Appendix I to
FAIRNESS OPINION PRESENTATION TO THE
SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF
STAR GAS CORPORATION
Analyses performed under 30-year weather scenario
CONFIDENTIAL
A.G. EDWARDS & SONS, INC.
INVESTMENT BANKING
October 16, 1998
TABLE OF CONTENTS
Section
-------
Overview of Petroleum Heat and Power Co., Inc.................... A
Overview of Star Gas Partners, L.P............................... B
Summary of the Transaction....................................... C
Implied Unit Value Analysis...................................... D
Pro Forma Merger Analysis........................................ E
Merger Premiums to Market Value Analysis......................... F
Relative Contribution Analysis................................... G
Discounted Cash Flow Analysis.................................... H
Comparable Transactions Analysis................................. I
Public Company Analysis.......................................... J
Pro Forma Model.................................................. K
Overview of Petroleum Heat and Power Co., Inc. ("Petro")
Selected Financial Data
($ in thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
Historical Years Ended December 31,
-------------------------------------------------------------------------------------------------------------
1993 % 1994(a) % 1995(a) % 1996 % 1997 %
- ------------------------------------------------------------------------------------------------------------------------------------
Net sales $538,526 100.0% $546,677 100.0% $609,507 100.0% $608,161 100.0% $548,141 100.0%
% Growth 1.5% 11.5% -0.2% -9.9%
Cost of sales 366,810 68.1% 362,981 66.4% 387,825 63.6% 427,388 70.3% 379,748 69.3%
------------------ ------------------ ------------------ ------------------ ------------------
Gross profit 171,717 31.9% 183,696 33.6% 221,682 36.4% 180,773 29.7% 168,393 30.7%
SG&A expenses 93,379 17.3% 95,314 17.4% 128,295 21.0% 105,601 17.4% 102,377 18.7%
Direct delivery
expense 29,902 5.6% 32,995 6.0% 36,634 6.0% 33,102 5.4% 30,006 5.5%
Restructuring
charges - - - 1,150 0.2% 2,850 0.5%
Corporate
identity
expenses - - - 2,659 0.4% 4,136 0.8%
Pension
curtailment
expense - - - 557 0.1% 654 0.1%
Amortization
of customer
lists 23,183 4.3% 19,748 3.6% 20,527 3.4% 18,611 3.1% 17,903 3.3%
Depreciation
of plant and
equipment 5,933 1.1% 6,469 1.2% 12,374 2.0% 6,574 1.1% 7,204 1.3%
Amortization of
deferred charges 5,548 1.0% 6,177 1.1% 6,142 1.0% 4,760 0.8% 4,639 0.8%
Provision for
supplemental
benefits 264 0.0% 373 0.1% 1,407 0.2% 873 0.1% 565 0.1%
------------------ ------------------ ------------------ ------------------ ------------------
Operating income
(loss) 13,509 2.5% 22,619 4.1% 16,303 2.7% 6,886 1.1% (1,941) -0.4%
Interest expense,
net (20,508) -3.8% (23,766) -4.3% (38,792) -6.4% (32,412) -5.3% (31,668) -5.8%
Other income
(expense) (165) 0.0% 109 0.0% 218 0.0% 1,842 0.3% 11,445 2.1%
------------------ ------------------ ------------------ ------------------ ------------------
Loss before income
taxes, equity
interest and
extraordinary item (7,164) -1.3% (1,038) -0.2% (22,271) -3.7% (23,684) -3.9% (22,164) -4.0%
Income taxes 400 0.1% 600 0.1% 500 0.1% 500 0.1% 500 0.1%
------------------ ------------------ ------------------ ------------------ ------------------
Loss before equity
interest and
extraordinary item (7,564) -1.4% (1,638) -0.3% (22,771) -3.7% (24,184) -4.0% (22,664) -4.1%
Share of income
(loss) of Gas - 0.0% (1,973) -0.4% 728 0.1% 2,283 0.4% 235 0.0%
------------------ ------------------ ------------------ ------------------ ------------------
Extraordinary
item-loss on early
extinguishment of
debt (867) -0.2% (655) -0.1% (1,436) -0.2% (6,414) -1.1% -
------------------ ------------------ ------------------ ------------------ ------------------
Net loss (8,431) -1.6% (4,266) -0.8% (23,479) -3.9% (28,315) -4.7% (22,899) -4.2%
Preferred stock
dividends (3,367) -0.6% (3,510) -0.6% (3,263) -0.5% (2,389) -0.4% (4,644) -0.8%
------------------ ------------------ ------------------ ------------------ ------------------
Net loss to common ($11,798) -2.2% ($7,776) -1.4% ($26,742) -4.4% ($30,704) -5.0% ($27,543) -5.0%
================== ================== ================== ================== ==================
Net loss per share ($0.55) ($0.36) ($1.06) ($1.20) ($1.06)
========= ========= ========= ========= =========
Weighted average
shares out-
standing (b) 21,538 21,745 25,309 25,581 26,039
EBITDA (c) $48,437 9.0% $55,387 10.1% $56,753 9.3% $42,070 6.9% $36,010 6.6%
Adjusted net loss
to common (10,931) -2.0% (d) (7,121) -1.3% (e) (25,306) -4.2% (f) (22,583) -3.7% (g) (35,439) -6.5% (h)
Adjusted net loss
per share ($0.51) ($0.33) ($1.00) ($0.88) ($1.36)
========= ========= ========= ========= =========
Acquisition
capital
expenditures $15,399 $26,411 $26,438 $28,493 $16,252
Maintenance
capital
expenditures (i) 3,000 3,000 3,000 3,000 3,000
EBITDA/total
assets 18.9% 13.9% 15.9% 15.3% 14.5%
Distributable
cash flow 24,528 28,020 14,461 6,158 842
- --------------------------------------------------------------------------------
(a) Star Gas operations consolidated into Petro.
(b) Weighted shares do not include Class B shares.
(c) Calculated as gross profit minus SG&A expense and direct delivery expense.
(d) Excludes $867 for early extinguishment of debt.
(e) Excludes $655 for early extinguishment of debt.
(f) Excludes $1,436 for early extinguishment of debt.
(g) Excludes $6,414 for early extinguishment of debt.
(h) Excludes $11,400 gain on sale of TLC.
(i) Management's estimates.
Page A-1
OVERVIEW OF PETRO
EBITDA RECONCILIATION: 1997(a)
($) IN THOUSANDS)
================================================================================
PETRO
-----
1997 Actual EBITDA $36,010
NORMALIZING ADJUSTMENTS:
Weather was 3.8% warmer than 30-year normal
3.8% of 1997 budgeted retail gallons 13,482 gallons
Gross profit margin $0.4545
Delivery and garage cost savings ($0.0814)
------
Net impact per gallon $0.3731
$ impact 5,030
Insurance reserve 2,000
------
1997 Normalized EBITDA $43,040
======
- --------------------------------------------------------------------------------
(a) Management's assumptions.
Page A-2
OVERVIEW OF PETRO
EBITDA RECONCILIATION: 1997 - 1998 (a)
($ in thousands)
============================================================================================
PETRO
-----
1997 Normalized EBITDA $43,040
Volume Adjustments for 1998
Sale of TLC Division in 1997 (16,926) gallons
Attrition in 1998 (4.1%) (17,375)
1997 Acquisitions 9,828
-----
(24,473) gallons
@
$0.1700/gallon (b) (4,159)
Gross Profit Margin Increase $0.006 per gallon on 395,086 gallons (c) 2,371
Inflation (3,662)
Operating Cost Reductions (d) 5,850
Non-Budgeted Operating Expense
Eliminations (e) 3,460
------
Normalized 1998 EBITDA Budget $46,900
======
- --------------------------------------------------------------------------------------------
(a) Management's assumptions.
(b) Represents the average gross profit per gallon ($.4700 per gallon) offset
by $.30 per gallon reduction in operating expenses.
(c) Actual gross profit margin increase achieved in first quarter of 1998 was
$5.9 million (156 million gallons @ $0.037/gallon).
(d) Represents already accomplished reductions as of 12/31/97 in branch,
regional and corporate expenses in excess of normal indexing related to
volume reductions as well as 1% productivity improvements.
(e) Represent specific operating expense eliminations that have already been
accomplished.
Page A - 3
OVERVIEW OF PETRO
EBITDA RECONCILIATION: NON-BUDGETED OPERATING EXPENSE ELIMINATIONS
($ IN THOUSANDS)
BASE EXPENSE
------------
Exton PA Facility Rent $ 500
Corporate Staff Reductions - Salary & Benefits
Alex Tyshovnytsky 310
Allen Levenson 279
Joe Massoud 310
Total Staff Reductions 900
Wage Freeze - Non-Union 1,373
Wage Freeze - Union 687
------------
Total $ 3,460
Page A-4
OVERVIEW OF PETRO
EBITDA RECONCILIATION: 1998 (a)
($ in thousands)
=====================================================================
PETRO
-----
Normalized 1998 EBITDA Budget $46,900
Actual Differential between first seven months of
Fiscal 1998 vs. Budget (11,741)
Revised margin improvement based on results from the
first seven months of Fiscal 1998 2,471
-------
Adjusted for Actual 1998 EBITDA Budget $37,630
=======
- ---------------------------------------------------------------------
(a) Management's assumptions.
Page A-5
OVERVIEW OF PETRO
EBITDA RECONCILIATION: 1998-1999 (a)
($ in thousands)
- --------------------------------------------------------------------------------------------------------------
PETRO
-----
Normalized 1998 EBITDA Budget $46,900
Attrition (3.8%) and Inflation (3.0%) partially offset by $0.01 Margin Increase in 1999 (1,352)
Acquisition Growth
$30,000 of acquisitions at 4.75 x multiple using half-year convention (b) 3,158
-------
1999 Projected $48,706
_______________________________________________________________
(a) Management's assumptions.
(b) A.G. Edwards' assumption.
Page A-6
OVERVIEW OF PETRO
EBITDA SUMMARY
($ in thousands)
---------------------------------------------------------
PETRO
-----
1997 Actual $36,010
1997 Normalized $43,040
Normalized 1998 Budget $46,900
Adjusted for Actual 1998 Budget $37,630
1999 Projected $48,706
- ---------------------------------------------------------------
Page A-7
OVERVIEW OF PETRO
EBITDA PROJECTIONS
($ IN THOUSANDS)
-----------------------------------------------------------------------------
ADJUSTED FOR
ACTUAL NORMALIZED PROJECTED
-----------------------------------
1998 1998 1999 2000 2001 2002
----------------------------------------------------------------
EBITDA $37,630 $46,900 $48,706 $51,196 $53,390 $55,385
- --------------------------------------------------------------------------------
MAJOR ASSUMPTIONS FOR 1999 - 2002
---------------------------------
[_] 30 Year Weather
[_] Flat Attrition.
[_] $30 million of acquisitions at 4.75x EBITDA multiple using half-year
convention.
[_] Increase in gross profit margin of $0.01 in 1999 and $0.005 annually in
2000 to 2002.
Page A-8
OVERVIEW OF PETRO
ATTRITION ANALYSIS
====================================================================================================================
Average Accounts Absolute Account Losses Loss Rate Gains
------------------------------ ---------------------------- --------------- ---------------------
Base Business, Base Business,
Year Total excl. Acquisitions Total excl. Acquisitions Total Base Accounts %
- --------- --------- ------------------ ------- ------------------- ----- ------ ---------- -------
1993 391,454 352,576 70,127 56,459 17.9% 16.0% 47,090 12.0%
1994 386,235 354,786 57,442 46,386 14.9% 13.1% 35,380 9.2%
1995 381,842 344,342 59,550 46,366 15.6% 13.5% 34,516 9.0%
1996 386,398 354,471 60,084 48,860 15.5% 13.8% 39,192 10.1%
1997 366,421 342,738 60,407 52,581 16.5% 15.3% 39,561 10.8%
- --------------------------------------------------------------------------------------------------------------------
Mean 382,470 349,783 61,522 50,130 16.1% 14.3% 39,148 10.2%
- --------------------------------------------------------------------------------------------------------------------
6/98 YTD 342,065 328,112 48,485 43,967 14.2% 13.4% 38,296 10.8%
Net Attrition Rate
-----------------------------
Base
Year Total Business
- --------- ----------- --------------
1993 -5.9% -4.0%
1994 -5.7% -3.9%
1995 -6.6% -4.5%
1996 -5.4% -3.7%
1997 -5.8% -4.5%
- --------------------------------------------
Mean -5.9% -4.1%
- --------------------------------------------
6/98 YTD -5.8% -2.6%
Page A-9
Overview of Petro
Acquisition History
($ in thousands)
Date EBITDA Acquired Cost per
Acquired Company Purchase Price EBITDA Multiple Gallonage Gallon
- -------- ------- -------------- ------ -------- --------- --------
1/26/93 Houck Service $663.9 $245.0 2.7x 807.2 $0.823
1/28/93 Harris and Gans 1,607.9 475.0 3.4x 2,599.6 0.619
5/28/93 Goodrich 2,397.7 672.0 3.6x 4,156.0 0.577
6/4/93 Warren 2,965.0 712.0 4.2x 14,448.3 0.205
6/23/93 Savin 1,655.4 403.0 4.1x 2,769.0 0.598
6/25/93 Baylis and Baylis 989.3 251.0 3.9x 1,224.7 0.808
7/28/93 Agway 1,660.6 315.0 5.3x 2,708.5 0.613
9/28/93 Garden State 1,015.2 312.0 3.3x 1,408.0 0.721
9/29/93 Essex 866.3 234.0 3.7x 2,649.4 0.327
--------- ------- ------- --------- -------
1993 Totals $13,821 $3,619 3.8x 32,771 $0.422
========= ======= ======= ========= =======
1/7/94 Petrilla Oil $189.5 $53.4 3.5x 329.0 $0.576
3/8/94 Rettig 1,813.0 466.0 3.9x 4,930.0 0.368
6/30/94 Deblois Oil 15,374.6 2,909.0 5.3x 19,869.0 0.774
7/26/94 Herbert Fuel 5,133.0 882.0 5.8x 6,103.0 0.841
7/28/94 Trico Fuel 3,126.3 930.0 3.4x 4,091.0 0.764
9/1/94 Stickley 1,261.4 355.0 3.6x 1,702.0 0.741
9/13/94 Sinkler 4,880.0 948.0 5.1x 7,433.0 0.657
12/1/94 Ryan 2,954.3 528.0 5.6x 4,804.0 0.615
12/2/94 Fowler 182.8 37.4 4.9x 354.0 0.516
--------- ------- ------- --------- -------
1994 Totals $34,915 $7,109 4.9x 49,615 $0.704
========= ======= ======= ========= =======
3/30/95 Reliable Oil $6,065.6 $1,183.0 5.1x 10,102.2 $0.600
5/24/95 Rosetta (Waldman) 3,413.2 684.0 5.0x 5,153.6 0.662
5/24/95 Rosetta (Price) 789.4 153.0 5.2x 1,309.5 0.603
7/27/95 Slocum 643.8 198.0 3.3x 742.6 0.867
8/23/95 Contex 1,856.8 448.0 4.1x 2,503.2 0.742
8/31/95 Rackliffe 546.2 139.0 3.9x 904.0 0.604
9/1/95 A-One 5,184.2 1,164.0 4.5x 5,900.0 0.879
9/11/95 Reading Merchants 4,260.0 656.0 6.5x 3,613.0 1.179
10/25/95 Franklin Fuel 293.5 76.0 3.9x 445.0 0.660
11/17/95 Home Fuel 2,158.9 430.0 5.0x 6,072.3 0.356
12/19/95 Texaco 3,854.8 1,071.0 3.6x 5,845.1 0.659
--------- ------- ------- --------- -------
1995 Totals $29,066 $6,202 4.7x 42,590 $0.682
========= ======= ======= ========= =======
Overview of Petro
Acquisition History
($ in thousands)
(continued) ---------------------------------------------------------------------------------------------------------------
Date EBITDA Acquired Cost per
Acquired Company Purchase Price EDITDA Multiple Gallonage Gallon
-------- ------- -------------- ------ -------- --------- --------
1/11/96 Garrison $5,242.5 $1,154.0 4.5x 6,017.0 $0.871
1/19/96 Cibro 4,367.6 1,087.0 4.0x 6,200.0 0.704
2/1/96 Seaman 7,133.7 1,552.0 4.6x 7,522.0 0.948
4/1/96 McDowell 2,723.5 669.0 4.1x 2,675.0 1.018
9/11/96 Flynn 1,038.0 232.0 4.5x 1,316.0 0.789
9/24/96 Farren 263.6 69.0 3.8x 481.0 0.548
10/18/96 Bergen 3,202.5 718.0 4.5x 5,933.0 0.540
10/18/96 Hightstown 233.5 62.0 3.8x 500.0 0.467
10/31/96 Hy-Test 813.4 177.0 4.6x 1,468.0 0.554
12/18/96 Dexter 331.9 99.0 3.4x 796.0 0.417
12/26/96 Sherman 492.5 103.0 4.8x 564.0 0.873
12/27/96 Malco 369.2 97.0 3.8x 988.0 0.374
12/30/96 Grasso 422.9 116.0 3.6x 1,212.0 0.349
-------- -------- -------- -------- --------
1996 Total $26,635 $6,135 4.3x 35,672 $0.747
======== ======== ======== ======== ========
1/15/97 Oils Inc $747.6 $188.0 4.0x 1,189.0 $0.629
4/14/97 Mugullian Fuel 2,801.9 638.0 4.4x 3,000.0 0.934
5/14/97 Alderfer Heating 401.1 111.0 3.6x 787.0 0.510
6/26/97 Bellomo 1,488.8 443.0 3.4x 1,657.0 0.898
7/10/97 Good 521.4 117.0 4.5x 1,200.0 0.434
8/29/97 Oil Burner 2,633.1 603.0 4.4x 3,500.0 0.752
9/10/97 Romary 2,252.5 545.0 4.1x 2,348.0 0.959
9/29/97 T.W. Perry 1,619.3 439.0 3.7x 2,118.0 0.765
10/1/97 Millbrook 527.5 112.0 4.7x 908.0 0.581
11/24/97 Shreve 1,457.0 300.0 4.9x 2,425.0 0.601
12/18/97 Genovese 1,010.8 281.0 3.6x 1,522.0 0.664
======== ======== ======== ======== ========
1997 Totals $15,461 $3,777 4.1x 20,654 $0.749
======== ======== ======== ======== ========
5 YEAR TOTALS $119,898 $26,842 4.5x 181,302 $0.661
======== ======== ======== ======== ========
Overview of Petro
Divestiture History
($ in thousands)
-------------------------------------------------------------------------------------------------------
A.G. Edwards noted that Date EBITDA Acquired Cost per
public disclosure Divested Branch Purchaser Purchase Price EBITDA Multiple Gallonage Gallon
regarding transactions -------- ------ --------- -------------- ------ -------- --------- ------
in the retail home 3/30/95 New Hampshire Bellemore Heating Oil, Inc. $1,477 $150 9.8x 6,060 $0.244
heating oil distribution 6/28/96 Punderson Ultramar Energy, Inc. $4,073 $443 9.2x 6,900 $0.590
industry was extremely 11/4/97 TLC Heating Oil Partners, L.P. $16,100 $2,005 8.0x 23,000 $0.700
limited. A.G. Edwards ----
analyzed the financial
terms related to the Mean: 9.0x
divestitures by Petro of ----
certain of its retail home
heating oil branches.
Page A-12
Overview of Petro
Margin Analysis
(Volume in gallons; gallons and $ in thousands, except margins)
- ---------------------------------------------------------------------------------------------------------
Fiscal Years Ended December 31,
---------------------------------------------------------------
1993 1994 1995 1996 1997
---------- ----------- ---------- ----------- ----------
RETAIL (a)
Volume 355,347 360,207 343,759 375,121 338,478
Margin $ 0.4883 $ 0.5030 $ 0.5027 $ 0.4993 $ 0.5196
-------- -------- -------- -------- --------
Gross profit $173,501 $181,202 $172,811 $187,290 $175,867
COMMERCIAL
Volume 81,515 79,514 75,476 81,020 71,813
Margin $ 0.2301 $ 0.2416 $ 0.2458 $ 0.2471 $ 0.2452
-------- -------- -------- -------- --------
Gross profit $ 18,755 $ 19,214 $ 18,554 $ 20,018 $ 17,607
PROPANE
Volume 6,625 7,435 5,538 -- --
Margin $ 0.5352 $ 0.5730 $ 0.5805 $ 0.0000 $ 0.0000
-------- -------- -------- -------- --------
Gross profit $ 3,546 $ 4,260 $ 3,215 -- --
OTHER PETROLEUM PRODUCTS
Volume 36,406 35,709 31,228 32,026 29,855
Margin $ 0.1424 $ 0.1417 $ 0.1481 $ 0.1401 $ 0.1424
-------- -------- -------- -------- --------
Gross profit $ 5,183 $ 5,061 $ 4,624 $ 4,487 $ 4,251
TOTAL PETROLEUM PRODUCTS
Volume 479,893 482,865 456,001 488,167 440,146
Margin $ 0.4188 $ 0.4344 $ 0.4368 $ 0.4339 $ 0.4492
-------- -------- -------- -------- --------
Gross profit $200,985 $209,737 $199,204 $211,795 $197,725
-------- -------- -------- -------- --------
DISCOUNTS $ 1,294 $ 1,200 $ 944 $ 1,084 $ 802
-------- -------- -------- -------- --------
Net service loss ($34,243) ($37,941) ($33,822) ($37,386) ($35,184)
Net installation income 3,681 4,944 4,364 5,280 5,050
-------- -------- -------- -------- --------
Gross profit (loss) ($30,562) ($32,997) ($29,458) ($32,106) ($30,134)
-------- -------- -------- -------- --------
GAS GROSS PROFIT -- $ 5,756 $ 50,992 -- --
Total gross profit $171,717 $183,696 $221,682 $180,773 $168,393
======== ======== ======== ======== ========
- ---------------------------------------
(a) Includes protected price ventures
Overview of Petro
Discounted Cash Flow Analysis
Weighted Average Cost of Capital Derivation
($ in millions)
- ----------------------------------------------------------------------------------------------------------------------------------
Total Implied Total Total
Market Unit Total Market Debt/ Debt as % Un-
Levered Val. Debt Price at Units Value of Total of Total levered
Comparable Company Beta (a) (Bk = Mkt) (10/14/98) Out (Mil) Equity Equity Capital Beta
- ----------------------------------------------------------------------------------------------------------------------------------
AmeriGas Partners, L.P. 0.42 $711.1 $24.125 41.9 $1,031.2 69.0% 40.8% 0.249
Cornerstone Propane Partners, L.P. 0.45 240.9 18.000 19.9 365.2 66.0% 39.8% 0.271
Ferrellgas Partners, L.P. 0.46 504.1 20.000 31.3 638.6 78.9% 44.1% 0.257
Heritage Propane Partners, L.P. 0.42 177.8 20.813 8.5 180.0 98.8% 49.7% 0.211
National Propane Partners, L.P. 0.61 145.5 9.438 11.2 108.2 134.5% 57.4% 0.260
Star Gas Partners, L.P. 0.39 109.8 19.563 6.3 124.9 87.9% 46.8% 0.208
Suburban Propane Partners, L.P. 0.40 427.9 19.625 28.7 575.3 74.4% 42.7% 0.229
Comparable group's average unlevered beta: 0.24
Petro's debt - to - equity ratio: 1123.5%
Petro's debt as a percent of total capital: 91.8%
Comparable group's beta relevered for Petro's capital structure: 2.945
======
Petro's capitalization at market
Total debt (b) $310.0 91.8%
Common equity 27.6 8.2%
------ ------
100.0% $337.6
Derivation of Weighted Average Cost of Capital:
- -----------------------------------------------
Market Risk Premium Range (e)
-----------------------------
Petro's theoretical levered beta (d): 2.945 11.3% 12.3% 13.3%
Assumed % of equity in Petro's capital structure: 8.2% -----------------------------
Risk - free rate of return (c): 4.6%
Petro's cost of equity range (at various market risk premiums): 37.9% 40.8% 43.8%
Petro's assumed tax rate: 0.0% ===== ===== =====
Assumed % of debt in capital structure (b): 91.8%
Petro's estimated cost of debt (f): 11.2%
Petro's estimated after-tax cost of debt: 11.2% 11.2% 11.2% 11.2%
-----------------------------
Petro's weighted average cost of capital range (g): 13.4% 13.6% 13.9%
- --------------------------------------------------------------- -----------------------------
(a) Source: Bloomberg. 143 week (maximum weekly time period allowed, or the
number of weeks available, which may be less than 143) adjusted beta
relative to the S&P 500 index.
(b) Includes preferred stock; not net of cash.
(c) Ten - year Treasury rate on October 14, 1998.
(d) Bloomberg's reported beta for Petro is .60.
(e) Ibbotson Associates 1997. Total returns for small company stocks of 17.7%
minus the risk-free rule.
(f) Based on Petro's current debt structure.
(g) Calculation based upon use of the Capital Asset Pricing Model (CAPM).
Page A-14
Overview of Petro
Summary of Capital Structure
($ in thousands)
------------------------------------------------------------------------------------------------------------------
6/30/98 10/14/98
Book Value Coupon Market Price Market Value
------------ ---------- -------------- ----------------
Debt:
Credit Agreement
Working Capital facility $ 0 7.75% NA $ 0
Acquisition facility 0 7.75% NA 0
Notes payable
Notes payable for fuel oil dealer purchases, etc. 14,528 8.0%-10.0% NA 14,528
11.85%, 12.17%, 12.18% Senior Notes 60,000 11.96% NA 60,000
14.1% Subordinated and Senior 6,200 14.10% NA 6,200
10.125% Subordinated 50,000 10.13% 92.50% 46,250
9.375% Subordinated Debentures 75,000 9.38% 92.50% 69,375
12.25% Subordinated Debentures 81,250 12.25% 92.50% 76,781
Total debt $ 286,978 $ 273,134
Effective cost of debt 11.0%
Preferred Stock:
Redeemable preferred stock $ 8,334 14.34% NA 8,334
12.875% Exchangeable preferred stock 30,000 12.88% NA 30,000
Adjustment to balance sheet (1,480) NA (1,480)
Total preferred stock $ 36,854 $ 38,854
Effective cost of preferred stock 13.2%
Total Debt and Preferred Stock $ 323,832 $309,988
Effective cost of debt and preferred stock 11.2%
Page A-15
OVERVIEW OF PETRO
SUMMARY OF CAPITAL STRUCTURE
($ IN THOUSANDS EXCEPT PER SHARE)
(continued)
======================================================================================================
9/30/98 10/14/98
SHARES OUT MARKET PRICE MARKET VALUE
---------- ------------ ------------
EQUITY:
Common Stock
Class A 23,964,962 $ 1.031 $24,714
Class B 11,228 17.776 (a) 200
Class C 2,597,519 NA (b) 2,679
TOTAL EQUITY $27,592
EFFECTIVE COST OF EQUITY 40.8%
TOTAL CAPITALIZATION $337,580
WACC 13.6%
Less: Cash 33,223
NET CAPITALIZATION $304,357
NET MARKET MARKET VALUE
% OF OWNERSHIP VALUE OF STAR GAS OF INTEREST
-------------- ----------------- ------------
LESS:
Interest in Star Gas 40.7% $234,147 $95,204
TOTAL CAPITALIZATION OF PETRO WITHOUT INTEREST IN STAR GAS $242,376
(a) Market price is calculated as: $17.50+$0.276
(b) Market price is assumed to equal that of the Class A shares, since the
Class C shares do not trade.
