EX-99.(C)(4) 3 dex99c4.htm MATERIALS PRESENTED BY UBS SECURITIES LLC ON MARCH 18, 2004 Materials presented by UBS Securities LLC on March 18, 2004

EXHIBIT (c)(4)

 

Contact Information

 

UBS Securities LLC

1999 Avenue of the Stars

15th Floor

Los Angeles CA 90067

Phone : (310) 556-6700

Fax : (310) 556-6706

 

www.ubs.com

 

UBS Investment Bank is a business group of UBS AG

UBS Securities LLC is a subsidiary of UBS AG

 

LOGO


LOGO

 

Discussion Materials Prepared for the

Special Committee of the Board of Directors

of Han Solo Regarding Project Star Wars

 

March 18, 2004


Table of Contents

 

SECTION 1

  

Executive Summary

   1

SECTION 2

  

Market Update

   6

SECTION 3

  

Valuation Analysis

   14

 

LOGO


SECTION 1

 

Executive Summary


Background and Process Update

 

    In early September 2003 rumors began appearing in the popular press that Viacom was considering an outright sale of its Blockbuster unit, a controlled publicly traded subsidiary

 

    Following several months of heightened speculation, Blockbuster’s board formed a special committee in mid-December 2003 to evaluate potential transactions including an outright sale of the Company

 

  it appears that due to valuation concerns, Viacom instead announced a spinoff transaction with respect to Blockbuster

 

    During this time period, UBS discussed strategic alternatives with the Company

 

    On January 30, 2004, Mark Wattles advised the board of preliminary discussions with Luke Skywalker and the Special Committee was formed

 

    On February 3, Luke Skywalker performed initial due diligence on Han Solo in Portland, OR

 

    On February 6, the Special Committee engaged Gibson, Dunn & Crutcher as its legal advisor

 

    On February 10, the Company executed an NDA with Luke Skywalker

 

    On February 10, UBS’s M&A Team presented an overview of Luke Skywalker and a market update to the Special Committee

 

    On February 12, the Company executed an NDA with Galaxy

 

  shortly thereafter, the UBS M&A Team had a conversation with Galaxy and discussed valuation

 

    On February 19, Luke Skywalker submitted a proposal of $13.00 per share in cash and requested a 45-day exclusivity period which the Special Committee subsequently rejected

 

    On February 20, UBS’s M&A Team was formally engaged as financial advisor by the Special Committee

 

    On February 27, Luke Skywalker submitted a request to the Special Committee to allow UBS’s Finance Team to potentially finance the acquisition indicating they believed utilization of UBS’s Finance Team “could enable [Luke Skywalker] to increase [its] proposed purchase price”

 

  shortly thereafter, the Special Committee and its counsel discussed the request to understand why Luke Skywalker believed utilizing UBS’ Finance Team “could enable [Luke Skywalker] to increase [its] proposed purchase price”

 

  the Special Committee and its counsel entered into negotiations with Luke Skywalker regarding a number of deal protections in connection with Luke Skywalker’s request to allow UBS’s Finance Team to provide a financing package

 

  specific deal structure and deal protection terms were agreed to in principle

 

    On March 6, the Special Committee agreed to allow UBS’s Finance Team to offer staple financing in the proposed transaction

 

2


  On March 8, Luke Skywalker requested that the Special Committee receive a draft purchase and sale agreement, the request was immediately rejected

 

  On March 10, Luke Skywalker submitted a proposal of $13.50 per share in cash

 

  On March 12, the Special Committee agreed to allow Luke Skywalker to submit a draft purchase and sale agreement

 

3


Overview of Luke Skywalker Proposals

 

    

Luke Skywalker Proposal—2/19/04


  

Revised Luke Skywalker Proposal—3/10/04


Initial Indication Range

   $13.00 per share in cash    $13.50 per share in cash

Implied Equity Value

   $828.8 million1    $861.7 million1

Implied Enterprise Value (EBITDA Mult.)

