1
EXHIBIT C
[Letterhead of Merrill Lynch]
December 22, 1995
Board of Directors
CBI Industries, Inc.
800 Jorie Boulevard
Oak Brook, IL 60521
Dear Members of the Board:
We understand that CBI Industries, Inc. (the "Company"),
Praxair, Inc. (the "Bidder") and Praxair Acquisition Corp., a wholly-owned
subsidiary of the Bidder ("Acquisition Sub"), have entered into an
Agreement and Plan of Merger dated as of December 22, 1995 (the "Merger
Agreement") which provides, among other things, for (i) the tender offer by
Acquisition Sub for all outstanding shares of the common stock, par value
$2.50 per share, together with certain associated rights, of the Company
for consideration of $33.00 net per share in cash (the "Tender Offer"), and
(ii) the subsequent merger (the "Merger," and together with the Tender
Offer, the "Transaction") of Acquisition Sub with and into the Company,
pursuant to which each outstanding share of the common stock of the Company
(other than shares held in treasury or held by the Bidder or any of its
affiliates or as to which dissenters' rights are perfected) will be
converted into the right to receive consideration of $33.00 net per share
in cash. The terms and conditions of the Transaction are set forth in more
detail in the Merger Agreement.
We have been requested by the Board of Directors of the Company
to render our opinion with respect to the fairness, from a financial point
of view, to the Company's shareholders of the consideration to be offered
to such shareholders in the Transaction. We have not been requested to
opine as to, and our opinion does not in any manner address, the Company's
underlying business decision to proceed with or effect the Transaction.
In arriving at our opinion, we reviewed and analyzed: (1) the
Merger Agreement and the specific terms of the Transaction, (2) such
publicly available information concerning the Company and the Bidder which
we believe to be relevant to our inquiry, (3) financial and operating
information with respect to the business, operations and prospects of the
Company furnished to us by the Company including, without limitation,
certain projections prepared
2
by the Company, (4) a trading history of the Company's common stock and a
comparison of that trading history with those of other companies that we
deemed relevant, (5) a comparison of the historical financial results and
present financial condition of the Company with those of other companies
that we deemed relevant, and (6) a comparison of the financial terms of the
Transaction with the financial terms of certain other transactions that we
deemed relevant. In addition, in arriving at our opinion, we have
considered the results of efforts to solicit indications of interest from
third parties with respect to an acquisition of all or part of the Company
or other strategic transactions involving the Company. We also have had
discussions with the management of the Company concerning its business,
operations, assets, financial condition and prospects and undertook such
other studies, analyses and investigations as we deemed appropriate.
In arriving at our opinion, we have assumed and relied upon the
accuracy and completeness of the financial and other information used by us
without assuming any responsibility for independent verification of such
information and have further relied upon the assurances of management of
the Company that they are not aware of any facts that would make such
information inaccurate or misleading. With respect to the financial
projections of the Company, upon advice of the Company we have assumed that
such projections have been reasonably prepared on a basis reflecting the
best currently available estimates and judgments of the management of the
Company as to the future financial performance of the Company and that the
Company will perform substantially in accordance with such projections. In
arriving at our opinion, we have not conducted a physical inspection of the
properties and facilities of the Company and have not made or obtained any
evaluations or appraisals of the assets or liabilities of the Company. Our
opinion is necessarily based upon market, economic and other conditions as
they exist on, and can be evaluated as of, the date of this letter.
Based upon and subject to the foregoing, we are of the opinion
as of the date hereof, that, from a financial point of view, the
consideration to be offered to the shareholders of the Company in the
Transaction is fair to such shareholders.
We have, in the past, provided financial advisory and financing
services to the Company and are acting as financial advisor to the Company
in connection with the Transaction and will receive a fee for our services,
a portion of which is contingent upon the consummation of the
3
Transaction. In addition, the Company has agreed to indemnify us for
certain liabilities that may arise out of the rendering of this opinion.
In the ordinary course of our business, we actively trade in the securities
of the Company and the Bidder for our own account and for the accounts of
our customers and, accordingly, may at any time hold a long or short
position in such securities.
This opinion is for the use and benefit of the Board of
Directors of the Company. This opinion is not intended to be and does not
constitute a recommendation to any shareholder of the Company as to whether
to accept the consideration offered to such shareholder in the Transaction.
Very truly yours,
MERRILL LYNCH