Page A-16
OVERVIEW OF PETRO
Price and Volume
12/15/95 - 12/31/97
[GRAPH APPEARS HERE]
Page A-17
OVERVIEW OF PETRO
Price and Volume
1/1/98 - 10/14/98
[GRAPH APPEARS HERE]
Page A-18
Overview of Petro
Class A Common Stock Trading History -- Volume Distribution
1995-1998(a)
Market Price
Pre-Announcement Price
Implied Offer Price
-----------------------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998(a) 1995-1998(a)
------------------ ------------------ ------------------ ------------------- -----------------
Price Per Share Volume % Volume % Volume % Volume % Volume %
-------------------- ------------------ ------------------ ------------------ ------------------- -----------------
Greater Than $9.400
9.200 9.400 600 100.00% 600 99.42%
9.000 9.200 0 99.99% 99.42%
8.800 9.000 49,200 99.99% 49,200 99.42%
8.600 8.800 6,800 99.41% 6,800 99.26%
8.400 8.600 67,500 99.33% 67,500 99.24%
8.200 8.400 289,100 98.54% 289,100 99.02%
8.000 8.200 161,500 95.13% 1,600 100.00% 163,100 98.07%
7.800 8.000 873,500 93.22% 47,400 99.96% 920,900 97.54%
7.600 7.800 245,800 82.92% 236,200 98.87% 482,000 94.52%
7.400 7.600 193,300 80.02% 185,000 93.44% 378,300 92.94%
7.200 7.400 1,154,800 77.74% 822,300 89.19% 1,977,100 91.70%
7.000 7.200 5,190,500 64.12% 1,507,100 70.28% 6,697,600 85.23%
6.800 7.000 246,000 2.90% 815,700 35.63% 1,061,700 63.30%
6.600 6.800 498,500 16.88% 498,500 59.82%
6.400 6.600 129,300 5.42% 417,300 100.00% 546,600 58.19%
6.200 6.400 37,600 2.45% 526,900 96.34% 564,500 56.40%
6.000 6.200 44,100 1.58% 417,700 91.72% 461,800 54.55%
5.800 6.000 24,700 0.57% 110,200 88.06% 134,900 53.04%
5.600 5.800 868,000 87.09% 868,000 52.60%
5.400 5.600 143,300 79.48% 143,300 49.76%
5.200 5.400 92,600 78.22% 92,600 49.29%
5.000 5.200 940,500 77.41% 940,500 48.98%
4.800 5.000 142,200 69.16% 142,200 45.90%
4.600 4.800 20,200 67.92% 20,200 45.44%
4.400 4.600 13,900 67.74% 13,900 45.37%
4.200 4.400 - 67.62% - 45.33%
4.000 4.200 - 67.62% - 45.33%
3.800 4.000 117,100 67.62% 117,100 45.33%
3.600 3.800 370,600 66.59% 370,600 44.94%
3.400 3.600 250,900 63.34% 250,900 43.73%
3.200 3.400 1,236,200 61.14% 1,236,200 42.91%
3.000 3.200 1,652,500 50.30% 1,652,500 38.86%
2.800 3.000 2,785,300 35.81% 130,000 100.00% 2,915,300 33.45%
2.600 2.800 788,500 11.39% 249,100 97.94% 1,037,600 23.90%
---------------------------------------------------------------------------------------------------------------------
2.400 2.600 430,100 4.47% 270,800 93.99% 700,900 20.50%
---------------------------------------------------------------------------------------------------------------------
2.200 2.400 79,800 0.70% 964,300 89.70% 1,044,100 18.21%
2.000 2.200 345,000 74.40% 345,000 14.79%
---------------------------------------------------------------------------------------------------------------------
1.800 2.000 1,789,900 68.93% 1,789,900 13.66%
---------------------------------------------------------------------------------------------------------------------
1.600 1.800 804,500 40.55% 804,500 7.80%
1.400 1.600 1,542,400 27.80% 1,542,400 5.16%
1.200 1.400 34,800 3.34% 34,800 0.11%
---------------------------------------------------------------------------------------------------------------------
1.000 1.200 175,900 2.79% 175,900 0.58%
---------------------------------------------------------------------------------------------------------------------
Less Than $1.000
--------- --------- ---------- --------- ----------
Total Stock for Period 8,478,600 4,349,500 11,403,800 6,306,700 30,538,600
Cumulative % of Total Traded 27.76% 14.24% 37.34% 20.65% 100.00%
% Traded of Current Stock
Out.(b) 35.38% 18.15% 47.59% 26.32% 127.43%
% Traded of Current Float(c) 91.99% 47.19% 123.73% 68.43% 331.34%
Wtd. Average Stock Price $7.31 $7.07 $3.90 $1.90 $4.89
- --------------
(a) Through October 14, 1998.
(b) Based on 23,964,962 Class A shares outstanding.
(c) Based on 9,216,760 Class A shares held by institutional and retail public
holders.
Page A-19
Overview of Petro
Shareholder Analysis (a)
- ------------------------------------------------------------------------------------------------------------------------------------
Class A % of Total
Institutions (b) Shrs. Held % of Total Voting Power
- ---------------------------------- ------------ ------------ ------------
Dimensional Fund Adv. 639,700 2.7% 1.3%
CNA Financial Group 360,900 1.5% 0.7%
Barclays Bank plc 340,573 1.4% 0.7%
Deltec Asset Mgmt. 230,810 1.0% 0.5%
Vanguard Group 215,500 0.9% 0.4%
Robert Fleming Holdings 200,000 0.8% 0.4%
Bear, Stearns & Co. 148,238 0.6% 0.3%
Mellon Bank 119,904 0.5% 0.2%
Northern Trust 84,611 0.4% 0.2%
ANB Investment Mgmt. 51,100 0.2% 0.1%
Prudential Insurance 48,200 0.2% 0.1%
First Source Bank 40,000 0.2% 0.1%
World Asset Management 33,937 0.1% 0.1%
IBM Retirement Funds 16,300 0.1% 0.0%
DLJ Corp. 4,502 0.0% 0.0%
Legg Mason 2,000 0.0% 0.0%
------------ ------------ ------------
All Institutions (c) 2,536,275 10.6% 5.1%
Class A % of Class C % of Total % of Total
Directors and Officers (c) Title Shrs. Held Total Shrs. Held Total Voting Power Voting Power
- ----------------------------- -------------- ---------- ------ ---------- ------ ------------ ------------
Audrey L. Sevin Director and
Secretary of
Petro and Star 1,876,863 7.8% 477,716 18.4% 6,654,023 13.3%
Irik P. Sevin Chairman, CEO
and Director
of Petro 740,438 3.1% 201,641 7.8% 2,756,848 5.5%
Philip Ean Cohen Director of
Petro 679,262 2.8% 113,423 4.4% 1,813,492 3.6%
Thomas J. Edelman Director of
Petro and Star 653,312 2.7% 129,019 5.0% 1,943,502 3.9%
Vincent De Palma VP and GM of
New York
Region 5,000 0.0% - 0.0% 5,000 0.0%
Hanseatic Corporation
(d) (e) 1,777,279 7.4% 298,717 11.5% 4,764,449 9.5%
Tortosa (d) - 0.0% 298,717 11.5% 2,987,170 6.0%
Hubertus Langen (d) 734,473 3.1% 9,038 0.3% 824,853 1.7%
Wolfgang Traber (e) Director of
Petro and Star - 0.0% 9,038 0.3% 90,380 0.2%
Paul Biddelman (e) Director of
Petro and Star 2,386 0.0% - 0.0% 2,386 0.0%
----------- ------- ----------- ------- ------------- ------------
Total Directors &
Officers Holdings 6,469,013 27.0% 1,537,309 59.2% 21,842,103 43.7%
Class A % of Class C % of Total % of Total
5% Beneficial Owners and Affiliates Shrs. Held Total Shrs. Held Total Voting Power Voting Power
- ----------------------------------- ---------- ------ ---------- ------ ------------ ------------
Frank Russell Company (f) 2,611,000 10.9% - 0.0% 2,611,000 5.2%
Schneider Capital 2,491,165 10.4% - 0.0% 2,491,165 5.0%
Richard O'Connell 1,128,745 4.7% 302,461 11.6% 4,153,355 8.3%
Brentwood Corp. 681,873 2.8% 120,985 4.7% 1,891,723 3.8%
Barcel Corporation 605,151 2.5% 151,231 5.8% 2,117,461 4.2%
Gabes S.A. 597,617 2.5% 124,314 4.8% 1,840,757 3.7%
United Capital Corp. 90,000 0.4% - 0.0% 90,000 0.2%
Minneford Corp. 73,638 0.3% 12,000 0.5% 193,638 0.4%
Fernando Montero - 0.0% 35,287 1.4% 352,870 0.7%
M.M. Warburg & Co. - 0.0% 31,808 1.2% 318,080 0.6%
----------- ------- ----------- ------- ------------- ------------
Total 5% Beneficial Holdings 8,279,189 34.5% 778,086 30.0% 16,060,049 32.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Summary
- -------
% of % of Total % of Total
Class A Total Class C Total Voting Power Voting Power
----------- ------ ---------- ------ ------------- -------------
Insider Holdings
Directors and Officers as a Group 6,469,013 27.0% 1,537,309 59.2% 21,842,103 43.7%
5% Beneficial Owners and Affiliates 8,279,189 34.5% 778,086 30.0% 16,060,049 32.2%
----------- ------- ----------- ------- ------------- ------------
14,748,202 61.5% 2,315,395 89.1% 37,902,152 75.9%
Public Holdings
Institutional 2,536,275 10.6% 2,536,275 5.1%
Retail 6,680,485 (g) 27.9% 282,124 10.9% 9,501,725 19.0%
----------- ------- ----------- ------- ------------- ------------
9,216,760 38.5% 282,124 10.9% 12,038,000 24.1%
Total 23,964,962 100.0% 2,597,519 100.0% 49,940,152 100.0%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------
(a) Based on shares outstanding, most recently available data as of 10/14/98 and
does not include options to purchase and Class B shares.
(b) Source: Bloomberg and Petro's Proxy.
(c) Does not include 5% beneficial ownership institutions.
(d) Hanseatic Corporation holds shared voting power in Tortosa. Tortosa is owned
and controlled by Mr. Langen.
(e) Mr. Traber and Mr. Biddelman are executive officers of Hanseatic
Corporation.
(f) Frank Russell Company shares beneficial ownership of 1,943,835 Class A with
Schneider Capital.
(g) AGE has 29,080 Class A shares in its system.
[CAPTION]
Overview of Petro
Research Coverage
While Petro had decent Research Coverage Date Published Estimates Updated
coverage in 1996, it has ----------------- -------------- -----------------
not had much support
in recent months.
Published Research Reports
Freeman Securities* 8/17/98 --
KDP Investment Advisors* 8/1/98 --
SAMCO Capital Markets* 8/1/98 --
Bear Stearns 9/5/96 10/18/96
DLJ 8/2/96 --
PaineWebber 7/16/96 11/11/97
Additional Research
Jefferies - Hold
Earnings Estimates Number of Estimates Mean 1998 Mean 1999
------------------ ------------------- --------- ---------
IBES 1 ($1.25) NA
Nelson 1 ($1.25) NA
-----------------------
*Fixed income research.
Page A-21
Overview of Star Gas Partners, L.P. ("Star Gas")
Selected Financial Data
($ in thousands)
- -------------------------------------------------------------------------------------------------------------------------
Historical Years Ended September 30,
----------------------------------------------------------------------------
1996 % 1997 % 1997(a) %
- -------------------------------------------------------------------------------------------------------------------------
Sales $119,634 100.0% $135,159 100.0% $149,766 100.0%
% growth 17.0% 13.0% 25.2% (b)
Cost of sales 58,557 48.9% 72,211 53.4% 80,370 53.7%
------------------- ------------------- --------------------
Gross profit 61,077 51.1% 62,948 46.6% 69,396 46.3%
Operating expenses 41,207 34.4% 43,245 32.0% (c) 46,408 31.0%
Net (loss) on sales of assets (260) -0.2% (295) -0.2% (265) -0.2%
Depreciation and amortization 9,808 8.2% 10,405 7.7% 11,495 7.7%
------------------- ------------------- --------------------
Operating income 9,802 8.2% 9,003 6.7% 11,228 7.5%
Interest expense, net 7,124 6.0% 6,966 5.2% 7,766 5.2%
------------------- ------------------- --------------------
Income (loss) before income taxes 2,678 2.2% 2,037 1.5% 3,462 2.3%
Income taxes 85 0.1% 25 0.0% 25 0.0%
General Partners' interest -- 0.0% 40 0.0% 69 0.0%
------------------- ------------------- --------------------
Net income $ 2,593 2.2% $ 1,972 1.5% $ 3,368 2.2%
=================== =================== ====================
Net income per limited partner unit $ 0.49 $ 0.37 $ 0.54
======== ======== ========
Weighted average L.P. unit outstanding 5,271 5,271 6,228
EBITDA (d) $ 19,870 16.6% $ 19,703 14.6% $ 22,988 15.3%
Capital expenditures $ 5,332 $ 5,279 $ 5,579
Maintenance capital expenditures 2,300 3,100 3,400
Distributable cash flow 10,361 9,612 11,797
Distributable cash flow per unit $ 1.97 $ 1.82 $ 1.89
Common distribution coverage 1.8x 1.5x 1.4x
Total distribution coverage 0.9x 0.8x 0.8x
EBITDA/total assets 12.7% 13.4% 12.8%
- ------------------------------------------------------
(a) Proforma for December 16, 1997 common unit offering and the acquisition of
Pearl Gas Co.
(b) Growth over 1996.
(c) Includes $350 in special project expenses.
(d) Excludes loss from sale of assets.
Page B-1
Overview of Star Gas
EBITDA Reconciliation: 1997(a)
($ in thousands)
-------------------------------------------------------------------------------------
Star Gas
--------
1997 Actual EBITDA $19,703(b)
NORMALIZING ADJUSTMENTS:
Weather
Residential - 1,125 gallons @ 0.7106 margin 799
Commercial - 277 gallons @ 0.4459 margin 124
Margin
Residential - 50,832 gallons @ (0.7106 - 0.6995) (564)
Commercial - 19,864 gallons @ (0.4454 - 0.4348) (220)
Wholesale - 38,404 gallons @ (0.0975 - 0.0675) (1,152)
Compensation (56)
Elimination of strategic expense 902(c)
Pearl Gas EBITDA 3,012
Pearl Gas acquisition adjustments 273(d)
-------
1997 Adjusted EBITDA $22,821
=======
-------------------------------------------------------------------------------------
(a) Management's assumptions.
(b) Not pro forma for Pearl Gas acquisition.
(c) Certain expenses including the exploration of strategic
alternatives by Morgan Stanley.
(d) Certain cost savings, primarily salary and benefit expenses
of certain selling shareholders.
Page B-2
Overview of Star Gas
EBITDA Reconciliation: 1997 - 1999(a)
($ in thousands)
-------------------------------------------------------------------
Star Gas
--------
Normalized 1998 EBITDA Budget $22,135
Approximate Differential between first ten
months of Fiscal 1998 vs. Budget (3,354)
-------
Adjusted for Actual 1998 EBITDA Budget $18,781
=======
Normalized 1998 EBITDA Budget $22,135
Acquisition Growth
1998 acquisitions 1,585
$10 million of acquisitions at 6.5x multiple
completed on 4/1/99 using half-year
convention 771
-------
1999 EBITDA Projected $24,491
=======
--------------------------------------------------------------------
(a) Management's assumptions.
Page B-3
Overview of Star Gas
EBITDA Projections
($ in thousands)
--------------------------------------------------------------------------------------------
Adjusted for
Actual Normalized Projected
-----------------------------------------------
1998 1998 1999 2000 2001 2002
--------------------------------------------------------------------------------
EBITDA $18,781 $22,135 $24,491 $26,029 $27,566 $29,104
--------------------------------------------------------------------------------------------
Major Assumptions for 1999 - 2002
---------------------------------
[_] 30 Year Weather
[_] No growth in base business.
[_] $10 million of acquisitions at 6.5x EBITDA multiple
using half-year convention.
[_] No increase in gross profit margin.
Page B-4
OVERVIEW OF STAR GAS
ACQUISITION HISTORY
($ IN THOUSANDS)
- -----------------------------------------------------------------------------------------
DATE EBITDA ACQUIRED COST PER
ACQUIRED COMPANY PURCHASE PRICE EBITDA MULTIPLE GALLONAGE GALLON
-------- ------- ------------- ------ -------- --------- ------
6/15/94 Loveland $ 700 $ 127 5.5x 433 $1.616
11/24/94 Baystate $ 1,450 $ 209 6.9x 769 $1.886
9/12/95 Debolt $ 950 $ 151 6.3x 852 $1.115
3/22/96 Bob White L.P. Gas/
Mitchell Bottle Gas $ 1,500 $ 263 5.7x 898 $1.671
7/22/96 Fuzzy Moore $ 850 $ 147 5.8x 454 $1.871
10/22/97 Pearl Gas Co. $24,126 $3,288 7.3x 14,000 $1.723
2/20/98 Tri-County Gas $ 550 $ 108 5.1x 320 $1.720
5/28/98 Knowles LP Gas $ 3,000 $ 426 7.0x 1,021 $2.939
5/28/98 Tioga Petroleum $ 1,200 $ 257 4.7x 668 $1.795
7/30/98 Lowe Bros & Dad $ 3,750 $ 602 6.2x 1,965 $1.908
8/11/98 Myers Propane $ 1,200 $ 191 6.3x 572 $2.099
----------- ------ ------ -------- ------
4 YEAR TOTALS $39,276 $5,769 6.8x 21,952 $1.789
=========== ====== ====== ======== ======
Page B-5
OVERVIEW OF STAR GAS
MARGIN ANALYSIS
(volume in gallons, gallons and $ in thousands, except margins)
- ------------------------------------------------------------------------------------------------------------------------------------
Fiscal Years Ended September 30,
------------------------------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1997 1997
------------ -------- -------- -------- ------------ ------------ ------------
Stand Alone Pro Forma Pro Forma Pearl and
Weather Weather
Residential
Volume 44,590 48,430 45,235 54,336 49,707 50,832 62,630
Margin $ 0.6902 $ 0.6861 $ 0.6677 $ 0.6592 $ 0.7106 $ 0.7106 $ 0.6554
------------ -------- -------- -------- ------------ ------------ ------------
Gross profit $ 30,777 $ 33,228 $ 30,203 $ 35,818 $ 35,322 $ 36,121 $ 41,049
Commercial
Volume 17,617 19,875 18,831 21,194 19,587 19,864 20,936
Margin $ 0.4614 $ 0.4611 $ 0.4271 $ 0.4202 $ 0.4459 $ 0.4459 $ 0.4399
------------ -------- -------- -------- ------------ ------------ ------------
Gross profit $ 8,129 $ 9,164 $ 8,043 $ 8,906 $ 8,734 $ 8,858 $ 9,209
Argriculture
Volume 23,291 16,053 15,080 12,567 17,338 17,338 18,275
Margin $ 0.2349 $ 0.2630 $ 0.2357 $ 0.2556 $ 0.2694 $ 0.2694 $ 0.2678
------------ -------- -------- -------- ------------ ------------ ------------
Gross profit $ 5,471 $ 4,222 $ 3,554 $ 3,212 $ 4,671 $ 4,671 $ 4,895
Motor Fuel & other
Volume 7,581 8,060 8,056 8,197 8,024 8,024 8,391
Margin $ 0.4922 $ 0.5359 $ 0.5271 $ 0.5215 $ 0.5765 $ 0.5765 $ 0.5926
------------ -------- -------- -------- ------------ ------------ ------------
Gross profit $ 3,731 $ 4,319 $ 4,246 $ 4,275 $ 4,626 $ 4,626 $ 4,973
Wholesale
Volume 51,493 45,318 38,941 39,025 38,404 38,404 38,532
Margin $ 0.0619 $ 0.0680 $ 0.0568 $ 0.0704 $ 0.0975 $ 0.0975 $ 0.0972
------------ -------- -------- -------- ------------ ------------ ------------
Gross profit $ 3,189 $ 3,082 $ 2,212 $ 2,747 $ 3,743 $ 3,743 $ 3,744
Total Propane
Volume 144,572 137,736 126,143 135,319 133,060 134,462 148,764
Margin $ 0.3548 $ 0.3922 $ 0.3826 $ 0.4061 $ 0.4291 $ 0.4315 $ 0.4293
------------ -------- -------- -------- ------------ ------------ ------------
Total propane
gross profit $ 51,297 $ 54,015 $ 48,258 $ 54,958 $ 57,096 $ 58,019 $ 63,870
------------ -------- -------- -------- ------------ ------------ ------------
Appliances/other
Revenue $ 9,237 $ 9,454 $ 7,536 $ 8,269 $ 8,043 $ 8,403 $ 8,760
Cost 3,232 3,187 1,935 2,150 2,191 2,191 2,303
------------ -------- -------- -------- ------------ ------------ ------------
Gross Profit $ 6,005 $ 6,267 $ 5,601 $ 6,119 $ 5,852 $ 5,852 $ 6,457
Total gross profit $ 57,302 $ 60,282 $ 53,859 $ 61,077 $ 62,948 $ 63,871 $ 70,327
============ ======== ======== ======== ============ ============ ============
Page B-6
OVERVIEW OF STAR GAS
DISCOUNTED CASH FLOW ANALYSIS
WEIGHTED AVERAGE COST OF CAPITAL DERIVATION
($ IN MILLIONS)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Implied Total Total
Market Unit Total Market Debt/ Debt as % Un-
Levered Val. Debt Price at Units Value of Total of Total levered
Comparable Company Beta (a) (Bk = Mkt) (10/14/98) Ont. (Mil) Equity Equity Capital Beta
- ------------------------------------------------------------------------------------------------------------------------------------
AmeriGas Partners, L.P. 0.42 $711.1 $24.125 41.9 $1,031.2 69.0% 40.8% 0.249
Cornerstone Propane Partners, L.P. 0.45 240.9 18.000 19.9 365.2 66.0% 39.8% 0.271
Ferrellgas Partners, L.P. 0.46 504.1 20.000 31.3 638.6 78.9% 44.1% 0.257
Heritage Propane Partners, L.P. 0.42 177.8 20.813 8.5 180.0 98.8% 49.7% 0.211
National Propane Partners, L.P. 0.61 145.5 9.438 11.2 108.2 134.5% 57.4% 0.260
Star Gas Partners, L.P. 0.39 109.8 19.563 6.3 124.9 87.9% 46.8% 0.208
Suburban Propane Partners, L.P. 0.40 427.9 19.625 28.7 575.3 74.4% 42.7% 0.229
Comparable group's average ----------------------------------------------
unlevered beta: 0.24 Star's capitalization-at market (b)
Star's debt-to-equity ratio(b): 87.9%
Star's debt as a percent of total Total debt $109.8 46.8%
capital(b): 46.8% Common 124.9 53.2%
Comparable group's beta relevered ------ ------
for Star's capital structure: 0.378 $234.6 100.0%
===== ----------------------------------------------
Derivation of Weighted Average Cost of Capital: Market Risk Premium Range (d)
- ---------------------------------------------- -------------------------------------
11.3% 12.3% 13.3%
Star's theoretical levered beta: 0.378 -------------------------------------
Assumed % of equity in Star's capital structure(b): 53.2%
Risk-free rate of return(c): 4.6%
Star's cost of equity range (at various market risk premiums): 8.9% 9.3% 9.6%
==== ==== ====
Star's assumed tax rate: 35.0%
Assumed % of debt in capital structure(b): 46.8%
Star's estimated cost of debt(e): 6.9%
Star's estimated after-tax cost of debt: 4.5% 4.5% 4.5% 4.5%
-------------------------------------
Star's weighted average cost of capital range(f): 6.8% 7.0% 7.2%
-------------------------------------
- -----------------
(a) Source: Bloomberg. 143 week (maximum weekly time period allowed, or the
number of weeks available, which may be less than 143) adjusted beta
relative to the S&P 500 index.
(b) Market value of debt is assumed to equal book value; debt is not net of
cash.
(c) Ten-year Treasury rate on October 14, 1998.
(d) Ibbotson Associates 1997. Total returns for small company stocks of 17.7%
minus the risk-free rate.
(e) Based on Star current debt structure.
(f) Calculation based upon use of the Capital Asset Pricing Model (CAPM).
Overview of Star Gas
Summary of Capital Structure
($ in thousands)
9/30/98 10/14/98
Book Value Coupon Market Price Market Value
---------- ------ ------------ ------------
Debt:
Credit Agreement
Working Capital facility $4,785 7.25% Not applicable $4,785
Acquisition facility 9,000 7.25% Not applicable 9,000
Notes payable
8.04% First Mortgage Notes 85,000 8.04% NA 85,000
7.17% First Mortgage Notes 11,000 7.17% NA 11,000
Total debt: $109,785
Effective cost of debt 6.9%
After-tax cost of debt 4.5%
9/30/98 10/14/98
Shares Out Market Price Market Value
---------- ------------ ------------
Equity:
Common units 3,858,999 $19,563 $75,492
Subordinated units 2,396,078 NA (a) 46,873
General Partner 2,497 (b)
Total Equity $124,862
Effective cost of equity 9.3%
Total Capitalization $234,647
WACC 7.0%
Less: Cash $500
Net Capitalization $234,147
(a) Market price assumed to equal common units.
(b) Implied 2% general partner interest.
