Exhibit (c)(12)
December 13, 2013 Fairness Opinion Materials Regarding: Project WILDCATS Strictly Private & Confidential |
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I. Transaction Summary II. TIGER Overview III. LION Overview IV. Pro Forma Analysis V. Appendix |
I. Transaction Summary |
Transaction Summary & Multiples Consideration: Structure: LION Fund Holdings L.P. to acquire 100% of TIGER shares which would operate as a subsidiary with TIGER’s existing perpetual preferred and debt obligations remaining outstanding at the TIGER level 0.510 exchange ratio 100% Units, with any gains taxable Aggregate consideration to TIGER shareholders of $2,533(1) million Per share consideration to TIGER shareholders of $12.37(1)(2) Pro Forma Ownership: TIGER shareholders will own approximately 12.7% of the fully diluted combined company 1. Based on LION closing price of $24.25 on 12/12/13 2. Based on fully diluted shares of 204,824,159 (excludes anti-dilutive effect of options with a weighted-average strike price of $20.00) 3. See page 13 4. See page 14 Source: SNL Financial and company documents 1. Based on common shares outstanding of 204,824,159 2. 7 Affiliated-Party transactions 3. 11 Asset Vehicle transactions Source: SNL Financial and company filings ($ in millions, Except Per Share) TIGER Per Share Information Proposed Transaction Median Multiples for Affiliated-Party Transactions (3) Median Multiples for Asset Vehicle Transactions (4) Per Share Transaction Value (1) - $12.37 - - Implied Aggregate Transaction Value (1)(2) - $2,533 - - Price / Book $10.42 1.19x - 1.03x Premium to Current Share Price $9.19 34.6% 23.7% 8.4% |
II. TIGER Overview |
TIGER Historical Financial Performance Note: Balance sheet as of GAAP 1. Includes common stock, AOCI and accumulated deficit Source: SNL Financial and company filings ($ in thousands, except per share amounts) 9 Mos. Ended 9 Mos. Ended 2010 2011 2012 9/30/2012 9/30/2013 Total Revenue $505,359 $542,021 $555,473 $421,818 $406,396 Net Income 371,064 318,072 348,230 271,217 224,354 EPS (Diluted) $2.32 $1.75 $1.87 $1.48 $1.01 ROAA 4.4% 3.7% 4.1% 4.2% 3.5% ROAE 28.3% 18.7% 19.7% 20.0% 12.9% Book Value Per Share $9.24 $9.41 $10.31 $10.09 $10.42 Debt / Equity 4.0x 4.0x 3.5x 3.5x 2.3x Assets Cash and cash equivalents 313,829 392,154 237,606 331,366 221,986 Restricted cash and cash equivalents 571,425 399,620 896,396 735,099 509,688 Corporate loans, net of allowance for loan losses 6,321,444 6,443,399 5,947,857 5,845,421 6,153,072 Total assets $8,418,412 $8,647,228 $8,358,879 $8,255,152 $8,471,991 Liabilities Collateralized loan obligation secured notes 5,630,272 5,540,037 5,122,338 5,013,433 4,903,438 Total liabilities $6,775,364 $6,971,396 $6,519,757 $6,454,727 $5,976,939 Shareholders' equity Preferred Stock 0 0 0 0 361,622 Common Stock (1) 1,643,048 1,675,832 1,839,122 1,800,425 2,133,430 Total shareholders' equity 1,643,048 1,675,832 1,839,122 1,800,425 2,495,052 Total liabilities and shareholders' equity $8,418,412 $8,647,228 $8,358,879 $8,255,152 $8,471,991 Distributions Per Share $0.43 $0.67 $0.86 $0.65 $0.68 |
