DISCOUNTED CASH FLOW ANALYSIS MANAGEMENT CASE + EXCLUDED PIPELINE (DOLLARS IN MILLIONS)
MANAGEMENT PROJECTIONS 1997- ------------------------------------------------------- 2002 REPORTED CAGR 1997 1998 1999 2000 2001 2002 --------------------------------------------------------------- Revenues $5,112 $5,272 $5,831 $6,387 $7,147 $7,836 8.9% Growth 3.1% 10.6% 9.5% 11.9% 9.6% EBIT 779 824 990 1,161 1,384 1,602 15.5% Margin 15.2% 15.6% 17.0% 18.2% 19.4% 20.4% Centeon Income (41) 55 75 120 150 180 34.5% Taxes 225 281 343 403 483 561 20.1% Rate 30.5% 32.0% 32.2% 31.5% 31.5% 31.5% Tax Effected EBIT + Centeon 513 598 722 877 1,051 1,221 18.9% + Amortization 140 140 140 140 140 140 0.0% As % of Revenues 2.7% 2.7% 2.4% 2.2% 2.0% 1.8% + (Increase)/Decrease in WC (140) (48) (174) (168) (290) (238) 11.2% + (Increase)/Decrease in Other (215) (136) (100) (100) (100) (100) -14.2% - - CAPEX (310) (325) (325) (325) (350) (350) 2.5% As % of Revenues 6.1% 6.2% 5.6% 5.1% 4.9% 4.5% + Depreciation 192 205 210 215 220 225 3.2% As % of Revenues 3.8% 3.9% 3.6% 3.4% 3.1% 2.9% - --------------------------------------------------------------------------------------------------- = Unlevered Free Cash Flow $ 180 $ 433 $ 474 $ 639 $ 671 $ 8971 37.9% Growth 140.5% 9.3% 34.9% 5.0% 33.8% - ----------------------------------------------------------------------------------------------------
DISCOUNTED CASH FLOW ANALYSIS MANAGEMENT CASE + EXCLUDED PIPELINE (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
Discount Rate ---------------------------------------------------------------------------------- 9.0% 9.5% 10.0% 10.5% 11.0% 11.5% 12.0% ---------------------------------------------------------------------------------- PV of Future Cash Flows $ 2,444 $ 2,412 $ 2,381 $ 2,350 $ 2,320 $ 2,290 $ 2,262 + PV of Terminal Value Perpetual Growth of FCF 5.0% $ 19,929 $ 17,333 $ 15,266 $ 13,583 $ 12,186 $ 11,011 $ 10,010 5.5% 22,776 19,500 16,962 14,941 13,294 11,929 10,780 6.0% 26,572 22,286 19,083 16,601 14,624 13,014 11,678 6.5% 31,886 26,000 21,809 18,676 16,249 14,315 12,740 7.0% 39,857 31,200 25,444 21,344 18,280 15,905 14,014 - - Net Debt (a) $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290 = Equity Consideration 5.0% $ 20,083 $ 17,456 $ 15,357 $ 13,643 $ 12,217 $11,012 $ 9,982 5.5% 22,930 19,623 17,053 15,001 13,325 11,930 10,752 6.0% 26,726 22,408 19,174 16,661 14,654 13,014 11,650 6.5% 32,040 26,123 21,900 18,736 16,279 14,316 12,712 7.0% 40,012 31,323 25,535 21,404 18,310 15,906 13,986 Consideration Per Share (b) 5.0% $ 139.24 $ 121.02 $ 106.47 $ 94.59 $ 84.70 $ 76.35 $ 69.20 5.5% 158.97 136.04 118.23 104.00 92.38 82.71 74.54 6.0% 185.29 155.36 132.93 115.51 101.60 90.23 80.77 6.5% 222.13 181.11 151.83 129.90 112.86 99.25 88.13 7.0% 277.40 217.16 177.03 148.40 126.94 110.28 96.96
(a) 6/30/97 balance sheet: $158 mm ST debt, $2,432 mm LT debt, $187 mm notes payable to RP, $175 mm preferred, $310 cash and $353 mm in cash proceeds from the exercise of 6.8 mm options at a weighted average exercise price of $51.65 (b) Number of fully diluted shares assumed to be 144.2 mm TAB 5 SUMMARY OF THEORETICAL ANALYSIS OF COMPONENTS OF LONG-TERM VALUE [_] PHARMACEUTICAL OPERATIONS -- Management projections for RPR Pharmaceutical Operations (including Dermik and Industrial operations) for 1997-2002 [_] EXCLUDED PIPELINE PRODUCTS -- DCF analysis of Excluded Pipeline Products -- Three different approaches used -- Substantial long-term potential value -- Derived values not entirely incremental to Pharma Operations DCF values [_] CENTEON -- Value as multiple of normalized earnings [_] GENCELL -- Substantial on-going investment in gene therapy technology platform creates a "drag" on current earnings -- No explicit future revenues/earnings attributed to provide return on investment in DCF analysis, with the exception of GOLDMAN P-53 SACHS -- Significant potential value on stand alone basis TAB 5a DISCOUNTED CASH FLOW ANALYSIS SUMMARY IMPLIED PER SHARE VALUATIONS - WITHOUT CENTEON
Management Case Management Case + Excluded Pipeline (a) --------------- --------------------------------------- - ----------------- 5-Year Discount Rate Discount Rate - ----------------- -------------------------------------------- ------------------------------------- 10.0% 10.5% 11.0% 10.5% 10.5% 11.0% -------------------------------------------- ------------------------------------- 5.0% $ 79.46 $ 70.34 $ 62.76 $ 91.38 $80.97 $72.31 Perpetual Growth of FCF 5.5% 88.46 77.55 68.64 101.68 89.22 79.04 6.0% 99.72 86.36 75.70 114.56 99.30 87.11
(a) Certain new products have been included in management's projections. Excluded Pipeline refers to other specifically identified new products in the Company's research and development pipeline that were not included in management's projections. DISCOUNTED CASH FLOW ANALYSIS - WITHOUT CENTEON MANAGEMENT CASE (DOLLARS IN MILLIONS)
MANAGEMENT PROJECTIONS -------------------------------------------------------------- 1997- REPORTED 2002 1997E 1998E 1999E 2000E 2001E 2002E CAGR ---------------------------------------------------------------------- Revenues $ 5,112 $ 5,262 $ 5,648 $ 6,071 $ 6,573 $ 7,001 6.5% Growth 2.9% 7.3% 7.5% 8.3% 6.5% EBIT 779 822 947 1,083 1,233 1,372 12.0% Margin 15.2% 15.6% 16.8% 17.8% 18.8% 19.6% Taxes 237 263 305 341 388 432 12.7% Rate 30.5% 32.0% 32.2% 31.5% 31.5% 31.5% Tax Effected EBIT 542 559 642 742 845 940 11.6% + Amortization 140 140 140 140 140 140 0.0% As % of Revenues 2.7% 2.7% 2.5% 2.3% 2.1% 2.0% + (Increase)/Decrease in WC (140) (45) (120) (128) (192) (148) 1.1% + (Increase)/Decrease in Other (215) (136) (100) (100) (100) (100) -14.2% - - CAPEX (310) (325) (325) (325) (350) (350) 2.5% As % of Revenues 6.1% 6.2% 5.8% 5.4% 5.3% 5.0% + Depreciation 192 205 210 215 220 225 3.2% As % of Revenues 3.8% 3.9% 3.7% 3.5% 3.3% 3.2% - ---------------------------------------------------------------------------------------------- = Unlevered Free Cash Flow $ 209 $ 398 $ 447 $ 544 $ 563 $ 707 27.6% Growth 90.5% 12.4% 21.6% 3.5% 25.6% - ----------------------------------------------------------------------------------------------
DISCOUNTED CASH FLOW ANALYSIS - WITHOUT CENTEON MANAGEMENT CASE (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