Page B-8
Overview of Star Gas
Price and Volume
12/15/95 - 12/31/97
[GRAPH APPEARS HERE]
Page B-9
OVERVIEW OF STAR GAS
Price and Volume
1/1/98 - 10/14/98
[GRAPH APPEARS HERE]
Page B-10
Overview of Star Gas
Common Unit Trading History - Volume Distribution
1995 - 1998 (a)
- ------------------------------------------------------------------------------------------------------------------------------------
Dec. 15-31 1995 1996 1997 1998(a) 1995-1998(a)
----------------- -------------------- -------------------- -------------------- --------------------
Price Per Unit Volume % Volume % Volume % Volume % Volume %
----------------------- ----------------- -------------------- -------------------- -------------------- --------------------
Greater Than $24.600
24.400 24.600 32,400 100.00% 32,400 100.00%
24.200 24.400 55,300 99.34% 26,000 100.00% 75,500 99.69% 156,800 99.73%
24.000 24.200 27,200 98.20% 25,800 99.24% - 97.19% 53,000 98.44%
23.800 24.000 436,500 97.65% 38,400 98.49% - 97.19% 474,900 98.00%
23.600 23.800 119,200 88.71% 3,000 97.37% 131,200 97.19% 253,400 94.08%
23.400 23.600 79,500 86.27% 56,900 97.28% 85,600 92.83% 222,000 91.98%
23.200 23.400 105,000 84.64% 194,500 95.62% 173,700 89.99% 473,200 90.15%
23.000 23.200 396,900 82.49% 148,000 89.94% 51,400 84.22% 596,300 86.24%
22.800 23.000 229,200 74.36% 102,100 85.62% 36,200 82.52% 367,500 81.32%
22.600 22.800 96,100 69.67% 184,500 82.64% 42,700 81.32% 323,300 78.28%
22.400 22.600 273,800 67.70% 145,500 77.26% 192,300 79.90% 611,600 75.61%
22.200 22.400 33,400 100.00% 430,500 62.09% 128,000 73.01% 710,900 73.51% 1,302,800 70.56%
22.000 22.200 762,000 95.80% 510,900 53.28% 217,500 69.27% 256,500 49.91% 1,746,900 59.80%
21.800 22.000 400,400 42.82% 411,600 62.92% 395,800 41.40% 1,207,800 45.37%
Pre-
Announcement
-----------------------------------------------------------------------------------------------------------------------------
Price 21.600 21.800 422,600 34.62% 302,200 50.91% 243,600 28.26% 968,400 35.40%
-----------------------------------------------------------------------------------------------------------------------------
21.400 21.600 259,400 25.96% 290,200 42.09% 161,600 20.17% 711,200 27.40%
21.200 21.400 214,300 20.65% 372,800 33.62% 106,200 14.80% 693,300 21.53%
21.000 21.200 388,000 16.26% 499,100 22.74% 151,500 11.28% 1,038,600 15.80%
20.800 21.000 110,900 8.32% 108,000 8.17% 64,700 6.25% 283,600 7.22%
20.600 20.800 137,500 6.05% 34,300 5.01% 33,000 4.10% 204,800 4.88%
20.400 20.600 41,900 3.23% 16,000 4.01% 21,600 3.00% 79,500 3.19%
20.200 20.400 62,800 2.38% 46,500 3.55% 19,000 2.29% 128,300 2.53%
20.000 20.200 53,200 1.09% 22,000 2.19% - 1.66% 75,200 1.47%
19.800 20.000 24,400 1.55% - 1.66% 24,400 0.85%
19.600 19.800 28,600 0.83% - 1.66% 28,600 0.65%
Market
-----------------------------------------------------------------------------------------------------------------------------
Price 19.400 19.600 - 1.66% - 0.41%
-----------------------------------------------------------------------------------------------------------------------------
19.200 19.400 - 1.66% - 0.41%
19.000 19.200 - 1.66% - 0.41%
18.800 19.000 16,700 1.66% 16,700 0.41%
18.600 18.800 33,200 1.10% 33,200 0.27%
18.400 18.600 9,200 0.31%
Less Than 18.400
--------- ----------- ----------- ----------- ------------
Total Units for Period 795,400 4,883,500 3.425,900 3,012,100 12,107,700
Cumulative % of
Total Traded 6.57% 40.33% 28.30% 24.88% 100.00%
% Traded of Current
Units Out. (b) 20.61% 126.55% 88.78% 78.05% 313.75%
Wtd. Average Unit Price $22.11 $22.25 $21.89 $22.14 $22.12
- ----------------------------------
(a) Through October 14, 1998.
(b) Based on 3,858,999 common units outstanding.
OVERVIEW OF STAR GAS
SHAREHOLDER ANALYSIS (a)
====================================================================================================================================
Common
Institutions (b) Units Held % of Total
- ---------------- ---------- ----------
Bear, Stearns & Co. 53,200 1.4%
Graver Bokhof 28,900 0.7%
DLJ Corp. 24,950 0.6%
The Vanguard Group 13,800 0.4%
Advest Group, Inc. 12,015 0.3%
PaineWebber Group 9,870 0.3%
Legg Mason Wood Walker 500 0.0%
U.S. Trust Co. NY 500 0.0%
Cullen/Frost Bankers 300 0.0%
---------- ----------
All Institutions 144,035 3.7%
Common Subordinated
Directors and Officers Title Units Held % of Total Units Held % of Total
- ---------------------- -------------------------------- ---------- ---------- ------------ ----------
Wolfgang Traber Star Director and Petro Director 10,400 0.3% - 0.0%
Richard F. Ambury V.P. of Finance 525 0.0% - 0.0%
Total Directors & Officers Holdings ---------- ---------- ------------ ----------
10,925 0.3% - 0.0%
General Partner Common Subordinated
- --------------- Units Held % of Total Units Held % of Total
Petro ---------- ---------- ------------ ----------
60,727 1.6% 2,396,078 100.0%
- ------------------------------------------------------------------------ --------------------------------------------------------
Summary Common Subordinated
- ------- Units % of Total Units % of Total
---------- ---------- ------------ ----------
Insider Holdings
Directors and Officers as a Group 10,925 0.3% - 0.0%
General Partner 60,727 1.6% 2,396,078 100.0%
---------- ---------- ------------ ----------
71,652 1.9% 2,396,078 100.0%
Public Holdings
Institutional 144,035 3.7%
Retail 3,643,312 (c) 94.4%
---------- ----------
3,787,347 98.1%
Total Units Outstanding 3,858,999 100.0% 2,396,078 100.0%
========================================================================
=================================================================================================================================
________________________________________
(a) Based on units outstanding and most recently available data as of 10/14/98.
(b) Source: Bloomberg.
(c) AGE has 362,910 Common Units in its system.
Page B-12
OVERVIEW OF STAR GAS
RESEARCH COVERAGE
Star Gas has ongoing
research coverage by
two firms. Research Coverage Date Published Estimates Updated
----------------- -------------- -----------------
Published Research Reports
A.G. Edwards - Buy 1/5/98 8/25/98
PaineWebber - Attractive 12/30/97 8/3/98
Lehman 2/7/96 11/4/96
Earnings Estimates Number of Estimates Mean 1998 Mean 1999
------------------ ------------------- --------- ---------
IBES 2 NA NA
Nelson 2 ($0.14) $0.65
Zacks 2 ($0.19) $0.48
Page B-13
SUMMARY OF THE TRANSACTION
PRO FORMA STAR GAS UNITS OUTSTANDING
(IN THOUSANDS EXCEPT PER SHARE AND PER UNIT)
[_] There are currently 6,383 Star Gas units
outstanding comprised of 3,859 common units, 2,396
subordinated units and 128 implied general partner
("GP") units. The subordinated units and GP units
are currently assets of Petro.
[_] There are currently 26,574 shares of Petro common
stock outstanding held by public shareholders and
"affiliates." The public holds 14,327 Class A
shares, 11 Class B shares and 282 Class C shares.
The "affiliates" hold 11,953 shares which include
9,638 Class A shares and 2,315 Class C shares.
[_] Each shareholder of Petro will receive a certain
number of units in Star Gas such that the implied
consideration paid for each Petro share averages
$2.43 based on A.G. Edwards' estimates of the
value of the units being offered to Petro as
consideration.
[_] All of the publicly held 14,327 Class A shares and
282 Class C shares, and a portion of the
"affiliate" held Class A shares (5,243) and Class
C shares (1,328) will receive .13064 units of
newly created senior subordinated units for each
share (1,908 units to the public and 859 units to
the "affiliates", 2,767 units in total) with an
attached Contingent Unit ("CU"). See the following
page for a discussion of the Contingent Units.
A.G. Edwards estimates an implied value for these
units of $18.52/unit (see page D-3). The remaining
"affiliates" of Petro not receiving senior
subordinated units, who hold a total of 5,382
shares, will receive .15920 units for a total of
857 junior subordinated and GP units, both of
which will also include attached CUs. A.G. Edwards
estimates an implied value for these units of
$15.41/unit (see page D-6).
[_] The 2,396 subordinated units and 128 GP units
currently owned by Petro will effectively be
retired in the Transaction.
Page C-1
SUMMARY OF THE TRANSACTION
PRO FORMA STAR GAS UNITS OUTSTANDING
(IN THOUSANDS)
(continued)
DESCRIPTION OF CONTINGENT UNITS
[_] During the five year period, beginning with the
first full four quarters following the Merger, the
senior subordinated units, junior subordinated
units and general partner interests will have the
right to receive up to 909,000 senior subordinated
units upon Petro meeting a "Contingent Unit Test."
Each time the Contingent Unit Test is met, (but
not more frequently than once every four quarter
period), the senior subordinated units, junior
subordinated units and general partner interests
will receive an aggregate of 303,000 senior
subordinated units, subject to a maximum of
909,000 senior subordinated units. The Contingent
Unit Test will be met during any four quarter
period when distributable cash flow per unit
attributable to Petro exceeds $2.90 which is 32%
higher than the current annualized MQD of $2.20
and 26% higher than the proposed MQD of $2.30.
Page C-2
SUMMARY OF THE TRANSACTION
ALLOCATION OF CURRENT PETRO SHARES OUTSTANDING
(IN THOUSANDS)
--------------------------------------------------------------------------------
Class A Class C Total
----------- --------- ---------
Groups Receiving Senior Sub
---------------------------
Public 14,327 282 14,609
Affiliates 5,243 1,328 6,572
----------- --------- ---------
Total Receiving Senior Sub 19,570 1,610 21,181
Groups Receiving Junior Sub and GP
----------------------------------
Affiliates 4,395 987 5,382
----------- --------- ---------
Sub Total 23,965 2,598 26,562
=========== =========
Class B 11
---------
Total Shares including Class B 26,574
=========
Page C-3
SUMMARY OF THE TRANSACTION
PRO FORMA STAR GAS UNITS OUTSTANDING
PRE-FINANCING ASSUMPTIONS
(IN THOUSANDS)
----------------------------------------------------------
Issued to Petro
-----------------
Types of Units Current Public Affiliates Retired Pro Forma
----------------------- --------- --------- ------------ --------- ----------
Common 3,859 - - - 3,859
Senior Subordinated - 1,908 859 - 2,767
Subordinated 2,396 - - (2,396) -
Junior Subordinated
& New General Partner - - 857 - 857
Old General Partner 128 - - (128) -
--------- ----------
6,383 7,482
Page C-4
SUMMARY OF THE TRANSACTION
EQUITY PURCHASE PRICE CALCULATION
IMPLIED EQUITY VALUE OF PETRO'S ASSETS
($ AND UNITS IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)
--------------------------------------------------------------------------------------------------
Value of Securities
Event Issued to and Retired from Petro
-------------------------------------------------------- -------------------------------------
Issuance of Senior Subordinated
Units to Public Petro Shareholders 1,908 x $18.52
------------------------------
$35,337
Issuance of Senior Subordinated
Units to Affiliate Petro Shareholders 859 x $18.52
------------------------------
$15,900
Issuance of Junior Subordinated
& General Partner Units to Affiliate Petro Shareholders 857 x $15.41
------------------------------
$13,203
---------
Purchase Price of Petro's Equity $64,439
-----------------------------------------------------------------------------------------------
Divided by 26,562 shares of Petro's Common stock = $2.43 per share
(Excludes 11 Class B Shares)
-----------------------------------------------------------------------------------------------
Retire Subordinated Units held by Petro (2,396) x $15.41
------------------------------
($36,924)
Retire Old General Partner Units held by Petro (128) x $15.41
------------------------------
($1,967)
---------
Equity Value of Petro's Heating Oil Assets $25,549
Page C-5
SUMMARY OF THE TRANSACTION
PRO FORMA CAPITAL STRUCTURE
PROJECTED 9/30/98
($ IN THOUSANDS)
---------------------------------------------------------------------------------------------
Pro forma
Star Gas Petro Adjustments Star Gas
---------- ------- -------------- ----------
Debt:
8.04% First Mortgage Notes $85,000 - - $85,000
7.25% WC Revolver 4,785 - - 4,785
7.25% Acquisition Facility 9,000 - - 9,000
7.17% First Mortgage Notes 11,000 - - 11,000
11.96% Senior Notes - $60,000 ($60,000) -
14.10% Senior Notes - 3,100 (3,100) -
14.10% Subordinated Notes - 3,100 (3,100) -
10.13% Sub Notes & Sr Notes - 50,000 (50,000) -
9.38% Sub Notes & Sr Notes - 75,000 (75,000) -
12.25% Sub Notes & Sr Notes - 81,250 (81,250) -
8.00% Existing Acq Notes Payable - 14,508 - 14,508
11.5% Exchanged Debt - - 6,520 6,520
9.0% Exchanged Debt - - 63,126 63,126
9.0% New Debt - - 120,000 120,000
---------- -------- --------- ---------
Total Debt $109,785 $286,958 ($82,804) $313,939
Weighted average cost of Debt 8.6%
Preferred Stock:
14.33% Preferred Stock $ 0 $4,167 ($4,167) $ 0
12.88% Preferred Stock - 30,000 (30,000) -
----------- --------- ---------- ----------
- $34,167 ($34,167) -
Common Equity: $57,206 ($210,486) $115,389 ($37,891)
Estimated Equity Value:
Pro Forma Estimated Estimated
Units Out. Unit Price Market Value
----------- ---------- ------------
Common 10,841 (a) $19.56 (c) $212,086
Senior Subordinated 2,767 (b) 18.52 52,246
Junior Subordinated and GP 857 15.41 13,206
---------- -----------
14,466 $276,538
Total Capitalization: $590,477
Less: Cash and Cash Collateral 21,942
-----------
Net Capitalization $568,535
(a) Comprised of 3,858 currently outstanding units, 6,879
units to be issued in common unit offering to close
concurrent with the Merger, and 104 units issued as a
consent fee in the Refinancing Transaction.
(b) Includes 2,767 units issued to the Petro shareholders.
(c) Current price of Star Gas (10/14/98) $19,563
Page C - 6
IMPLIED UNIT VALUE ANALYSIS
COMMON UNITS
[_] A.G. Edwards calculated a range of values for the Senior Subordinated,
Junior Subordinated and General Partner units, based on a required rate of
return, trading yield, and discount to the common units.
=====================================================================================================
1999 2000 2001 2002 Thereafter
------ ------ ------ ------ ------------
COMMON UNIT
Indicated Distribution $ 2.30 $2.30 $2.30 $2.30 $2.30
Cost of Equity (a) 9.3% 9.3% 9.3% 9.3% 9.3%
------
NPV of future distributions $24.65
------
1999 2000 2001 2002 Thereafter
------ ------ ------ ------ ------------
COMMON UNIT
Indicated Distribution $ 2.30 $2.30 $2.30 $2.30 $2.30
Cost of Equity (a) 9.8% 9.8% 9.8% 9.8% 9.8%
------
NPV of future distributions $23.59
------
1999 2000 2001 2002 Thereafter
------ ------ ------ ------ ------------
COMMON UNIT
Indicated Distribution $ 2.30 $2.30 $2.30 $2.30 $2.30
Cost of Equity (a) 10.2% 10.2% 10.2% 10.2% 10.2%
------
NPV of future distributions $22.62
------
---------------------------------------------------- -----------------------------------
AVERAGE PRICE OF LAST 20 TRADING DAYS: $20.26 CURRENT PRICE (10/14/98 $19.56
IMPLIED YIELD (B): 11.4% CURRENT YIELD (B): 11.8%
---------------------------------------------------- -----------------------------------
(a) Per Cost of Capital analysis on page D-2.
(b) Assumes a $2.30 distribution.
[_] Certain analysis included in this presentation, including the calculations
of the implied value of the senior subordinated, junior subordinated and GP
units, require an estimate of the future price of the common units at
Closing. To serve as a proxy for this future price, A.G. Edwards used the
average common unit closing price for the last 20 trading days ended October
14, 1998. Such price is 10.4% to 17.8% lower than the common units' implied
unit value per the above analysis, and 3.6% greater than the common units'
most recent closing price on October 14, 1998.
Page D-1
IMPLIED UNIT VALUE ANALYSIS
THEORETICAL PRO FORMA COST OF EQUITY FOR COMMON UNITS
($ in millions)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Implied Total Total
Market Unit Total Market Debt/ Debt as % Un-
Levered Val. Debt Price at Units Value of Total of Total levered
Comparable Company Beta (a) (Bk=Mkt) (10/14/98) Out. (Mil) Equity Equity Capital Beta
- ------------------------------------------------------------------------------------------------------------------------------------
AmeriGas Partners, L.P. 0.42 $711.1 $24.125 41.9 $1,031.2 69.0% 40.8% 0.249
Cornerstone Propane Partners, L.P. 0.45 240.9 18.000 19.9 365.2 66.0% 39.8% 0.271
Ferrellgas Partners, L.P. 0.46 504.1 20.000 31.3 638.6 78.9% 44.1% 0.257
Heritage Propane Partners, L.P. 0.42 177.8 20.813 8.5 180.0 98.8% 49.7% 0.211
National Propane Partners, L.P. 0.61 145.5 9.438 11.2 108.2 134.5% 57.4% 0.260
Star Gas Partners, L.P. 0.39 109.8 19.563 6.3 124.9 87.9% 46.8% 0.208
Suburban Propane Partners, L.P. 0.40 427.9 19.625 28.7 575.3 74.4% 42.7% 0.229
---------------------------------------------------------
Pro forma capitalization - at market (b)
Comparable group's average unlevered beta: 0.24 Total debt $313.9 53.2%
Pro forma debt-to-equity ratio (b): 113.5% Total equity 276.5 46.8%
------ ------
Pro forma debt as a percent of total capital (b): 53.2% $590.5 100.0%
=========================================================
Comparable group's beta relevered for Pro forma
capital structure: 0.418
Derivation of Weighted Average Cost of Capital: Market Risk Premium Range (d)
- ----------------------------------------------- ---------------------------------
11.3% 12.3% 13.3%
---------------------------------
Pro forma theoretical levered beta: 0.418
Assumed % of equity in Pro forma capital structure (b) 46.8%
Risk-free rate of return (c): 4.6%
Pro forma cost of equity range (at various market risk premiums): 9.3% 9.8% 10.2%
Pro forma assumed tax rate: === === ====
Assumed % of debt in capital structure (b): 35.0%
Pro forma estimated cost of debt (e): 53.2%
Pro forma estimated after-tax cost of debt: 8.6%
5.6% 5.6% 5.6% 5.6%
---------------------------------
Pro forma weighted average cost of capital range (f): 7.3% 7.5% 7.7%
---------------------------------
__________________________________________
(a) Source: Bloomberg, 143 week (maximum weekly time period allowed, or the
number of weeks available, which may be less than 143) adjusted beta
relative to the S&P 500 index.
(b) Market value of debt is assumed to equal book value. See Page C-6 for
equity calculation.
(c) Ten-year Treasury rate on October 14, 1998.
(d) ?????? Associates 1997. Total returns for small company stocks of 17.7%
?????? the risk-free rate.
(e) Based on Pro forma debt structure.
(f) Calculation based upon use of the Capital Asset Pricing Model (CAPM).
Page D-2
IMPLIED UNIT VALUE ANALYSIS
SENIOR SUBORDINATED UNITS
- -----------------------------------------------------------------------------
Range
--------------
Required rate of return (a) 20.0% - 30.0% $17.90 - 22.28
Trading yield (b) 11.5% - 13.5% $17.04 - 20.00
Discount to common units (c) 10.0% - 20.0% $16.21 - 18.23
Range $16.21 - 22.28
Adjusted Range (d) $17.04 - 20.00
--------------
Assumed value (e) $18.52
--------------
(a) Represents required rate of return during subordination period, which is
assumed for the minimum three years.
Thereafter, the rate of return is assumed to equal that of the common
units, for a blended required rate of return of 12.4% to 15.3%. Cost per
unit calculations provided on page D-4.
(b) Based on a $2.30 annualized MQD.
(c) Based on a discount to the common unit's average closing price for the
last 20 trading days ended 10/14/98 of $20.26, as referenced on
page D-1.
(d) Represents the middle values of both the range of highs and lows.
(e) Implied required rate of return, trading yield and discount to common
at a unit price of $18.52 are 28.1% during subordination (14.7% blended),
12.4%, and 8.6%, respectively.
Page D-3
IMPLIED UNIT VALUE ANALYSIS
SENIOR SUBORDINATED UNITS
REQUIRED RATE OF RETURN
===============================================================================
1999 2000 2001 2002(a) Thereafter(a)
------ ------ ------ --------- -------------
Senior Subordinated Unit (without CU)
Indicated Distribution $ 2.30 $ 2.30 $ 2.30 $ 2.30 $ 2.30
Cost of Equity 20.0% 20.0% 20.0% 9.8% 9.8%
-------
NPV of future distributions $ 18.50
-------
CONTINGENT UNIT
Indicated Distribution (b) $ 0 $ 697 $1,394 $2,091 $ 2,091
Cost of equity 20.0% 20.0% 20.0% 9.8% 9.8%
-------
NPV of future distributions $13,699
-------
-------
UNIT VALUE OF SENIOR SUBORDINATED UNIT WITH ATTACHED CU $ 22.28
-------
(Each Unit has claim to 1/3,624 of the Contingent Unit.)
1999 2000 2001 2002(a) Thereafter(a)
------- ------- ------- ------- -------------
SENIOR SUBORDINATED UNIT (WITHOUT CU)
Indicated Distribution $ 2.30 $ 2.30 $2.30 $2.30 $2.30
Cost of Equity 30.0% 30.0% 30.0% 9.8% 9.8%
---------
NPV of future distributions $ 14.91
---------
CONTINGENT UNIT
Indicated Distribution (b) $ 0 $ 697 $1,394 $2,091 $2,091
Cost of Equity 30.0% 30.0% 30.0% 9.8% 9.8%
---------
NPV of future distributions $ 10,806
---------
---------
UNIT VALUE OF SENIOR SUBORDINATED UNIT WITH ATTACHED CU $ 17.90
---------
(Each Unit has claim to 1/3,624 of the Contingent Unit.)
(a) Distributions made after 2001 are discounted at the cost of equity for the
Common Units, estimated at 9.8%, due to the end of the Subordination
Period.
(b) Assumes that the Contingent Units Test is met in each of the first three
years.
Page D-4
IMPLIED UNIT VALUE ANALYSIS
THEORETICAL PRO FORMA COST OF EQUITY FOR SENIOR SUBORDINATED UNITS
($ in millions)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Implied Total Total
Market Unit Total Market Debt/ Debt as % Un-
Levered Val. Debt Price at Units Value of Total of Total Levered
Comparable Company Beta (a) (Bk=Mkt) (10/14/98) Out. (Mil) Equity Equity Capital Beta
- -----------------------------------------------------------------------------------------------------------------------------------
AmeriGas Partners, L.P. 0.42 $711.1 $ 24.125 41.9 $1,031.2 69.0% 40.8% 0.249
Cornerstone Propane Partners, L.P. 0.45 240.9 18.000 19.9 365.2 66.0% 39.8% 0.271
Ferrellgas Partners, L.P. 0.46 504.1 20.000 31.3 638.6 78.9% 44.1% 0.257
Heritage Propane Partners, L.P. 0.42 177.8 20.813 8.5 180.0 98.8% 49.7% 0.211
National Propane Partners, L.P. 0.61 145.5 9.438 11.2 108.2 134.5% 57.4% 0.260
Star Gas Partners, L.P. 0.39 109.8 19.563 6.3 124.9 87.9% 46.8% 0.208
Suburban Propane Partners, L.P. 0.40 427.9 19.625 28.7 575.3 74.4% 42.7% 0.229
-----------------------------------------------------------------
Pro forma capitalization - at market (b)
Comparable group's average unlevered beta: 0.24 Total debt $526.0 89.1%
Pro forma debt - to - equity ratio (b): 816.1% Total equity 64.5 10.9%
------ ------
Pro forma debt as a percent of total capital (b): 89.1% $590.5 100.0%
=================================================================
Comparable group's beta relevered for Pro forma 1.518
capital structure: =====
Derivation of Weighted Average Cost of Capital: Market Risk Premium Range (d)
- ----------------------------------------------- ------------------------------------
11.3% 12.3% 13.3%
------------------------------------
Pro forma theoretical levered beta: 1.518
Assumed % of equity in Pro forma capital structure (b): 10.9%
Risk-free rate of return (c): 4.6%
Pro forma cost of equity range (at various market risk premiums): 21.8% 23.3% 24.8%
===== ===== =====
------------------------------------
_________________________________________
(a) Source: Bloomberg. 143 week (maximum weekly time period allowed, or the
number of weeks available, which may be less than 143) adjusted beta
relative to the S&P 500 index.
(b) Market value of debt is assumed to equal book value; debt includes the
market value of pro forma common units; equity includes the value of
senior sub, junior sub units, and GP units.
(c) Ten - year Treasury rate on October 14, 1998.
(d) Ibbotson Associates 1997. Total returns for small company stocks of 17.7%
minus the risk-free rate.
Page D-5
IMPLIED UNIT VALUE ANALYSIS
JUNIOR SUBORDINATED AND GP UNITS
------------------------------------------------------------------------
Range
-----------------
Required rate of return (a) 35.0% - 45.0% $14.52 - 16.84
Trading yield (b) 14.0% - 16.0% $14.38 - 16.43
Discount to common units (c) 25.0% - 35.0% $13.17 - 15.19
Range $13.17 - 16.84
Adjusted Range (d) $14.38 - 16.43
-----------------
Assumed value (e) $15.41
-----------------
(a) Represents required rate of return during subordinated period, which
is assumed for the minimum three years.
Thereafter, the rate of return is assumed to equal that of the
common units, for a blended required rate of return of 16.2% to
18.7%. Cost per unit calculations provided on page D-7.
(b) Based on a $2.30 annualized MQD.
(c) Based on a discount to the common unit's average closing price for
the last 20 trading days ended 10/14/98 of $20.26, as referenced on
page D-1.
(d) Represents the middle values of both the range of highs and lows.
(e) Implied required rate of return, trading yield and discount to
common at a unit price of $15.41 are 39.4% during subordination
(17.6% blended), 14.9%, and 23.9%, respectively.