TIGER One Year Stock Performance TIGER One Year Price and Volume TIGER One Year Comparative Price Appreciation Market data as of December 12, 2013 Source: SNL Financial 124% 88% 102% 105% High: $11.67 Low: $9.11 VWAP: $10.57 |
TIGER Three Year Stock Performance TIGER Three Year Comparative Price Appreciation TIGER Three Year Price and Volume Market data as of December 12, 2013 Source: SNL Financial 89% 143% 101% 99% High: $11.67 Low: $7.05 VWAP: $9.72 |
TIGER Three Year Premium to Book Value Performance Quarterly Book Value Per Share and P / BV Multiples Since January 1, 2011 Pricing as of 12/12/13 Source: SNL Financial 0.00x 0.25x 0.50x 0.75x 1.00x 1.25x $0.00 $3.00 $6.00 $9.00 $12.00 $15.00 12/31/10 03/31/11 06/30/11 09/30/11 12/31/11 03/31/12 06/30/12 09/30/12 12/31/12 03/31/13 06/30/13 09/30/13 Book Value Per Share Price/Book Price / Book Value Ratios High 1.23x Low 0.71x Mean 0.99x Median 1.00x |
TIGER Comparable Group Analysis Note: Financial data as of MQR and LTM for ROE; pricing data as of December 12, 2013 1. Dividend yield computed as most recent quarterly dividend annualized divided by closing share price 2. Compass Point estimates are excluded Source: SNL Financial ($ in millions except share price) Valuation Price/ Total Return 2013 2014 2015 Current Share Market Total LTM Est. Est. Est. Dividend Three One Price Cap Assets ROE NAV EPS EPS EPS Yield (1) Month Year Company Ticker ($) ($mm) ($mm) (%) (x) (x) (x) (x) (%) (%) (%) Business Development Companies Ares Capital Corporation ARCC 17.32 5,119 7,754 12.9 1.06 10.6 10.5 9.7 8.8 2.1 10.6 Prospect Capital Corporation PSEC 11.07 3,146 4,784 10.2 1.03 8.7 8.8 8.8 12.0 (0.5) 16.3 Apollo Investment Corporation AINV 8.64 1,942 3,140 8.0 1.04 9.8 10.0 9.4 9.3 6.2 15.2 Main Street Capital Corporation MAIN 31.75 1,262 1,239 15.3 1.59 15.8 14.0 NA 6.2 8.4 18.9 Fifth Street Finance Corp. FSC 9.01 1,254 2,072 9.3 0.92 8.8 8.5 7.6 11.1 (12.4) (4.6) Hercules Technology Growth Capital, Inc. HTGC 16.73 1,033 1,228 17.2 1.61 13.7 12.9 12.1 7.4 14.7 71.7 Solar Capital Ltd. SLRC 22.52 997 1,256 7.2 1.01 11.9 12.8 11.9 7.1 2.3 8.1 PennantPark Investment Corporation PNNT 11.72 780 1,153 13.3 1.12 18.3 10.3 NA 9.6 3.3 20.9 Triangle Capital Corporation TCAP 27.90 772 807 18.5 1.75 12.4 12.1 NA 7.7 (2.2) 22.1 Golub Capital BDC, Inc. GBDC 18.42 797 1,092 9.1 1.21 14.0 12.7 11.6 6.9 8.0 26.9 Blackrock Kelso Capital Corporation BKCC 9.60 714 1,194 9.1 1.02 10.8 9.9 10.0 10.8 0.6 7.7 New Mountain Finance Corporation NMFC 14.89 672 548 12.5 1.04 9.7 10.8 NA 9.1 3.1 13.7 TICC Capital Corp. TICC 10.53 562 1,022 12.6 1.06 10.0 9.3 9.2 11.0 7.8 17.2 THL Credit, Inc. TCRD 16.20 549 598 10.7 1.21 11.2 11.3 10.8 8.4 7.1 26.1 Medley Capital Corporation MCC 13.96 561 776 10.2 1.10 12.2 8.6 8.5 10.6 5.1 12.9 TCP Capital Corp. TCPC 16.49 512 729 9.0 1.09 10.1 10.0 NA 8.7 6.3 26.4 Median 15.55 789 1,173 10.5 1.08 11.0 10.4 9.7 9.0 4.2 16.7 Mean 16.05 1,292 1,837 11.6 1.18 11.8 10.8 10.0 9.1 3.7 19.4 Business Development Companies - Senior / Floating Funds