   $1,126.0 (4.6x LTM EBITDA)    $1,158.9 (4.7x LTM EBITDA)

Premiums:

  

Current Trading Price ($10.93): 18.9%

30-Day Average Price ($11.17): 16.4%

  

Current Trading Price ($10.93): 23.5%

30-Day Average Price ($11.17): 20.8%

Financing

   To be financed with a combination of senior debt, subordinated debt and equity - Financing not yet arranged    Believe they could be in a position to receive binding commitment letters within the next two weeks

Timing

   Would like to sign a definitive purchase and sale agreement and announce a transaction in late March or early April 2004    In position to immediately begin negotiating a definitive purchase and sale agreement and believe a transaction could be documented and announced by the end of March

Exclusivity Request

   45-day exclusivity period    Not requested

Closing Conditions

  

•      Completion of business, legal and accounting due diligence

•      Receipt of necessary financing commitments

•      Agreement with current management of Han Solo with respect to their continuing involvement with the Company

•      Negotiation of a definitive agreement

•      Hart-Scott-Rodino clearance (2nd request not anticipated)

•      Approval of Han Solo shareholders

  

•      Same as previous

Valuation Issues cited by Luke Skywalker

  

•      General market disinterest in specialty retailers lacking strong comparable store sales trends

•      Uncertainty regarding the long-term impact of competition from video-on-demand, the Internet, mass-market retailers and subscription rental services

•      Uncertainty regarding the magnitude, timing and ultimate success of investments the Company intends to make in certain new business initiatives, including in-store subscription, on-line subscription and the Game Crazy concept

•      Unconfirmed results of the industry’s transformation in format from VHS to DVD

•      The Company’s limited institutional research coverage and a lack of strong equity analyst support for Han Solo’s stock

  

•      Not Discussed


Note:  

 

1   Based on 59.0 million basic shares outstanding and 9.7 million options with a weighted average exercise price of $5.96; assumes treasury stock method to calculate FD shares outstanding

 

4


Financial Overview of Han Solo

 

Han Solo trading statistics

 

Market Valuation

($ in millions, except per share data)

 

                LGP Proposal

 
          Current

    2/19/04

    3/10/04

 

Current Share Price as of 3/17/04

          $ 10.93     $ 13.00     $ 13.50  

Premium to Current Share Price

            —         18.9 %     23.5 %

LTM High / Low

          $ 18.85 /$10.53       NA       NA  

Diluted Shares Outstanding2

            63.410       63.756       63.831  

Equity Value

          $ 693.1     $ 828.8     $ 861.7  

Plus: 12/31/03 Debt (incl. Capital Leases)

            371.3       371.3       371.3  

Less: 12/31/03 Cash

            (74.1 )     (74.1 )     (74.1 )

Enterprise Value

          $ 990.3     $ 1,126.0     $ 1,158.9  

Valuation Data 1:

                               
     Statistic

   Multiple

    Multiple

    Multiple

 

Enterprise Value /

                               

2003 Revenue

   $ 1,682.5      0.59x       0.67x       0.69x  

2003 EBITDA

     244.3      4.1x       4.6x       4.7x  

2004E Revenue

     1,778.5      0.56x       0.63x       0.65x  

2004E EBITDA

     229.9      4.3x       4.9x       5.0x  

Price /

                               

2004E EPS

   $ 1.36      8.0x       9.6x       9.9x  

2005E EPS

     1.44      7.6x       9.0x       9.4x  

Note:

 

1   Revenue and EBITDA projections per Wall Street research and EPS estimates per First Call
2   Based on 59.0 million basic shares outstanding and 9.7 million options with a weighted average excercise price of $5.96; assumes treasury stock method to calculate FD shares outstanding

 

5


SECTION 2

 

Market Update

 


Price / Volume Performance

 

Han Solo’s stock performance for the last twelve months, six months, three months and one month are shown below

 

One Month

 

LOGO

 

Source: Factset

 

Three Month

 

LOGO

 

Six Month

 

LOGO

 