Page D-6
IMPLIED UNIT VALUE ANALYSIS
JUNIOR SUBORDINATED AND GP UNITS
REQUIRED RATE OF RETURN
- --------------------------------------------------------------------------------
1999 2000 2001 2002(A) THEREAFTER(A)
-------- ------- ------- -------- --------------
JUNIOR SUBORDINATED AND GP UNITS
Indicated Distribution $ 2.30 $2.30 $ 2.30 $2.30 $ 2.30
Cost of Equity 35.0% 35.0% 35.0% 9.8% 9.8%
---------
NPV of future distributions $ 13.49
---------
CONTINGENT UNIT
Indicated Distribution (b) $ 0 $ 697 $1,394 $2,091 $2,091
Cost of Equity (c) 25.0% 25.0% 25.0% 9.8% 9.8%
---------
NPV of future distributions $12,138
---------
---------
UNIT VALUE OF JUNIOR SUBORDINATED AND GP UNIT WITH ATTACHED CU $ 16.84
---------
(Each Unit has claim to 1/3,624 of the Contingent Unit.)
1999 2000 2001 2002(A) THEREAFTER(A)
-------- ------- ------- -------- --------------
JUNIOR SUBORDINATED AND GP UNITS
Indicated Distribution $ 2.30 $2.30 $ 2.30 $2.30 $ 2.30
Cost of Equity 45.0% 45.0% 45.0% 9.8% 9.8%
---------
NPV of future distribution $ 11.17
---------
CONTINGENT UNIT
Indicated Distribution (b) $ 0 $ 697 $1,394 $2,091 $2,091
Cost of Equity (c) 25.0% 25.0% 25.0% 9.8% 9.8%
---------
NPV of future distribution $12,138
---------
---------
UNIT VALUE OF JUNIOR SUBORDINATED AND GP UNIT WITH ATTACHED CU $ 14.52
---------
(Each Unit has claim to 1/3,624 of the Contingent Unit.)
(a) Distributions made after 2001 are discounted at the cost of equity for the
Common Units, estimated at 9.8%, due to the end of the Subordination Period.
(b) Assumes that the Contingent Units Test is met in each of the first three
years.
(c) Utilized senior subordinated discount rate as CUs convert to senior
subordinated units.
Page D-7
IMPLIED UNIT VALUE ANALYSIS
THEORETICAL PRO FORMA COST OF EQUITY FOR JUNIOR SUBORDINATED AND GP UNITS
($ in millions)
===================================================================================================================================
TOTAL IMPLIED TOTAL TOTAL
MARKET UNIT TOTAL MARKET DEBT/ DEBT AS % UN-
LEVERED VAL. DEBT PRICE AT UNITS VALUE OF TOTAL OF TOTAL LEVERED
COMPARABLE COMPANY BETA (A) (BK = MKT) (10/14/98) OUT. (MIL) EQUITY EQUITY CAPITAL BETA
- ----------------------------------------------------------------------------------------------------------------------------
AmeriGas Partners, L.P. 0.42 $711.1 $24.125 41.9 $ 1,031.2 69.0% 40.8% 0.249
Cornerstone Propane Partners, L.P. 0.45 240.9 18.000 19.9 365.2 66.0% 39.8% 0.271
Ferrellgas Partners, L.P. 0.46 504.1 20.000 31.3 638.6 78.9% 44.1% 0.257
Heritage Propane Partners, L.P. 0.42 177.8 20.813 8.5 180.0 98.8% 49.7% 0.211
National Propane Partners, L.P. 0.61 145.5 9.438 11.2 108.2 134.5% 57.4% 0.260
Star Gas Partners, L.P. 0.39 109.8 19.563 6.3 124.9 87.9% 46.8% 0.208
Suburban Propane Partners, L.P. 0.40 427.9 19.625 28.7 575.3 74.4% 42.7% 0.229
--------------------------------------------------
Pro forma Capitalization-at market (b)
Comparable group's average unlevered beta: 0.24 Total debt $577.3 97.8%
Pro forma debt-to-equity ratio (b): 4371.2% Total equity 13.2 2.2%
------ -----
$590.5 100.0%
--------------------------------------------------
Pro forma debt as a percent of total capital (b): 97.8%
Comparable group's beta relevered for Pro forma capital structure: 7.080
=====
DERIVATION OF WEIGHTED AVERAGE COST OF CAPITAL: MARKET RISK PREMIUM RANGE (D)
- ---------------------------------------------- --------------------------------------
11.3% 12.3% 13.3%
--------------------------------------
Pro forma theoretical levered beta: 7.080
Assumed % of equity in Pro forma capital structure (b): 2.2%
Risk-free rate of return (c): 4.6%
Pro forma cost of equity range (at various market risk premiums): 84.6% 91.7% 98.8%
===== ===== =====
--------------------------------------
____________________________________________
(a) Source: Bloomberg. 143 week (maximum weekly time period allowed, or the
number of weeks available, which may be less than 143) adjusted beta
relative to the S&P 500 index.
(b) Market value of debt is assumed to equal book value; debt includes the
market value of common and senior subordinated units; equity includes the
value of junior sub and GP units.
(c) Ten-year Treasury rate on October 14, 1998.
(d) Ibbotson Associates 1997. Total returns for small company stocks of 17.7%
minus the risk-free rate.
Page D-8
PRO FORMA MERGER ANALYSIS
[_] A.G. Edwards analyzed the impact of the Transaction on the
Partnership's distributable cash flow per unit, the related accretion,
common unit coverage and total unit coverage on a pro forma basis.
------------------------------------------------------------------
STAR GAS STAR GAS
STAND-ALONE PRO FORMA
------------- -----------
DCF PER UNIT
1998 Adjusted for Actual (a) $1.27 $1.53
1998 Normalized (b) 1.84 2.40
1999 Projected 2.02 2.60
ACCRETION/DILUTION
1998 Adjusted for Actual (a) $0.26
1998 Normalized (b) 0.56
1999 Projected 0.58
COMMON UNIT COVERAGE
1998 Adjusted for Actual (a) 0.96x 0.89x
1998 Normalized (b) 1.38 1.39
1999 Projected 1.51 1.51
TOTAL UNIT COVERAGE
1998 Adjusted for Actual (a) 0.58x 0.66x
1998 Normalized (b) 0.84 1.05
1999 Projected 0.92 1.13
__________________________________________________________________
(a) Projected results are adjusted for the year to date actual
performance.
(b) Adjusted to represent normal weather.
Page E-1
Merger Premiums to Market Value Analysis
[_] A.G. Edwards analyzed the premium of the consideration to be
received by Petro Common Shareholders and compared the
premium to Petro's current and historical prices. These
premiums were compared to premiums paid in acquisitions of
majority or remaining interests announced and completed
between January 1, 1996 and October 7, 1998 where the
target's share price one week prior to the announcement date
was either (i) equal to or less than $5, (ii) greater than
$5 and less than $10, or (iii) equal to or greater than $10.
[_] Premiums were calculated one day, one week, four weeks,
three months and one year prior to the announcement of the
agreement in principle for each merger.
--------------------------------------------------------------------------------------------------------------------
Comparison of Premium Paid
--------------------------------------------------------------------------------------------------------------------
Petro at Mean of Transactions Mean of Transactions Mean of Transactions
Premium to stock price prior to $2.43 per Unit Equal to or Greater Than $5 Equal to or
announcement on August 14th: Offer Price Less Than $5 and Less Than $10 Greater Than $10
--------------------------------------------------------------------------------------------------------------------
One day prior: 29.6% 39.7% 34.3% 28.1%
One week prior: 38.9% 48.8% 42.3% 32.7%
Four weeks prior: 17.8% 55.4% 48.5% 39.6%
Three months prior: 52.5% 67.1% 58.0% 77.9%
One year prior: -19.0% 53.8% 45.8% 53.2%
-----------------------------------------------------------------------------------
Maximum 52.5% 67.1% 58.0% 77.9%
Minimum -19.0% 39.7% 34.3% 28.1%
-----------------------------------------------------------------------------------
[_] The premium to Petro's current stock price ($1.031 as of
October 14, 1998) was 135.6%.
Page F-1
Merger Premiums to Market Value Analysis
Mergers with Target Price Equal to or Less than $5 per Share
Announced and Completed 1/1/96-10/9/98
- ------------------------------------------------------------------------------------------------------------------------------------
Date Date
Announced Effective Target Name Target Business Description Acquiror Name
- ------------------------------------------------------------------------------------------------------------------------------------
01/10/96 06/26/96 American Resource Corp Gold mining company REA Gold Corp
01/18/96 08/23/96 AMSERV Healthcare Inc Pvd temp nursing employment Star Multi Care Services Inc
01/23/96 05/09/96 Portage Industries Corp Mnfr extruded plastic sheets Spartech Corp
02/05/96 09/30/96 Customedix Corp Mnfr dental, medical products CUS Acquisitions Inc
02/13/96 07/12/96 Medical Innovations Inc Pvd home health care services Horizon/CMS Healthcare Corp
02/15/96 04/29/96 LDI Corp Computer equip leasing svcs NationsBank Corp, Charlotte, NC
02/28/96 07/11/96 Salton/Maxim Housewares Inc Mnfr electric housewares, fans Windmere Corp
03/13/96 09/27/96 DeSoto Inc Mnfr paints and detergents Keystone Consolidated Inds Inc
04/16/96 05/31/96 CIS Technologies Inc Manufacture computers National Data Corp
04/22/96 06/04/96 Cornerstone Natural Gas Co Natural gas distribution svcs El Paso Field Svcs(El Paso)
05/03/96 03/17/98 Homeowners Group Inc Real estate, insurance agency Cross Country Group Inc
05/06/96 09/03/96 Transcisco Industries Inc Mnfr, service railroad equip Trinity Industries Inc
05/07/96 09/03/96 NMR of America Inc Pvd. medical equip leasing svcs Medical Resources Inc
05/13/96 08/30/96 MDT Corp Mnfr sterility assurance equip Getinge Industries AB
05/15/96 09/10/96 Carlisle Plastics Inc Mnfr, whl plastic prods, resins Tyco International Ltd
06/03/96 01/09/97 Bio-Dental Technologies Corp Provide dental research svcs Zila Inc
06/10/96 07/22/96 SysteMed Inc Pvd medical services Merck-Medco Managed Care Inc
06/11/96 09/03/96 Computer Identics Corp Manufacture bar code scanners Robotic Vision Systems Inc
06/17/96 10/07/96 Scanforms Inc Mnfr business forms Big Flower Press Holdings Inc
06/21/96 08/23/96 Computer Petroleum Corp Information retrieval svcs United Communications Group
06/24/96 12/05/96 MEM Co Inc. Manufacture toiletries Renaissance Cosmetics Inc
07/31/96 11/13/96 Calgene Inc Own and operate greenhouse Monsanto Co
08/13/96 02/27/97 LaTex Resources Inc Oil and gas expln, prodn Alliance Resources PLC
09/10/96 01/03/97 GreenStone Industries Corp Manufacture stationery Louisiana-Pacific Corp
09/11/96 03/04/97 Chempower Inc Insulation, asbestos abatement American Eco Corp
09/16/96 12/06/96 Proler International Corp Whl scrap metals & metals Schnitzer Steel Industries Inc
09/26/96 01/24/97 General Physics Corp Provide training services National Patent Development
10/02/96 12/27/96 Software Publishing Corp Develop software Allegro New Media
10/03/96 11/12/97 Pittencrieff Communications Pvd radiotelephone commun svcs Nextel Communications Inc
10/04/96 12/31/96 Pet Food Warehouse Inc Own, op pet food stores Petco Animal Supplies Inc
10/30/96 12/20/96 Pacific Rehab & Sports Med Own, op rehab hospital Horizon/CMS Healthcare Corp
11/05/96 03/14/97 Panatech Research &
Development Manufacture semiconductors Harbour Group Ltd
11/25/96 02/28/97 American Studios Inc Pvd photography services PCA International Inc
12/06/96 03/18/97 MaxServ Inc (Sears Roebuck) Pvd technical info support svc Sears Roebuck & Co
12/09/96 02/28/97 Houston Biotechnology Inc Mnfr monoclonal antibodies Medarex Inc
01/24/97 07/02/97 INCSTAR Corp (Sorin
Biomedical) Mnfr diagnostic substances American Standard Inc
01/28/97 05/21/97 Calgene Inc (Monsanto Co) Own and operate greenhouse Monsanto Co
01/30/97 08/12/97 AST Research Inc Mnfr computers; dvlp software Samsung Electronic Co Ltd
02/07/97 08/01/97 MS Financial (MS Diversified) Pvd financial credit services Search Financial Services Inc
02/11/97 07/31/97 Serv-Tech Inc Maintenance and cleaning svcs Philip Environmental Inc
03/04/97 06/27/97 Audio King Corp Own, op consumer electn stores Ultimate Electronic Inc
04/15/97 06/30/97 Kurzweil Applied Intelligence Electronic computing equip Lernout & Hauspic Speech
04/30/97 07/25/97 Arden Industrial Products Inc Whl fasteners Park-Ohio Industries Inc
05/01/97 08/01/97 Cryenco Sciences Inc Mnfr liquid gas storage tanks Chart Industries Inc
05/08/97 09/10/97 Imex Medical Systems Inc Mnfr fetal diagnostic instr Nicolet Biomedical Inc
06/16/97 09/30/97 Frederick's of Hollywood, Inc Women's clothing stores Investor Group
06/24/97 07/25/97 Jillians Entertainment Corp Own, op billiard clubs JW Childs Equity Partners LP
07/23/97 12/02/97 Rudy's Restaurant Group Own and operate restaurants Benihana Inc
08/01/97 09/26/97 Community Care of America Inc Own, op nursing homes Integrated Health Services Inc
08/07/97 12/02/97 Magnetic Technologies Corp Manufacture copiers, printers SPS Technologies Inc
08/14/97 12/31/97 Allied Capital Advisers Inc Investment advisory svcs Allied Capital Lending Corp
09/02/97 12/03/97 Ground Round Restaurants Own and operate restaurants GRR Holdings LLC
09/04/97 12/30/97 Cinergi Pictures Entertainment Pvd motion picture prodn svcs Investor Group
09/26/97 09/26/97 Laclede Steel Co Own, operate steel works Birmingham Steel Corp
10/10/97 01/07/98 Puro Water Group Inc Whl bottled water United States Filter Corp
10/13/97 03/19/98 Integrated Brands Inc Produce ice cream Yogen Furz World-Wide Inc
11/03/97 02/25/98 Individual Inc Pvd on-line info retrieval svc Desktop Data Inc
11/04/97 01/12/98 ComputerVision Corp Mnfr computers, peripherals Parametric Technology Corp
11/12/97 03/03/98 PureTec Corp Manufacture plastic products Tekni-Plex Inc
11/24/97 01/07/98 General Host Corp Own, op specialty retail stores Cypress Group LLC
12/02/97 03/17/98 Staodyn Inc Mnfr electromedical equipment Rehabilicare Inc
12/12/97 02/13/98 Impact Systems Inc Paper prodn control systems Voith Sulzer Paper Technology
12/12/97 09/10/98 Timber Lodge Steakhouse Inc Own, op restaurants Santa Barbara Restaurant Group
12/15/97 02/24/98 MetroGolf Inc Own, op golf courses Family Golf Centers Inc
12/22/97 05/20/98 Artistic Greetings Inc Mnfr personalized stationery MDC Communications Corp
- ------------------------------------------------------------------------------------------------------------------------------------
Value of Enter-
Trans- prise
Date Date Acquiror action Value
Announced Effective Target Name Business Description ($ mil) ($ mil)
- ------------------------------------------------------------------------------------------------------------------------------------
01/10/96 06/26/96 American Resource Corp Gold mining company 77.5 76.353
01/18/96 08/23/96 AMSERV Healthcare Inc Pvd home health care services 9.2 7.895
01/23/96 05/09/96 Portage Industries Corp Manufacture plastic products 15.8 17.540
02/05/96 09/30/96 Customedix Corp Investment company 3.6 15.103
02/13/96 07/12/96 Medical Innovations Inc Pvd nursing care services 30.3 41.725
02/15/96 04/29/96 LDI Corp Bank hldg co; pvd finl svcs 28.1 288.893
02/28/96 07/11/96 Salton/Maxim Housewares Inc Mnfr personal care appliances 21.1 53.442
03/13/96 09/27/96 DeSoto Inc Manufacture steel wire 36.1 40.529
04/16/96 05/31/96 CIS Technologies Inc Pvd info, transaction svcs 99.3 112.471
04/22/96 06/04/96 Cornerstone Natural Gas Co Own, op oil and gas pipelines 96.6 97.614
05/03/96 03/17/98 Homeowners Group Inc Pvd homeowner membership svcs 11.4 14.968
05/06/96 09/03/96 Transcisco Industries Inc Mnfr transp equip,parts 44.7 51.126
05/07/96 09/03/96 NMR of America Inc Own,op diagnostic imaging ctrs 40.4 57.369
05/13/96 08/30/96 MDT Corp Mnfr sterilizing equipment 70.3 69.457
05/15/96 09/10/96 Carlisle Plastics Inc Mnfr fire protection systems 122.4 273.282
06/03/96 01/09/97 Bio-Dental Technologies Corp Mnfr,whl pharmaceuticals 40.3 48.477
06/10/96 07/22/96 SysteMed Inc Health insurance company 64.8 60.646
06/11/96 09/03/96 Computer Identics Corp Mnfr 2-D,3-D vision-based sys 42.0 40.881
06/17/96 10/07/96 Scanforms Inc Pvd advertising,marketing svcs 27.5 15.661
06/21/96 08/23/96 Computer Identics Corp Publish newsletters 12.0 11.548
06/24/96 12/05/96 MEM Co Inc Investor group 38.2 29.577
07/31/96 11/13/96 Calgene Inc Mnfr agro chems,manmade fibers 50.0 584.080
08/13/96 02/27/97 LaTex Resources Inc Oilo and gas exploration, prodn 27.1 44.759
09/10/96 01/03/97 GreenStone Industries Corp Mnfr lumber,plywood,pulp 29.2 40.823
09/11/96 03/04/97 Chempower Inc Pvd engineering services 50.0 36.189
09/16/96 12/06/96 Proler International Corp Manufacture steel products 42.5 68.146
09/26/96 01/24/97 General Physics Corp Mnfr contact lenses 261. 70.360
10/02/96 12/27/96 Software Publishing Corp Pvd software services 25.2 8.786
10/03/96 11/12/97 Pittencrieff Communications Pvd cellular telephone svcs 158.4 159.860
10/04/96 12/31/96 Pet Food Warehouse Inc Own and operate pet stores 60.7 55.986
10/30/96 12/20/96 Pacific Rehab & Sports Med Pvd nursing care services 72.7 75.706
11/05/96 03/14/97 Panatech Research &
Development Mnfr steel cutting tools 29.2 26.218
11/25/96 02/28/97 American Studios Inc Pvd photo processing services 66.3 67.650
12/06/96 03/18/97 MaxServ Inc (Sears Roebuck) Department stores; finl svcs 46.0 87.263
12/09/96 02/28/97 Houston Biotechnology Inc Manufacture pharmaceuticals 8.6 8.700
01/24/97 07/02/97 INCSTAR Corp (Sorin
Biomedical) Transportation, building prod 106.3 102.865
01/28/97 05/21/97 Calgene Inc (Monsanto Co) Mnfr agro chems, manmade fibers 242.6 567.548
01/30/97 08/12/97 AST Research Inc Mnfr consumer electronics 495.8 558.108
02/07/97 08/01/97 MS Financial (MS Diversified) Pvd business credit services 17.2 102.602
02/11/97 07/31/97 Serv-Tech Inc Provide waste management svcs 73.4 54.956
03/04/97 06/27/97 Audio King Corp Own, op radio, TV, electn stores 6.0 12.363
04/15/97 06/30/97 Kurzweil Applied Intelligence Mnfr speech tech products 51.3 50.852
04/30/97 07/25/97 Arden Industrial Products Inc Mnfr forged and machined parts 42.0 44.995
05/01/97 08/01/97 Cryenco Sciences Inc Mnfr process control instmnts 19.2 27.904
05/08/97 09/10/97 Imex Medical Systems Inc Investment company 9.3 10.238
06/16/97 09/30/97 Frederick's of Hollywood, Inc Investor group 69.4 57.007
06/24/97 07/25/97 Jillians Entertainment Corp Investment company 4.7 7.007
07/23/97 12/02/97 Rudy's Restaurant Group Own and operate restaurants 18.8 18.936
08/01/97 09/26/97 Community Care of America Inc Pvd specialty healthcare svcs 94.0 89.996
08/07/97 12/02/97 Magnetic Technologies Corp Mnfr industrial fasteners 16.8 15.984
08/14/97 12/31/97 Allied Capital Advisers Inc Closed-end mgmt investment co 49.5 44.111
09/02/97 12/03/97 Ground Round Restaurants Investment company 17.5 56.945
09/04/97 12/30/97 Cinergi Pictures Entertainment Investor group 16.3 59.794
09/26/97 09/26/97 Laclede Steel Co Manufacture steel, steel prod 15.0 131.767
10/10/97 01/07/98 Puro Water Group Inc Mnfr water treatment equip 25.7 30.186
10/13/97 03/19/98 Integrated Brands Inc Produce frozen yogurt 46.8 51.274
11/03/97 02/25/98 Individual Inc Pvd info retrieval svcs 86.8 79.390
11/04/97 01/12/98 ComputerVision Corp Develop, wholesale software 250.3 460.128
11/12/97 03/03/98 PureTec Corp Mnfr plastic 324.6 281.484
11/24/97 01/07/98 General Host Corp Investment bank 326.2 278.128
12/02/97 03/17/98 Staodyn Inc Mnfr electromedical equip 22.5 22.867
12/12/97 02/13/98 Impact Systems Inc Provide paper tech dvlp svcs 28.6 28.467
12/12/97 09/10/98 Timber Lodge Steakhouse Inc Own, op fast food restaurants 30.4 30.925
12/15/97 02/24/98 MetroGolf Inc Own and operate golf courses 6.6 18.428
12/22/97 05/20/98 Artistic Greetings Inc Provide marketing services 33.6 35.618
- ------------------------------------------------------------------------------------------------------------------------------------
Premium
----------------------------------------------------------------------------------
Date Date 1 Day Prior 1 Week Prior 4 Weeks Prior 3 Months Prior 1 Year Prior
Announced Effective Target Name to Annc. Date to Annc. Date to Annc. Date to Annc. Date to Annc. Date
- ------------------------------------------------------------------------------------------------------------------------------------
01/10/96 06/26/96 American Resource Corp 30.77 23.50 27.03
01/18/96 08/23/96 AMSERV Healthcare Inc 14.56 27.29 20.59 -4.67 20.42
01/23/96 05/09/96 Portage Industries Corp 46.67 78.98 78.98 134.67 193.33
02/05/96 09/30/96 Customedix Corp 22.58 26.67 5.56 19.00 -18.98
02/13/96 07/12/96 Medical Innovations Inc 13.85 18.40 5.71 5.71 37.67
02/15/96 04/29/96 LDI Corp 31.20 21.48 49.09 26.15 5.81
02/28/96 07/11/96 Salton/Maxim Housewares Inc -0.19 12.84 3.81 1.65 -9.05
03/13/96 09/27/96 DeSoto Inc 65.41 53.00 80.00 118.57 53.00
04/16/96 05/31/96 CIS Technologies Inc 50.50 30.16 30.16 -5.57 33.78
04/22/96 06/04/96 Cornerstone Natural Gas Co 28.00 29.73 100.00 134.15 182.35
05/03/96 03/17/98 Homeowners Group Inc 22.07 26.77 93.88 135.43 17.71
05/06/96 09/03/96 Transcisco Industries Inc 15.56 36.84 28.40 57.58 271.43
05/07/96 09/03/96 NMR of America Inc 41.43 86.79 90.39 98.08 37.56
05/13/96 08/30/96 MDT Corp 12.82 22.22 4.76 15.79 -6.38
05/15/96 09/10/96 Carlisle Plastics Inc 38.20 38.20 41.83 73.94 31.51
06/03/96 01/09/97 Bio-Dental Technologies Corp 64.99 43.28 109.42 194.49 65.09
06/10/96 07/22/96 SysteMed Inc -4.00 4.35 9.09 -23.81 -56.36
06/11/96 09/03/96 Computer Identics Corp 63.11 54.53 54.53 72.71 19.84
06/17/96 10/07/96 Scanforms Inc 61.40 61.40 58.62 70.37 130.00
06/21/96 08/23/96 Computer Petroleum Corp 28.33 46.67 71.11 105.33 208.00
06/24/96 12/05/96 MEM Co Inc 13.21 81.82 90.48 93.55 114.29
07/31/96 11/13/96 Calgene Inc 64.10 80.28 39.13 31.96 14.29
08/13/96 02/27/97 LaTex Resources Inc 181.14 202.77 181.14 228.00 107.16
09/10/96 01/03/97 GreenStone Industries Corp 33.33 52.73 58.49 42.37 50.00
09/11/96 03/04/97 Chempower Inc 48.06 48.06 45.88 50.30 65.33
09/16/96 12/06/96 Proler International Corp 132.26 125.00 148.28 33.33 9.09
09/26/96 01/24/97 General Physics Corp 16.57 31.61 36.00 23.64 45.71
10/02/96 12/27/96 Software Publishing Corp 14.86 10.90 60.80 -88.09
10/03/96 11/12/97 Pittencrieff Communications 8.95 14.40 30.74 -13.08 29.14
10/04/96 12/31/96 Pet Food Warehouse Inc 22.93 26.00 48.24 48.24 57.50
10/30/96 12/20/96 Pacific Rehab & Sports Med 67.74 62.50 48.57 60.00 6.12
11/05/96 03/14/97 Panatech Research &
Development 55.56 55.56 51.35
11/25/96 02/28/97 American Studios Inc 90.48 110.53 166.67 -65.28 -73.33
12/06/96 03/18/97 MaxServ Inc (Sears Roebuck) 19.23 67.57 55.00 67.57 129.63
12/09/96 02/28/97 Houston Biotechnology Inc 52.00 62.13 52.00 -93.01 -92.05
01/24/97 07/02/97 INCSTAR Corp (Sorin
Biomedical) 42.93 53.21 68.53
01/28/97 05/21/97 Calgene Inc (Monsanto Co) 62.03 60.00 60.00 60.00 42.22
01/30/97 08/12/97 AST Research Inc 16.76 8.00 20.00 23.43 -31.43
02/07/97 08/01/97 MS Financial (MS Diversified) 20.00 46.67 10.00 1.54 -70.67
02/11/97 07/31/97 Serv-Tech Inc 32.00 60.00 88.57 129.57 12.34
03/04/97 06/27/97 Audio King Corp 60.00 68.00 68.00 68.00 -18.05
04/15/97 06/30/97 Kurzweil Applied Intelligence 83.83 69.69 66.49 84.00 63.56
04/30/97 07/25/97 Arden Industrial Products Inc 41.18 50.00 37.14 20.00 26.32
05/01/97 08/01/97 Cryenco Sciences Inc 69.23 76.00 72.55 41.94 -26.67
05/08/97 09/10/97 Imex Medical Systems Inc 7.90 2.76 2.76 -30.32 -32.50
06/16/97 09/30/97 Frederick's of Hollywood, Inc 48.85 44.47 25.95 93.75 85.07
06/24/97 07/25/97 Jillians Entertainment Corp 14.29 77.78 45.46 220.00 166.67
07/23/97 12/02/97 Rudy's Restaurant Group 50.94 70.21 72.04 60.00 5.26
08/01/97 09/26/97 Community Care of America Inc 23.08 18.52 88.24 68.42 -48.39
08/07/97 12/02/97 Magnetic Technologies Corp 25.00 25.00 33.33 42.86 33.33
08/14/97 12/31/97 Allied Capital Advisers Inc 10.41 4.68 10.41 8.97 -28.00
09/02/97 12/03/97 Ground Round Restaurants 10.00 10.00 -5.71 14.78 -34.00
09/04/97 12/30/97 Cinergi Pictures Entertainment 26.90 24.75 56.60 236.00 26.00
09/26/97 09/26/97 Laclede Steel Co 106.45 106.45 106.45 113.33 88.24
10/10/97 01/07/98 Puro Water Group Inc 33.95 47.69 44.00 44.00
10/13/97 03/19/98 Integrated Brands Inc 69.94 106.35 167.50 501.33 381.07
11/03/97 02/25/98 Individual Inc 0.92 14.93 -7.02 47.71 -6.00
11/04/97 01/12/98 ComputerVision Corp 28.31 69.92 18.63 14.33 -55.09
11/12/97 03/03/98 PureTec Corp 28.74 34.94 31.77 143.48 69.70
11/24/97 01/07/98 General Host Corp 60.00 62.96 79.59 51.72 77.69
12/02/97 03/17/98 Staodyn Inc 47.38 47.38 89.49 100.45 152.95
12/12/97 02/13/98 Impact Systems Inc 57.14 49.15 44.26 69.23 109.52
12/12/97 09/10/98 Timber Lodge Steakhouse Inc 74.13 74.13 81.19 94.32 139.43
12/15/97 02/24/98 MetroGolf Inc 20.00 20.00 -11.11 -25.00 -75.51
12/22/97 05/20/98 Artistic Greetings Inc 28.45 47.10 52.00 47.10 21.60
Page F-10
Merger Premiums to Market Value Analysis
Mergers with Target Price Equal to or Less than $5 per Share
Announced and Completed 1/1/96-10/9/98
(continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Date Date
Announced Effective Target Name Target Business Description Acquiror Name
- ------------------------------------------------------------------------------------------------------------------------------------
12/23/97 03/20/98 American Paging Inc Pvd wireless messaging svcs Telephone and Data Systems Inc
12/23/97 01/27/98 Hi-Lo Automotive Inc Own, op auto parts stores O'Reilly Automotive Inc
01/13/98 07/31/98 Bird Corp Manufacture building products CertainTeed Corp
01/16/98 02/26/98 Ophthalmic Imaging Systems Inc Mnfr, design, market imaging sys Premier Laser Systems
01/26/98 05/06/98 TransAmerican Waste Industries Pvd waste management services USA Waste Services Inc
02/09/98 06/18/98 American Waste Services Provide waste management svcs USA Waste Services Inc
02/23/98 06/26/98 CompScript Inc Pvd pharmaceutical mgmt svcs Omnicare Inc
03/02/98 04/30/98 First Alert Inc Mnfr fire and burglar alarms Sunbeam Corp
03/31/98 06/29/98 IBAH Inc Mnfr pharmaceutical products Omnicare Inc
04/09/98 07/29/98 Spec's Music Inc Record and video retail stores Camelot Music Holdings
04/10/98 06/26/98 Dataflex Corp Whl microcomputer equipment CompuCom Systems Inc (Safeguard)
04/22/98 06/29/98 AccelGraphics Inc Mnfr graphics accelerators Evans & Sutherland Computer
04/23/98 07/31/98 Morrison Restaurants Inc Own, operate eating places Piccadilly Cafeterias Inc
05/05/98 09/25/98 Allied Digital Technologies Co Mnfr multi media software prod Investor Group
05/07/98 07/31/98 Innovative Tech Systems Inc Dvlp facilities mgmt software Peregine Systems Inc
05/11/98 07/14/98 Micronics Computers Inc Mnfr system boards Diamond Multimedia Systems Inc
05/12/98 08/24/98 Virus Research Institute Inc Mnfr biological products T Cell Sciences Inc
05/20/98 09/15/98 InnoServ Technologies Pvd med equip repair svcs GE Medical Systems
05/22/98 07/22/98 Pete's Brewing Co Produce beer Gambinus Co.