Discount Rate -------------------------------------------------------------------------------- 9.0% 9.5% 10.0% 10.5% 11.0% 11.5% 12.0% -------------------------------------------------------------------------------- PV of Future Cash Flows $ 2,115 $ 2,088 $ 2,062 $ 2,036 $ 2,011 $ 1,987 $ 1,962 + PV of Terminal Value Perpetual Growth of FCF 5.0% $ 15,258 $ 13,271 $ 11,688 $ 10,399 $ 9,331 $ 8,431 $ 7,664 5.5% 17,438 14,930 12,987 11,439 10,179 9,133 8,254 6.0% 20,344 17,063 14,611 12,710 11,197 9,964 8,941 6.5% 24,413 19,907 16,698 14,299 12,441 10,960 9,754 7.0% 30,517 23,888 19,481 16,342 13,996 12,178 10,730 - - Net Debt (a) $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290 = Equity Consideration 5.0% $ 15,084 $ 13,070 $ 11,461 $ 10,146 $ 9,052 $ 8,128 $ 7,337 5.5% 17,263 14,729 12,760 11,186 9,900 8,831 7,927 6.0% 20,170 16,862 14,383 12,457 10,918 9,661 8,614 6.5% 24,239 19,706 16,470 14,046 12,162 10,657 9,427 7.0% 30,342 23,687 19,253 16,089 13,717 11,875 10,403 Consideration Per Share (b) 5.0% $ 104.57 $ 90.61 $ 79.46 $ 70.34 $ 62.76 $ 56.35 $ 50.87 5.5% 119.69 102.11 88.46 77.55 68.64 61.22 54.95 6.0% 139.84 116.90 99.72 86.36 75.70 66.98 59.72 6.5% 168.05 136.62 114.19 97.38 84.32 73.89 65.36 7.0% 210.36 164.22 133.48 111.54 95.10 82.33 72.12
(a) 6/30/97 balance sheet: $158 mm ST debt, $2,432 mm LT debt, $187 mm notes payable to RP, $175 mm preferred, $310 cash and $353 mm in cash proceeds from the exercise of 6.8 mm options at a weighted average exercise price of $51.65 (b) Number of fully diluted shares assumed to be 144.2 mm DISCOUNTED CASH FLOW ANALYSIS - WITHOUT CENTEON MANAGEMENT CASE + EXCLUDED PIPELINE (DOLLARS IN MILLIONS)
MANAGEMENT PROJECTIONS 1997- ----------------------------------------------------------- REPORTED 2002 1997E 1998E 1999E 2000E 2001E 2002E CAGR ---------------------------------------------------------------------- Revenues $ 5,112 $ 5,272 $ 5,831 $ 6,387 $ 7,147 $ 7,836 8.9% Growth 3.1% 10.6% 9.5% 11.9% 9.6% EBIT 779 824 990 1,161 1,384 1,602 15.5% Margin 15.2% 15.6% 17.0% 18.2% 19.4% 20.4% Taxes 237 264 319 366 436 505 16.3% Rate 30.5% 32.0% 32.2% 31.5% 31.5% 31.5% Tax Effected EBIT 542 560 672 795 948 1,097 15.2% + Amortization 140 140 140 140 140 140 0.0% As % of Revenues 2.7% 2.7% 2.4% 2.2% 2.0% 1.8% + (Increase)/Decrease in WC (140) (48) (174) (168) (290) (238) 11.2% + (Increase)/Decrease in Other (215) (136) (100) (100) (100) (100) -14.2% - - CAPEX (310) (325) (325) (325) (350) (350) 2.5% As % of Revenues 6.1% 6.2% 5.6% 5.1% 4.9% 4.5% + Depreciation 192 205 210 215 220 225 3.2% As % of Revenues 3.8% 3.9% 3.6% 3.4% 3.1% 2.9% - ---------------------------------------------------------------------------------------------------- = Unlevered Free Cash Flow $ 209 $ 396 $ 423 $ 557 $ 568 $ 774 30.0% Growth 89.8% 6.7% 31.7% 2.0% 36.3% - ----------------------------------------------------------------------------------------------------
DISCOUNTED CASH FLOW ANALYSIS - WITHOUT CENTEON MANAGEMENT CASE + EXCLUDED PIPELINE (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
Discount Rate ----------------------------------------------------------------------------- 9.0% 9.5% 10.0% 10.5% 11.0% 11.5% 12.0% ----------------------------------------------------------------------------- PV of Future Cash Flows $ 2,151 $ 2,124 $ 2,096 $ 2,070 $ 2,044 $ 2,018 $ 1,993 + PV of Terminal Value Perpetual Growth of FCF 5.0% $ 17,458 $ 15,184 $ 13,373 $ 11,898 $ 10,675 $ 9,646 $ 8,769 5.5% 19,952 17,082 14,859 13,088 11,646 10,450 9,443 6.0% 23,277 19,522 16,716 14,542 12,810 11,400 10,230 6.5% 27,932 22,776 19,105 16,360 14,234 12,540 11,160 7.0% 34,915 27,331 22,289 18,697 16,013 13,933 12,276 - - Net Debt (a) $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290 $ 2,290 = Equity Consideration 5.0% $ 17,319 $ 15,018 $ 13,180 $ 11,679 $ 10,430 $ 9,375 $ 8,472 5.5% 19,813 16,916 14,666 12,868 11,400 10,179 9,147 6.0% 23,138 19,356 16,523 14,323 12,565 11,129 9,934 6.5% 27,794 22,610 18,911 16,140 13,988 12,269 10,864 7.0% 34,777 27,165 22,095 18,478 15,767 13,662 11,980 Consideration Per Share (b) 5.0% $ 120.07 $ 104.12 $ 91.38 $ 80.97 $ 72.31 $ 65.00 $ 58.74 5.5% 137.36 117.28 101.68 89.22 79.04 70.57 63.42 6.0% 160.42 134.20 114.56 99.30 87.11 77.15 68.87 6.5% 192.69 156.75 131.11 111.90 96.98 85.06 75.32 7.0% 241.11 188.34 153.19 128.10 109.31 94.72 83.06
(a) 6/30/97 balance sheet: $158 mm ST debt, $2,432 mm LT debt, $187 mm notes payable to RP, $175 mm preferred, $310 cash and $353 mm in cash proceeds from the exercise of 6.8 mm options at a weighted average exercise price of $51.65 (b) Number of fully diluted shares assumed to be 144.2 mm TAB5b SUMMARY OF EXCLUDED PIPELINE VALUATION ANALYSIS PER SHARE (a) [_] Incremental NPV on DCF Analysis (b) 5-YEAR DCF ANALYSIS DISCOUNT RATE -------------------------------- PERPETUAL GROWTH OF FCF 10.0% 10.5% 11.0% -------------------------------- 5.0% $11.92 $10.63 $ 9.55 5.5% 13.22 11.67 10.40 6.0% 14.84 12.94 11.41 [_] Sum of RPR Development Pipeline Valuation Risk Adjusted NPVs by Project ($19.25) [_] DCF Analysis using Monte Carlo Simulation: $9.00 -$17.00 (c) (a) Assumes 144.2 million shares outstanding on a fully diluted basis. (b) Calculated at the difference between the NPV figures for the Management case + Excluded Pipeline and the Management case GOLDMAN alone. SACHS (c) + 1 standard deviation around the mean. - PIPELINE PRODUCTS EXCLUDED IN MANAGEMENT'S FORECASTS CATEGORY INDICATION - ----------------------------------------------------- R Easi-breathe R Eformoterol Ultrahaler R Kestine D Combination R Kestine Syrup R LBLO31 R Salbutamol Ultrahaler R TAA Ultrahaler R Tilade HFA 227 MDI R Tilade Ultrahaler R Tilarin R Tilavist O Campto Adv Gastric Cancer O Campto CRC 1st line Oral O Campto CRC Adjuvant Oral O Docetaxel Polymer Program O GD-Tex O New Taxoid Oral H Estalis Aliatis Osteoporosis H Menorest 2nd Generation H Menorest Osteoporosis H Single Entity Patch for NA H Menorest PMS CNS CCKb Antagonist CNS Rilutek Huntington CNS Rilutek Parkinson C AMP 579 C Fibrinogen hist. ischemic vascular disease C Lovenox AML C Lovenox DVT Prevention in Stroke C Lovenox Stent C Lovenox Trauma C Lovenox Unstable Angina (chronic phase) AI Anti-CMV Oral AI Oral Streptogramin DP1 Skin ASSUMPTIONS UNDERLYING EXCLUDED PIPELINE VALUATION BASE CASE [_] Cashflow numbers (1997 - 2013) from Company R&D projections with the following exceptions: -- Rilutek (Parkinson's) sales increased by 50% each year, with corresponding increase in operating income, based on Management's belief that peak sales could be substantially higher