Solar Senior Capital Ltd. SUNS 18.21 210 286 4.0 1.02 15.5 13.5 12.6 7.7 2.2 8.7 PennantPark Floating Rate Capital PFLT 13.73 205 329 9.0 0.97 12.2 12.0 NA 7.9 4.2 16.1 Oxford Lane Capital Corporation OXLC 16.98 130 146 9.5 1.05 13.6 11.4 NA 14.1 7.5 19.5 Fifth Street Senior Floating Rate Corp. FSFR 13.39 89 101 NA 0.88 41.8 12.4 NA 6.0 (1.3) (1.3) Median 15.36 167 216 9.0 1.00 14.5 12.2 12.6 7.8 3.2 12.4 Mean 15.58 159 215 7.5 0.98 20.8 12.3 12.6 8.9 3.2 10.7 TIGER TIGER 9.19 1,882 8,472 13.5 0.88 7.2 (2) 8.8 (2) 8.0 9.6 (8.5) (4.3) |
Research Analysts’ Views, Price Targets and Recommendations 1. Mean excludes Compass Point estimates as they are dated Source: SNL Financial, Bloomberg and FactSet Analyst Recommendations Mean Analyst Estimates(1) 4 Analysts (66.7%) 2 Analysts (33.3%) Buy Hold $1.27 $1.05 2013 2014 Stephens John Hecht Overwei ght $12.50 $1.38 $1.06 10/24/2013 Compass Poi nt Jason Stewart Buy $12.00 $1.62 $1.63 7/26/2013 JefferiesDani el Furtado Hol d $12.00 $1.27 $1.11 10/24/2013 Deutsche Bank Stephen Laws Buy $11.50 $1.25 $1.01 10/24/2013 FBR Capi tal Markets Scott Valentin Hold $10.50 $1.25 $1.07 10/24/2013 Wel ls Fargo Securi ties Joel Houck Buy NA $1.21 $1.00 10/24/2013 |
TIGER Share Buyback Analysis Note: Assumes 7.50% coupon debt is issued for share buyback 1. Mean analyst estimate for TIGER is 2014E multiplied by EPS LTGR of 10% Source: SNL Financial TIGER $200 Million Share Buyback - 2015 Impact Stand-Alone $9.19 $9.25 $9.50 $9.75 $10.00 TIGER 2015 EPS (1) $1.16 $1.21 $1.21 $1.21 $1.20 $1.20 Accretion / (Dilution) ($) - $0.06 $0.05 $0.05 $0.05 $0.04 (%) - 4.8% 4.7% 4.4% 4.1% 3.8% TIGER Pro Forma Book Value (As of September 30, 2013) $10.42 $10.56 $10.55 $10.52 $10.49 $10.46 Accretion / (Dilution) ($) - $0.14 $0.13 $0.10 $0.07 $0.04 (%) - 1.4% 1.3% 1.0% 0.7% 0.4% |
Comparable Transactions: Affiliated-Party Financial Services 1. When a range of values is expressed the analysis assumes that the mid-point of the range is used for purposes of any calculations Source: SNL Financial, Thompson IB, SEC filings Annc. Date Buyer Target Deal Value ($ mm) Stock Price Before Initial Offer or Rumor Initial Offer 1 Final Offer Total Rounds of Offers Initial Premium to Initial Stock Price Final Premium to Initial Stock Price Increase to Initial Offer 11/12/2012 Annaly Capital Management Inc CreXus Investment Corp $876 $11.10 $12.50 $13.05 4 12.6% 17.6% 4.4% 11/12/2012 Leucadia National Corp Jefferies Group Inc $2,924 $14.27 $16.46 $17.66 2 15.4% 23.7% 7.3% 10/13/2008 Banco Santander SA Sovereign Bancorp Inc $1,910 $3.81 $3.81 $3.81 1 0.0% 0.0% 0.0% 08/12/2008 Bank of Tokyo-Mitsubishi UFJ Ltd UnionBanCal Corp,CA $3,808 $53.02 $58.00 $73.50 3 9.4% 38.6% 26.7% 03/10/2008 Nationwide Mutual Insurance Co Nationwide Finl Svcs Inc $2,471 $40.00 $47.20 $52.25 3 18.0% 30.6% 10.7% 07/17/2007 Alfa Mutual Alfa Corp $833 $15.20 $17.60 $22.00 5 15.8% 44.7% 25.0% 11/20/2006 Toronto-Dominion Bank TD Banknorth Inc $3,201 $28.81 $32-34 $32.33 6 14.5% 12.2% (2.0%) Mean 3.4 12.2% 23.9% 10.3% Median 3.0 14.5% 23.7% 7.3% -- LION TIGER $2,533 $10.00 $10.56 $12.37 4 5.6% 23.7% 17.1% |