05/29/98 08/17/98 Arch Petroleum Inc Oil, gas mining Pogo Producing Co
06/09/98 06/09/98 Lincoln Snack Co (Noel Group) Produce, whl pre-poped popcorn Brynwood Partners III LP
06/22/98 10/02/98 GT Bicycles Inc Manufacture, wholesale bicycles Schwinn Holdings Corp
07/07/98 09/21/98 Republic Engineered Steels Mnfr cold-finished steel prods Investor Group
07/14/98 09/18/98 DEP Corp Manufacture personal care prod Henkel KGaA
07/20/98 10/01/98 US SerVis Inc Dvp, design, whl software HBO & Co
07/29/98 09/11/98 E-Z Serve Corp Whl and retail gasoline EBC Texas Acquisition Corp
- ------------------------------------------------------------------------------------------------------------------------------------
Value of Enter-
Trans- prise
Date Date Acquiror action Value
Announced Effective Target Name Business Description ($ mil) ($ mil)
- ------------------------------------------------------------------------------------------------------------------------------------
12/23/97 03/20/98 American Paging Inc Pvd telecommunications svcs 9.1 217.941
12/23/97 01/27/98 Hi-Lo Automotive Inc Own, op auto supply stores 42.5 89.690
01/13/98 07/31/98 Bird Corp Mnfr asbestos, fiberglass prods 39.2 27.821
01/16/98 02/26/98 Ophthalmic Imaging Systems Inc Mnfr, whl laser sys alarms 1.3 7.006
01/26/98 05/06/98 TransAmerican Waste Industries Pvd waste disposal services 142.3 156.717
02/09/98 06/18/98 American Waste Services Pvd waste disposal services 122.1 106.919
02/23/98 06/26/98 CompScript Inc Whl, retail pharmaceuticals 68.4 68.415
03/02/98 04/30/98 First Alert Inc Mnfr, whl household appliances 129.2 171.213
03/31/98 06/29/98 IBAH Inc Whl, retail pharmaceuticals 154.3 153.807
04/09/98 07/29/98 Spec's Music Inc Own, op chain record stores 26.8 25.276
04/10/98 06/26/98 Dataflex Corp Manufacture computer equipment 25.2 46.850
04/22/98 06/29/98 AccelGraphics Inc Mnfr computer graphics system 55.9 36.284
04/23/98 07/31/98 Morrison Restaurants Inc Own and operate cafeterias 46.2
05/05/98 09/25/98 Allied Digital Technologies Co Investoer group 69.2 110.009
05/07/98 07/31/98 Innovative Tech Systems Inc Dvlp service desk software 75.7 72.285
05/11/98 07/14/98 Micronics Computers Inc Manufacture multimedia systems 31.7 12.967
05/12/98 08/24/98 Virus Research Institute Inc Mnfr vaccines, related products 62.6 60.225
05/20/98 09/15/98 InnoServ Technologies Mnfr diagnostic imaging equip 13.1 11.596
05/22/98 07/22/98 Pete's Brewing Co Produce, wholesale beer 69.4 51.299
05/29/98 08/17/98 Arch Petroleum Inc Oil and gas exploration, prodn 114.0 100.081
06/09/98 06/09/98 Lincoln Snack Co (Noel Group) Investment firm 7.1 8.981
06/22/98 10/02/98 GT Bicycles Inc Mnfr bicycles; holding company 149.6 170.494
07/07/98 09/21/98 Republic Engineered Steels Investor group 417.8 409.392
07/14/98 09/18/98 DEP Corp Mnfr, whl chemicals, detergents 89.7 90.606
07/20/98 10/01/98 US SerVis Inc Dvlp healthcare software 47.4 29.160
07/29/98 09/11/98 E-Z Serve Corp Investment firm 43.2 107.882
- ------------------------------------------------------------------------------------------------------------------------------------
Premium
----------------------------------------------------------------------------------
Date Date 1 Day Prior 1 Day Prior 4 Weeks Prior 3 Months Prior 1 Year Prior
Announced Effective Target Name to Annc. Date to Annc. Date to Annc. Date to Annc. Date to Annc. Date
- ------------------------------------------------------------------------------------------------------------------------------------
12/23/97 03/20/98 American Paging Inc 17.65 33.33 29.03 17.65 (47.37)
12/23/97 01/27/98 Hi-Lo Automotive Inc (14.07) 12.26 24.29 17.97 74.00
01/13/98 07/31/98 Bird Corp 25.71 18.92 29.41 37.50 (8.33)
01/16/98 02/26/98 Ophthalmic Imaging Systems Inc 16.67 27.27 40.00 75.00 (63.16)
01/26/98 05/06/98 TransAmerican Waste Industries 51.42 36.57 78.59 55.02 70.15
02/09/98 06/18/98 American Waste Services 100.00 156.00 166.67 166.67 77.78
02/23/98 06/26/98 CompScript Inc 26.56 67.24 52.70 80.10 (57.69)
03/02/98 04/30/98 First Alert Inc 68.00 90.91 110.00 104.88 71.43
03/31/98 06/29/98 IBAH Inc 12.20 61.40 58.62 53.33 (9.80)
04/09/98 07/29/98 Spec's Music Inc 30.37 65.00 65.00 340.00 230.00
04/10/98 06/26/98 Dataflex Corp 8.43 9.33 23.77 21.48 49.09
04/22/98 06/29/98 AccelGraphics Inc 13.58 22.67 21.05 62.83 (38.67)
04/23/98 07/31/98 Morrison Restaurants Inc 45.56 73.91 81.82 77.78 8.11
05/05/98 09/25/98 Allied Digital Technologies Co 14.29 14.29 37.93 86.05 158.06
05/07/98 07/31/98 Innovative Tech Systems Inc 8.04 10.88 25.78 62.15 301.52
05/11/98 07/14/98 Micronics Computers Inc 37.54 15.29 50.77 30.67 (16.60)
05/12/98 08/24/98 Virus Research Institute Inc 91.64 75.67 81.72 46.44 9.83
05/20/98 09/15/98 InnoServ Technologies 30.77 32.04 41.67 21.43 130.51
05/22/98 07/22/98 Pete's Brewing Co 6.25 39.73 42.66 45.83 6.33
05/29/98 08/17/98 Arch Petroleum Inc 0.13 5.47 (3.53) 4.00 (17.67)
06/09/98 06/09/98 Lincoln Snack Co (Noel Group) 6.67 3.23 3.23 42.22
06/22/98 10/02/98 GT Bicycles Inc 68.42 77.78 36.17 31.96 0.00
07/07/98 09/21/98 Republic Engineered Steels 56.76 68.12 45.00 87.10 427.27
07/14/98 09/18/98 DEP Corp 31.25 93.35 78.72 75.00 236.00
07/20/98 10/01/98 US SerVis Inc 151.62 85.98 151.62 289.09 256.67
07/29/98 09/11/98 E-Z Serve Corp 37.14 20.00 20.00 20.00 (20.00)
Mean: 39.7% 48.8% 55.4% 67.1% 53.8%
Source: Securities Data Company, Inc; Three month and one-year premiums
calculated using security prices
from FactSet Research Systems, Inc. Commercial banks and other similar
financial institutions were excluded
for the purpose of this analysis.
Page F-3
Merger Premiums to Market Value Analysis
Mergers with Target Price Between $5 and $10 per Share
Announced and Completed 1/1/96-10/9/98
(continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Date Date
Announced Effective Target Name Target Business Description Acquiror Name
- ------------------------------------------------------------------------------------------------------------------------------------
01/03/96 08/28/96 International Jensen Inc Mnfr radios and televisions Recoton Corp
01/08/96 05/31/96 Medalist Industries Inc Mnfr screws, bolts Illinois Tool Works Inc
01/11/96 07/30/96 Golf Enterprises Inc Own, op golf course, club, shop National Golf Properties Inc
01/16/96 02/26/96 Concord Health Group Pvd healthcare mgmt services Multicare Cos Inc
01/16/96 04/10/96 Orthopedic Technology Inc Manufacture surgical supplies Depuy Inc (Corange Ltd)
01/24/96 03/29/96 TGV Software Inc Develop software Cisco Systems Inc
01/29/96 04/08/96 Varitronic Systems Inc Mnfr typewriters WH Brady Co
02/08/96 07/31/96 Citizens Security Group Inc Insurance holding company Meridian Insurance Group
03/04/96 06/27/96 Storage Properties Inc Own and operate warehouses Public Storage Inc
03/13/96 04/18/96 CAPCO Automotive Products Corp Mnfr automobile parts Eaton Corp
04/03/96 06/17/96 E&B Marine Inc Ret, whl marine accessories West Marine Inc
04/15/96 11/22/96 Multi-Market Radio Inc Own, op radio broadcasting stns SFX Broadcasting Inc
04/22/96 07/18/96 Duplex Products Inc Manufacture business forms Reynolds & Reynolds Co
04/22/96 08/07/96 Ideon Group Inc Operate ret mail order house CUC International Inc
04/25/96 10/01/96 Sterling Chemicals Inc Mnfr commodity chemicals Investor Group
04/29/96 09/09/96 Crocker Realty Trust Inc REIT Highwoods Properties Inc
05/16/96 08/20/96 Professional Sports Care Mngmt Own, op physical therapy clinic HealthSouth Corp
05/20/96 08/29/96 Financing for Science Intl Inc Pvd business credit services Finova Group Inc
05/22/96 08/02/96 Network Express Inc Mnfr telecommunication equip Cabletron Systems Inc
05/24/96 09/04/96 Clinton Gas Systems Inc Oil and gas exploration, prodn Joint Energy Dven Investments
06/10/96 08/23/96 Bailey Corp Manufacture rubber products Venco Acquisition Corp
06/14/96 09/13/96 Bugaboo Creek Steak House Inc Own, op restaurants Longhorn Steaks Inc
06/21/96 09/26/96 Applied Bioscience Intl (IMS) Provide medical testing svcs Phamaceutical Product Dvlp
07/01/96 09/25/96 Brooktree Corp Manufacture semiconductors Rockwell International Corp
07/03/96 09/05/97 Golden Poultry Co Inc Produce, wholesale poultry Gold Kist Inc
07/11/96 10/11/96 Fay's Inc Own and operate drug stores Thrift Drug Inc (JC Penney Co)
07/12/96 10/10/96 ADCO Technologies Inc Mnfr adhesives and sealants Astor Chemicals
07/12/96 10/23/96 Supercuts Inc Operate barber shops Regis Corporation
07/19/96 08/30/96 FluoroScan Imaging Systems Mnfr, whl x-ray imaging device Hologic Designs
08/02/96 11/07/96 Colonial Data Technologies Manufacture telcommun equip US Order Inc
08/26/96 12/20/96 Home Shopping Network (Liberty) Own. op TV broadcasting statn Silver King Communications Inc
09/09/96 09/23/96 Crooker realty Trust Inc REIT Highwoods Properties Inc
09/10/96 12/05/96 Acquitron Medical Inc Manufacture apnca monitors Nellcor Puritan-Bennett
09/11/96 12/02/96 ReadiCare Inc Own and operate HMO's HealthSouth Corp
09/16/96 11/07/97 Centerior Energy Corp Electric utility holding co Ohio Edison Co
09/24/96 01/02/97 Datalogix International Develop business software Oracle Corp
10/01/96 04/25/97 Cosmetic Center Inc Operate cosmetic stores Prestige Fragance & Cosmetics
10/10/96 02/12/97 Knogo North America Inc Mnfr search, navigation equip Video Sentry Corp
10/10/96 11/27/96 WCI Steel Inc (Renco Group Inc) Manufacture steel Renco Group Inc
10/17/96 02/27/97 Triad Systems Corp Develop turnkey computer sys Investor Group
11/06/96 03/07/97 Midland Financial Group Inc Fire, marine, casualty ins co Progressive Corp
11/06/96 12/11 96 Union Switch & Signal Inc Manufacture railroad equip Ansaldo Transporti SpA
11/11/96 03/17/97 AHI Healthcare Systems Inc Pvd physician contracting svcs FPA Medical Management Inc
11/13/96 12/17/96 Edmark Corp Develop educational software IBM Corp
11/18/96 03/27/97 Tyco Toys Inc Manufacture and wholesale toys Mattel Inc
12/10/96 04/01/97 Softdesk Inc Develop, wholesale CAD software Autodesk Inc
12/23/96 05/09/97 StarSight Telecast Inc Pvd cable programming svcs Gemstar International Group
12/26/96 04/16/97 Royce Laboratories Inc Mnfr pharmaceuticals products Watson Pharmaceuticals Inc
01/17/97 04/24/97 American Recreation Centers Own, op bowling, rec centers AMF Bowling Centers (AMF Group)
01/27/97 07/24/97 Cardiometrics Inc Mnfr surgical, medical equip EndoSonics Corp
02/11/97 05/29/97 Fractal Design Corp Develop graphics software MetaTools Inc
02/11/97 03/24/97 Innotech Inc Mnfr electro-medical prods Johnson & Johnson
02/18/97 07/01/98 Contour Medical (Retirement) Mnfr surgical supplies Sun Healthcare Group Inc
02/18/97 07/01/98 Retirement Care Associates Inc Own, operate nursing homes Sun Healthcare Group Inc
03/06/97 07/31/97 Allwaste Inc Pvd asbestos treatment svcs Philip Environmental Inc
03/06/97 08/13/97 Crop Growers Corp Insurance agency Fireman's Fund Insurance Co
03/11/97 04/15/97 TPC Corp Pvd gas transmission svcs PacifiCorp Holdings Inc
03/21/97 06/12/97 CrossComm Corp Mnfr computer networking equip Olicom A/S
03/27/97 03/27/97 Strober Organization Inc Wholesale building materials Hamilton Acquisition LLC
03/31/97 06/03/97 Peak Technologies Group Inc Whl integrated systems Moore Corp Ltd
04/10/97 06/13/97 ERO Inc Manufacture toys Hedstrom Corp (Hedstrom Hldgs)
04/10/97 06/26/97 Microcom Inc Mnfr data comm products Company Computer Corp
04/18/97 07/10/97 LIVE Entertainment Inc Whl, retail recorded music Investor Group
05/30/97 07/09/97 Integrated Living Communities Pvd nursing, personal care svcs Whitehall Street Real Estate
05/30/97 10/16/97 National Picture and Frame Co Mnfr picture, mirror frames Colonnade Capital LLC
06/03/97 09/08/97 Physician Corp of America Own and operate HMO's Humana Inc
- ------------------------------------------------------------------------------------------------------------------------------------
Value of Enter-
Trans- prise
Date Date Acquiror action Value
Announced Effective Target Name Business Description ($ mil) ($ mil)
- ------------------------------------------------------------------------------------------------------------------------------------
01/03/96 08/28/96 International Jensen Inc Mnfr audio, video equipment 109.1 109.595
01/08/96 05/31/96 Medalist Industries Inc Mnfr indl fasteners, tools 55.4 91.567
01/11/96 07/30/96 Golf Enterprises Inc Real estate investment trust 82.9 141.614
10/16/96 02/26/96 Concord Health Group Own, op nursing care facilities 126.9 126.755
01/16/96 04/10/96 Orthopedic Technology Inc Mnfr orthopedic devices 45.2 44.871
01/24/96 03/29/96 TGV Software Inc Mnfr inter-networking systems 92.4 71.54
01/29/96 04/08/96 Varitronic Systems Inc Mnfr indl labeling machines 42.5 43.333
02/08/96 07/31/96 Citizens Security Group Inc Insurance holding company 22.6 26.703
03/04/96 06/27/96 Storage Properties Inc Real estate investment trust 22.8 1,293.505
03/13/86 04/18/96 CAPCO Automotive Products Corp Manufacture automotive parts 128.9 140.935
04/03/96 06/17/96 E&B Marine Inc Own, op boat dealerships 30.6 49.597
04/15/96 11/22/96 Multi-Market Radio Inc Own, op radio bdcstg stations 104.4 89.166
04/22/95 07/18/96 Duplex Products Inc Pvd comp sys bus forms svcs 90.1 85.54
04/22/96 08/07/96 Ideon Group Inc Provide discount club svcs 381.8 382.225
04/25/96 10/01/96 Sterling Chemicals Inc Investor group 798.4 791.162
04/29/96 09/09/96 Crocker Realty Trust Inc Real estate investment trust 537.5 531.94
05/16/96 08/20/96 Professional Sports Care Mngmt Own, op outpatient surgery ctr 64.8 54.952
05/20/96 08/29/96 Financing for Science Inl Inc Pvd financial services 39.2 193.919
05/22/95 08/02/96 Network express Inc Mnfr, whl, install LAN, WAN 118.4 112.039
05/24/96 09/04/96 Clinton Gas Systems Inc Investment firm 38.4 52.887
06/10/96 08/23/96 Bailey Corp Investment holding company 47.8 106.359
06/14/96 09/13/96 Bugaboo Creek Steak House Inc own and operate steakhouses 48.5 55.641
06/21/96 09/26/96 Applied Bioscience Inc (IMS) Pvd comm phy research svcs 491.5 483.418
07/01/96 09/25/96 Brooktree Corp Mnfr aircraft defense systems 261.8 273.377
07/03/96 09/05/97 Golden Poultry Co Inc Produce, wholesale poultry 52.1 209.708
07/11/96 10/11/96 Fay's Inc Own and operate drug stores 277.9 352.368
07/12/96 10/10/96 ADCO Technologies Inc Mnfr specialty chemicals 53.8 54.141
07/12/96 10/23/96 Supercuts Inc Operate hairstyling salons 175.1 174.379
07/19/96 08/30/96 FluoroScan Imaging Systems Mnfr and whl X-ray systems 59.1 53.882
08/02/96 11/07/96 Colonial data Technologies Pvd equip rental, leasing svcs 186.5 176.021
08/26/96 12/20/96 Home Shopping Network (Liberty) Operate television stations 1,216.9 1,069.458
09/09/96 09/23/96 Crooker realty Trust Inc Real estate investment trust 76.1 557.561
09/10/96 12.05/96 Acquitron Medical Inc Mnfr electn patient monitors 56.6 56.176
09/11/96 12/02/96 ReadiCare Inc Own, op outpatient surgery ctr 73.9 70.736
09/16/96 11/07/97 Centerior Energy Corp Electric utility 1,612.6 6,202.925
09/24/96 01/02/97 Datalogix International Develop database software 80.0 63.045
10/01/96 04/25/97 Cosmetic Center Inc Own and op retail stores 32.8 30.68
10/10/96 02/12/97 Knogo North America Inc Provide electrical services 48.8 45.572
10/10/96 11/27/96 WCI Stell Inc (Renco Group Inc) Mnfr steel products 56.5 437.182
10/17/96 02/27/97 Triad Systems Corp Investor group 193.1 225.973
11/06/96 03/07/97 Midland Financial Group Inc Insurance holding company 47.2 72.692
11/06/96 12/11 96 Union Switch & Signal Inc Mnfr train and transp equip 27.1 135.632
11/13/96 03/17/97 All Healthcare Systems Inc Pvd health care mgmt services 117.0 103.179
11/13/96 12/17/96 Edmark Corp Mnfr computers, office equip 123.8 81.322
11/18/96 03/27/97 Tyco Toys Inc Mnfr, whl games, toys 737.4 1,073.147
12/10/96 04/01/97 Softdesk Inc Design drafting software 91.7 88.442
12/23/96 05/05/97 StarSight Telecast Inc Mnfr simplified VCR programmer 273.1 266.569
12/26/96 04/16/97 Royce Laboratories Inc Mnfr pharmaceutical products 84.2 81.639
01/17/96 04/24/97 American Recreation Centers Own, op bowling centers 70.7 63.83
01/27/97 07/24/97 Cardiometrics Inc Mnfr image processing equip 56.8 37.872
02/11/97 05/29/97 Fractal Design Corp Develop software 140.2 136.069
02/11/97 03/24/97 Innotech Inc Mnfr medical equip and prods 135.6 116.561
02/18/97 07/01/98 Contour Medical (Retirement) Pvd long-term healthcare svcs 55.2 72.823
02/18/97 07/01/98 Retirement Care Associates Inc Pvd long-term healthcare svcs 305.9 292.435
03/06/97 07/03/97 Allwaste Inc Provide waste management svcs 506.7 534.883
03/06/97 08/13/97 Crop Growers Corp Insurance company 82.1 89.061
03/11/97 04/15/97 TPC Corp Pvd telephone commun services 408.5 398.392
03/21/97 06/12/97 CrossComm Corp Mnfr communications equipment 84.6 77.829
03/27/97 03/27/97 Strober Organization Inc Investment company 33.4 30.937
03/03/97 06/03/97 Peak Technologies Group Inc Mnfr manifold business forms 169.8 192.09
04/10/97 06/13/97 ERO Inc Manufacture games and toys 203.6 201.739
04/10/97 06/26/97 Microcom Inc Manufacture personal computers 267.6 273.087
04/18/97 07/10/97 LIVe Entertainment Inc Investor group 53.1 98.981
05/30/97 07/09/97 Integrated Living Communities Real estate development finn 79.7 78.553
05/30/97 10/16/97 National Picture and Frame Co Private equity firm 60.3 67.073
06/03/97 09/08/97 Physician Corp of America Own and operate HMO's 405.1 260.352
- ------------------------------------------------------------------------------------------------------------------------------------
Premium
----------------------------------------------------------------------------------
Date Date 1 Day Prior 1 Day Prior 4 Weeks Prior 3 Months Prior 1 Year Prior
Announced Effective Target Name to Annc. Date to Annc. Date to Annc. Date to Annc. Date to Annc. Date
- ------------------------------------------------------------------------------------------------------------------------------------
01/03/96 08/28/96 International Jensen Inc 29.41 57.14 49.15 46.67 12.82
01/08/96 05/31/96 Medalist Industries Inc 127.20 136.67 110.37 (43.20) (43.20)
01/11/96 07/30/96 Golf Enterprises Inc 37.14 45.46 45.46 (7.69) 6.67
10/16/96 02/26/96 Concord Health Group 25.11 43.42 58.92 50.77 40.00
01/16/96 04/10/96 Orthopedic Technology Inc 26.45 43.89 49.03
01/24/96 03/29/96 TGV Software Inc 41.55 70.63 73.00 73.00
01/29/96 04/08/96 Varitronic Systems Inc 79.49 79.49 62.79 94.44 89.19
02/08/96 07/31/96 Citizens Security Group Inc 88.68 108.33 117.39 25.00 25.00
03/04/96 06/27/96 Storage Properties Inc 10.94 16.44 15.29 (58.88) (50.59)
03/13/86 04/18/96 CAPCO Automotive Products Corp 66.67 72.41 78.57 24.22 (13.04)
04/03/96 06/17/96 E&B Marine Inc (4.76) 20.00 7.14 100.00 3.45
04/15/96 11/22/96 Multi-Market Radio Inc 11.11 29.87 19.05 28.21 56.25
04/22/95 07/18/96 Duplex Products Inc 1.05 28.86 36.17 48.84 41.18
04/22/96 08/07/96 Ideon Group Inc 38.46 54.29 36.71 38.46 (22.30)
04/25/96 10/01/96 Sterling Chemicals Inc 29.73 47.69 47.69 29.73 (7.69)
04/29/96 09/09/96 Crocker Realty Trust Inc 10.20 11.60 13.03 24.17
05/16/96 08/20/96 Professional Sports Care Mngmt 13.74 29.05 34.21 620.95 (36.92)
05/20/96 08/29/96 Financing for Science Inl Inc 4.49 6.67 12.53 17.70 108.98
05/22/95 08/02/96 Network express Inc (10.64) 19.97 39.01 119.00 (20.36)
05/24/96 09/04/96 Clinton Gas Systems Inc 3.85 14.89 31.71 12.50 80.00
06/10/96 08/23/96 Bailey Corp 5.46 6.06 11.11 55.56 68.67
06/14/96 09/13/96 Bugaboo Creek Steak House Inc 9.19 16.02 10.82 (60.93) (30.62)
06/21/96 09/26/96 Applied Bioscience Inc (IMS) 75.34 82.86 77.78 77.78 204.76
07/01/96 09/25/96 Brooktree Corp 42.86 64.38 16.51 71.43 (13.04)
