EX-(E)(3)
OPINION OF MORGAN STANLEY & CO. INCORPORATED
[LOGO]
April 28, 2000
Board of Directors
Rexall Sundown, Inc.
6111 Broken Sound Parkway, NW
Boca Raton, Florida 33487
Members of the Board:
We understand that Rexall Sundown, Inc. (the "Company"), Royal Numico N.V.
("Buyer") and Nutricia Investment Corp., a wholly owned subsidiary of Buyer
("Acquisition Sub"), propose to enter into an Agreement and Plan of Merger
substantially in the form of the draft dated April 27, 2000 (the "Merger
Agreement"), which provides, among other things, for (i) the commencement by
Acquisition Sub of a tender offer (the "Tender Offer") for all outstanding
shares of common stock, par value $0.01 per share (the "Common Stock"), of the
Company for $24.00 per share net to the seller in cash, and (ii) the subsequent
merger (the "Merger") of Acquisition Sub with and into the Company. Pursuant to
the Merger, the Company will become a wholly owned subsidiary of Buyer and each
outstanding share of Common Stock, other than shares held in treasury or held by
Buyer or Acquisition Sub or as to which dissenters' rights have been perfected,
will be converted into the right to receive $24.00 per share in cash. The terms
and conditions of the Tender Offer and the Merger are more fully set forth in
the Merger Agreement.
You have asked for our opinion as to whether the consideration to be received by
the holders of shares of Common Stock pursuant to the Merger Agreement is fair
from a financial point of view to such holders.
For purposes of the opinion set forth herein, we have:
(i) reviewed certain publicly available financial statements and other
information of the Company;
(ii) reviewed certain internal financial statements and other financial and
operating data concerning the Company prepared by the management of the
Company;
(iii) reviewed certain financial projections prepared by the management of
the Company;
(iv) discussed the past and current operations and financial condition and
the prospects of the Company with senior executives of the Company;
(v) reviewed the reported prices and trading activity for the Common Stock;
(vi) compared the financial performance of the Company and the prices and
trading activity of the Common Stock with that of certain other
comparable publicly-traded companies and their securities;
(vii) reviewed the financial terms, to the extent publicly available, of
certain comparable acquisition transactions;
(viii) participated in discussions with representatives of the Company, Buyer
and their financial and legal advisors;
(ix) reviewed the draft Merger Agreement and certain related documents; and
(x) performed such other analyses and considered such other factors as we
have deemed appropriate.
We have assumed and relied upon without independent verification the accuracy
and completeness of the information reviewed by us for the purposes of this
opinion. With respect to the financial projections, we have assumed that they
have been reasonably prepared on bases reflecting the best currently available
estimates and judgments of the future financial performance of the Company. We
have assumed that the executed version of the Merger Agreement will not differ
in any material respect from the last draft we reviewed. We have also assumed
that the Merger will be consummated in accordance with the terms set forth in
the Merger Agreement. We have not made any independent valuation or appraisal of
the assets or liabilities of the Company, nor have we been furnished with any
such appraisals. Our opinion is necessarily based on financial, economic, market
and other conditions as in effect on, and the information made available to us
as of, the date hereof.
In arriving at our opinion, we were not authorized to solicit, and did not
solicit, interest from any party with respect to the acquisition of, business
combination or other extraordinary transaction involving the Company or any of
its assets.
We have acted as financial advisor to the Board of Directors of the Company in
connection with this transaction and will receive a fee for our services. In the
past, Morgan Stanley & Co. Incorporated and its affiliates have provided
financial advisory services for the Company and have received fees for the
rendering of these services.
It is understood that this letter is for the information of the Board of
Directors of the Company, except that this opinion may be included in its
entirety in any filing which is required to be made by the Company with the
Securities and Exchange Commission pursuant to the rules and regulations of the
Commission with respect to the Tender Offer and the Merger. In addition, Morgan
Stanley expresses no opinion or recommendation as to whether the stockholders of
the Company should tender their shares of Common Stock into the Tender Offer.
Based on and subject to the foregoing, we are of the opinion on the date hereof
that the consideration to be received by the holders of shares of Common Stock
pursuant to the Merger Agreement is fair from a financial point of view to such
holders.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
By: /s/ JAMES STYNES
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James Stynes
MANAGING DIRECTOR