Comparable Transactions: Asset Vehicles 1. Represents offer premium to share price 2. Represents offer premium to NAV or book, as the case may be, per share 3. Indicates internally managed investment vehicle Source: SNL Financial Date Target Premium on Premium to Announced Target Type Buyer Type Announcement 1 NAV/Book 2 % Stock % Cash 10/22/13 Cole Real Estate Investments, Inc. Net Lease American Realty Capital Properties, Inc. REIT 3 13.8% 23.0% 81% 19% 09/04/13 Thomas Properties Group, Inc. Office Parkway Properties, Inc. REIT 3 12.0% NM 100% 0% 06/03/13 Colonial Properties Trust Apartment Mid-America Apartment Communities, Inc. REIT 3 0.7% (8.4)% 100% 0% 05/28/13 CapLease, Inc. Net Lease American Realty Capital Properties, Inc. REIT 3 19.7% 16.9% 0% 100% 01/30/13 CreXus Investment Corp. Mortgage Annaly Capital Management, Inc. REIT 3 17.1% NM 0% 100% 09/06/12 American Realty Capital Trust, Inc. Net Lease Realty Income Corporation REIT 3 2.2% 13.3% 97% 3% 07/02/12 Conversus Capital PE Interests HarbourVest Partners PE PCV 5.0% (18.7)% >50.1% <49.9% 12/24/11 Cogdell Spencer Inc. Healthcare / Medical Office Ventas, Inc. REIT 3 8.4% (20.0)% 0% 100% 04/21/11 Absolute Private Equity PE Fund of Funds HarbourVest Partners PE PCV 1.5% (28.6)% 0% 100% 02/27/11 Nationwide Health Properties, Inc. Healthcare Ventas, Inc. REIT 3 15.5% 56.3% 100% 0% 01/30/11 ProLogis Industrial AMB Property Corporation REIT 3 (0.2)% NM 100% 0% Mean 8.7% 4.2% Median 8.4% 2.5% -- TIGER -- LION -- 34.6% 18.7% 100% 0% |
TIGER Valuation Analysis TIGER 2013 and 2014 estimated earnings per share based on mean analysts’ estimate 2015 – 2017 estimated earnings per share based on 10% mean analysts’ long-term growth estimate Quarterly dividend of $0.22 per share based on TIGER management guidance Source: SNL Financial, Ibbotson and Bloomberg Calculation of Discount Rate: 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 10 Year Treasury Bond 2.88% Net Income $260 $215 $237 $260 $286 2 Year Beta of Stock 87.00% Earnings Per Share $1.27 $1.05 $1.16 $1.27 $1.40 Equity Risk Premium 5.70% Dividends $0.88 $0.88 $0.88 $0.88 $0.88 Discount Rate 7.84% Tangible Book Value $10.44 $10.61 $10.89 $11.28 $11.79 Present Value per Share Based on Dividend Yield; Net Present Value for Period Ending 12/2017 $10.95 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% Assumptions: 7.0% 13.45 12.17 11.17 10.37 9.72 9.17 Stock Price as of 12/12/2013 $9.19 7.8% 13.18 11.92 10.95 10.17 9.53 9.00 Projected Quarterly Distributions $0.22 Discount 8.0% 13.13 11.88 10.91 10.13 9.50 8.97 Discount Rate 7.84% Rate 9.0% 12.81 11.60 10.66 9.90 9.28 8.77 Shares Outstanding in 2017 (mm) 205 10.0% 12.51 11.33 10.41 9.68 9.08 8.58 11.0% 12.22 11.07 10.18 9.46 8.88 8.39 12.0% 11.94 10.82 9.95 9.25 8.69 8.21 Present Value per Share Based on Dividend Yield and a Discount rate of 7.85%; Net Present Value for Period Ending 12/2017 $10.95 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% (25.0%) 9.88 8.94 8.21 7.63 7.15 6.75 Under