Source: Factset

 

Twelve Month

 

LOGO

 

Source: Factset

 

7


Han Solo Volume Traded Analysis

 

Last 6 Months1

 

Trading Statistics

 

Current Price

   $ 10.93

Trading Days

     126

Avg. Daily Volume

     703,088

Total Volume

     88,589,145

Float

     57,480,000

 

LOGO    LOGO

 

Stock Price Range

 

Volume Traded in Range

  2,220     20,618     22,129     15,242     8,022     4,702     7,535     6,756     1,365  

Cumulative Volume Traded
at or Below Range

  2.5 %   25.8 %   50.8 %   68.0 %   77.0 %   82.3 %   90.8 %   98.5 %   100.0 %

Source: Factset

 

Notes:

 

1   Total volume is assigned to the average of the high and low price of the day

 

8


Han Solo Volume Traded Analysis

 

Last 3 Months1

 

Trading Statistics

 

Current Price

   $ 10.93

Trading Days

     62

Avg. Daily Volume

     663,506

Total Volume

     41,137,366

Float

     57,480,000

 

LOGO

   LOGO

 

Stock Price Range

 

Volume Traded in Range

   4,439          41,237          25,880          10,719      

Cumulative Volume Traded at or Below Range

   5.4 %        55.5 %        87.0 %        100.0 %    

Source: Factset

 

Notes:

 

1   Total volume is assigned to the average of the high and low price of the day

 

9


Indexed Price Performance

 

Han Solo’s stock price performance relative to its peer group and broad market indices over the last twelve months is shown below

 

LTM 3/17/04

 

LOGO


 

Source: Factset

 

10


Summary of Research Analyst Estimates

 

The following provides an overview of analyst coverage of Han Solo

 

Current

 

Bank


 

Date


 

Rating


              Revenue ($mm)

  EBITDA ($mm)

  EPS

          Target Price

  2004

  2005

  2004

  2005

  2004

  2005

Aperion Group, LLC

  2/20/04   Buy   Hold   Sell   $ 10.00 - $12.00   $ 1,804.1   $ 1,966.2     NA     NA   $ 1.30   $ 1.40

Fulcrum

  1/30/04   Buy   Neutral   Sell     10.00     1,737.6     NA     NA     NA     1.33     NA

Southwest Securities

  1/30/04   Strong Buy   Neutral   Sell     17.00     1,734.9     NA     NA     NA     1.44     NA

Wedbush Morgan

  1/30/04   Buy   Hold   Sell     19.25     1,833.0     NA     NA     NA     1.40     NA

Wells Fargo Securities, LLC

  2/2/04   Buy   Hold   Sell     22.00     1,782.9     1,943.8     229.9     255.1     1.31     1.51
                Mean   $ 17.06   $ 1,778.5   $ 1,955.0   $ 229.9   $ 255.1   $ 1.36   $ 1.46
                Median     18.13     1,782.9     1,955.0     229.9     255.1     1.33     1.46
                High     22.00     1,833.0     1,966.2     229.9     255.1     1.44     1.51
                Low     10.00     1,734.9     1,943.8     229.9     255.1     1.30     1.40

Management Projections 2/24/04

                    $ 1,835.8   $ 2,071.3   $ 252.3   $ 277.0   $ 1.45   $ 1.68

 

Source: Select Wall Street research reports available as of March 5, 2004

 

One Year Ago

 

                              Revenue ($mm)

   EBITDA ($mm)

   EPS

Bank


   Date

   Rating

   Target Price

   2003

   2004

   2003

   2004

   2003

   2004

Wedbush Morgan

   1/31/03    Buy    Hold    Sell      22.00      1,755.0      NA      NA      NA      1.45      NA

Wells Fargo Securities, LLC

   1/24/03    Buy    Hold    Sell      26.00      1751.4      2,063.8      267.2      308.2      1.46      1.76
                    Mean    $ 24.00    $ 1,753.2    $ 2,063.8    $ 267.2    $ 308.2    $ 1.46    $ 1.76

 

Source: Select Wall Street research reports available as of March 5, 2003

 

11


Han Solo Guidance

 

Han Solo revised its guidance downward twice during 2003

 

2003 Fiscal Year EPS Guidance

 

 

LOGO


Note: Based on midpoint of given ranges

 

12


Han Solo Ownership Analysis

 

    

Basic

Shares Held


  

Market

Value (1)


   Percent (2)

 

Institutional Ownership:

                  

Fidelity Management & Research Co.