than originally estimated -- Lovenox (Chronic Unstable Angina) sales decreased by 50% each year, with a corresponding decrease in operating income, as a portion of this indication's sales are included in Management's base case projections -- Oral Streptogramin sales and operating income derived from Company's projection of peak sales, using standard pharmaceutical product lifecycle sales and cashflow curves [_] Cashflow numbers (2014 - 2029) derived using standard pharmaceutical product lifecycle sales and cashflow curve [_] Tax rate =32% [_] Working capital = 30% of probability-weighted sales GOLDMAN SACHS [_] WACC=15% EXCLUDED PIPELINE VALUATION MONTE CARLO SIMULATION [_] Simulates the net present value of total excluded pipeline cashflows from 1997 - 2029 using probabilities of technical success provided by the Company [_] Each simulation "rolls a die" with 100 sides for each product and based on result of the roll either includes the non-risk adjusted cashflows or excludes all cashflows related to the specific product in the calculation of the net present value of the excluded pipeline -- e.g., for a product with a probability of technical success of 70%, if the die rolls anything 70 or under, the non-risk adjusted cashflows are included in the net present value calculation of the excluded pipeline; if the die rolls greater than 70, all cashflows related to this product are excluded in the net present value calculation of the excluded pipeline GOLDMAN [_] After 1,000 simulations, the model provides a distribution curve SACHS of the total pipeline net present value, as well as several statistical data points EXCLUDED PIPELINE VALUATION less than or equal to 0 0 less than or equal to 1 0 less than or equal to 2 0 less than or equal to 3 0 less than or equal to 4 2 less than or equal to 5 4 less than or equal to 6 15 less than or equal to 7 23 less than or equal to 8 40 less than or equal to 9 48 less than or equal to 10 77 less than or equal to 11 89 less than or equal to 12 100 less than or equal to 13 100 less than or equal to 14 109 less than or equal to 15 102 less than or equal to 16 74 less than or equal to 17 53 less than or equal to 18 51 less than or equal to 19 24 less than or equal to 20 33 less than or equal to 21 23 less than or equal to 22 13 less than or equal to 23 7 less than or equal to 24 2 less than or equal to 25 4 less than or equal to 26 3 less than or equal to 27 1 less than or equal to 28 3 less than or equal to 29 0 less than or equal to 30 0 less than or equal to 31 0 less than or equal to 32 0 less than or equal to 33 0 less than or equal to 34 0 less than or equal to 35 0 less than or equal to 36 0 less than or equal to 37 0 less than or equal to 38 0 less than or equal to 39 0 less than or equal to 40 0 less than or equal to 41 0 less than or equal to 42 0 less than or equal to 43 0 less than or equal to 44 0 less than or equal to 45 0 less than or equal to 46 0 less than or equal to 47 0 less than or equal to 48 0
Page 1 MONTE CARLO SIMULATION--INCLUDING R&D EXPENSES STATISTICAL DATA - ---------------------------- Mean: $13.22 Median: 13.03 Mode: 12.58 Standard Deviation: 4.11 Variance: 16.93 Kurtosis: 0.36 Skewness: 0.46 Range: 24.19 Min: 3.59 Max: 27.79 Sum: 13,222 Count: 1,000 TAB5c STAND--ALONE CENTEON VALUATION ($ MILLION)
1998 1999 2000 ------ ------ ------ Operating Income RPR Case(a) $ 160 $ 200 $ 290 Sale Value @ lOx Operating Income RPR Case $2,900 RPR Share of Value @ 50% (b) RPR Case $1,245 RPR Share of AT Income RPR Case $ 55 $ 75 $ 120 PV @ 12.0% of RPR Share of AT Income + Year 2000 Value RPR Case $1,080 Per Share PV @ 12.0% of RPR Share of AT Income + Year 2000 Value RPR Case $7.88
(a) Based on RPR management projections. (b) Assumes Centeon debt of $410 million. STAND--ALONE CENTEON VALUATION ($ MILLION)
1998 1999 2000 ------ ------ ------ Operating Income RPR Case (a) $ 160 $ 200 $ 290 Sale Value @ lOx Operating Income RPR Case $2,900 RPR Share of Value @ 50% (b) RPR Case $1,245 RPR Share of AT Income RPR Case $ 55 $ 75 $ 120 PV @ 15.0% of RPR Share of AT Income + Year 2000 Value RPR Case $1,002 Per Share PV @ 15.0% of RPR Share of AT Income + Year 2000 Value RPR Case $7.31
(a) Based on RPR management projections. (b) Assumes Centeon debt of $410 million. TAB 6 COMPARISON OF SELECTED PUBLICLY TRADED COMPARABLE COMPANIES ENTERPRISE VALUE/LTM SALES
- ------------------------------------------- PNU 2.5x RPR Pre-Bid 2.6x RPR Current 3.1x RPR Proposed 3.1x AHP 3.8x ABT 4.4x BMY 4.7x US Median 5.0x WLA 5.0x MRK 5.1x PFE 5.9x SGP 6.0x LLY 7.4x - ------------------------------------------
ENTERPRISE VALUE/LTM EBIT
- ------------------------------------------- PNU 10.5x AHP 15.9x RPR Pre-Bid 17.0x BMY 17.5x ABT 18.0x MRK 18.0x US Median 18.0x RPR Current 19.6x RPR Proposed 20.0x SGP 20.1x PFE 21.4x LLY 24.0x WLA 32.9x - ------------------------------------------
1998 P/E
- ------------------------------------------- PNU 17.3x RPR Pre-Bid 18.7x AHP 19.1x BMY 20.2x ABT 20.3x MRK 20.5x US Median 20.5x SGP 21.8x RPR Current 22.3x RPR Proposed 22.8x PFE 25.0x LLY 26.4x WLA 29.6x - ------------------------------------------
PROJECTED LONG-TERM EPS GROWTH
- ------------------------------------------- PNU 10.0% BMY 11.0% ABT 12.5% AHP 13.0% SGP 13.0% US Median 13.0% MRK 14.0% RPR Current 14.0% RPR Pre-Bid 14.0% RPR Proposed 14.0% LLY 15.0% PFE 15.7% WLA 16.5% - ------------------------------------------
Goldman Sachs COMPARISON OF SELECTED PUBLICLY TRADED COMPARABLE COMPANIES EQUITY MARKET CAPITALIZATION ($MM)
- ---------------------------------- RPR Pre-bid $10,915 RPR Current $12,993 RPR Proposed $13,328 PNU $17,516 WLA $35,469 SGP $35,943 ABT $48,042 AHP $48,223 US Median $48,223 LLY $57,362 PFE $67,781 BMY $74,383 MRK $112,627 - ---------------------------------
LTM EBIT MARGINS
- ---------------------------------- WLA 15.3% RPR Pre-bid 15.5% RPR Current 15.5% RPR Proposed 15.5% PNU 23.6% AHP 23.9% ABT 24.2% BMY 26.8% US Median 26.8% PFE 27.4% MRK 28.6% SGP 29.7% LLY 31.0% - ---------------------------------
DEBT TO TOTAL CAPITALIZATION
- ---------------------------------- MRK 11.8% PNU 16.5% BMY 18.9% PFE 19.1% US Meridan 30.4% SGP 30.4% ABT 32.7% LLY 39.7% AHP 44.3% WLA 49.7% RPR Current 50.5% RPR Pre-bid 50.5% RPR Proposed 50.5% - ---------------------------------
NEW PRODUCT VERSUS PATENT VULNERABILITY