Consensus (20.0%) 10.54 9.54 8.76 8.14 7.63 7.20 (15.0%) 11.20 10.14 9.31 8.64 8.10 7.65 (10.0%) 11.86 10.73 9.85 9.15 8.58 8.10 (5.0%) 12.52 11.33 10.40 9.66 9.06 8.55 Match Consensus 0.0% 13.18 11.92 10.95 10.17 9.53 9.00 5.0% 13.84 12.52 11.50 10.68 10.01 9.45 10.0% 14.49 13.12 12.04 11.19 10.49 9.90 15.0% 15.15 13.71 12.59 11.70 10.96 10.35 Exceed Consensus 20.0% 15.81 14.31 13.14 12.20 11.44 10.80 25.0% 16.47 14.90 13.69 12.71 11.91 11.25 Present Value per Share Based on Tangible Book Value; Net Present Value for Period Ending 12/2017 $8.72 80% 90% 100% 110% 120% 130% 7.0% 7.20 8.10 9.00 9.90 10.80 11.70 7.8% 6.98 7.85 8.72 9.59 10.46 11.34 Discount 8.0% 6.93 7.80 8.67 9.54 10.40 11.27 Rate 9.0% 6.68 7.52 8.35 9.19 10.03 10.86 10.0% 6.44 7.25 8.05 8.86 9.67 10.47 11.0% 6.21 6.99 7.77 8.55 9.32 10.10 |
III. LION Overview |
LION Historical Financial Performance Note: Balance sheet based on GAAP Source: SNL Financial and company filings ($ in millions, except per share amounts) 9 Mos. Ended 9 Mos. Ended 2010 2011 2012 9/30/2012 9/30/2013 Fee Related Earnings $318 $417 $320 $234 $292 Economic Net Income (ENI) 2,140 751 2,131 1,783 1,406 ENI / Unit $2.83 $0.73 $2.90 $2.42 $1.90 ROAA 22.9% 2.2% 18.7% 20.5% 13.4% ROAE 24.6% 2.4% 20.3% 22.3% 14.8% AUM $60,998 $59,009 $75,528 $66,279 $90,169 Fee Paying AUM $46,011 $46,397 $60,846 $50,266 $73,612 Assets Cash and cash equivalents 1,435 1,774 1,818 1,603 1,549 Investments $36,450 $37,495 $40,698 40,941 44,263 Total assets $38,391 $40,378 $44,426 $43,649 $48,160 Total liabilities $2,391 $2,693 $3,021 $3,008 $4,652 Total shareholders' equity 36,000 37,409 40,943 40,168 42,934 Total liabilities and shareholders' equity $38,391 $40,378 $44,426 $43,649 $48,160 Total Distributable Earnings - $783 $1,449 $903 $946 Total Distributions / Unit $0.60 $0.74 $1.22 $0.52 $0.92 |
LION Comparable Group Analysis % of Publicly Fully LTM Implied Closing 52 Week Floated Diluted Enterprise Current 2015E AUM Price / Economic Net Income ENI Growth Price High Market Cap Market Cap Value AUM Dividend Growth ADTV 2012 Adj 2013E 2014E 2015E 12Adj-13 13-14 Company Name Ticker ($) (%) ($M) ($M) ($M) ($M) Yield (%) ($M) (x) (x) (x) (x) (%) (%) Alternative Asset Managers Apollo Global Management, LLC APO 29.70 $ 85% 4,268 $ 11,173 $ 13,038 $ 112,687 $ 7.5% 3% 25.6 $ 7.8x 6.8x 9.7x 9.9x 14% (30%) The Blackstone Group, L.P. BX 28.97 98% 16,490 33,190 40,800 248,065 6.9% 21% 105.5 16.4x 12.3x 9.9x 8.4x 33% 24% The Carlyle Group, L.P. CG 32.88 87% 1,621 10,239 10,306 185,024 7.0% 18% 12.3 13.9x 13.1x 10.7x 9.6x 6% 22% Fortress Investment Group, LLC FIG 8.52 94% 2,041 4,167 4,170 57,971 6.8% 13% 8.6 16.4x 11.1x 10.5x 9.3x 48% 5% Oaktree Capital Group, LLC OAK 54.94 92% 2,101 8,299 8,580 79,818 8.2% (1%) 12.0 13.6x 9.3x 11.4x 11.8x 47% (18%) Och-Ziff Capital Management Group OZM 14.53 100% 2,322 6,708 6,882 37,808 8.9% 21% 10.9 12.3x 10.0x 10.6x 10.0x 24% (6%) Maximum 100% 8.9% 21% 105.5 $ 16.4x 13.1x 11.4x 11.8x 48% 24% Median 93% 7.3% 15% 12.1 13.8x 10.5x 10.6x 9.7x 28% (1%) Mean 93% 7.6% 12% 29.2 13.4x 10.4x 