07/03/96 09/05/97 Golden Poultry Co Inc 52.00 50.00 39.02 29.55 142.55
07/11/96 10/11/96 Fay's Inc 27.50 61.91 61.91 82.14 72.88
07/12/96 10/10/96 ADCO Technologies Inc 28.13 51.85 57.69 368.57 105.00
07/12/96 10/23/96 Supercuts Inc 55.29 53.04 60.00 99.25 50.86
07/19/96 08/30/96 FluoroScan Imaging Systems 116.00 109.35 70.10 134.62 131.63
08/02/96 11/07/96 Colonial data Technologies 20.00 33.33 (6.80) (45.86) 13.68
08/26/96 12/20/96 Home Shopping Network (Liberty) 38.95 62.46 62.46 (6.55) 27.23
09/09/96 09/23/96 Crooker realty Trust Inc 18.80 20.30 21.85 5.02 58.40
09/10/96 12.05/96 Acquitron Medical Inc 18.06 21.53 40.07 23.34 22.43
09/11/96 12/02/96 ReadiCare Inc 66.79 55.42 55.42 66.83 120.65
09/16/96 11/07/97 Centerior Energy Corp 42.82 40.52 42.82 50.21 2.49
09/24/96 01/02/97 Datalogix International 28.00 42.22 56.10 14.19 (55.24)
10/01/96 04/25/97 Cosmetic Center Inc 17.39 45.33 103.47 64.97 (3.11)
10/10/96 02/12/97 Knogo North America Inc (3.38) 13.31 7.45
10/10/96 11/27/96 WCI Steel Inc (Renco Group Inc) 17.65 29.03 77.78 90.48 105.13
10/17/96 02/27/97 Triad Systems Corp 68.18 60.87 89.74 72.09 68.18
11/06/96 03/07/97 Midland Financial Group Inc 30.91 24.14 0 (2.70) (5.26)
11/06/96 12/11 96 Union Switch & Signal Inc 3.57 3.57 0 (6.45) 9.43
11/11/96 03/17/97 AHI Healthcare Systems Inc 10.90 34.00 23.69 34.00 (34.37)
11/13/96 12/17/96 Edmark Corp 35.52 63.16 31.92 5.08 (61.73)
11/18/96 03/27/97 Tyco Toys Inc 73.69 80.12 94.53 (33.82) (26.30)
12/10/96 04/01/97 Softdesk Inc 60.00 66.76 146.67 111.43 (32.73)
12/23/96 05/09/97 StarSight Telecast Inc 17.86 20.84 44.28 16.22 94.60
12/26/96 04/16/97 Royce Laboratories Inc 0.57 22.91 18.52 30.95 (36.21)
01/17/96 04/24/97 American Recreation Centers 15.25 33.33 70.00 58.14 33.33
01/27/97 07/24/97 Cardiometrics Inc 18.28 13.81 47.12 82.79 2.24
02/11/97 05/29/97 Fractal Design Corp 44.97 40.44 0.99 (6.82) (18.25)
02/11/97 03/24/97 Innotech Inc 54.93 64.18 54.93 400.00 (50.95)
02/18/97 07/01/98 Contour Medical (Retirement) 21.43 47.83 58.14
02/18/97 07/01/98 Retirement Care Associates Inc 19.44 14.67 21.13 91.11 3.79
03/06/97 07/03/97 Allwaste Inc 48.22 63.35 95.22 122.44 128.80
03/06/97 08/13/97 Crop Growers Corp 20.59 15.49 41.38 57.69 (2.38)
03/11/97 04/15/97 TPC Corp 52.17 65.05 55.48 652.84 946.63
03/21/97 06/12/97 CrossComm Corp 74.32 70.17 70.17 70.10 (9.57)
03/27/97 03/27/97 Strober Organization Inc 0 3.23 2.13 4.35 37.14
03/03/97 06/03/97 Peak Technologies Group Inc 108.70 97.26 65.52 50.00 (1.37)
04/10/97 06/13/97 ERO Inc 12.50 16.88 30.44 47.54 73.08
04/10/97 06/26/97 Microcom Inc 54.76 91.18 35.42 35.42 (43.48)
04/18/97 07/10/97 LIVE Entertainment Inc 6.67 6.67 50.00
05/30/97 07/09/97 Integrated Living Communities 26.90 21.05 50.82 73.58
05/30/97 10/16/97 National Picture and Frame Co 31.51 28.00 28.00 22.29 18.52
06/03/97 09/08/97 Physician Corp of America 12.00 12.00 23.08 65.93 (45.63)
Page F-4
Merger Premiums to Market Value Analysis
Mergers with Target Price Between $5 and $10 per Share
Announced and Completed 1/1/96-10/9/98
(continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Date Date
Announced Effective Target Name Target Business Description Acquiror Name
- ------------------------------------------------------------------------------------------------------------------------------------
06/05/97 07/14/97 DIGEX Inc Develop Internet software Intermedia Communicaitons Inc
06/20/97 10/23/97 Convest Energy Corp Oil and gas exploration, prodn Forcenergy Inc
07/02/97 10/28/97 Calnetics Corp Manufacture plastic products Summa Industries Inc
07/03/97 09/26/97 Krystal Co Own, op fast food restaurants Port Royal Holdings Inc
07/10/97 11/18/97 Airways Corp Passenger airline AirTran Holdings Inc
07/14/97 10/28/97 Katz Media Group Advertising agency Investor Group
07/24/97 10/28/97 Astrotech International Corp Pvd storage tank maintenance ITEQ Inc
07/25/97 12/01/97 Homegate Hospitality Inc Own and operate hotels Prime Hospitality Corp
07/25/97 08/28/97 Imo Industries Inc Mnfr industrial controls, pumps Constellation Capital Partners
07/31/97 09/29/97 Interactive Group Inc Dvlp, whl comp integrated sys DataWorks Corp
08/04/97 12/31/97 Belmont Homes Inc Mnfr prefabricated Houses Cavalier Homes Inc
08/04/97 11/19/97 Gyncare Inc Pvd biotech prod dvlp services Johnson & Johnson
08/14/97 12/18/97 Technology Service Group Inc. Mnfr cellular telephones Elcotel
08/25/97 10/03/97 BioWhitaker Inc Mnfr, whl medical testing prods Cambrex Corp
08/25/97 01/23/98 PerSeptive Biosystems Inc Mnfr chromatography equipment Perkin-Elmer Corp
09/17/97 12/12/97 Designer Holdings (New Rio LLC) Dvlp, mkt designer sportswear Warnaco Group Inc
09/23/97 01/22/98 El Chico Restaurants Inc Own and operate restaurants Investor Group
09/26/97 02/03/98 Sagebrush Inc Own and operate eating places WSMP Inc
09/26/97 04/28/98 Skyline Chili Inc Operate, franchise restaurants Investor Group
09/29/97 11/26/97 CompuRAD Inc Pvd Healthcare software Lumisys Inc
10/01/97 12/05/97 Alpine Lace Brands Inc Whl dairy products, cheese LandO'Lakes Inc
10/15/97 11/21/97 Thompson PBE Inc Whl automotive paint, supplies FinishMaster Inc (Lacey Distn)
10/20/97 01/29/98 Cruise America Inc Own, op trailer dealership Budget Group Inc
11/07/97 05/28/98 Medicus Systems Corp Develop, whl medical software QuadraMed Corp
11/17/97 03/10/98 Shared Technologies Fairchild Mnfr telecommunications equip Intermedia Communications Inc
11/17/97 03/02/98 Visigenie Software Inc Dvlp database access software Borland International Inc
11/21/97 01/20/98 New Jersey Steel (Von Roll) Mnfr steel reinforcing bars Co-Steel Inc
11/24/97 02/03/98 Communicaitons Central Inc Pvd telecommunications svcs Davel Communications Inc
12/19/97 06/03/98 Eclipse Telecommunicaitons Inc Pvd radiotelecommunication svc IXC Communications Inc
12/29/97 03/17/98 Heartstream Inc Mnfr defibrillators Hewlett-Packard Co
01/06/98 03/02/98 DBA Systems Inc Dvlp digital imaging systems Titan Corp
01/14/98 06/02/98 Meridian Point Realty Trust Real estate investment trust EastGroup Properties
01/15/98 06/11/98 OHM Corp Operate hazardous waste sites International Technology Corp
01/16/98 02/25/98 Checkmate Electronics Inc Mnfr, whl payment systems International Verifact Inc
01/21/98 05/15/98 BKC Semiconductors Inc Mnfr semiconductor devices Microsemi Corp
01/22/98 09/29/98 BT Office Products Intl Inc Whl office stationary, supples Buhrmann NV
01/28/98 03/05/98 Sun Coast Industries Inc Mnfr plastic products Kerr Group Inc
01/29/98 06/05/98 Monroe Inc Mnfr, whl concrete, sand, gravel US Aggregates Inc
01/29/98 05/21/98 ProSource Inc (Onex Corp) Wholesale groceries AmeriServe Food Distribution
02/04/98 06/09/98 TresCom International Inc Pvd communicaitons svcs Primus Telecommunications
02/10/98 06/30/98 Ryan Beck & Co, Livingston, NJ Securities brokerage firm BankAtlantic Bancorp, Florida
02/17/98 08/17/98 Bell Sports Corp Mnfr bicycle equip, accessories HB Acquisition Corp
02/24/98 05/04/98 Somatogen Inc Dvlp human blood substitutes Baxter International Inc
03/02/98 04/30/98 Signature Brands USA Inc Mnfr, whl consumer housewares Sunbean Corp
03/05/98 05/20/98 Intelligent Electronics Inc Whl, ret computer systems Xerox Corp
03/06/98 04/30/98 Proxima Corp Mnfr PC liq crys display prods ASK AS
03/10/98 06/19/98 Corcom Inc Manufacture radio filters Communications Instruments Inc
03/16/98 07/10/98 International Murex Tech Corp Mnfr in-vitro test systems Abbott Laboratories
04/03/98 07/21/98 Bertucci's Inc Own and operate restaurants NE Restaurant Co Inc
04/15/98 05/29/98 Simulation Sciences Inc Dvlp simulation software Siche PLC
04/28/98 07/20/98 Hein-Werner Corp Mnfr automotive service equip Snap-On Inc
04/29/98 09/25/98 Group I Software Inc Develop software COMNET Corp
05/04/98 06/10/98 Farah Inc Mnfr, ret family apparel Tropical Sportswear Intl Corp
05/07/98 06/30/98 InTime Systems International Pvd systems integration svcs Aris Corp
05/29/98 08/06/98 Mid-America Realty Investments Real estate investment trust Bradley Real Estate Inc
06/01/98 08/28/98 PST Vans Inc Trucking company US Xpress Enterprises Inc
06/11/98 07/02/98 Imo Industries Inc Mnfr industrial controls, pumps Constellation Capital Partners
07/28/98 09/10/98 CyberMedia Inc Dvlp, whl support software prod Network Associates Inc
09/14/98 09/14/98 Icon CMT Corp Pvd Internet computer svcs Qwest Commun Int Inc
- ------------------------------------------------------------------------------------------------------------------------------------
Value of Enter-
Trans- prise
Date Date Acquiror action Value
Announced Effective Target Name Business Description ($ mil) ($ mil)
- ------------------------------------------------------------------------------------------------------------------------------------
06/05/97 07/14/97 DIGEX Inc Pvd telecommunications svcs 171.6 166.838
06/20/97 10/23/97 Convest Energy Corp Oil, gas exploration and prodn 102.0 101.521
07/02/97 10/28/97 Calnetics Corp Mnfr plastic conveyor parts 23.4 26.363
07/03/97 09/26/97 Krystal Co Investment company 145.4 145.677
07/10/97 11/18/97 Airways Corp Passenger airline 63.7 75.936
07/14/97 10/28/97 Katz Media Group Investor group 371.9 362.128
07/24/97 10/28/97 Astrotech International Corp Prvd, treatment for liqds, gas 116.7 147.176
07/25/97 12/01/97 Homegate Hospitality Inc Own, operate, franchise hotels 133.2 123.069
07/25/97 08/28/97 Imo Industries Inc Investment company 117.3 430.169
07/31/97 09/29/97 Interactive Group Inc Dvlp computer integrated sys 55.0 59.004
08/04/97 12/31/97 Belmont Homes Inc Manufacture mobile homes 74.0 68.986
08/04/97 11/19/97 Gyncare Inc Mnfr medical equip and prods 70.5 65.68
08/14/97 12/18/97 Technology Service Group Inc. Mnfr public commun products 32.9 35.485
08/25/97 10/03/97 BioWhitaker Inc Mnfr specialty chemicals 130.5 130.017
08/25/97 01/23/98 PerSeptive Biosystems Inc Mnfr analytical instruments 288.1 339.306
09/17/97 12/12/97 Designer Holdings (New Rio LLC) Mnfr women's intimate apparel 353.6 290.492
09/23/97 01/22/98 El Chico Restaurants Inc Investor group 49.2 58.65
09/26/97 02/03/98 Sagebrush Inc Produce prepared sandwiches 39.4 41.395
09/26/97 04/28/98 Skyline Chili Inc Investor group 22.9 26.661
09/29/97 11/26/97 CompuRAD Inc Mnfr medical imaging equipment 25.0 23.321
10/01/97 12/05/97 Alpine Lace Brands Inc Produce butter, milk and meats 48.4 59.309
10/15/97 11/21/97 Thompson PBE Inc Whl automotive paint, coatings 69.3 116.683
10/20/97 01/29/98 Cruise America Inc Pvd passenger car rental svcs 59.3 144.263
11/07/97 05/28/98 Medicus Systems Corp Pvd info sys for healthcare 23.3 46.93
11/17/97 03/10/98 Shared Technologies Fairchild Pvd telecommunications svcs 503.6 585.377
11/17/97 03/02/98 Visigenie Software Inc Develop software 148.4 130.467
11/21/97 01/20/98 New Jersey Steel (Von Roll) Mnfr steel and steel products 173.5 176.789
11/24/97 02/03/98 Communicaitons Central Inc Pvd pay telephone commun svcs 102.4 133.097
12/19/97 06/03/98 Eclipse Telecommunicaitons Inc Pvd long distance tele svcs 122.2 122.055
12/29/97 03/17/98 Heartstream Inc Mnfr computers, testing equip 130.6 110.93
01/06/98 03/02/98 DBA Systems Inc Pvd computer sys design svcs 37.9 28.993
01/14/98 06/02/98 Meridian Point Realty Trust Real estate investment trust 51.7 45.053
01/15/98 06/11/98 OHM Corp Pollution control engineering 326.8 343.15
01/16/98 02/25/98 Checkmate Electronics Inc Mnfr, whl electn payment sys 47.2 46.947
01/21/98 05/15/98 BKC Semiconductors Inc Mnfr semi-conductor products 13.3 15.905
01/22/98 09/29/98 BT Office Products Intl Inc Mnfr folding paperboard boxes 138.1 689.726
01/28/98 03/05/98 Sun Coast Industries Inc Mnfr plastic packaging prods 45.5 63.493
01/29/98 06/05/98 Monroe Inc Manufacture building products 50.3 60.961
01/29/98 05/21/98 ProSource Inc (Onex Corp) Wholesale packaged frozed food 343.3 293.91
02/04/98 06/09/98 TresCom International Inc Pvd telecommunications svcs 134.7 142.626
02/10/98 06/30/98 Ryan Beck & Co, Livingston, NJ Savings and loan 35.9 36.324
02/17/98 08/17/98 Bell Sports Corp Investment firm 165.7 228.365
02/24/98 05/04/98 Somatogen Inc Mnfr health care products 232.9 175.471
03/02/98 04/30/98 Signature Brands USA Inc Mnfr, whl household appliances 81.7 246.68
03/05/98 05/20/98 Intelligent Electronics Inc Mnfr business machine, fin co 341.6 298.084
03/06/98 04/30/98 Proxima Corp Mnfr liquid crystal displays 82.9 70.022
03/10/98 06/19/98 Corcom Inc Mnfr, whl relay systems 51.7 44.47
03/16/98 07/10/98 International Murex Tech Corp Mnfr pharmaceuticals, med equip 232.7 126.361
04/03/98 07/21/98 Bertucci's Inc Own, operate restaurants 96.5 104.175
04/15/98 05/29/98 Simulation Sciences Inc Mnfr aappliance controls 146.5 100.093
04/28/98 07/20/98 Hein-Werner Corp Manufacture tools 37.5 32.296
04/29/98 09/25/98 Group I Software Inc Pvd dat processing svcs 11.8 64.592
05/04/98 06/10/98 Farah Inc Mnfr, whl mens sportswear 93.6 144.521
05/07/98 06/30/98 InTime Systems International Pvd computer related services 44.9 39.672
05/29/98 08/06/98 Mid-America Realty Investments Real estate investment trust 153.2 148.756
06/01/98 08/28/98 PST Vans Inc Trucking company 83.9 88.376
06/11/98 07/02/98 Imo Industries Inc Investment company 9.1
07/28/98 09/10/98 CyberMedia Inc Develop network software 130.1 108.15
09/14/98 09/14/98 Icon CMT Corp Pvd telephone commun svcs 190.6 171.891
- ------------------------------------------------------------------------------------------------------------------------------------
Premium
----------------------------------------------------------------------------------
Date Date 1 Day Prior 1 Day Prior 4 Weeks Prior 3 Months Prior 1 Year Prior
Announced Effective Target Name to Annc. Date to Annc. Date to Annc. Date to Annc. Date to Annc. Date
- ------------------------------------------------------------------------------------------------------------------------------------
06/05/97 07/14/97 DIGEX Inc 19.54 35.95 31.65 20.93
06/20/97 10/23/97 Convest Energy Corp 11.06 11.06 18.93 84.20 89.99
07/02/97 10/28/97 Calnetics Corp 30.67 33.64 25.11 20.00 (13.53)
07/03/97 09/26/97 Krystal Co 132.00 169.77 176.19 169.77 182.93
07/10/97 11/18/97 Airways Corp 26.74 29.76 32.93 (7.66) (39.47)
07/14/97 10/28/97 Katz Media Group 44.26 69.23 93.41 225.93 120.00
07/24/97 10/28/97 Astrotech International Corp 45.70 63.40 78.41 96.49 149.83
07/25/97 12/01/97 Homegate Hospitality Inc 30.25 33.77 28.56 83.26
07/25/97 08/28/97 Imo Industries Inc 18.74 20.00 22.61 116.92 44.62
07/31/97 09/29/97 Interactive Group Inc 54.40 44.75 71.56 137.54 131.60
08/04/97 12/31/97 Belmont Homes Inc (17.90) 0.65 9.47 2.30 (42.22)
08/04/97 11/19/97 Gyncare Inc (2.82) 1.66 37.67 37.67 73.89
08/14/97 12/18/97 Technology Service Group Inc. (4.55) 7.14 41.89 23.48 (34.40)
08/25/97 10/03/97 BioWhitaker Inc 17.77 38.87 47.68 8.19 63.23
08/25/97 01/23/98 PerSeptive Biosystems Inc 16.80 24.88 50.42 92.78 68.27
09/17/97 12/12/97 Designer Holdings (New Rio LLC) 17.28 50.36 58.49 7.32 (51.65)
09/23/97 01/22/98 Il Chico Restaurants Inc 64.52 75.86 104.00 39.73 54.55
09/26/97 02/03/98 Sagebrush Inc 15.87 13.38 21.20
09/26/97 04/28/98 Skyline Chili Inc 0 1.89 5.88 8.00 18.68
09/29/97 11/26/97 CompuRAD Inc 1.32 3.43 1.32 3.50 (4.46)
10/01/97 12/05/97 Alpine Lace Brands Inc 15.87 48.98 46.00 60.53 43.22
10/15/97 11/21/97 Thompson PBE Inc 25.49 33.33 42.22 45.45 10.34
10/20/97 01/29/98 Cruise America Inc 17.95 13.70 39.87 36.28 64.67
11/07/97 05/28/98 Medicus Systems Corp 36.36 39.54 25.00 87.50 50.00
11/17/97 03/10/98 Shared Technologies Fairchild 66.67 106.90 163.74
11/17/97 03/02/98 Visigenie Software Inc 92.00 64.00 92.00 19.27 (41.45)
11/21/97 01/20/98 New Jersey Steel (Von Roll) 162.86 170.59 166.67 148.65 411.11
11/24/97 02/03/98 Communicaitons Central Inc 30.23 25.37 12.00 20.00 71.43
12/19/97 06/03/98 Eclipse Telecommunicaitons Inc 18.02 19.92 14.39 (7.10) 16.13
12/29/97 03/17/98 Heartstream Inc (6.71) 18.17 (8.64) 10.80 (13.10)
01/06/98 03/02/98 DBA Systems Inc 38.40 44.29 25.58 5.59 57.77
01/14/98 06/02/98 Meridian Point Realty Trust 38.78 65.85 88.89
01/15/98 06/11/98 OHM Corp 24.21 45.08 26.77 31.36
01/16/98 02/25/98 Checkmate Electronics Inc 4.83 9.37 37.52 10.22 (29.86)
01/21/98 05/15/98 BKC Semiconductors Inc 66.73 59.48 66.73 (58.79) (33.31)
01/22/98 09/29/98 BT Office Products Intl Inc 32.53 78.86 78.86 30.18 44.74
01/28/98 03/05/98 Sun Coast Industries Inc 56.36 62.26 84.95 115.00 244.00
01/29/98 06/05/98 Monroe Inc 5.07 10.46 6.37 (3.19) 74.06
01/29/98 05/21/98 ProSource Inc (Onex Corp) 126.42 106.90 100.00
02/04/98 06/09/98 TresCom International Inc 25.17 30.86 51.52 5.37 39.35
02/10/98 06/30/98 Ryan Beck & Co, Livingston, NJ 23.21 21.29 25.20 38.57 104.21
02/17/98 08/17/98 Bell Sports Corp 13.89 13.10 8.61 15.49 90.70
02/24/98 05/04/98 Somatogen Inc 35.85 39.81 92.00 58.24 (31.43)
03/02/98 04/30/98 Signature Brands USA Inc 57.14 60.98 106.25 73.68 103.08
03/05/98 05/20/98 Intelligent Electronics Inc 5.74 19.22 34.37 44.76 125.19
03/06/98 04/30/98 Proxima Corp 31.34 25.71 23.94 58.56 44.26
03/10/98 06/19/98 Corcom Inc 33.33 31.65 36.84 36.84 62.50
03/16/98 07/10/98 International Murex Tech Corp 21.64 38.21 50.73 (97.44) (96.56)
04/03/98 07/21/98 Bertucci's Inc 35.48 35.48 35.48 58.49 86.67
04/15/98 05/29/98 Simulation Sciences Inc 24.03 16.79 11.11 (26.61) 6.67
04/28/98 07/20/98 Hein-Werner Corp 52.73 65.25 80.00 83.27 96.00
04/29/98 09/25/98 Group I Software Inc 71.60 61.51 71.60 115.37 80.07
05/04/98 06/10/98 Farah Inc 33.33 44.00 39.81 60.00 (10.00)
05/07/98 06/30/98 InTime Systems International 18.80 14.97 28.43
05/29/98 08/06/98 Mid-America Realty Investments 5.00 6.33 2.44 1.20 9.09
06/01/98 08/28/98 PST Vans Inc 32.80 35.82 10.67 24.50 159.83
06/11/98 07/02/98 Imo Industries Inc (1.05) 4.44 2.55
07/28/98 09/10/98 CyberMedia Inc 25.62 38.18 117.14 8.57 (34.48)
09/14/98 09/14/98 Icon CMT Corp 65.52 60.00 (4.00) (25.87)
Mean: 34.3% 42.3% 48.5% 58.0% 45.8%
Source: Securities Data Company, Inc.; Three month and one-year premiums
calculated using security prices from FactSet Research Systems, Inc. Commercial
banks and other similar financial institutions were excluded for the purpose of
this analysis.
Page F-5
Merger Premiums to Market Value Analysis
Mergers with Target Price Equal to or Greater than $10 per Share
Announced and Completed 1/1/96-10/9/98
- ------------------------------------------------------------------------------------------------------------------------------------
Date Date
Announced Effective Target Name Target Business Description Acquiror Name
- ------------------------------------------------------------------------------------------------------------------------------------
01/05/96 07/01/96 Safety Fund Corp Closed-end investment fund CFX Corp, Keene, New Hampshire
01/08/96 04/30/96 Loral Corp Mnfr defense electronics Lockheed Martin Corp
01/08/96 03/04/96 US Delivery Systems Inc. Pvd courier services Corporate Express Inc
01/09/96 04/30/96 Technalysis Corp Develop software CompuWare Corp
01/18/96 07/02/96 Corvita Corp Manufacture medical equipment Pfizer Inc.
01/22/96 04/11/96 Premier Industrial Corp Whl electronic parts and equip Farnell Electronics PLC
01/24/96 08/08/96 National Lodging Corp Own and operate casinos Chartwell Leisure Associates
01/25/96 06/12/96 Dual Drilling (Mosvold Shippg) Oil and gas drilling ENSCO International Inc
01/30/96 05/31/96 Daig Corporation Mnfr pacemakers St Jude Medical Inc
01/31/96 03/04/96 Tivoli Systems Inc Dvlp systems mgmt software IBM Corp
02/01/96 04/12/96 Health Wise of America Inc Own and operate HMO United HealthCare Corp
02/05/96 04/30/96 DiMark Inc. Pvd database marketing svcs Harte-Hanks Inc.