   6,560,380    $ 71,704,953    11.1 %

Wellington Management Co. LLP

   4,180,230      45,689,914    7.1 %

Barclays Global Investors, N.A.

   2,855,934      31,215,359    4.8 %

Boston Partners Asset Management LP

   2,743,945      29,991,319    4.7 %

Cramer Rosenthal McGlynn LLC

   2,436,140      26,627,010    4.1 %

Reich & Tang Asset Management LP

   2,306,900      25,214,417    3.9 %

Artisan Partners LP

   1,897,200      20,736,396    3.2 %

Mazama Capital Management, Inc.

   1,623,424      17,744,024    2.8 %

AIM Management Group, Inc.

   1,569,200      17,151,356    2.7 %

Vanguard Group

   1,352,664      14,784,618    2.3 %

OppenheimerFunds, Inc.

   1,306,900      14,284,417    2.2 %

INVESCO Funds Group, Inc.

   1,246,470      13,623,917    2.1 %

WM Advisors, Inc.

   1,046,500      11,438,245    1.8 %

PAR Capital Management, Inc.

   1,000,000      10,930,000    1.7 %

Essex Investment Management Co. LLC

   911,416      9,961,777    1.5 %

Top 15 Institutions

   33,037,303    $ 361,097,722    56.0 %

Other Institutions

   19,485,655      212,978,209    33.0 %

Total Institutional Ownership

   52,522,958    $ 574,075,931    89.0 %

Total Insider Ownership

   3,156,400      34,499,452    5.3 %

Retail and Others

   3,320,642      36,294,617    5.6 %

Total Basic Shares Outstanding

   59,000,000    $ 644,870,000    100.0 %

Float

   57,390,000      627,272,700    97.3 %

Management Ownership (3):

                  

Mark Wattles

   3,137,600    $ 34,293,968    5.3 %

Donald Ekman

   18,800      205,484    0.0 %

Total Management Ownership

   3,156,400    $ 34,499,452    5.3 %

Source: Factset

 

Note:

 

1   Based on 3/5/04 stock price
2   Percentage of basic shares outstanding
3   Excludes stock options. As of 12/31/02 Management held 5.8 million stock options of which 4.0 million options are held by the Company’s CEO

 

13


SECTION 3

 

Valuation Analysis

 

14


Valuation Methodology Overview

 

UBS employed several valuation methodologies

 

Comparable

Company Trading

Analysis

  

•      Determining the current public market value and trading multiples of companies similar to Han Solo

 

•      Comparing to current trading value and Luke Skywalker offer value for Han Solo

Discounted Cash

Flow Analysis

  

•      Determining the present value of the projected unlevered free cash flows of Han Solo utilizing a range of EBITDA exit multiple terminal values and discount rates

LBO Analysis   

•      Determining the maximum price a financial sponsor would pay for Han Solo based upon internal rate of return requirements and leverage constraints

Premiums Paid   

•      Determining the premiums paid by acquirers for past public market change of control acquisitions

 

•      Compare premiums paid in past retail transactions to the implied premium for Luke Skywalker’s offer for Han Solo

Comparable Transactions   

•      UBS did not utilize a comparable transactions valuation due to a lack of direct comparables data

 

15


Comparable Company Analysis

 

Han Solo’s closest comparable is Blockbuster based on size, strategy and markets served

 

Company Name


 

Price

3/17/04


 

Total

Enterprise

Value


 

Adj

Enterprise

Value1


 

Equity

Market

Value


 

LTM

Revenue


 

LTM

EBITDA


 

LTM

EBITDAR


 

LTM

EBITDA

Margin


    TEV / LTM

 

Adj. TEV /
LTM

EBITDAR2


  Price / EPS3

                  Revenue

  EBITDA

    CY 2004

  CY 2005

Blockbuster, Inc.