PATENT PRODUCT VULNERABILITY LEVERAGE ----------------------------------------------- Astra 33% 9% Glaxo Wellcome 7 33 Novartis 15 23 Rhone-Poulenc Rorer 10 23 Roche 14 23 Sanofi 10 22 Schering 14 17 Smithkline Beecham 16 22 Synthelabo 7 13 Zeneca 41 40 - ------------------------------------------------
(a) Percentage of 1998 sales vulnerable to patent loss 1998-2002. (b) Percentage of year 2000 sales derived from launches since 1994-1995. Source: Goldman Sachs estimates. PHARMACEUTICAL COMPANY P/Es vs. EST. EPS GROWTH 1998 P/E VS. 5-YEAR EST. EPS GROWTH
COMPANY EST. 5-YEAR GROWTH RATE 1998 P/E - --------------------------------------------------------- RPR Pre-Bid 14.0% 18.7x RPR Current 14.0% 22.5x Abbott 12.5% 20.3x AHP 13.0% 19.1x Astra 12.0% 17.9x BMY 11.0% 20.2x Eli Lilly 15.0% 26.4x GW 9.0% 20.6x Merck 14.0% 20.5x Novartis 18.7% 22.1x Pfizer 15.7% 25.0x PNY 10.0% 17.3x Roche 17.0% 21.3x Sanofi 17.0% 27.6x SGP 13.0% 21.8x SKB 16.0% 23.6x Synthelabo 22.0% 25.2x WLA 16.5% 29.6x Zeneca 12.0% 23.3x
- --------------------------------------------------------- DIFFERENCE BETWEEN PREDICTED AND ACTUAL 1998 P/E
- ---------------------------------- WLA 6.0 Eli Lilly 3.8 Sanofi 3.7 Zeneca 2.6 Pfizer 1.9 GW 1.8 SGP 0.4 SKB 0.3 RPR Current 0.2 BMY 0.0 Abbott (0.8) Merck (1.5) Synthelabo (1.9) PNU (2.2) AHP (2.3) Roche (2.7) Astra (2.9) Novartis (3.0) RPR Pre-Bid (3.3) - ---------------------------------
GOLDMAN SACHS PUBLIC MARKET VALUATION OF SELECTED COMPARABLE COMPANIES WORLDWIDE PHARMACEUTICALS SECTOR (LTM 6/30/97)
- ------------------------------------------------------------------------------------------------------------------------------------ % OF 52- MARKET LEVERED LEV. MKT CAP AS MULTIPLE OF AS OF SHARE WEEK CAP MKT CAP LTM (A) P/E ----------------------------- ------------------------- AUGUST 18, 1997 PRICE HIGH US$ M US$ M SALES EBITDA EBIT 1996 1997E 1998E - ------------------------------------------------------------------------------------------------------------------------------------ UNITED KINGDOM: GlaxoWellcome (Pounds) 11.96 84.3% $ 68,608 $ 72,037 5.4 x 12.6 x 14.2 x 21.1 x 21.7 x 20.6 x SmithKline Beecham 10.87 86.1% 48,302 50,938 4.0 16.8 19.3 28.7 27.2 23.6 Zeneca 18.90 82.5% 28,847 28,454 3.3 14.0 16.9 26.8 26.3 23.3 - ------------------------------------------------------------------------------------------------------------------------------------ UK MEDIAN 84.3% 4.0 X 14.0 X 16.9 X 26.8 X 26.3 X 23.3 X UK MEAN 84.3% 4.2 14.5 16.8 25.5 25.1 22.5 ==================================================================================================================================== CONTINENTAL EUROPE: Astra SEK 132.50 82.8% $ 28,006 $ 27,154 5.3 x 14.6 x 16.8 x 23.0 x 20.7 x 17.9 x Novartis SFr 2,140.00 84.4% 97,215 93,133 3.9 18.6 24.4 35.3 26.8 22.1 Roche SFr 13,315.00 88.8% 85,768 81,694 8.3 26.5 34.8 29.3 24.7 21.3 Sanofi FF 588.00 89.8% 8,652 8,990 2.8 13.6 17.9 35.0 32.3 27.6 Synthelabo FF 705.00 85.5% 4,766 4,645 3.1 19.4 24.0 35.8 30.3 25.2 - ------------------------------------------------------------------------------------------------------------------------------------ EUROPEAN MEDIAN 85.5% 3.9 X 18.6 X 24.0 X 35.0 X 26.8 X 22.1 X EUROPEAN MEAN 86.3% 4.7 18.5 23.6 31.7 26.9 22.8 ==================================================================================================================================== UNITED STATES: Abbott Laboratories $ 62.44 90.6% $ 48,042 $ 50,291 4.4 x 14.6 x 18.0 x 25.9 x 23.0 x 20.3 x American Home Products 74.38 87.6% 48,223 53,274 3.8 13.1 15.9 25.1 21.9 19.1 Bristol-Myers Squibb 74.63 84.2% 74,383 74,101 4.7 15.5 17.5 26.3 23.2 20.2 Eli Lilly 103.13 87.6% 57,362 58,094 7.4 19.6 24.0 37.1 32.2 26.4 Merck 93.25 86.2% 112,627 112,135 5.1 16.1 18.0 29.1 24.2 20.5 Pfizer 52.44 81.0% 67,781 69,253 5.9 18.7 21.4 35.0 30.8 25.0 Pharmacia & Upjohn 34.50 78.4% 17,516 17,359 2.5 8.2 10.5 18.2 20.3 17.3 Schering-Plough 49.06 89.6% 35,943 36,361 6.0 18.2 20.1 29.7 25.3 21.8 Warner-Lambert 130.44 88.6% 35,469 37,065 5.0 26.9 32.9 47.1 38.9 29.6 - ------------------------------------------------------------------------------------------------------------------------------------ US MEDIAN 87.6% 5.0 X 16.1 X 18.0 X 29.1 X 24.2 X 20.5 X US MEAN 86.0% 5.0 16.8 19.8 30.4 26.6 22.2 ==================================================================================================================================== - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL PHARMA MEDIAN 86.1% 4.7 X 16.1 X 18.0 X 29.1 X 25.3 X 21.8 X TOTAL PHARMA MEAN 85.8% 4.7 16.9 20.4 29.9 26.5 22.5 ==================================================================================================================================== RHONE-POULENC RORER (B) $ 79.44 98.2% $ 10,915 $ 13,558 2.6 X 11.9 X 17.0 X 25.1 X 22.1 X 18.7 X RHONE-POULENC RORER (C) 94.56 98.5% 12,993 15,636 3.1 13.8 19.6 29.9 26.3 22.3 RHONE-POULENC RORER (D) 97.00 101.0% 13,328 15,971 3.1 14.1 20.0 30.7 26.9 22.8 - ------------------------------------------------------------------------------------------------------------------------------------ 1997 5 YR AVG- LTM 1997 PE/ LTM RELATIVE EST EPS DIVIDEND TOTAL TOTAL 1997 PE/ 1999 PE/ LTM MARGINS R&D/ --------------------- P/E GROWTH YIELD RETURN RETURN GROWTH GROWTH EBITDA EBIT NET SALES - ------------------------------------------------------------------------------------------------------------------------------------ UNITED KINGDOM: GlaxoWellcome 131.0 % 9.0 % 3.5 % 12.5 % 1.7 x 2.4 x 2.3 x 42.7 % 37.8 % 24.3 13.9 % SmithKline Beecham 163.7 16.0 % 2.1 18.1 1.5 1.7 1.5 23.8 20.6 14.2% 9.6 Zeneca 158.1 12.0 % 2.3 14.3 1.8 2.2 1.9 23.5 19.4 12.2 11.2 - ------------------------------------------------------------------------------------------------------------------------------------ UK MEDIAN 158.1 % 12.0 % 2.3 % 14.3 % 1.7 x 2.2 x 1.9 x 23.8 % 20.6 14.2% 11.2 % UK MEAN 150.9 % 12.3 % 2.6 % 14.9 % 1.7 2.1 1.9 30.0 % 26.0% 16.9% 11.6 % ==================================================================================================================================== CONTINENTAL EUROPE: Astra 93.3 % 12.0 % 3.0 % 15.0 % 1.4 x 1.7 x 1.5 x 36.0 % 31.2% 23.8% 13.3 % Novartis 120.0 18.7 0.8 19.5 1.4 1.4 1.2 20.9 16.0 6.4 10.1 Roche 110.6 17.0 0.6 17.6 1.4 1.5 1.3 31.2 23.7 24.5 14.9 Sanofi 141.1 17.0 1.8 18.8 1.7 1.9 1.6 20.4 15.5 7.1 13.8 Synthelabo 132.1 22.0 1.1 23.1 1.3 1.4 1.1 16.2 13.1 7.9 12.9 - ------------------------------------------------------------------------------------------------------------------------------------ EUROPEAN MEDIAN 120.0 % 17.0 % 1.1 % 18.8 % 1.4 x 1.5 x 1.3 x 20.9 % 16.0% 7.9 % 13.3 % EUROPEAN MEAN 119.4 % 17.3% 1.5 % 18.8 % 1.4 1.6 1.3 24.9 % 19.9% 13.9 % 13.0 % ==================================================================================================================================== UNITED STATES: Abbott Laboratories 120.8 % 12.5 % 1.5 % 14.0 % 1.6 x 1.8 x 1.6 x 29.9 % 24.2% 17.2% 10.7 % American Home Products 115.1 13.0 2.2 15.2 1.4 1.7 1.5 28.9 23.9 14.7 10.6 Bristol-Myers Squibb 122.0 11.0 4.0 15.0 1.5 2.1 1.8 30.2 26.8 19.1 8.3 Eli Lilly 169.6 15.0 1.3 16.3 2.0 2.1 1.8 38.1 31.0 20.8 16.2 Merck 127.5 14.0 1.8 15.8 1.5 1.7 1.5 31.9 28.6 19.3 7.1 Pfizer 162.3 15.7 2.3 18.0 1.7 2.0 1.6 31.3 27.4 17.6 15.0 Pharmacia & Upjohn 106.8 10.0 3.1 13.1 1.5 2.0 1.7 30.4 23.6 16.6 17.5 Schering-Plough 133.1 13.0 2.7 15.7 1.6 1.9 1.7 32.8 29.7 21.7 12.7 Warner-Lambert 204.9 16.5 1.1 17.6 2.2 2.4 1.8 18.8 15.3 10.3 8.0 - ------------------------------------------------------------------------------------------------------------------------------------ US MEDIAN 127.5 % 13.0 % 2.2 % 15.7 % 1.6 x 2.0 X 1.7 x 30.4 % 26.8% 17.6% 10.7 % US MEAN 140.2 % 13.4 % 2.2 % 15.6 % 1.7 2.0 1.7 30.2 % 25.6% 17.5 % 11.8 % ==================================================================================================================================== TOTAL PHARMA MEDIAN 131.0 % 14.0 % 2.1 % 15.8 % 1.5 x 1.9 x 1.6 x 30.2 % 23.9% 17.2 % 12.7 % TOTAL PHARMA MEAN 136.0 % 14.4 % 2.1 % 16.4 % 1.6 1.9 1.6 28.6 % 24.0% 16.3 % 12.1 % ==================================================================================================================================== RHONE-POULENC RORER (B) 116.1 % 14.0 % 1.6 % 15.6 % 1.4 x 1.6 x 1.3 x 22.2 % 15.5 7.6 % 17.0 % RHONE-POULENC RORER (C) 138.2 % 14.0 % 1.3 % 15.3 % 1.7 1.9 1.6 22.2 % 15.5 % 7.6 % 17.0 % RHONE-POULENC RORER (D) 141.8 % 14.0 % 1.3 % 15.3 % 1.8 1.9 1.6 22.2 % 15.5 % 7.6 % 17.0 %
(a) LTM EBIT, net income and EPS have been adjusted to exclude exceptional items. (b) Price as of 6/25/97 before RP announcement. (c) Price as of 8/18/97. (d) At proposed price of $97.00. TAB 7 IMPLIED STOCK PRICE UNDER VARIOUS FORECASTED AND P/E SCENARIOS BASED ON A 10.5% DISCOUNT RATE MANAGEMENT CASE W/ DE-LOAD
1997 1998 1999 2000 2001 - -------------------------------------------------------------------------- Stock Price @23x $78.89 $95.22 $117.53 $137.31 $158.24 Stock Price @21x 72.03 86.94 107.31 125.37 144.48 PV @ 23x 78.89 87.70 99.12 106.11 112.03 PV @ 21x 72.03 80.21 90.75 97.26 102.80
MANAGEMENT CASE W/O DE-LOAD
1997 1998 1999 2000 2001 - -------------------------------------------------------------------------- Stock Price @23x $86.02 $102.35 $124.66 $137.31 $158.24 Stock Price @21x 78.54 93.45 113.82 125.37 144.48 PV @ 23x 86.02 94.28 105.19 106.40 112.32 PV @ 21x 78.54 86.23 96.31 97.55 103.09
MANAGEMENT CASE + EXCLUDED PIPELINE
1997 1998 1999 2000 2001 - -------------------------------------------------------------------------- Stock Price @23x $79.12 $100.05 $126.27 $154.33 $184.00 Stock Price @21x 72.24 91.35 115.29 140.91 168.00 PV @ 23x 79.12 92.09 106.38 118.95 129.74 PV @ 21x 72.24 84.22 97.38 109.00 119.01
MANAGEMENT CASE + EXCLUDED PIPELINE W/O DE-LOAD
1997 1998 1999 2000 2001 - -------------------------------------------------------------------------- Stock Price @23x $86.25 $107.18 $133.40 $154.33 $184.00 Stock Price @21x 78.75 97.86 121.80 140.91 168.00 PV @ 23x 86.25 98.68 112.44 119.24 130.04 PV @ 21x 78.75 90.24 102.94 109.30 119.30
IMPLIED STOCK PRICE UNDER VARIOUS FORECASTED AND P/E SCENARIOS BASED ON 14% DISCOUNT RATE MANAGEMENT CASE W/ DE-LOAD
1997 1998 1999 2000 2001 ----------------------------------------- Stock Price @ 23x $78.89 $95.22 $117.53 $137.31 $158.24 Stock Price @21x 72.03 86.94 107.31 125.37 144.48 PV @ 23x 78.89 85.03 93.21 96.81 99.21 PV @ 21x 72.03 77.77 85.35 88.75 91.06
MANAGEMENT CASE W/O DE-LOAD
1997 1998 1999 2000 2001 ------------------------------------------ Stock Price @ 23x $86.02 $102.35 $124.66 $137.31 $158.24 Stock Price @21x 78.54 93.45 113.82 125.37 144.48 PV @ 23x 86.02 91.41 98.92 97.09 99.49 PV @ 21x 78.54 83.61 90.58 89.04 91.34
MANAGEMENT CASE + EXCLUDED PIPELINE
1997 1998 1999 2000 2001 ------------------------------------------ Stock Price @ 23x $79.12 $100.05 $126.27 $154.33 $184.00 Stock Price @21x 72.24 91.35 115.29 140.91 168.00 PV @ 23x 79.12 89.29 100.03 108.51 114.86 PV @ 21x 72.24 81.65 91.58 99.46 105.39
MANAGEMENT CASE + EXCLUDED PIPELINE W/O DE-LOAD
1997 1998 1999 2000 2001 ------------------------------------------ Stock Price @ 23x $86.25 $107.18 $133.40 $154.33 $184.00 Stock Price @21x 78.75 97.86 121.80 140.91 168.00 PV @ 23x 86.25 95.67 105.74 108.79 115.14 PV @ 21x 78.75 87.50 96.81 99.74 105.67
TAB 8 SUMMARY STATISTICS FOR MINORITY BUYOUT ANALYSIS Initial Premium over Market Price One Month Prior to Announcement Mean 27.0 % Median 20.0 % Final Premium over Market Price One Month Prior to Announcement Mean 34.2 % Median 26.1 % % Increase in Offer Mean 7.0 % Median 5.0 % % LESS THAN 5 47.9% % LESS THAN 10 64.8% % LESS THAN 15 80.3% % LESS THAN 20 84.5% COMPARISON OF SELECTED BUYOUTS BY SIGNIFICANT EXISTING SHAREHOLDERS
STOCK STOCK AGGREGATE PRICE PRICE CONSIDERATION ONE ONE 52 WEEK INSIDE FOR MONTH DAY HIGH OWNERSHIP AMOUNT INITIAL ACQUIRING COMPANY/ PRIOR PRIOR DATE PRIOR TO BEFORE THE ACQUIRED BID DATE ACQUIRED COMPANY TO ANN. TO ANN. OF ANN. ANN. TRANSACTION (000'S) PER SHARE 4/97 Zeneca Group PLC/ $ 22.5 $ 29.25 12/22/94 $ 29.25 50.0% $ 234,000 $ 41.15 Salick Health Care 3/97 Tembec Inc./ 6.25 7.00 1/23/97 N.A. 51.0 175,000 10.00 Spruce Falls 2/97 Hoechst AG/ 231.53 243.10 12/10/96 266.72 56.5 3,500,000 266.55 Roussel-Uclaf (a) 9/96 Chemed Corp./ 34.13 36.50 6/10/96 41.50 58.1 88,250 41.00 Roto-Rooter Inc. (Chemed Corp.) 4/96 BHP/ 2.50 2.80 12/18/95 2.81 49.5 446,900 3.06 Tubemaker 1/96 Berkshire Hathaway 55.63 55.75 8/25/95 68.63 52.4 2,347,000 70.00 Inc./ GEICO Corp (Berkshire Hathaway) 12/95 COBE Laboratories/ 14.75 15.75 7/14/95 19.38 53.0 177,700 18.00 REN-Corp-USA (COBE Labs) 12/95 BIC SA/ 31.13 35.75 5/19/95 38.88 78.0 212,600 36.50 Bic Corp (BIC SA) 10/95 McCaw Cellular/ 128.25 109.88 4/7/95 140.50 52.0 3,323,400 127.50 LIN Bdcstg (McCaw Cellular) 9/95 PacifiCorp/ 24.75 24.25 11/2/94 29.50 86.6 159,000 28.00 