02/07/96 05/07/96 Pyxis Corp Provide med equip leasing svcs Cardinal Health Inc
02/12/96 05/01/96 Duracraft Corp Mnfr electric housewares Honeywell Inc
02/13/96 09/18/96 Citicasters(American Finl Grp) Own, op TV, radio stations Jacor Communications Inc
02/14/96 03/20/96 Helene Curtis Industries Inc Mnfr perfumes, cosmetics Unilever NV
02/15/96 05/14/96 Andros Inc Mnfr infared gas analyzers Genstar Capital Partners II LP
02/16/96 05/30/96 Circle K Corp Operate convenience stores Tosco Corp
02/16/96 06/13/96 Forum Group Inc Own, operate nursing homes Marriott International Inc
02/20/96 07/24/96 Davidson & Associates Inc. Develop educational software CUC International Inc.
02/20/96 07/24/96 Sierra On-Line Inc Develop software for games CUC International Inc
02/23/96 07/01/96 Cray Research Inc Manufacture supercomputers Silicon Graphics Inc
02/26/96 09/16/96 Sterile Concepts Inc Mnfr sterilized surgical trays Maxxim Medical Inc
02/26/96 06/18/96 Tide West Oil Co Oil and gas exploration, prodn HS Resources Inc
02/27/96 05/24/96 Brandon Systems Corp Personnel agency, consulting Interim Services Inc
02/29/96 07/10/96 Big O Tires Inc Own, operate tire stores TBC Corp
03/04/96 04/08/96 Guardsman Products Inc Mnfr coatings, cleaning prod Lilly Industries, Inc
03/07/96 07/03/96 Acme-Cleveland Corp Mnfr metal cutting tools Danaher Corp
03/11/96 08/02/96 Life Partners Group Inc Life insurance holding company Conseco Inc
03/18/96 07/01/96 Athena Neurosciences Inc Manufacture pharmaceuticals Elan Corp PLC
03/18/96 08/30/96 Microtek Medical Inc Mnfr, whl surgical supplies Isolyser Co Inc
03/25/96 07/01/96 InStent Inc Mfr surgical instrumentation Medtronic Inc
03/26/96 08/09/96 DeBartolo Realty Corp Real estate investment trust Simon Property Group Inc.
03/28/96 08/01/96 Stop & Shop Cos Own, op supermarkets Koninklijke Ahold NV
03/29/96 04/26/96 Great American Mgmt & Invt Inc Invt advice and financial svcs Equity Holdings, Chicago, IL
03/29/96 07/02/96 Hayes Wheels International Inc Mnfr motor vehicle parts Motor Wheel Corp
03/29/96 08/07/96 MediSense Inc Mnfr blood monitoring systems Abbot Laboratories
03/29/96 09/03/96 Regional Acceptance Corp Pvd consumer financing svcs Southern Natl, Winston-Salem, NC
04/01/96 04/01/97 Pacific Telesis Group Pvd telecommun svcs; hldg co SBC Communications Inc
04/01/96 07/19/96 US Healthcare Inc Own and operate HMO's Aetna Life & Casualty Co
04/02/96 08/15/96 Teledyne Inc Manufacture aviation products Allegheny Ludlum Corp
04/08/96 08/16/96 Cellular Communications Inc Operate cellular telephone sys AirTouch Communications
04/10/96 10/15/96 Waterhouse Investor Services Discount brokerage holding co Toronto-Dominion Bank
04/17/96 07/31/96 Tucker Drilling Co Inc Oil & gas contract drilling Patterson Energy Inc
04/22/96 07/10/96 StrataCom Inc Manufacture telecommun equip Cisco Systems Inc
04/22/96 06/03/96 Westcott Communicatons Inc Pvd motion picture prodn svcs K-III Communications Corp
04/30/96 08/12/96 UUNet Technologies Inc Internet service provider MFS Communications Co Inc
05/01/96 06/28/96 Quantum Health Resources Inc Provide home health care svcs Olsten Corp
05/01/96 08/21/96 Uniroyal Chemical Co Mnfr pesticides, rubber chems Crompton & Knowles Corp
05/07/96 07/03/96 Guaranty National Corp Insurance company Orion Capital Corp
05/07/96 08/14/96 Kahler Realty Corp Real estate investment trust Tiger Real Estate Fund LP
05/10/96 08/22/96 CyCare Systems Inc Provide accounting services HBO & Co
05/10/96 12/11/96 Transnational Re Corp Property reinsurance company PXRE Corp
05/13/96 08/15/96 MICOM Communications Corp Mnfr communications equipment Northern Telecom Ltd(BCE Inc.)
05/14/96 09/05/96 Caremark International Inc Pvd home health care services MedPartners/Mullikin Inc
05/15/96 08/23/96 Davis Water & Waste Industries Water distn and treatment prod United StatesFilter Corp
05/16/96 11/15/96 A+ Network Inc Pvd paging servics Metrocall Inc
05/20/96 07/23/96 AmeriData Technologies Inc Whl computers, peripherals General Electric Capital Svces
05/20/96 12/30/96 Continental Waste Industries Pvd waste disposal services Republic Industries Inc
05/20/96 10/31/96 Sterling Healthcare Group Inc Own, op doctor's offices. FPA Medical Management Inc
05/24/96 07/02/96 Masland Corp Mnfr motor vehicle parts Lear Corp
05/27/96 02/16/97 SyStemix Inc(Novartis AG) Mnfr, dvlp cellular processes Norvartis AG
05/31/96 12/19/96 Addington Resources Inc Bituminous coal mining Republic Industries Inc
05/31/96 08/30/96 Image Industries Inc. Pvd plastic recycling svcs Maxim Group Inc
06/03/96 08/05/96 Heltel Broadcasting Corp Own, op radio bdcstg stations Clear Channel Communications
06/03/96 09/30/96 Univar Corp Whl chemicals, pesticides Pakhoed Holding NV
- ------------------------------------------------------------------------------------------------------------------------------------
Value of Enter-
Trans- prise
Date Date Acquiror action Value
Announced Effective Target Name Business Description ($ mil) ($ mil)
- ------------------------------------------------------------------------------------------------------------------------------------
01/05/96 07/01/96 Safety Fund Corp Savings and loan 28.30 206.25
01/08/96 04/30/96 Loral Corp Mnfr aerospace systems, prod 8,762.40 8,322.78
01/08/96 03/04/96 US Delivery Systems Inc. Retail office supplies 428.70 456.04
01/09/96 04/30/96 Technalysis Corp Dvlp, whl software systems 32.60 28.79
01/18/96 07/02/96 Corvita Corp Manufacture pharmaceuticals 78.50 78.53
01/22/96 04/11/96 Premier Industrial Corp Mnfr, whl electronic components 2,722.70 2,720.93
01/24/96 08/08/96 National Lodging Corp Own and operate hotels 57.00 21.75
01/25/96 06/12/96 Dual Drilling (Mosvold Shippg) Pvd oil, gas drilling svcs. 224.70 352.22
01/30/96 05/31/96 Daig Corporation Mnfr heart valves, x-ray equip 441.30 419.98
01/31/96 03/04/96 Tivoli Systems Inc Mnfr computers, office equip 709.80 688.03
02/01/96 04/12/96 Health Wise of America Inc Own and operate HMOs 271.10 268.54
02/05/96 04/30/96 DiMark Inc. Pvd direct marketing services 151.80 145.08
02/07/96 05/07/96 Pyxis Corp Whl pharmaceutical products 907.30 870.02
02/12/96 05/01/96 Duracraft Corp Mnfr automation, control sys 286.70 295.83
02/13/96 09/18/96 Citicasters(American Finl Grp) Own, op radio bdcstg stations 767.60 746.54
02/14/96 03/20/96 Helene Curtis Industries Inc Produce foods; holding company 737.40 882.13
02/15/96 05/14/96 Andros Inc Investment firm 92.60 61.21
02/16/96 05/30/96 Circle K Corp Petroleum refining 983.00 951.57
02/16/96 06/13/96 Forum Group Inc Own, op hotels, restaurants 622.30 598.84
02/20/96 07/24/96 Davidson & Associates inc. Provide discount club svcs 1,145.00 1,141.54
02/20/96 07/24/96 Sierra On-Line Inc Provide discount club svcs 911.00 964.42
02/23/96 07/01/96 Cray Research Inc Manufacture computer systems 770.00 776.92
02/26/96 09/16/96 Sterile Concepts Inc Mnfr surgical instruments 140.20 145.64
02/26/96 06/18/96 Tide West Oil Co Oil and gas exploration, prodn 201.30 199.61
02/27/96 05/24/96 Brandon Systems Corp Pvd human resource solutions 165.20 162.70
02/29/96 07/10/96 Big O Tires Inc Whl tires, automobile parts 56.60 69.32
03/04/96 04/08/96 Guardsman Products Inc Mnfr industrial finishings 227.80 247.93
03/07/96 07/03/96 Acme-Cleveland Corp Mnfr tools, control equipment 204.40 193.81
03/11/96 08/02/96 Life Partners Group Inc Insurance holding company 838.80 721.52
03/18/96 07/01/96 Athena Neurosciences Inc Mnfr drug delivery systems 601.30 477.78
03/18/96 08/30/96 Microtek Medical Inc Mnfr surgical supplies 108.60 104.86
03/25/96 07/01/96 InStent Inc Mnfr medical technology prods 233.70 204.11
03/26/96 08/09/96 DeBartolo Realty Corp Real estate investment trust 2,962.10 2,782.11
03/28/96 08/01/96 Stop & Shop Cos Own, operate supermarkets 2,870.80 3,029.71
03/29/96 04/26/96 Great American Mgmt & Invt Inc Investment firm 63.30 746.41
03/29/96 07/02/96 Hayes Wheels International Inc Manufacture automotive parts 563.80 695.07
03/29/96 08/07/96 MediSense Inc Mnfr pharmaceuticals, med equip 821.60 797.41
03/29/96 09/03/96 Regional Acceptance Corp Bank holding company 160.70 261.86
04/01/96 04/01/97 Pacific Telesis Group Provide telecommun services 16,490.00 22,421.02
04/01/96 07/19/96 US Healthcare Inc Insurance Company 8,939.00 7,793.34
04/02/96 08/15/96 Teledyne Inc Mnfr specialty materials, metal 2,097.50 2,442.37
04/08/96 08/16/96 Cellular Communications Inc Pvd telecommunications svcs 1,657.40 2,910.44
04/10/96 10/15/96 Waterhouse Investor Services Bank holding company 526.00 551.24
04/17/96 07/31/96 Tucker Drilling Co Inc Pvd contract drilling services 23.30 15.86
04/22/96 07/10/96 StrataCom Inc Mnfr inter-networking systems 4,833.50 4,728.08
04/22/96 06/03/96 Westport Communicatons Inc Publish magazines 438.90 421.64
04/30/96 08/12/96 UUNet Technologies Inc Pvd telephone communs svcs 2,060.90 2037.02
05/01/96 06/28/96 Quantum Health Resources Inc Pvd temporary personnel svcs 270.20 301.17
05/01/96 08/21/96 Uniroyal Chemical Co Mnfr chemicals, dyes, flavors 1,463.40 1,326.16
05/07/96 07/03/96 Guaranty National Corp Insurance company; holding co 85.10 361.07
05/07/96 08/14/96 Kahler Realty Corp Real estate investment trust 222.70 212.81
05/10/96 08/22/96 CyCare Systems Inc Dvlp healthcare software 277.10 252.05
05/10/96 12/11/96 Transnational Re Corp Reinsurance company 133.10 165.35
05/13/96 08/15/96 MMICOM Communications Corp Mnfr telecommunications equip 138.30 144.31
05/14/96 09/05/96 Caremark Internation Inc Pvd management health services 2,707.80 3,139.10
05/15/96 08/23/96 Davis Water & Waste Industries Mfr water treatment equip 100.80 109.50
05/16/96 11/15/96 A+Network Inc Pvd local paging services 345.10 342.75
05/20/96 07/23/96 AmeriData Technologies Inc Pvd financing services 454.80 734.65
05/20/96 12/30/96 Continental Waste Industries Provide waste disposal svcs 345.40 360.35
05/20/96 10/31/96 Sterling Healthcare Group Inc Pvd health care mgmet services 157.50 172.34
05/24/96 07/02/96 Masland Corp Mnfr automobile seats 413.50 444.87
05/27/96 02/16/97 SyStemix Inc(Novartis AG) Manufacture pharmaceuticals 107.60 401.60
05/31/96 12/19/96 Addington Resources Inc Provide waste disposal svcs 317.80 358.73
05/31/96 08/30/96 Image Industries Inc. Own, op floor covering fran 105.10 152.44
06/03/96 08/05/96 Heltel Broadcasting Corp Own, op TV, radio bdcstg station 315.30 370.10
06/03/96 09/30/96 Univar Corp Pvd freight transp services 331.80 605.30
- ------------------------------------------------------------------------------------------------------------------------------------
Premium
----------------------------------------------------------------------------------
Date Date 1 Day Prior 1 Week Prior 4 Weeks Prior 3 Months Prior 1 Year Prior
Announced Effective Target Name to Annc. Date to Annc. Date to Annc. Date to Annc. Date to Annc. Date
- ------------------------------------------------------------------------------------------------------------------------------------
01/05/96 07/01/96 Safety Fund Corp 3.53 10.06 145.06 60.04
01/08/96 04/30/96 Loral Corp 4.83 7.42 8.19
01/08/96 03/04/96 US Delivery Systems Inc. 9.57 8.62 32.63 123.01 30.57
01/09/96 04/30/96 Technalysis Corp 12.00 16.67 16.67 30.23 9.80
01/18/96 07/02/96 Corvita Corp -2.38 2.50 -2.38 148.48 24.24
01/22/96 04/11/96 Premier Industrial Corp 37.17 35.75 34.37 65.64 18.63
01/24/96 08/08/96 National Lodging Corp 34.12 26.67 42.50 46.15
01/25/96 06/12/96 Dual Drilling (Mosvold Shippg) 8.86 13.19 23.65 72.36 51.68
01/30/96 05/31/96 Daig Corporation 20.17 22.72 26.77
01/31/96 03/04/96 Tivoli Systems Inc 25.83 25.00 41.79 49.31
02/01/96 04/12/96 Health Wise of America Inc 8.35 9.07 18.63 15.26 32.13
02/05/96 04/30/96 DiMark Inc. 1.70 1.70 0.84 33.93 16.50
02/07/96 05/07/96 Pyxis Corp 53.27 60.93 66.48 10.35 67.93
02/12/96 05/01/96 Duracraft Corp 58.18 50.00 68.12 16.78 82.20
02/13/96 09/18/96 Citicasters(American Finl Grp) 9.26 15.69 28.26 337.04 349.52
02/14/96 03/20/96 Helene Curtis Industries Inc 18.64 30.23 71.78
02/15/96 05/14/96 Andros Inc 16.13 24.14 35.85 4.35 12.50
02/16/96 05/30/96 Circle K Corp 45.85 42.47 68.82 830.11 548.63
02/16/96 06/13/96 Forum Group Inc 4.00 8.33 44.44
02/20/96 07/24/96 Davidson & Associates inc. 72.30 87.50 67.76 129.77 30.12
02/20/96 07/24/96 Sierra On-Line Inc 69.33 71.70 90.38 160.60 65.51
02/23/96 07/01/96 Cray Research Inc 18.81 21.21 20.60 83.21 34.83
02/26/96 09/16/96 Sterile Concepts Inc 53.85 60.00 55.34
02/26/96 06/18/96 Tide West Oil Co 44.64 44.64 51.52 74.36 27.28
02/27/96 05/24/96 Brandon Systems Corp 32.21 39.41 29.77 758.54 554.88
02/29/96 07/10/96 Big O Tires Inc 5.60 7.32 12.82 22.22 23.36
03/04/96 04/08/96 Guardsman Products Inc 32.37 32.37 57.27
03/07/96 07/03/96 Acme-Cleveland Corp 50.00 55.84 56.86
03/11/96 08/02/96 Life Partners Group Inc 35.48 34.40 55.56 -1.75 69.70
03/18/96 07/01/96 Athena Neurosciences Inc 20.66 16.80 40.39 220.88 73.81
03/18/96 08/30/96 Microtek Medical Inc 37.50 40.63 43.90 201.85 129.19
03/25/96 07/01/96 InStent Inc 1.03 9.14 5.87 228.93
03/26/96 08/09/96 DeBartolo Realty Corp 11.59 16.57 25.54 15.54 23.17
03/28/96 08/01/96 Stop & Shop Cos 25.23 27.01 45.65
03/29/96 04/26/96 Great American Mgmt & Invt Inc 2.56 4.17 3.63 41.34 2.04
03/29/96 07/02/96 Hayes Wheels International Inc 29.29 33.33 43.02 62.03 24.88
03/29/96 08/07/96 MediSense Inc 48.76 48.76 39.00 123.60 42.29
03/29/96 09/03/96 Regional Acceptance Corp 9.33 6.60 25.41 6.60 9.33
04/01/96 04/01/97 Pacific Telesis Group 38.70 36.24 33.88 27.24 14.04
04/01/96 07/19/96 US Healthcare Inc 24.25 21.28 18.75 28.81 23.91
04/02/96 08/15/96 Teledyne Inc 113.55 115.12 108.97 39.31 35.44
04/08/96 08/16/96 Cellular Communications Inc 7.45 7.84 6.28 87.23 94.69
04/10/96 10/15/96 Waterhouse Investor Services 15.15 19.69 65.22
04/17/96 07/31/96 Tucker Drilling Co Inc 4.68 7.13 10.05 71.68 34.13
04/22/96 07/10/96 StrataCom Inc 48.39 59.72 79.69 192.99 57.00
04/22/96 06/03/96 Westport Communicatons Inc 43.33 57.80 56.36 45.15 37.05
04/30/96 08/12/96 UUNet Technologies Inc 27.59 39.91 125.91 58.86
05/01/96 06/28/96 Quantum Health Resources Inc 23.65 29.32 60.18 9.27 54.90
05/01/96 08/21/96 Uniroyal Chemical Co 27.66 44.58 55.84 25.00 64.38
05/07/96 07/03/96 Guaranty National Corp 15.63 15.63 22.31 12.98 26.50
05/07/96 08/14/96 Kahler Realty Corp 9.68 13.33 9.68 88.89 46.24
05/10/96 08/22/96 CyCare Systems Inc 6.33 8.99 61.02 101.69 79.49
05/10/96 12/11/96 Transnational Re Corp 12.47 16.52 8.70 22.75 0.81
05/13/96 08/15/96 MMICOM Communications Corp -14.29 9.09 58.35 74.55 57.38
05/14/96 09/05/96 Caremark Internation Inc 9.95 16.00 18.17 81.93 25.81
05/15/96 08/23/96 Davis Water & Waste Industries 36.18 59.03 62.30 207.74 111.57
05/16/96 11/15/96 A+Network Inc 36.13 40.67 63.88 53.45 72.24
05/20/96 07/23/96 AmeriData Technologies Inc 4.07 25.49 47.13 109.84 62.03
05/20/96 12/30/96 Continental Waste Industries 66.73 62.18 82.04 223.19 117.56
05/20/96 10/31/96 Sterling Healthcare Group Inc -3.07 3.67 13.09
05/24/96 07/02/96 Masland Corp 6.12 18.18 30.00 84.07 77.78
05/27/96 02/16/97 SyStemix Inc(Novartis AG) 4.70 69.57 59.18 59.18 39.29
05/31/96 12/19/96 Addington Resources Inc 24.88 43.93 50.30 58.73 69.84
05/31/96 08/30/96 Image Industries Inc. 17.00 15.84 23.16
06/03/96 08/05/96 Heltel Broadcasting Corp 2.22 4.55 2.22 253.85 162.86
06/03/96 09/30/96 Univar Corp 57.17 54.06 58.78 55.60 80.93
Page F-6
Merger Premiums to Market Value Analysis
Mergers with Target Price Equal to or Greater than $10 per Share
Announced and Completed 1/1/96-10/9/98
(continued)
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Date Date
Announced Effective Target Name Target Business Description Acquiror Name
- ------------------------------------------------------------------------------------------------------------------------------------
06/04/96 09/20/96 HomeTown Buffet Inc Own and operate restaurants Buffets Inc.