    17.67     3,212.4     7,830.7     3,225.9     5,911.7     717.6     1,294.9   12.1 %   0.5x   4.5x   6.0x   13.1x   11.9x

Movie Gallery Inc.

    19.75     628.8     1,439.2     682.5     692.4     109.4     210.7   15.8 %   0.9x   5.7x   6.8x   10.9x   9.6x

Netflix

    30.52     1,858.8     1,886.4     1,993.5     272.2     66.2     69.6   24.3 %   6.8x   28.1x   27.1x   24.0x   12.8x

Han Solo

  $ 10.93   $ 990.3   $ 2,750.5   $ 693.1   $ 1,682.5   $ 244.3   $ 464.3   14.5 %   0.6x   4.1x   5.9x   8.0x   7.6x

Han Solo (@ $13.50)

  $ 13.50   $ 1,158.9   $ 2,919.2   $ 861.7   $ 1,682.5   $ 244.3   $ 464.3   14.5 %   0.7x   4.7x   6.3x   9.9x   9.4x

Note:

 

1   Adj. TEV = Enterprise Value + (8 x Rent)
2   Rent based on 2002 rent expense / average store count applied to 2003 average store count
3   First Call consensus estimates

 

16


Projected Financial Performance

 

     2003

    2004E1

    2005E1

    2006E1

    2007E2

    2008E2

 

Revenue:

                                                

Video Rental

   $ 1,386.6     $ 1,434.2     $ 1,545.0     $ 1,645.2     $ 1,743.1     $ 1,840.9  

Video Purchases

     115.8       122.4       131.7       140.2       148.5       156.9  

Total Video Revenue

     1,502.4       1,556.6       1,676.7       1,785.4       1,891.6       1,997.8  

Game Crazy

     180.1       279.2       394.6       586.8       654.3       745.0  

Total Revenue

   $ 1,682.5     $ 1,835.8     $ 2,071.3     $ 2,372.2     $ 2,545.9     $ 2,742.9  

EBITDA:

                                                

Video

   $ 262.3     $ 263.9     $ 277.3     $ 293.6     $ 304.4     $ 314.5  

Game Crazy

     (15.9 )     (11.6 )     (0.3 )     0.7       12.8       28.0  

Special Charges3

     (2.1 )     —         —         —         —         —    

Total EBITDA (after dep. of Rental Product)

   $ 244.3     $ 252.3     $ 277.0     $ 294.3     $ 317.2     $ 342.5  

Capital Expenditures (excl. CapEx related to inventory)

   $ 94.1     $ 91.2     $ 97.7     $ 73.1     $ 55.7     $ 55.7  

Depreciation and Amortization

     60.8       67.0       68.6       78.1       78.1       78.1  

Video Same Store Sales Growth

     —         (1.3 )%     0.6 %     0.9 %     0.7 %     0.6 %

Game Crazy Store Sales Growth

     —         12.7 %     5.2 %     23.8 %     3.9 %     7.1 %

End of Period Stores

                                                

Y-o-Y Revenue Growth:

                                                

Video Rental

     —         3.4 %     7.7 %     6.5 %     5.9 %     5.6 %

Video Purchases

     —         5.7 %     7.6 %     6.5 %     5.9 %     5.6 %

Total Video

     —         3.6 %     7.7 %     6.5 %     5.9 %     5.6 %

Game Crazy

     —         55.0 %     41.4 %     48.7 %     11.5 %     13.9 %

Total

     —         9.1 %     12.8 %     14.5 %     7.3 %     7.7 %

Y-o-Y EBITDA Growth:

                                                