Pacific Telecom (PacifiCorp) 8/95 Societe BIC/ 31.13 35.75 5/19/95 37.50 78.0 219,000 36.50 BIC Corp 6/95 Club Mediterranee 22.25 22.63 4/5/95 26.00 70.8 135,600 26.50 SA/ Club Med 5/95 GTE Corp/ 18.25 17.75 9/8/94 21.25 90.0 254,300 22.50 Contel Cellular Inc. 3/95 Siemens AG/ 10.75 12.25 1/9/95 16.00 14.2 261,700 15.00 Pyramid Technology 3/95 Proventus AB/ 3.52 3.70 12/15/94 4.29 78.2 141,300 4.38 Aritmos AB 3/95 Dole Food Co. Inc./ 10.50 11.63 8/24/94 15.38 82.8 81,500 14.00 Castle & Cooke Homes, Inc. 1/95 WMX Technologies 8.63 8.00 7/28/94 10.88 78.5 397,400 7.80 Inc./ Chemical Waste Management 1/95 Adia SA/ 24.00 26.50 3/23/94 33.25 81.0 83,639 35.02 Adia Services Inc. (b) INITIAL FINAL INITIAL PREMIUM INITIAL PREMIUM FINAL PREMIUM OVER ONE PREMIUM OVER ONE PREMIUM OVER 52 MONTH OVER MONTH OVER PERCENT ACQUIRING COMPANY/ WEEK PRIOR MARKET FINAL BID PRIOR MARKET INCREASE DATE ACQUIRED COMPANY HIGH PRICE PRICE PER SHARE PRICE PRICE IN OFFER 4/97 Zeneca Group PLC/ 40.7% 82.9% 40.7% $ 41.15 82.9% 40.7% 0.0% Salick Health Care 3/97 Tembec Inc./ N.A. 60.0 42.9 10.00 60.0 42.9 0.0 Spruce Falls 2/97 Hoechst AG/ (0.0) 15.1 9.6 266.55 15.1 9.6 0.0 Roussel-Uclaf 9/96 Chemed Corp./ (0.0) 20.1 12.3 41.00 20.1 12.3 0.0 Roto-Rooter Inc. (Chemed Corp.) 4/96 BHP/ 8.9% 22.4 9.3 3.10 24.0 10.7 1.3 Tubemaker 1/96 Berkshire Hathaway 2.0% 25.8 25.6 70.00 25.8 25.6 0.0 Inc./ GEICO Corp (Berkshire Hathaway) 12/95 COBE Laboratories/ (7.1) 22.0 14.3 20.00 35.6 27.0 11.1 REN-Corp-USA (COBE Labs) 12/95 BIC SA/ (6.1) 17.3 2.1 40.50 30.1 13.3 11.0 Bic Corp (BIC SA) 10/95 McCaw Cellular/ (9.3) (0.6) 16.0 129.90 1.3 18.2 1.9 LIN Bdcstg (McCaw Cellular) 9/95 PacifiCorp/ (5.1) 13.1 15.5 30.00 21.2 23.7 7.1 Pacific Telecom (PacifiCorp) 8/95 Societe BIC/ (2.7) 17.3 2.1 40.50 30.1 13.3 11.0 BIC Corp 6/95 Club Mediterranee 1.0 19.1 17.1 32.00 43.8 41.4 20.8 SA/ Club Med 5/95 GTE Corp/ 5.9 23.3 26.8 25.50 39.7 43.7 13.3 Contel Cellular Inc. 3/95 Siemens AG/ (6.3) 39.5 22.4 16.00 48.8 30.6 6.7 Pyramid Technology 3/95 Proventus AB/ 2.1 24.4 18.4 4.38 24.4 18.4 0.0 Aritmos AB 3/95 Dole Food Co. Inc./ (8.9) 33.3 20.4 15.75 50.0 35.4 12.5 Castle & Cooke Homes, Inc. 1/95 WMX Technologies (28.3) (9.6) (2.5) 8.85 2.5 10.6 13.5 Inc./ Chemical Waste Management 1/95 Adia SA/ 5.3 45.9 32.2 35.02 45.9 32.2 0.0 Adia Services Inc. (b)
COMPARISON OF SELECTED BUYOUTS BY SIGNIFICANT EXISTING SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------------------ STOCK STOCK INSIDE AGGREGATE PRICE ONE PRICE ONE 52 WEEK OWNERSHIP CONSIDERATION FOR INITIAL ACQUIRING COMPANY/ MONTH PRIOR DAY PRIOR DATE HIGH PRIOR TO BEFORE THE AMOUNT ACQUIRED BID DATE ACQUIRED COMPANY TO ANN. TO ANN. OF ANN. ANN. TRANSACTION (000'S) PER SHARE - ------------------------------------------------------------------------------------------------------------------------------------ 12/94 Ogden Comp/ $ 15.25 $ 17.36 6/6/94 $ 24.25 83.2% $119,000 $ 17.16 Ogden Services 10/94 National Intergroup Inc./ 13.00 13.50 3/1/94 13.75 80.5 84,028 14.75 FoxMeyer 9/94 EW Scripps Co./ 75.00 78.50 2/17/94 86.00 86.0 125,386 84.75 Scripps Howard Broadcasting 7/94 Burlington Resources/ 4.13 4.63 4/26/94 6.75 87.1 42,600 4.49 Diamond Shamrock Offshore 6/94 Colonia Konzern AG/ 1,133.16 1,309.00 2/28/94 1,335.00 57.9 520,969 1,713.00 Nordstern Allgemeine (e) (f) 4/94 Triarc Cos/ 15.50 15.50 4/26/93 16.50 71.0 86,140 16.90 Southeastern Public Service Co. 4/94 Medco Containment Services/ 29.75 25.75 10/13/93 36.50 54.2 122,510 27.25 Medical Marketing Group 4/94 Quartex Corp/CMS/ N.A. 1.63 7/1/93 2.13 65.0 26,740 6.52 Data Corp 2/94 Holderbank Financiere Glaros/ 7.25 6.75 1/7/94 7.75 95.0 51,700 7.65 Holnam Inc. 1/94 Standard Industries Inc./ 7.00 7.00 5/19/93 9.75 88.4 3,683 7.25 Wellington Leisure Products, Inc. 12/93 Valley Fashions Corp./West 48.63 48.88 9/20/93 51.13 95.0 66,300 46.00 Point-Pepperell Inc. 10/93 Torchmark/ 27.38 26.88 2/22/93 30.25 83.0 216,591 30.50 United Investors Management 5/93 Rust International Inc./ N.A. 17.88 11/13/92 23.88 56.0 185,000 17.88 Brand Cos Inc. 7/92 BLV Acquisition Corp./ 4.88 4.38 3/20/92 5.38 54.8 16,900 6.00 Belvedere Corp. 7/92 W.R. Grace & Company/ 11.89 15.25 3/2/92 19.00 83.4 77,501 16.50 Grace Energy Corporation 5/92 Unocal Corp./ 9.75 9.88 2/24/92 12.00 95.3 120,418 11.68 Unocal Exploration Corp. 5/92 Envirosource Inc./ N.A. 9.00 8/2/91 15.00 62.5 14,400 9.79 Envirosafe Services Inc. 1/92 Arkla Inc./ N.A. 14.25 9/18/91 20.88 82.0 92,640 14.18 Arkla Exploration Co. - ------------------------------------------------------------------------------------------------------------------------------------ INITIAL INITIAL PREMIUM FINAL PREMIUM PREMIUM OVER ONE INITIAL PREMIUM OVER ONE FINAL PREMIUM PERCENT ACQUIRING COMPANY/ OVER 52 MONTH PRIOR OVER MARKET FINAL BID MONTH PRIOR OVER MARKET INCREASE DATE ACQUIRED COMPANY WEEK HIGH PRICE PRICE PER SHARE PRICE PRICE IN OFFER - ------------------------------------------------------------------------------------------------------------------------------------ 12/94 Ogden Comp/ 29.2% 12.5 % (1.3)% $ 18.48 21.2% 6.3% 7.7% Ogden Services 10/94 National Intergroup Inc./ 7.3 13.5 9.3 14.46 11.2 7.1 (2.0) FoxMeyer (c) 9/94 EW Scripps Co./ 0.7 13.0 8.0 82.8 10.4 5.5 (2.3) Scripps Howard Broadcasting (d) 26.9 7/94 Burlington Resources/ (33.6) 8.7 (3.0) 4.48 8.5 (3.2) (0.2) Diamond Shamrock Offshore 6/94 Colonia Konzern AG/ 28.3 51.2 30.9 1,713.00 51.2 30.9 0.0 Nordstern Allgemeine (f) 4/94 Triarc Cos/ 2.6 9.0 9.0 25.60 65.2 65.2 51.5 Southeastern Public Service Co. (g) 4/94 Medco Containment Services/ (25.3) (8.4) 5.8 27.75 (6.7) 7.8 1.8 Medical Marketing Group 4/94 Quartex Corp/CMS/ 30.8 N.A. 300.0 7.00 N.A. 329.4 7.4 Data Corp 2/94 Holderbank Financiere Glaros/ (0.0) 5.5 13.3 7.65 5.5 13.3 0.0 Holnam Inc. 1/94 Standard Industries Inc./ (25.6) 3.6 3.6 7.63 9.0 9.0 5.2 Wellington Leisure Products, Inc. 12/93 Valley Fashions Corp./West (10.0) (5.4) (5.9) 46.00 (5.4) (5.9) 0.0 Point-Pepperell Inc. 10/93 Torchmark/ 0.8 11.4 13.5 31.25 14.1 16.3 2.5 United Investors Management 5/93 Rust International Inc./ (25.1) N.A. 0.0 18.75 N.A. 4.9 4.9 Brand Cos Inc. 7/92 BLV Acquisition Corp./ 17.1 29.1 37.0 6.30 29.1 43.8 5.0 Belvedere Corp. 7/92 W.R. Grace & Company/ (13.2) 38.9 8.2 19.00 59.9 24.6 15.2 Grace Energy Corporation 5/92 Unocal Corp./ (9.8) 19.8 18.2 11.68 19.8 18.2 0.0 Unocal Exploration Corp. (h) 5/92 Envirosource Inc./ (24.3) N.A. 8.8 11.69 N.A. 29.9 19.4 Envirosafe Services Inc. 1/92 Arkla Inc./ (12.3) N.A. (0.5) 15.44 N.A. 8.4 8.9 Arkla Exploration Co. (i)