10.5x 9.8x 29% (0%) Minimum 85% 6.8% (1%) 8.6 7.8x 6.8x 9.7x 8.4x 6% (30%) LION LION 24.25 98% 6,987 17,545 16,716 98,169 6.3% 36% 42.1 8.4x 9.9x 9.8x 8.9x (15%) 0% (1) Blackstone's fully diluted shares equal to "Economic Net Income Adjusted Units". (2) AUM pro forma for pending Avoca acquisition Notes: Publicly Floated Market Cap is calculated as total common shares outstanding times closing stock price. Fully Diluted Market Cap is calculated as (total common shares outstanding, plus any assumed exchangeable units or other ownership converted to common stock, plus the amount of any other in-the-money instruments which are convertible to common stock, such as stock options/awards, restricted stock and non-voting participating preferred stock) times closing stock price. Enterprise Value equal to Fully Diluted Market Cap, less cash & equivalents (including marketable securities), plus total debt, plus minority interest. Source: Company filings, Bloomberg, Sandler O'Neill analysis (1) (2) |
LION One Year Stock Performance LION One Year Price and Volume LION Comparative Price Appreciation Market data as of December 12, 2013 Source: SNL Financial 124% 172% 176% High: $24.74 Low: $13.85 VWAP: $19.57 |
LION Three Year Stock Performance LION Three Year Price and Volume LION Three Year Comparative Price Appreciation Market data as of December 12, 2013 Source: SNL Financial 143% 181% 171% High: $24.74 Low: $19.33 VWAP: $16.54 |
Research Analysts’ Views, Price Targets and Recommendations Source: Bloomberg and FactSet Analyst Recommendations Mean Analyst Estimates 8 Analysts (66.7%) 4 Analysts (33.3%) Buy Hold $2.46 $2.47 2013 2014 Sterne, Agee & Leach Jason Weyeneth Buy $28.00 $2.49 $2.57 10/25/2013 Citi Will i am Katz Buy $28.00 $2.56 $2.26 10/25/2013 Sandler O'Nei l l Michael Ki m Buy $27.00 $2.46 $2.33 10/25/2013 Morgan Stanley Matthew Kell ey Equal Weight $27.00 $2.47 $2.42 11/13/2013 Bank of America Michael Carrier Buy $26.00 $2.48 $2.40 11/8/2013 Keefe, Bruyette & Woods Robert Lee Outperform $26.00 $2.51 $2.75 10/25/2013 Goldman Sachs Marc Irizarry Buy / Neutral $26.00 $2.77 $2.83 10/24/2013 Evercore Partners Warren Gardi ner Equalwieght $25.00 $2.39 $2.36 10/24/2013 Oppenhei mer & Co Chri stopher Kotowskim Outperform $25.00 $1.83 $1.99 10/24/2013 BMO Capital Markets David Chiaverni Market Perform $24.00 $2.42 $2.25 11/13/2013 Credit Suisse Howard Chen Neutral $23.00 $2.65 $2.90 10/24/2013 Wel ls Fargo Securities Christopher Harris Outperform NA $2.49 $2.53 10/25/2013 |
LION Valuation Analysis LION 2013-2015 estimated Economic Net Income, ENI / Unit and Distributions / Unit based on mean analysts’ estimates 2016-2017 based on 6.9% mean analysts’ mean long-term growth estimates Source: SNL Financial, Ibbotson and Bloomberg Calculation of Discount Rate: 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 10 Year Treasury Bond 2.88% Economic Net Income (ENI) $1,876 $1,980 $2,185 $2,336 $2,497 2 Year Beta of Stock 123.90% ENI / Unit $2.46 $2.47 $2.72 $2.91 $3.11 Equity Risk Premium 5.70% Distributions / Unit $1.21 $1.36 $1.52 $1.62 $1.74 Discount Rate 9.94% Present Value per Share Based on Price / ENI; Net Present Value for Period Ending 12/2017 $28.78 8.0x 9.0x 10.0x 11.0x 12.0x 13.0x Assumptions: 8.0% 25.28 27.74 30.21 32.68 35.14 37.61 Stock Price as of 12/12/2013 $24.25 9.0% 24.66 27.06 29.46 31.86 34.26 36.66 Discount Rate 9.94% Discount 9.9% 24.10 26.44 28.78 31.12 33.45 35.79 Shares Outstanding in 2017 (mm) 716 Rate 10.0% 24.07 26.40 28.74 31.07 33.41 35.74 11.0% 23.50 25.77 28.04 30.31 32.58 34.86 12.0% 22.94 25.15 27.37 29.58 31.79 34.00 13.0% 22.41 24.56 26.72 28.87 31.02 33.18 Present Value per Share Based on Price / ENI and a Discount Rate of 9.94%; Net Present Value for Period Ending 12/2017 $28.78 8.0x 9.0x 10.0x 11.0x 12.0x 13.0x (25.0%) 18.08 19.83 21.58 23.34 25.09 26.84 Under Budget (20.0%) 19.28 21.15 23.02 24.89 26.76 28.63 (15.0%) 20.49 22.47 24.46 26.45 28.44 30.42 (10.0%) 21.69 23.80 25.90 28.00 30.11 32.21 (5.0%) 22.90 25.12 27.34 29.56 31.78 34.00 Match Budget 0.0% 24.10 26.44 28.78 31.12 33.45 35.79 5.0% 25.31 27.76 30.22 32.67 35.13 37.58 10.0% 26.51 29.08 31.66 34.23 36.80 39.37 15.0% 27.72 30.41 33.09 35.78 38.47 41.16 Exceed Budget 20.0% 28.92 31.73 34.53 37.34 40.15 42.95 25.0% 30.13 33.05 35.97 38.90 41.82 44.74 |
IV. Pro Forma Analysis |
LION Pro Forma Transaction Impact Assumptions TIGER: 2014 estimate based on analysts’ mean estimates and 2015 estimate based on 2014 estimate and analysts’ mean long-term growth estimates Assumes that TIGER 2014E EPS (and thereafter) estimates equal distributable income LION: 2014 and 2015 estimates based on analysts’ mean estimates of ENI / Unit, Pre-tax Distributable Earnings and Distributions / Unit Assumed closing date of 1/1/2014 Annual expense synergies of $4.5mm Assumes transaction expenses equal 1.50% of total aggregate consideration Pro forma distributable earnings assumes LION distributes 100% of TIGER earnings per LION management guidance Assumes TIGER GAAP book value of $10.42 at September 30, 2012 equals TIGER’s mark-to-market book value Share / Unit Counts: (As of September 30, 2013 and kept constant) LION Units: 715,755,721 TIGER Shares: 204,824,159 (excludes anti-dilutive impact of 1,932,279 options at $20.00 strike price) Pro Forma Units: 820,216,042 |
LION Pro Forma Transaction Impact Note: Estimated transaction expenses are excluded from 2014E ENI pro forma impact. 1. Pre-tax distributable earnings of $1.393 billion and $1.565 billion for 2014 and 2015, respectively Source: SNL Financial and analyst estimates $200 Million Share Buyback 2014 2015 EPS / Economic Net Income Impact LION Estimated ENI / Unit $2.47 $2.72 TIGER Estimated EPS $1.05 $1.16 LION Pro Forma LION Estimated ENI / Unit $2.42 $2.67 Accretion / (Dilution) ($) ($0.05) ($0.05) (%) (1.9%) (1.9%) TIGER Pro Forma TIGER Estimated ENI $1.24 $1.36 Accretion / (Dilution) ($) $0.19 $0.20 (%) 17.7% 17.3% Total Distributable Earnings Impact LION LION Total Distributable Earnings (1) $1.95 $2.19 Pro Forma LION Total Distributable Earnings $1.97 $2.20 Accretion / (Dilution) ($) $0.02 $0.02 