Total Video

     —         0.6 %     5.1 %     5.9 %     3.7 %     3.3 %

Game Crazy

     —         (26.8 )%     NM       NM       1805.1 %     118.3 %

Total

     —         3.3 %     9.8 %     6.2 %     7.8 %     8.0 %

EBITDA Margin

                                                

Total Video

     17.5 %     17.0 %     16.5 %     16.4 %     16.1 %     15.7 %

Game Crazy

     (8.8 )%     (4.2 )%     (0.1 )%     0.1 %     2.0 %     3.8 %

Total EBITDA

     14.5 %     13.7 %     13.4 %     12.4 %     12.5 %     12.5 %

Note:

 

1   Management projections assuming the Company continues to operate as a public company
2   Projections prepared by UBS M&A Team utilizing management assumptions
3   Restructuring charge adjustments

 

17


Discounted Cash Flow

 

Present value as of March 31, 2004 based on management estimates

 

DCF VALUATION


  

2004

Q2 - Q4


    2005E

    2006E

    2007E

    2008E

 

Tax effected EBIT

   $ 77.5     $ 125.1     $ 129.7     $ 143.4     $ 158.6  

Plus: Depreciation and Amortization

     51.3       68.6       78.1       78.1       78.1  

Less: Capital Expenditures (excluding rental inventory)

     (79.8 )     (97.7 )     (73.1 )     (55.7 )     (55.7 )

Plus: Rental Product Depreciation

     137.6       203.8       215.7       228.5       241.4  

Less: Acquisition of Rental Inventory

     (155.3 )     (217.8 )     (229.8 )     (242.5 )     (255.2 )

Less: Working Capital Investment

     19.3       (14.6 )     (0.6 )     (0.1 )     (2.5 )

Unlevered Free Cash Flow

     50.6       67.4       120.0       151.8       164.7  

 

Total Enterprise Value1

 

Discount

 Rate2


   Terminal Multiple

   3.50x

   3.75x

   4.00x

   4.25x

   4.50x

12.0%

   $ 1,141.2    $ 1,191.2    $ 1,241.2    1,291.2    1,341.1

12.5%

     1,121.0      1,169.9      1,218.9    1,267.8    1,316.7

13.0%

     1,101.3      1,149.2      1,197.1    1,245.0    1,292.9

13.5%

     1,082.0      1,128.9      1,175.8    1,222.8    1,269.7

14.0%

     1,063.2      1,109.1      1,155.1    1,201.0    1,247.0

Note:

1   Based on projected net debt of $288 million as of 3/31/04
2   Tax assets valued at discount rate + 200bps

 

Implied Share Price1

 

Discount

 Rate2


   Terminal Multiple

   3.50x

   3.75x

   4.00x

   4.25x

   4.50x

12.0%

   $ 13.39    $ 14.17    $ 14.96    $ 15.74    $ 16.52

12.5%

     13.07      13.84      14.61      15.37      16.14

13.0%

     12.76      13.51      14.27      15.02      15.77

13.5%

     12.46      13.20      13.93      14.67      15.40

14.0%

     12.16      12.89      13.61      14.33      15.05

Note:

 

1   Based on 63.8 million shares outstanding
2   Tax assets valued at discount rate + 200bps

 

18


Preliminary LBO Analysis

 

UBS has analyzed the internal rates of return generated for a purchase of Han Solo assuming a range of purchase prices and leverage multiples

 

TRANSACTION ASSUMPTIONS

 

  Based on management estimates

 

  100% of cash flow used for debt repayment

 

  Interest rates

 

    Bank Debt—L+300

 

    High Yield Notes—10.0%

 

Sensitivity Analysis

 

  Assumes purchase multiple (without fees and expenses) and exit multiples are equal

 

Purchase Multiple:1

     4.02x       4.28x       4.54x       4.67x       4.80x       5.06x       5.32x       5.58x  

Purchase Multiple:2

     4.38x       4.64x       4.89x       5.02x       5.15x       5.41x       5.67x       5.93x  

Purchase Price:

   $ 11.00     $ 12.00     $ 13.00     $ 13.50     $ 14.00     $ 15.00     $ 16.00     $ 17.00  

Initial Leverage3

   3.50x
3.75x
4.00x
4.25x
4.50x
    
 
 
 
 
33.3
38.5
46.5
61.5
111.9
%
%
%
%
%
   
 
 
 
 
29.6
33.1
38.1
45.8
59.6
%
%
%
%
%
   
 
 
 
 
26.9
29.5
32.9
37.7
45.0
%
%
%
%
%
   
 
 
 
 
25.8
28.1
31.0
35.0
40.7
%
%
%
%
%
   
 
 
 
 
24.8
26.8
29.4
32.7
37.4
%
%
%
%
%
   
 
 
 
 
23.1
24.7
26.7
29.2
32.4
%
%
%
%
%
   
 
 
 
 
21.6
22.9
24.5
26.5
28.9
%
%
%
%
%
   
 
 
 
 
20.4
21.5
22.8
24.3
26.2
%
%
%
%
%

 

  Assumes exit multiple is 0.5x below purchase multiple (without fees and expenses)

 

Purchase Multiple:1

     4.02x       4.28x       4.54x       4.67x       4.80x       5.06x       5.32x       5.58x  

Exit Multiple:

     3.52x       3.78x       4.04x       4.17x       4.30x       4.56x       4.82x       5.08x  

Purchase Price:

   $ 11.00     $ 12.00     $ 13.00     $ 13.50     $ 14.00     $ 15.00     $ 16.00     $ 17.00  

Initial Leverage3

   3.50x
3.75x
4.00x
4.25x
4.50x
    
 
 
 
 
28.3
32.7
39.8
53.2
99.6
%
%
%
%
%
   
 
 
 
 
25.1
28.2
32.5
39.2
51.7
%
%
%
%
%
   
 
 
 
 
22.9
25.1
28.1
32.2
38.6
%
%
%
%
%
   
 
 
 
 
22.0
23.9
26.4
29.9
34.9
%
%
%
%
%
   
 
 
 
 
21.2
22.9
25.1
28.0
32.0
%
%
%
%
%
   
 
 
 
 
19.7
21.1
22.8
24.9
27.7
%
%
%
%
%
   
 
 
 
 
18.6
19.7
21.0
22.6
24.7
%
%
%
%
%
   
 
 
 
 
17.5
18.4
19.5
20.8
22.4
%
%
%
%
%

Note:

 

1   Multiple of LTM EBITDA as of 3/31/04. Excludes M&A, financing and tender fees
2   Multiple of LTM EBITDA as of 3/31/04. Includes M&A, financing and tender fees
3   Based on LTM EBITDA $246.0 as of 3/31/04. Excludes $50 million of cash which remains on the balance sheet

 

19


Premiums Paid Analysis

 

Premiums paid in selected retail transactions over the last three years are:

 

Date

Announced


 

Date

Effective


 

Target Name


 

Acquiror Name


 