COMPARISON OF SELECTED BUYOUTS BY SIGNIFICANT EXISTING SHAREHOLDERS
STOCK STOCK INSIDE AGGREGATE PRICE ONE PRICE ONE 52 WEEK OWNERSHIP CONSIDERATION FOR ACQUIRING COMPANY/ MONTH PRIOR DAY PRIOR DATE HIGH PRIOR BEFORE THE AMOUNT ACQUIRED INITIAL BID DATE ACQUIRED COMPANY TO ANN. TO ANN. OF ANN. ANN. TRANSACTION (000'S) PER SHARE 12/91 Siemens AG/ $131.77 $120.62 10/21/91 $209.35 78.0% $1,302,423 $147.52 Siemens Nixdorf (j) (k) Information Systems 12/91 Tele-Communications Inc./ 12.50 13.50 5/1/91 16.50 57.2 1,189,000 15.20 United Artists Entertainment Co. 10/91 LAC Minerals/ 4.50 3.87 2/8/91 6.25 64.7 85,000 6.40 Bond International 10/91 Air & Water 15.50 15.25 3/1/91 31.50 82.0 42,000 18.70 Technologies/ Metcalf & Eddy Cos. 4/91 Murphy Oil Corp/ 18.38 16.63 4/6/89 22.63 61.0 366,242 19.13 Ocean Drilling & Exploration 4/91 Ogden Corp./ 12.00 11.00 10/23/90 14.75 68.3 38,000 14.75 ERC Environmental & Energy Services 3/91 BHP Holdings/ 33.00 33.75 2/6/91 44.50 50.1 530,000 40.00 Hamilton Oil Corp. 2/91 Paramount Comm./ 5.06 7.50 7/12/90 7.50 74.6 46,576 7.50 TVX Broadcast Group 11/90 National 3.50 2.62 12/20/89 6.75 44.1 59,063 4.00 Intergroup Inc./ Permian Partners (o) L.P. 11/90 Pier 1 Imports 8.38 8.75 9/25/90 9.38 50.4 20,704 12.00 Inc. (of Intermarke Inc.)/ Sunbelt Nursery Group Inc. 11/90 Freeport-McMoRan 7.38 8.00 7/31/90 11.13 81.5 239,161 10.70 Inc./ Freeport-McMoRan Oil & Gas 10/90 Primerica Corp./ N.A. 9.75 4/18/89 11.38 82.6 48,752 11.50 American Capital Mgmt. & Research 10/90 Renault Vehicules 5.13 5.25 7/6/90 21.13 44.5 103,145 6.00 Industrial/ Mack Trucks Inc. (s) 9/90 Kansas City 10.25 12.75 5/17/90 15.00 87.1 35,000 14.00 Southern Industries, Inc./ DST Systems Inc. 9/90 Fuji Heavy 5.88 5.13 1/16/90 8.50 49.5 208,414 6.00 Industries/ Subaru of America 8/90 Imetal S.A./ N.A. 11.50 1/24/90 16.0 55.6 781,571 15.5 Copperweld Corp. Steel 8/90 American Express 12.00 13.00 3/2/90 N.A. 68.4 393,515 11.71 Company/ Shearson Lehman (t) Brothers 6/90 DeGeorges/ 17.25 19.50 3/19/90 27.25 51.0 37,500 24.00 LPL Technologies, Inc. INITIAL INITIAL PREMIUM FINAL PREMIUM PREMIUM OVER ONE INITIAL PREMIUM OVER ONE FINAL PREMIUM PERCENT ACQUIRING COMPANY/ OVER 52 MONTH PRIOR OVER MARKET FINAL BID- MONTH PRIOR OVER MARKET INCREASE DATE ACQUIRED COMPANY WEEK HIGH PRICE PRICE PER SHARE PRICE PRICE IN OFFER 12/91 Siemens AG/ (29.5)% 12.0% 22.3% $147.52 12.0% 22.3% 0.0 Siemens Nixdorf Information Systems 12/91 Tele-Communications In (20.4) 21.6 12.6 16.19 29.5 19.9 6.5 United Artists (l) Entertainment Co. 10/91 LAC Minerals/ 2.4 42.2 65.3 3.60 (20.0) (7.0) (43.8) Bond International 10/91 Air & Water (37.0) 20.6 22.6 19.25 24.2 26.2 2.9 Technologies/ Metcalf & Eddy Cos. (m) 4/91 Murphy Oil Corp/ (0.2) 4.1 15.0 19.39 5.5 16.6 1.4 Ocean Drilling & (n) Exploration 4/91 Ogden Corp./ 0.0 22.9 34.1 15.13 26.1 37.5 2.6 ERC Environmental & Energy Services 3/91 BHP Holdings/ (10.1) 21.2 18.5 40.00 21.2 18.5 0.0 Hamilton Oil Corp. 2/91 Paramount Comm./ 0.0 48.2 0.0 9.50 87.8 26.7 26.7 TVX Broadcast Group 11/90 National 40.7 14.3 52.7 4.43 26.4 68.9 10.5 Intergroup Inc./ Permian Partners (p) L.P. 11/90 Pier 1 Imports 27.9 43.2 37.1 12.00 43.2 37.1 0.0 Inc. (of Intermarke Inc.)/ Sunbelt Nursery Group Inc. 11/90 Freeport-McMoRan (5.7) 45.0 33.8 10.88 47.4 37.5 1.7 Inc./ Freeport-McMoRan (q) Oil & Gas 10/90 Primerica Corp./ 10.3 N.A. 17.9 11.50 N.A. 37.5 0.0 American Capital (r) Mgmt. & Research 10/90 Renault Vehicules (71.6) 17.0 14.3 6.25 21.8 19.0 4.2 Industrial/ Mack Trucks Inc. 9/90 Kansas City (6.7) 36.6 9.8 15.85 54.6 24.3 13.2 Southern Industries, Inc./ DST Systems Inc. 9/90 Fuji Heavy (29.4) 2.0 17.0 8.50 44.6 65.7 41.7 Industries/ Subaru of America 8/90 Imetal S.A./ (3.1) N.A. 34.8 17.00 N.A. 47.8 9.7 Copperweld Corp. Steel 8/90 American Express N.A. (2.4) (9.9) 12.90 7.5 (0.8) 10.2 Company/ Shearson Lehman (u) Brothers 6/90 DeGeorges/ (0.1) 39.1 23.1 25.00 44.9 28.2 4.2 LPL Technologies, Inc.
COMPARISON OF SELECTED BUYOUTS BY SIGNIFICANT EXISTING SHAREHOLDERS
STOCK STOCK AGGREGATE PRICE PRICE CONSIDERATION ONE ONE 52 WEEK INSIDE FOR MONTH DAY HIGH OWNERSHIP AMOUNT INITIAL ACQUIRING COMPANY/ PRIOR PRIOR DATE PRIOR TO BEFORE THE ACQUIRED BID DATE ACQUIRED COMPANY TO ANN. TO ANN. OF ANN. ANN. TRANSACTION (000'S) PER SHARE 6/90 Esselte A.B./ $33.50 $37.44 10/3/89 $38.00 78.5 $219,298 $43.50 Esselte Business Systems, Inc. 5/90 Montedison S.p.A./ N.A. 31.12 7/31/89 32.13 71.3 465,904 35.00 Erbamont 4/90 Anderson Group PLC/ 7.88 7.38 2/16/90 8.38 51.2 21,000 8.50 National Mine Service Co. 3/90 Heritage Media 6.00 7.88 12/1/88 9.50 57.0 32,243 20.50 Corp./ Pop Radio Corp. 2/90 Carlson Companies, 13.00 13.25 5/19/89 13.75 68.0 53,525 14.50 Inc./ TGI Friday's Inc. 1/90 Dow Jones & Co. 16.13 15.13 9/21/89 16.38 66.2 657,394 18.00 Inc./ Telerate, Inc. 1/90 Montedison S.P.A./ N.A. 44.13 7/31/89 46.00 81.0 653,811 47.00 HIMONT Inc. 1/90 Tele-Communications Inc. 20.75 27.00 5/24/89 24.00 75.0 209,625 31.75 WestMarc Communications 12/89 General Accident 0.34 0.28 6/16/89 1.38 51.0 175,000 N.A Fire & Life/ NZI Corp. Ltd. 11/89 Primerica N.A. 17.88 6/9/89 21.25 69.8 532,795 19.40 Corporation/ The A.L. Williams Corporation 11/89 Mayfair 18.75 17.25 4/3/89 25.25 71.0 193,600 23.50 Acquisition Corp/ Mayfair Super Markets, Inc. 10/89 ENSERCH Corp./ 9.63 11.25 2/15/89 12.75 87.4 151,194 10.38 ENSERCH Exploration Partners 9/89 United Meridian 6.25 6.13 1/27/89 9.00 60.1 26,341 8.00 Corporation/ Ensource Inc. 8/89 The Henley Group, 19.50 19.25 6/8/89 21.38 80.2 119,801 20.50 Inc./ Fisher Scientific Group, Inc. 6/89 Zayre Corp./ 13.31 26.38 12/5/88 27.13 83.0 314,081 35.60 The TJX Companies, Inc. 6/89 Allied Irish Banks 25.13 25.00 9/12/88 27.68 49.7 365,000 35.25 plc/ First Maryland Bancorp. 