Exhibit B
January 18, 1994
Special Transaction Committee
of the Board of Directors
Burnup & Sims Inc.
One North University Drive
Fort Lauderdale, FL 33324
Gentlemen:
Burnup & Sims Inc. (the "Company") has entered into an
agreement dated
as of October 15, 1993, as amended by the First Amendment and
the Second
Amendment, each dated as of November 23, 1993 (the
"Agreement") with the
shareholders of Church & Tower, Inc. ("CT") and the
shareholders of Church &
Tower of Florida, Inc. ("CTF" and collectively with CT, "CT
Group") pursuant
to which the Company will acquire all of the issued and
outstanding common
stock of CT Group (the "Acquisition"). In connection with the
Acquisition,
the shareholders of CT Group will receive 10,250,000 shares of
the Company's
common stock, par value $0.10 per share ("Common Stock"). In
addition, the
Agreement provides that as a condition to the Acquisition,
National Beverage
Corp. ("NBC") will agree to exchange all of the Company's
common stock owned
by NBC (approximately 3.154 million shares) for the
cancellation of
$17,500,000 of 14% Subordinated Debentures issued by NBC to
the Company and
by crediting the next succeeding principal payments in the
amount of $592,313
of a $2,050,000 Promissory Note issued by NBC to the Company
(the
"Exchange"). The Acquisition and the Exchange shall be
collectively referred
to herein as the Transaction.
You have asked us whether or not, in our opinion, each of
the
Acquisition, the Exchange and the Transaction is fair, from a
financial point
of view, to the Company and its holders of Common Stock other
than NBC and
its affiliates.
DC-126363.1
In arriving at the opinion set forth below, we have,
among other things:
1. Reviewed the audited financial statements for CT and
CTF for the
three fiscal years ended December 31, 1992, and
reviewed the
unaudited financial statements for CT and CTF for
the six months
ended June 30, 1993;
2. Reviewed the combined audited financial statements
for the CT Group
for the three years ended December 31, 1992, and
reviewed the
unaudited combined financial statements for the CT
Group for the
nine months ended September 30, 1993;
3. Reviewed the Company's Annual Reports, Forms 10-K
and related
financial information for the three fiscal years
ended April 30,
1993 and the Company's Form 10-Q and the related
unaudited
financial information for the six months ended
October 31, 1993;
4. Reviewed an estimated income statement for the CT
Group for the
year ended December 31, 1993 and an estimated income
statement for
the Company for the year ended April 30, 1994;
5. Conducted discussions with members of senior
management of the CT
Group and the Company concerning their respective
businesses and
prospects;
6. Reviewed the summary appraisal reports dated June
and July of 1991
and an updated market analysis dated August 12, 1993
prepared by an
outside appraisal firm with respect to certain of
the Company's
real estate assets;
7. Reviewed the historical market prices and trading
activity of the
Company's common stock and compared them with that
of certain
publicly traded companies which we deemed to be
reasonably similar
to the Company;
8. Compared the results of operations of the CT Group
and the Company
and compared them with that of certain publicly
traded companies
which we deemed to be reasonably similar to the CT
Group and the
Company, respectively;
9. Reviewed the terms of the 14% Subordinated Debenture
in the
principal amount of $17,500,000 and the Promissory
Note in the
principal amount of $2,050,000 issued by NBC to the
Company;
10. Reviewed the Agreement; and
11. Reviewed such other financial studies and analyses
and performed
such other investigations and took into account such
other matters
as we deemed necessary, including our assessment of
general
economic, market and monetary conditions.
In preparing our opinion, we have relied on the accuracy
and
completeness of all information supplied or otherwise made
available to us by
the Company and the CT Group, and we have not independently
verified such
information or undertaken an independent appraisal of the
assets of the CT
Group or the Company. This opinion does not address the
relative merits of
the Transaction and any other transactions or other business
strategies
discussed by the Board of Directors of the Company as
alternatives to the
Transaction or the decision of the Board of Directors of the
Company to
proceed with the Transaction. This opinion does not
constitute a
recommendation to any holder of Common Stock of the Company as
to how such
holders of Common Stock should vote on the Acquisition. Our
opinion has been
prepared solely for the use of the Special Transaction
Committee of the Board
of Directors of the Company and shall not be reproduced,
summarized,
described or referred to or given to any other person or
otherwise made
public without PaineWebber's prior written consent, except for
inclusion in
full in the proxy statement to be sent to the Company's
holders of Common
Stock in connection with obtaining shareholder approval of the
Acquisition.
No opinion is expressed herein as to the price at which the
securities to be
issued in the Transaction may trade at any time.
In rendering this opinion, we have not been engaged to
act as an agent
or fiduciary of, and the Company has expressly waived any
duties or
liabilities we may otherwise be deemed to have had to, the
Company's equity
holders or any other third party.
On the basis of, and subject to the foregoing, we are of
the opinion
that each of the Acquisition, the Exchange and the Transaction
is fair, from
a financial point of view, to the Company and its holders of
Common Stock
other than NBC and its affiliates.
Very truly yours,
PAINEWEBBER INCORPORATED
/s/ PaineWebber
Incorporated
By:
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