Transaction

Value


  Purchase Premium

 
          1 day

    1 week

    1 Month

 
02/11/99   03/22/99   Fingerhut Cos Inc   Federated Department Stores   1,544.1   32.9 %   22.7 %   40.9 %
03/04/99   06/01/99   K&G Men’s Center Inc   Men’s Wearhouse Inc   118.3   37.4 %   45.5 %   44.9 %
05/10/99   07/30/99   Pamida Holdings Corp   ShopKo Stores Inc   372.3   27.8 %   55.9 %   253.9 %
07/05/99   08/11/99   General Nutrition Cos Inc   Koninklijke Numico NV   2,506.4   9.3 %   13.8 %   39.4 %
07/14/99   11/22/99   Egghead.com Inc   ONSALE Inc   328.3   5.4 %   5.9 %   27.9 %
07/26/99   09/02/99   Host Marriott Services   Autogrill SpA   547.3   61.5 %   73.8 %   101.6 %
08/18/99   07/31/00   Hannaford Bros Co   Food Lion Inc   3,713.0   24.0 %   40.4 %   40.9 %
11/15/99   01/31/00   Catherines Stores Corp   Charming Shoppes Inc   153.6   69.7 %   71.4 %   52.7 %
11/22/99   02/02/00   Garden Ridge Corp   GR Acquisition Corp   144.4   58.6 %   65.8 %   70.4 %
12/21/99   02/03/00   Micro Warehouse Inc   Investor Group   679.9   24.6 %   51.2 %   47.6 %
01/25/00   03/10/00   CompUSA Inc   Grupo Sanborns(Grupo Carso)   805.3   6.3 %   85.8 %   92.4 %
02/10/00   05/01/00   uBID Inc   CMGI Inc   396.7   18.7 %   22.1 %   18.7 %
04/06/00   06/19/00   Funco Inc   Babbage’s Etc LLC   162.9   108.4 %   80.0 %   126.3 %
04/07/00   08/01/00   Seaway Food Town Inc   Spartan Stores Inc   108.0   1.1 %   (4.8 )%   (30.8 )%
05/17/00   10/02/00   Petco Animal Supplies Inc   Investor Group   589.4   49.8 %   70.0 %   90.3 %
06/05/00   09/28/00   Buffets Inc   Investor Group   646.8   14.2 %   27.4 %   23.1 %
07/03/00   08/11/00   David’s Bridal Inc   May Department Stores Co   412.8   73.0 %   58.4 %   66.7 %
07/10/00   10/02/00   Barnett Inc   Interline Brands   214.0   25.2 %   35.3 %   29.9 %
07/20/00   09/01/00   CDNow Inc   Bertelsmann AG   138.4   4.4 %   20.0 %   4.4 %
08/11/00   10/01/00   Piercing Pagoda Inc   Zale Corp   265.6   34.4 %   47.6 %   49.6 %
09/07/00   04/26/01   Delhaize America Inc   Etablissements Delhaize Freres   1,825.0   15.5 %   22.8 %   19.3 %
10/06/00   12/20/00   Taco Cabana Inc   Carrols Corp   151.4   117.5 %   109.6 %   103.0 %
12/07/00   02/01/01   Musicland Stores Corp   Best Buy Co Inc   418.7   22.4 %   93.1 %   59.4 %
02/06/01   04/05/01   Morrison Management Specialist   Compass Group PLC   572.9   20.9 %   21.2 %   25.6 %
02/15/01   05/14/01   VICORP Restaurants Inc   Investor Group   178.8   35.9 %   34.6 %   50.9 %
02/22/01   04/06/01   Sunglass Hut International Inc   Luxottica Group Spa   715.0   38.4 %   36.3 %   65.8 %
06/04/01   08/01/01   Sound Advice Inc   Tweeter Home Ent Group Inc   174.1   91.7 %   116.3 %   149.1 %
08/07/01   11/28/01   Discount Auto Parts Inc   Advance Auto Parts   284.9   19.7 %   29.3 %   58.9 %
01/25/02   04/10/02   Shoney’s Inc   Lone Star Fund   245.2   (7.7 )%   16.1 %   28.6 %
05/13/02   06/17/02   Lands’ End Inc   Sears Roebuck & Co   1,933.2   78.9 %   81.5 %   110.5 %
02/19/03   08/04/03   Sports Authority Inc   Gart Sports Co   189.1   (0.5 )%   5.2 %   (27.3 )%
07/14/03   12/09/03   OfficeMax Inc   Boise Cascade Corp   1,366.1   46.9 %   53.5 %   59.6 %
            Median:       26.5 %   43.0 %   50.2 %
            High:       117.5 %   116.3 %   253.9 %
            Low:       (7.7 )%   (4.8 )%   (30.8 )%
            Han Solo @ $13.50       23.5 %   18.5 %   20.8 %

 

Source: SDC - Retail transactions of value more than $100 million, announced and closed between 3/1/99 and 3/1/04

 

20