5/89 Investors 5.38 5.25 12/6/88 8.50 69.0 22,083 5.88 (Private-USA)/ Sage Energy Co. MEAN MEDIAN INITIAL FINAL PREMIUM INITIAL PREMIUM FINAL INITIAL OVER ONE PREMIUM OVER ONE PREMIUM PREMIUM MONTH OVER MONTH OVER PERCENT ACQUIRING COMPANY/ OVER 52 PRIOR MARKET FINAL BID PRIOR MARKET INCREASE DATE ACQUIRED COMPANY WEEK HIGH PRICE PRICE PER SHARE PRICE PRICE IN OFFER 6/90 Esselte A.B./ 14.5% 29.9% 16.2% $48.06 43.5 % 28.4 % 10.5 % Esselte Business Systems, Inc. 5/90 Montedison S.p.A./ 15.2 N.A. 12.5 37.00 N.A. 18.9 5.7 Erbamont (v) 4/90 Anderson Group PLC/ 1.5 7.9 15.2 8.88 12.7 20.3 4.5 National Mine Service Co. 3/90 Heritage Media 115.8 241.7 160.2 20.50 241.7 160.2 0.0 Corp./ Pop Radio Corp. 2/90 Carlson Companies, 5.5 11.5 9.4 14.88 14.5 12.3 2.6 Inc./ TGI Friday's Inc. 1/90 Dow Jones & Co. 9.8 11.6 19.0 21.00 30.2 38.8 16.7 Inc./ Telerate, Inc. 1/90 Montedison S.P.A./ 6.5 N.A. 6.5 51.00 N.A. 15.6 8.5 HIMONT Inc. (v) 1/90 Tele-Communications In 32.3 53.0 17.6 32.25 55.4 19.4 1.6 WestMarc Communications 12/89 General Accident N.A. N.A. N.A. 0.37 8.8 32.1 N.A. Fire & Life/ NZI Corp. Ltd. 11/89 Primerica (5.9) N.A. 8.5 22.24 N.A. 24.4 14.6 Corporation/ The A.L. Williams (w) Corporation 11/89 Mayfair (6.9) 25.3 36.2 24.70 31.7 43.2 5.1 Acquisition Corp/ Mayfair Super Markets, Inc. 10/89 ENSERCH Corp./ (13.6) 7.8 (7.7) 13.53 40.6 20.3 30.3 ENSERCH (x) Exploration Partners 9/89 United Meridian (11.1) 28.0 30.5 10.50 68.0 71.3 31.3 Corporation/ Ensource Inc. 8/89 The Henley Group, (4.1) 5.1 6.5 22.25 14.1 15.6 8.5 Inc./ Fisher Scientific Group, Inc. 6/89 Zayre Corp./ 0.3 167.4 32.2 34.80 161.4 0.4 (2.2) The TJX Companies, (x) Inc. 6/89 Allied Irish Banks 27.3 40.3 41.0 39.25 56.2 57.0 11.3 plc/ First Maryland Bancorp. 5/89 Investors (30.9) 9.3 12.0 6.50 20.8 23.8 10.5 (Private-USA)/ mean 27.0 % 34.2 % 7.0 % median (0.2)% 26.1 % 5.0 %
COMPARISON OF SELECTED BUYOUTS BY SIGNIFICANT EXISTING SHAREHOLDERS Footnotes (a) Closing date $/Ff exchange rate of 0.17422 used to calculate all premiums. (b) Represents combined share/cash offer. (c) Received principal amount in 8.25% senior notes due 2004. (d) 3.45 acquiror shares. (e) Purchased 37.35% stake from Union des Assurances de Paris; increased ownership to 95.4%. (f) $/DM exchange rate = 1.5356; DM 630 million to UAP for 37.35% stake and a further DM 170 million in cash (DM 2,630 per share) to Nordstern independent shareholders. (g) 0.80 acquiror shares. (h) 0.54 acquiror shares. (i) 0.95 acquiror shares. (j) 91% of voting Interest. (k) $/DM exchange rate = 1.5356. (l) 1.02 acquiror shares. (m) 0.88 acquiror shares. (n) 0.55 acquiror shares. (o) 99.7% voting interest. (p) Final bid $3.5625 received in tender offer plus three distributions comprised of $.2875 prior to the closing of the tender. (q) 0.283 to 0.345 acquiror shares, upper end of range valued at nearly $11.00. (r) 0.32 acquiror shares. (s) 61.1% ownership on a fully diluted basis. (t) 60% voting interest. (u) 0.48 acquiror shares. (v) Includes a warrant valued at $2.00. (w) 0.82 to 0.85 acquiror shares. (x) Share/cash offer. (y) 1.95 acquiror shares. TAB 9 COMPARISON OF SELECTED CONTROL ACQUISITIONS OF PUBLICLY TRADED PHARMACEUTICAL COMPANIES
MULTIPLES ---------------------------------------- TOTAL PREMIUM TO ENTITY NET PRICE 4 WEEKS PRIOR DATE TARGET ACQUIROR VALUE SALES EBIT INCOME (%) - -------------------------------------------------------------------------------------------------------------------- 2/95 Marion-Merrell Dow Hoechst $ 7,254 2.4x 12.3x 15.8x 11.4 1/95 Wellcome Glaxo 12,844 3.6 11.4 22.1 45.9 8/94 American Cyanamid American Home 9,604 2.0 21.2 26.0 80.8 Products 5/94 Syntex Roche 5,300 2.5 10.2 18.4 79.4 1/90 Rorer Group (68%) Rhone-Poulenc 3,367 3.2 23.4 38.7 75.3 Mean 2.7x 15.7x 24.2x 58.6 Median 2.5 12.3 22.1 75.3 High 3.6 23.4 38.7 80.8 Low 2.0 10.2 15.8 11.4 8/97 Rhone-Poulenc Rhone-Poulenc $ 4,534 3.2x 20.4x 35.8x 30.8 (b) Rorer (a) - --------------------------------------------------------------------------------------------------------------------
(a) Total Entity Value represents fully-diluted consideration paid to RPR minority shareholders less cash proceeds from the exercise of 6.8 mm options at a weighted average exercise price of $51.65; levered multiples calculated from fully diluted shares outstanding of 144.2 mm plus net debt of $2,290 mm after proceeds of $353 mm from the exercise of options. Goldman Sachs (b) Represents premium over share price four weeks prior to 6/26/97 announcement. TAB 10 MERGER ANALYSIS - RP ACQUIRES RPR (31.7%) ASSUMES APPROXIMATELY FF 7 BILLION RP EQUITY OFFERING (FF IN MILLIONS, EXCEPT PER SHARE AND EQUITY CONSIDERATION DATA)
- ------------------------------------------------------------------------------------------------------------------------------------ PREMIUM PER SHARE 15.8% 18.3% 20.8% 22.1% 23.4% 25.9% 28.4% 30.9% PRICE PER SHARE ($) $ 92.00 $ 94.00 $ 96.00 $ 97.00 $ 98.00 $100.00 $ 102.00 $104.00 EQUITY CONSIDERATION ($) $ 4,283 $ 4,384 $ 4,485 $ 4,535 $ 4,585 $ 4,686 $ 4,787 $ 4,888 - ------------------------------------------------------------------------------------------------------------------------------------ INCREMENTAL INTEREST CHARGE (AFTER TAX) 664 679 695 703 710 726 742 757 TRANSACTION GOODWILL CHARGE PER YEAR 629 647 665 673 682 700 718 736 MINORITY CHARGE REDUCTION (ADDITION TO NET INCOME) 1998 1,148 1,148 1,148 1,148 1,148 1,148 1,148 1,148 1999 1,291 1,291 1,291 1,291 1,291 1,291 1,291 1,291 RP PRO-FORMA NET INCOME 1998 3,888 3,855 3,821 3,804 3,788 3,754 3,721 3,687 1999 5,248 5,214 5,181 5,164 5,147 5,114 5,080 5,047 CONSIDERATION IN STOCK ISSUED 6,639 6,795 6,951 7,029 7,107 7,264 7,420 7,576 NEW SHARES ISSUED 28 29 29 30 30 31 31 32 PRO-FORMA SHARES OUTSTANDING RP 361 362 362 363 363 364 364 365 RP PRO-FORMA EPS ----- 1998 12.10 10.76 10.65 10.54 10.49 10.43 10.32 10.21 10.10 1999 15.75 14.53 14.41 14.29 14.23 14.17 14.06 13.94 13.82 ACCRETION/DILUTION TO RP 1998 (11.0)% (12.0)% (12.9)% (13.3)% (13.8)% (14.7)% (15.6)% (16.5)% 1999 (7.8)% (8.5)% (9.3)% (9.6)% (10.0)% (10.8)% (11.5)% (12.2)% PRE-TAX SYNERGIES TO BREAKEVEN 1998 689 748 807 837 866 926 985 1,044 1999 630 692 755 786 818 880 943 1,005 PRE-TAX SYNERGIES TO BREAKEVEN AS % OF RPR 1996 SALES 1997 16.2% 17.3% 18.3% 18.9% 19.4% 20.4% 21.5% 22.5% 1998 12.7% 13.8% 14.9% 15.4% 16.0% 17.1% 18.2% 19.3% 1999 11.6% 12.8% 13.9% 14.5% 15.1% 16.2% 17.4% 18.5% P/E FOR BREAK-EVEN STOCK PRICE RP RPR 1998 -------------- 22.1 x 22.3 x 22.6 x 22.7 x 22.8 x 23.1 x 23.3 x 23.6 x 1999 19.7 x 21.6 x 16.4 16.5 16.7 16.7 16.8 16.9 17.1 17.2 15.1 19.2 RP Pro-Forma Debt/Total Capital 53.8% 53.9% 54.0% 54.1% 54.1% 54.2% 54.3% 54.4% Total Debt/1997 EBITDA 3.8 x 3.9 x 3.9 x 3.9 x 3.9 x 4.O x 4.O x 4.O x 1997 EBIT/Interest Expense 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1997 EBITDA/Interest Expense 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.2
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