Distribution Impact LION Distributions / Unit $1.36 $1.52 TIGER Income Distributions $0.88 $0.88 LION Pro Forma LION Distributions / Unit $1.45 $1.62 Accretion / (Dilution) ($) $0.09 $0.10 (%) 6.9% 6.7% TIGER Pro Forma TIGER Income Distribution $0.74 $0.83 Accretion / (Dilution) ($) ($0.14) ($0.05) (%) (15.7%) (6.0%) Book Value Impact Book Value per Adjusted Unit (September 30, 2013) LION $10.07 Pro Forma LION $11.83 Accretion / (Dilution) ($) $1.76 (%) 17.5% TIGER $10.42 Pro Forma TIGER $6.03 Accretion / (Dilution) ($) ($4.39) (%) (42.1%) |
LION 2015 Pro Forma Trading Analysis Note: Assumes 2015E Distributable Earnings for Tiger of $1.16 Source: SNL Financial and research estimates Pro Forma Stand-Alone Hold Current Price Multiple Expansion Price / Distributable Earnings 11.1x 11.0x 12.0x 13.0x 14.0x 15.0x 16.0x LION Share Price $24.25 $24.25 $26.40 $28.60 $30.80 $33.00 $35.20 TIGER Value per Share $12.37 $12.37 $13.46 $14.59 $15.71 $16.83 $17.95 Premium to TIGER Current Share Price 34.6% 34.6% 46.5% 58.7% 70.9% 83.1% 95.3% Premium to TIGER 52 Week VWAP 17.0% 17.0% 27.4% 38.0% 48.6% 59.2% 69.8% LION 2015 Distributions / Unit $1.52 $1.62 $1.62 $1.62 $1.62 $1.62 $1.62 Implied Yield 6.3% 6.7% 6.1% 5.7% 5.3% 4.9% 4.6% |
V. Appendix |
Liquidity Analysis Deal Price @ 0.51 Exchange Ratio $12.37 TIGER - Common Shares Out 204,824,159 Options @ Strike Price 1,932,279 @ $20.00 Common Stock Equivalents - FD Shares Outstanding 204,824,159 Implied Deal Value at $12.37 Per Share - $2,533,162,786 Last 5 Trading Days Last 5 Days Average Daily Deal Value / Current Market Average Daily Average Daily Market Value Average Daily Company Value Stock Volume Stock Price Traded Market Value LION - Stand Alone $6,987,476 1,643,982 $24.18 $39,755,581 64 Days to Trade out of Total Position TIGER - Stand Alone $1,882,334 1,645,051 $9.19 $15,124,460 LION - Pro Forma $9,520,638 (1) $54,880,041 (2) 46 Days to Trade out of Total Position Last 30 Trading Days Last 30 Days Average Daily Deal Value / Current Market Average Daily Average Daily Market Value Average Daily Company Value ($M) Stock Volume Stock Price Traded Market Value LION - Stand Alone $6,987,476 1,662,826 $23.25 $38,665,399 66 Days to Trade out of Total Position TIGER - Stand Alone $1,882,334 1,645,051 $9.49 $15,609,179 LION - Pro Forma $9,520,638 (1) $54,274,578 (2) 47 Days to Trade out of Total Position Last 90 Trading Days Last 3 Months Average Daily Deal Value / Current Market Average Daily Average Daily Market Value Average Daily Company Value ($M) Stock Volume Stock Price Traded Market Value LION - Stand Alone $6,987,476 1,769,222 $21.55 $38,121,475 66 Days to Trade out of Total Position TIGER - Stand Alone $1,882,334 943,212 $9.94 $9,379,198 LION - Pro Forma $9,520,638 (1) $47,500,673 (2) 53 Days to Trade out of Total Position Notes: (1) Total market value for the pro forma company is the sum of buyer's Stand Alone and the Deal Value (2) The Average Daily Market Value Traded for the pro forma company is estimated to be the sum of the current values for each stand alone company. |