06/06/96 10/10/96 AT&T Capital Corp (AT&T Corp) Pvd leasing, financing services Investor Group
06/06/96 12/18/96 Bally Entertainment Corp Own, op casino hotels Hilton Hotels Corp
06/06/96 07/09/96 FinishMaster Inc (Maxco Inc) Whl automotive paint, coatings Lacy Distribution Inc (LDI Ltd)
06/10/96 08/23/96 Orbit Semiconductor Inc Manufacture semiconductors DII Group Inc
06/11/96 07/23/96 Community Health Systems Inc Own and operate hospitals Forstmann Little & Co
06/14/96 08/23/96 Brenco Inc Ball and roller bearings Varlen Corp
06/17/96 11/19/96 Penril DataComm Networks Inc Mnfr data communications equip Bay Networks Inc
06/18/96 09/30/96 Builders Warehouse Assn Inc Pvd LAN design services Osicom Technologies Inc
06/20/96 12/31/96 Infinity Broadcasting Corp Own, op radio broadcasting stns Westinghouse Electric Corp
06/20/96 09/16/96 Public Storage Properties X Pvd warehousing, storage svcs Public Storage Inc
06/20/96 09/16/96 Public Storage Properties XII Rent storage space Public Storage Inc
06/24/96 09/03/96 Sanifill Inc Provide waste management svcs USA Waste Services Inc
06/28/96 10/02/96 National Re Corp Fire, casualty insurance co General Re Corp
06/28/96 09/27/96 Salem Corp Whl industrial mach and equip Investor Group
07/01/96 10/04/96 Landmark Graphics Corp Dvlp CAE sys for geoscientists Halliburton Co
07/01/96 03/25/97 Renaissance Commun Corp Own and operate TV stations Tribune Co
07/02/96 08/08/96 Ambar Inc Pvd oil and gas field services Beacon Group Energy Investment
07/17/96 01/22/97 New World Common Grp (Mafco) Operate television stations News Corp Ltd
07/19/96 07/01/97 Portland General Corp Electric utility holding co Enron Corp
07/19/96 08/27/97 Rexene Corp Mnfr petrochemical products Huntsman Corp
07/22/96 10/03/96 Global Natural Resources Inc Oil and gas exploration, prodn Seagull Energy Corp
07/22/96 10/25/96 Telchit Corp Mnfr data transmission equip Cisco Systems Inc
07/22/96 07/29/97 United Cities Gas Co Gas utility Atmos Energy Corp
07/23/96 02/19/97 Osborn Communications Corp Own, op radio and TV stations Capstar Broadcasting Partners
07/24/96 10/11/96 PCI Services Inc Pvd product packaging services Cardinal Health Inc
08/02/96 11/29/96 First Colony Corp Insurance holding company General Electric Capital Corp
08/05/96 04/07/97 EZ Communications Inc Own, operate radio stations American Radio Systems Corp
08/05/96 02/14/97 FHP International Corp Own and operate HMOs PacifiCare Health Systems Inc
08/07/96 10/03/96 Douglas & Lomason Co Wholesale motor vehicles Magna International Inc
08/08/96 09/17/96 Roto-Rooter Inc (Chemed Corp) Provide Plumbing services, prod Chemed Corp
08/09/96 08/06/97 NorAm Energy Corp Oil and gas exploration, prodn Houston Industries Inc
08/12/96 03/02/98 Atlantic Energy (Conoco) Public utility holding co Delmarva Power & Light
08/14/96 11/25/96 American Re Corp Property, casualty insurance co Muenchener Rueckversicherungs
08/14/96 11/07/96 Payco American Corp Credit collection services OSI Holdings Corp
08/14/96 10/24/96 Redman Industries Inc Manufacture mobile homes Champion Enterprises Inc
08/15/96 09/26/96 Orchard Supply Hardware Stores Own, op home improvement ctrs Sears Roebuck & Co
08/19/96 09/20/96 CasTech Aluminum Group Inc Mnfr aluminum sheets Commonwealth Aluminum Corp
08/19/96 12/16/96 Griffin Gaming & Entertainment Own, op gaming facilities Sun International Hotels Ltd
08/22/96 10/29/96 Meta Software Inc Develop software Avant! Corp
08/26/96 12/17/96 American Travellers Corp Insurance company Conseco Inc
08/26/96 12/31/96 Bankers Life Holding (Conseco) Life ins co; holding company Conseco Inc
08/26/96 03/04/97 Capitol American Financial Pvd accident, life ins svcs Conseco Inc
08/26/96 11/14/96 Career Horizons Inc Pvd temporary personnel svcs AccuStaff Inc
08/26/96 12/31/96 MFS Communications Co Inc Pvd telephone communs svcs WorldCom Inc
08/26/96 01/09/97 Spreckels Industries Inc Produce sugar; mnfr indust prod Columbus McKinnon Corp
08/28/96 11/08/96 Red Lions Hotels (Red Lion Inn) Own, op hotels Doubletree Corp
08/29/96 11/14/96 Amtrol Inc Mnfr plumbing, heating systems Cypress Group LLC
09/02/96 03/06/97 Arcadian Corp Mnfr phosphatic fertilizers Potash Corp of Saskatchewan
09/09/96 12/23/96 Big B Inc (Revco DS Inc) Drug, grocery retail stores Revco DS Inc
09/12/96 12/31/96 Duracell International Inc Manufacture alkaline batteries Gillette Co
09/23/96 12/04/96 Diamond Shamrock Inc Mnfr, wholesale petroleum Ultramar Corp
09/24/96 12/09/96 GMIS Inc Develop software HBO & Co
09/26/96 02/28/97 Providence Journal Co Own, op TV broadcasting stns AH Belo Corp
09/26/96 12/23/96 Transport Holdings Insurance holding company Conseco Inc
09/30/96 06/27/97 Belden & Blake Corp Oil and gas exploration, prodn Texas Pacific Group Inc
10/01/96 12/31/96 South West Property Trust Inc Real estate investment trust United Dominion Realty Tr Inc
10/02/96 02/03/97 Baby Superstore Inc Own, op children's wear stores Toys 'R' Us Inc
10/02/96 02/07/97 TSX Corporation Mnfr communications equipment ANTEC Corp
10/03/96 02/13/97 Kinder-Care Learning Centers Operate day care centers Kohlberg Kravis Roberts & Co
10/03/96 12/31/96 LXE (Electromagnetic Sciences) Mnfr microwave components Electromagnetic Sciences Inc
10/07/96 12/11/96 Augat Inc Mnfr electn, hardware prods Thomas & Betts Corp
10/07/96 12/02/96 Cheyenne Software Inc Develop computer software Computer Associates Intl Inc
10/08/96 11/22/96 Super Food Services Inc Wholesale food products Nash Finch Co
10/10/96 01/31/97 Gelman Sciences Inc Mnfr medical filter devices Pall Corp
10/14/96 06/26/98 Pacific Enterprises Inc Natural gas utility Enova Corp
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Value of Enter-
Trans- prise
Date Date Acquiror action Value
Announced Effective Target Name Business Description ($ mil) ($ mil)
- ------------------------------------------------------------------------------------------------------------------------------------
06/04/96 09/20/96 HomeTown Buffet Inc Own and operate restaurants 174.00 195.94
06/06/96 10/10/96 AT&T Capital Corp (AT&T Corp) Investor group 2128.60 9188.70
06/06/96 12/18/96 Bally Entertainment Corp Own, operate hotels 3138.10 3108.89
06/06/96 07/09/96 FinishMaster Inc (Maxco Inc) Whl industrial machinery equip 62.60 111.13
06/10/96 08/23/96 Orbit Semiconductor Inc Mnfr electronic components 118.30 105.05
06/11/96 07/23/96 Community Health Systems Inc Investment company 1080.00 1267.50
06/14/96 08/23/96 Brenco Inc Mnfr custom tubular products 161.40 164.89
06/17/96 11/19/96 Penril DataComm Networks Inc Mnfr, whl data networking prods 117.60 124.14
06/18/96 09/30/96 Builders Warehouse Assn Inc Mnfr communications equipment 69.30 73.34
06/20/96 12/31/96 Infinity Broadcasting Corp Mnfr elec defense electn equip 4737.80 4153.30
06/20/96 09/16/96 Public Storage Properties X Real estate investment trust 50.20 39.48
06/20/96 09/16/96 Public Storage Properties XII Real estate investment trust 55.20 37.66
06/24/96 09/03/96 Sanifill Inc Pvd waste disposal services 1236.90 1604.45
06/28/96 10/02/96 National Re Corp Insurance holding company 904.60 1110.32
06/28/96 09/27/96 Salem Corp Investor group 46.60 31.81
07/01/96 10/04/96 Landmark Graphics Corp Mnfr oil field machinery 586.70 531.76
07/01/96 03/25/97 Renaissance Commun Corp Publish newspaper, cable TV sys 1094.40 1118.68
07/02/96 08/08/96 Ambar Inc Investment firm 66.60 81.36
07/17/96 01/22/97 New World Common Grp (Mafco) Publish newspapers, magazines 2173.00 4241.94
07/19/96 07/01/97 Portland General Corp Own, operate gas pipelines 2901.70 2982.29
07/19/96 08/27/97 Rexene Corp Mnfr petrochemicals 606.80 494.49
07/22/96 10/03/96 Global Natural Resources Inc Own, op gas pipelines 525.60 526.49
07/22/96 10/25/96 Telchit Corp Mnfr inter-networking systems 196.30 196.20
07/22/96 07/29/97 United Cities Gas Co Natural gas distribution svcs 496.50 508.19
07/23/96 02/19/97 Osborn Communications Corp Own, operate radio stations 89.90 110.81
07/24/96 10/11/96 PCI Services Inc Whl pharmaceutical products 208.00 209.59
08/02/96 11/29/96 First Colony Corp Pvd consumer financing svcs 1799.20 2011.94
08/05/96 04/07/97 EZ Communications Inc Own, op radio bdcstg station 687.30 623.19
08/05/96 02/14/97 FHP International Corp Own and operate HMO's 2000.10 2161.89
08/07/96 10/03/96 Douglas & Lomason Co Mnfr auto parts, accessories 134.60 213.95
08/08/96 09/17/96 Roto-Rooter Inc (Chemed Corp) Mnfr chems, janitorial equip 93.60 220.33
08/09/96 08/06/97 NorAm Energy Corp Electric utility holding co 3648.80 3750.59
08/12/96 03/02/98 Atlantic Energy (Conoco) Electric and gas utility 951.10 2155.87
08/14/96 11/25/96 American Re Corp Provide reinsurance services 3967.80 3830.43
08/14/96 11/07/96 Payco American Corp Investment holding firm 161.90 154.65
08/14/96 10/24/96 Redman Industries Inc Mnfr single-family houses 341.90 319.85
08/15/96 09/26/96 Orchard Supply Hardware Stores Department stores; finl svcs 423.70 412.74
08/19/96 09/20/96 CasTech Aluminum Group Inc Manufacture aluminum prods 328.70 322.74
08/19/96 12/16/96 Griffin Gaming & Entertainment Own, operate hotels 309.60 345.20
08/22/96 10/29/96 Meta Software Inc Develop software 139.30 136.90
08/26/96 12/17/96 American Travellers Corp Insurance holding company 868.30 968.71
08/26/96 12/31/96 Bankers Life Holding (Conseco) Insurance holding company 120.80 1534.75
08/26/96 03/04/97 Capitol American Financial Insurance holding company 715.50 695.10
08/26/96 11/14/96 Career Horizons Inc Provide staffing services 1010.30 835.76
08/26/96 12/31/96 MFS Communications Co Inc Pvd telecommunications svcs 13595.70 14885.50
08/26/96 01/09/97 Spreckels Industries Inc Mnfr industrial chains, hoists 259.40 248.37
08/28/96 11/08/96 Red Lions Hotels (Red Lion Inn) Own, operate hotel mgt co 1174.10 1129.01
08/29/96 11/14/96 Amtrol Inc Investment bank 227.20 218.87
09/02/96 03/06/97 Arcadian Corp Manufacture potash 1723.30 1424.49
09/09/96 12/23/96 Big B Inc (Revco DS Inc) Own, operate drug stores 335.40 401.15
09/12/96 12/31/96 Duracell International Inc Mnfr shaving razors and blades 7231.90 7764.78
09/23/96 12/04/96 Diamond Shamrock Inc Mnfr refined petroleum prods 860.90 1807.57
09/24/96 12/09/96 GMIS Inc Dvlp healthcare software 242.60 235.10
09/26/96 02/28/97 Providence Journal Co Newspapers; radio, TV stations 1429.60 1617.14
09/26/96 12/23/96 Transport Holdings Insurance holding company 299.90 242.62
09/30/96 06/27/97 Belden & Blake Corp Investment holding company 405.70 404.19
10/01/96 12/31/96 South West Property Trust Inc Real estate investment trust 547.80 526.41
10/02/96 02/03/97 Baby Superstore Inc Own, op retail toy stores 382.20 501.92
10/02/96 02/07/97 TSX Corporation Mnfr commun network products 254.30 214.63
10/03/96 02/13/97 Kinder-Care Learning Centers Leverage buyout firm 571.00 510.01
10/03/96 12/31/96 LXE (Electromagnetic Sciences) Mnfr microwave components 14.80 81.96
10/07/96 12/11/96 Augat Inc Mnfr electronic connectors 570.10 611.78
10/07/96 12/02/96 Cheyenne Software Inc Develop applications software 1247.60 1199.60
10/08/96 11/22/96 Super Food Services Inc Wholesale groceries 164.20 262.84
10/10/96 01/31/97 Gelman Sciences Inc Mnfr filters, separations equip 297.70 292.22
10/14/96 06/26/98 Pacific Enterprises Inc Electric and gas utility 2870.00 4159.40
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Premium
----------------------------------------------------------------------------------
Date Date 1 Day Prior 1 Day Prior 4 Weeks Prior 3 Months Prior 1 Year Prior
Announced Effective Target Name to Annc. Date to Annc. Date to Annc. Date to Annc. Date to Annc. Date
- ------------------------------------------------------------------------------------------------------------------------------------
06/04/96 09/20/96 HomeTown Buffet Inc (3.27) 7.38 2.67 20.66 25.85
06/06/96 10/10/96 AT&T Capital Corp (AT&T Corp) 37.41 38.46 42.29
06/06/96 12/18/96 Bally Entertainment Corp 59.03 74.81 72.18 175.95 81.78
06/06/96 07/09/96 FinishMaster Inc (Maxco Inc) 30.42 27.76 42.27 9.82 42.27
06/10/96 08/23/96 Orbit Semiconductor Inc 37.78 36.10 57.18 (22.50) 69.09
06/11/96 07/23/96 Community Health Systems Inc 20.23 19.89 18.86 49.64 22.35
06/14/96 08/23/96 Brenco Inc 30.96 30.30 20.56 30.67 34.42
06/17/96 11/19/96 Penril DataComm Networks Inc 7.50 2.99 6.17
06/18/96 09/30/96 Builders Warehouse Assn Inc 9.67 15.95 35.32 370.00 37.08
06/20/96 12/31/96 Infinity Broadcasting Corp 12.76 10.82 15.27 33.11 7.01
06/20/96 09/16/96 Public Storage Properties X 13.85 13.08 10.83 20.40 5.26
06/20/96 09/16/96 Public Storage Properties XII 14.56 14.56 15.30 27.66 15.30
06/24/96 09/03/96 Sanifill Inc (1.02) 3.86 1.63 55.38 26.37
06/28/96 10/02/96 National Re Corp 45.21 65.63 60.61 60.61 57.04
06/28/96 09/27/96 Salem Corp 21.95 23.46 11.73 (11.50) 30.72
07/01/96 10/04/96 Landmark Graphics Corp 65.51 77.00 68.80 24.94 93.09
07/01/96 03/25/97 Renaissance Commun Corp 11.63 19.01 20.50 150.43 423.64
07/02/96 08/08/96 Ambar Inc 24.14 17.07 50.00 311.43 73.49
07/17/96 01/22/97 New World Common Grp (Mafco) 67.66 71.68 60.15 28.53 49.06
07/19/96 07/01/97 Portland General Corp 23.13 21.54 19.48 58.43 23.68
07/19/96 08/27/97 Rexene Corp 75.34 60.00 56.10 16.36 19.63
07/22/96 10/03/96 Global Natural Resources Inc 11.23 13.04 13.04 73.80 17.83
07/22/96 10/25/96 Telchit Corp 22.76 22.76 4.71 196.67 101.51
07/22/96 07/29/97 United Cities Gas Co 52.21 64.29 69.67 69.70 56.85
07/23/96 02/19/97 Osborn Communications Corp 28.13 50.00 38.20 108.54 44.75
07/24/96 10/11/96 PCI Services Inc 44.00 42.89 23.84 158.00 16.10
08/02/96 11/29/96 First Colony Corp 37.71 32.66 39.04 45.33 41.07
08/05/96 04/07/97 EZ Communications Inc 45.54 56.36 89.20 162.78 142.56
08/05/96 02/14/97 FHP International Corp 19.37 27.37 19.10 41.20 24.96
08/07/96 10/03/96 Douglas & Lomason Co 39.33 90.77 103.28 121.43 125.45
08/08/96 09/17/96 Roto-Rooter Inc (Chemed Corp) 12.33 12.33 11.19 25.19 20.15
08/09/96 08/06/97 NorAm Energy Corp 35.72 46.52 41.69 143.32 48.23
08/12/96 03/02/98 Atlantic Energy (Conoco) 5.34 3.83 3.09 (0.47) 5.34
08/14/96 11/25/96 American Re Corp 26.21 41.69 44.04 79.93 49.86
08/14/96 11/07/96 Payco American Corp 19.15 17.90 60.00 77.78 64.71
08/14/96 10/24/96 Redman Industries Inc 6.29 11.71 26.39 102.26 21.73
08/15/96 09/26/96 Orchard Supply Hardware Stores 17.65 25.56 28.44 137.29 8.95
08/19/96 09/20/96 CasTech Aluminum Group Inc 37.82 57.69 45.13 3.14 41.38
08/19/96 12/16/96 Griffin Gaming & Entertainment 88.88 88.88 69.28 52.07 52.07
08/22/96 10/29/96 Meta Software Inc 18.00 0.48 1.48 (27.49)
08/26/96 12/17/96 American Travellers Corp 30.09 37.35 81.17 230.54 61.36
08/26/96 12/31/96 Bankers Life Holding (Conseco) 14.94 10.50 11.73 31.58 25.79
08/26/96 03/04/97 Capitol American Financial 50.84 51.60 56.31 65.76 53.14
08/26/96 11/14/96 Career Horizons Inc 34.40 33.80 63.98 145.64 147.63
08/26/96 12/31/96 MFS Communications Co Inc 58.82 59.96 86.96 142.14 66.27
08/26/96 01/09/97 Spreckels Industries Inc 23.87 24.68 29.73 178.26 45.45
08/28/96 11/08/96 Red Lions Hotels (Red Lion Inn) 28.60 33.55 31.38
08/29/96 11/14/96 Amtrol Inc 71.21 56.94 56.94 137.89
09/02/96 03/06/97 Arcadian Corp 24.66 20.99 26.96 36.21 30.18
09/09/96 12/23/96 Big B Inc (Revco DS Inc) 36.63 66.27 58.62 10.40 68.29
09/12/96 12/31/96 Duracell International Inc 19.84 29.75 30.11 37.31 33.80
09/23/96 12/04/96 Diamond Shamrock Inc (3.90) 1.11 5.71 15.70 0.68
09/24/96 12/09/96 GMIS Inc 56.35 57.50 86.26 64.80 125.52
09/26/96 02/28/97 Providence Journal Co 58.38 64.43 65.49 109.89
09/26/96 12/23/96 Transport Holdings 25.80 35.27 32.18 41.52
09/30/96 06/27/97 Belden & Blake Corp 32.52 27.81 31.71 42.11 21.35
10/01/96 12/31/96 South West Property Trust Inc 9.31 9.31 13.39 18.98 12.37
10/02/96 02/03/97 Baby Superstore Inc 17.99 21.82 25.07 (46.86) 43.21
10/02/96 02/07/97 TSX Corporation 10.00 18.63 26.04 3.16 (22.41)
10/03/96 02/13/97 Kinder-Care Learning Centers 17.83 18.75 26.67 34.51 22.58
10/03/96 12/31/96 LXE (Electromagnetic Sciences) 22.09 14.13 19.32 28.10 23.58
10/07/96 12/11/96 Augat Inc 32.83 30.49 45.94 49.89 54.06
10/07/96 12/02/96 Cheyenne Software Inc 32.61 34.81 30.48
10/08/96 11/22/96 Super Food Services Inc 37.78 36.26 29.17 26.53 51.22
10/10/96 01/31/97 Gelman Sciences Inc 80.47 57.91 49.42 58.81 65.43
10/14/96 06/26/98 Pacific Enterprises Inc 7.43 8.72 11.87 98.59 76.24
Page F-7
Merger Premiums to Market Value Analysis
Mergers with Target Price Equal to or Greater than $10 per Share
Announced and Completed 1/1/96-10/9/98
(continued)
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Date Date
Announced Effective Target Name Target Business Description Acquiror Name
- ------------------------------------------------------------------------------------------------------------------------------------
10/14/96 12/12/96 Thrifty Payless Holdings Inc Own, op drug store chain Rite Aid Corp
10/15/96 06/03/97 Conrail Inc Own, op freight railroad lines Investor Group
10/15/96 12/23/96 FlightSafety International Mnfr flight simulators Berkshire Hathaway Inc
10/17/96 01/30/97 OrNda HealthCorp Own, operate hospitals Tenet Healthcare Corp
10/21/96 03/31/97 Detroit & Canada Tunnel Corp Pvd tunnel operation services Investor Group
10/23/96 04/16/97 Syratech Corp Manufacture silver flatware Thomas H Lee Equity Fund III
10/28/96 05/07/97 Cooper & Chyan Technology Inc Develop software Cadence Design Systems Inc
10/28/96 01/15/97 Loctite Corp Mnfr adhesives & sealants Henkel KGaA
10/28/96 05/29/97 Wireless Cable of Atlanta Pvd wireless cable commons svc BellSouth Corp
10/30/96 04/08/97 Vons Cos Inc Own and operate supermarkets Safeway Inc
10/31/96 07/01/97 California Jockey Club/Bay Own, op horse racing tracks Patriot American Hospitality
10/31/96 12/18/96 Kash N'Karry Food Stores Inc Own and operate supermarkets Food Lion Inc
11/04/96 02/27/97 Eckerd Corp Operate retail drug stores JC Penney Co
11/11/96 04/30/97 PHH Corp Pvd auto, truck leasing svcs HFS Inc
11/12/96 06/12/97 Leslie's Poolmart Own, op swimming pool stores Investor Group
11/12/96 02/27/97 SQA Inc Whl software Rational Software Corp
11/13/96 01/20/97 Medex Inc Mnfr drug infusion products FCY Inc
11/18/96 01/02/97 Sudbury Inc Mnfr automotive parts Internet Corp
11/25/96 01/09/97 Opal Inc Mnfr special industry equip Applied Materials Inc
11/25/96 06/18/97 PanEnergy Corp. Oil and gas exploration, prodn Duke Power Co
11/26/96 12/30/96 Armor All Products (McKesson) Mnfr cleaners and waxes Clorox Co
11/27/96 03/27/97 Central Tractor Farm & Country Own, op tractor, hardware stores JW Childs Equity Partners LP
11/27/96 12/27/96 Central Tractor Farm & Country Own, op tractor, hardware stores JW Childs Equity Partners LP
11/27/96 01/16/97 Milgray Electronics Inc Whl electronic equip Bell Industries Inc
11/27/96 03/19/97 Owen Healthcare Inc Wholesale pharmaceuticals Cardinal Health Inc
11/29/96 04/30/97 Chicago Dock and Canal Trust Real estate investment trust CityFront Center LLC
11/29/96 01/06/97 ElectroStar Inc Mnfr printed circuit boards Tyco International Ltd
12/02/96 01/30/97 Eastbay Inc Own, operate mail order bus Venator Group Inc
12/02/96 03/03/97 Health Images Inc Provide magnetic imaging svcs HealthSouth Corp
12/05/96 02/26/97 Barefoot Inc Provide lawn care services ServiceMaster LP
12/05/96 03/27/97 Cavco Industries Inc Mnfr mobile homes Centex Corp
12/05/96 04/11/97 Public Storage Properties XIV Real estate investment trust Public Storage Inc
12/05/96 04/11/97 Public Storage Properties XV Real estate investment trust Public Storage Inc
12/05/96 05/05/97 Santa Fe Pacific Gold Corp Gold mining co Newmont Mining Corp
12/05/96 01/10/97 Zycon Corp Mnfr printed circuit boards Hadco Corp
12/11/96 02/21/97 Alexander & Alexander Services Pvd insurance brokerage svcs Aon Corp
12/16/96 01/27/97 Eljer Industries Inc Manufacture plumbing fixtures Zurn Industries Inc
12/16/96 04/16/97 Paragon Group Inc Real estate investment trust Camden Property Trust
12/16/96 05/30/97 Pioneer Financial Services Life, health, accident ins svcs Conseco Inc
12/16/96 01/27/97 Tylan General Inc Mnfr gas measure equipment Millipore Corp
12/17/96 08/01/97 McDonnell Douglas Corp Mnfr aerospace, defense equip Boeing Co
12/19/96 03/25/97 IWC Resources Corp Water utility holding company NIPSCO Industries Inc
12/24/96 04/16/97 Home Beneficial Corp Insurance holding company American General Corp
12/30/96 05/29/98 LILCO Electric utility Brooklyn Union Gas Co
01/07/97 02/25/97 American Medical Response Inc Provide ambulance services MedTrans Inc (Laidlaw Inc)
01/07/97 02/10/97 Bonray Drilling Corp On-shore oil and gas drilling DLB Oil & Gas Inc
01/13/97 04/25/97 OpenVision Technologies Inc Mnfr software, pvd programming Veritas Software Corp
01/13/97 09/02/97 Zurich Reinsurance Centre Insurance agency Zurich Versicherungs GmbH
01/14/97 04/01/97 Oxford Resources Corp Pvd passenger car leasing svcs Barnett Banks, Jacksonville, FL
01/14/97 04/30/97 Tencor Instruments Inc Mnfr test instruments KLA Instruments Corp
01/15/97 08/06/97 Value Health Inc Provide health plan services Columbia/HCA Healthcare Corp
01/16/97 02/28/97 Epic Design Technology Inc Develop CAD software Synposys Inc
01/16/97 05/30/97 Wellsford Residential Ppty Real estate investment trust Equity Residential Pptys Trust
01/17/97 06/17/97 Avemco Corp Fire, marine, casualty ins co HCC Insurance Holdings Inc
01/17/97 04/11/97 Studio Plus Hotels Inc Own, operate hotels, motels Extended Stay America Inc
01/20/97 06/27/97 First USA Inc Pvd credit card svcs BANC ONE Corp, Columbus, Ohio
01/20/97 04/08/97 Target Therapeutics Inc Mnfr, whl mini-surgical devices Boston Scientific Corp
01/21/97 06/26/97 InPhyNet Medical Management Pvd physician management svcs MedPartners Inc
01/21/97 07/09/97 Mafco Consolidated Grp (Mafco) Mnfr cosmetics, beauty products Mafco Holdings Inc
01/22/97 03/05/97 Norand Corp Mnfr electronic info systems Western Atlas Inc
01/23/97 05/19/97 Amphenol Corp Manufactures connectors Kohlberg Kravis Roberts & Co
01/23/97 06/02/98 ESELCO Inc Electric utility Wisconsin Energy Corp
01/27/97 03/07/97 Measure Corp Mnfr process control systems Honeywell Inc
01/27/97 05/30/97 Revco DS Inc Own, operate drug stores CVS Corp
02/03/97 03/10/97 Kysor Industrial Corp Mnfr vehicle components Scotsman Industries Inc
02/05/97 05/31/97 Morgan Stanley Group Inc Investment bank Dean Witter Discover & Co
02/10/97 03/31/97 TheraTx Inc Own, op nursing care facilities Vencor Inc
02/11/97 06/13/97 AMISYS Managed Care Systems Pvd integrated systems svcs HBO & Co
- ------------------------------------------------------------------------------------------------------------------------------------
Value of Enter-
Trans- prise
Date Date Acquiror action Value
Announced Effective Target Name Business Description ($ mil) ($ mil)
- ------------------------------------------------------------------------------------------------------------------------------------
10/14/96 12/12/96 Thrifty Payless Holdings Inc Own, operate drug stores 2,394.00 2,367.73
10/15/96 06/03/97 Conrail Inc Investor group 10,435.90 12,532.43
10/15/96 12/23/96 FlightSafety International Property, casualty insurance co 1,518.10 1,555.16
10/17/96 01/30/97 OrNda HealthCorp Own, op hospitals 3,123.40 2,875.48
10/21/96 03/31/97 Detroit & Canada Tunnel Corp Investor group 36.50 33.33
10/23/96 04/16/97 Syratech Corp Pvd fund mgmt svcs 304.40 335.62
10/28/96 05/07/97 Cooper & Chyan Technology Inc Develop CAD software 474.80 452.04
10/28/96 01/15/97 Loctite Corp Mnfr, whl chemicals, detergents 1,289.10 2,118.28
10/28/96 05/29/97 Wireless Cable of Atlanta Pvd telecommunication svcs 44.70 37.95
10/30/96 04/08/97 Vons Cos Inc Own, op grocery stores 2,251.60 3,092.97
10/31/96 07/01/97 California Jockey Club/Bay Real estate investment trust 199.70 185.79
10/31/96 12/18/96 Kash N'Karry Food Stores Inc Own and operate supermarkets 347.10 342.27
11/04/96 02/27/97 Eckerd Corp Department stores 3,298.50 3,216.53
11/11/96 04/30/97 PHH Corp Own, op hotel franchises 1,809.50 6,273.96
11/12/96 06/12/97 Leslie's Poolmart Investor group 112.80 124.19
11/12/96 02/27/97 SQA Inc Dvlp component-based software 315.80 273.70
11/13/96 01/20/97 Medex Inc Mnfr engineered polymer prods 150.60 147.44
11/18/96 01/02/97 Sudbury Inc Ductile, gray iron castings 155.40 145.12
11/25/96 01/09/97 Opal Inc Mnfr wafer fabrication systems 189.60 146.57
11/25/96 06/18/97 PanEnergy Corp Electric utility 7,666.80 9,955.41
11/26/96 12/30/96 Armor All Products (McKesson) Manufacture household bleach 410.10 355.10
11/27/96 03/27/97 Central Tractor Farm & Country Investment company 56.70 172.74
11/27/96 12/27/96 Central Tractor Farm & Country Investment company 81.00 166.96
11/27/96 01/16/97 Milgray Electronics Inc Mnfr electronic, computer prods 100.00 135.18
11/27/96 03/19/97 Owen Healthcare Inc Whl pharmaceutical products 544.10 481.67
11/29/96 04/30/97 Chicago Dock and Canal Trust Real estate investment trust 177.90 176.49
11/29/96 01/06/97 ElectroStar Inc Mnfr fire protection systems 111.00 119.21
12/02/96 01/30/97 Easthay Inc Own, op variety stores 146.00 142.81
12/02/96 03/03/97 Health Images Inc Own, op outpatient surgery ctr. 263.70 259.67
12/05/96 02/26/97 Barefoot Inc Pvd mgmt svcs 230.90 246.11
12/05/96 03/27/97 Cavco Industries Inc Construct bldgs, RE dvlp firm 76.20 104.85
12/05/96 04/11/97 Public Storage Properties XIV Real estate investment trust 82.40 56.91
12/05/96 04/11/97 Public Storage Properties XV Real estate investment trusts 79.10 54.22
12/05/96 05/05/97 Santa Fe Pacific Gold Corp Gold, coal mining; oil, gas expl 2,505.50 2,862.14
12/05/96 01/10/97 Zycon Corp Mnfr computer circuit boards 211.70 240.90
12/11/96 02/21/97 Alexander & Alexander Services Insurance holding company 1,227.40 1,131.32
12/16/96 01/27/97 Eljer Industries Inc Mnfr environmental equipment 175.60 254.31
12/16/96 04/16/97 Paragon Group Inc Real estate investment trust 624.80 619.15
12/16/96 05/30/97 Pioneer Financial Services Insurance holding company 564.00 531.20
12/16/96 01/27/97 Tylan General Inc Mnfr analytical products 147.70 150.72
12/17/96 08/01/97 McDonnell Douglas Corp Mnfr aircraft, aerospace equip 13,359.00 15,830.06
12/19/96 03/25/97 IWC Resources Corp Electric, gas utility hldg co 290.60 418.56
12/24/96 04/16/97 Home Beneficial Corp Insurance holding company 665.10
12/30/96 05/29/98 LILCO Gas utility 4,725.50 8,325.51
01/07/97 02/25/97 American Medical Response Inc Pvd ambulance svcs 1,011.10 1,179.05
01/07/97 02/10/97 Bonray Drilling Corp Oil and gas exploration, prdn 12.70 13.61
01/13/97 04/25/97 OpenVision Technologies Inc Dvlp bus applications software 365.70 355.21
01/13/97 09/02/97 Zurich Reinsurance Centre Insurance holding company 319.00 932.99
01/14/97 04/01/97 Oxford Resources Corp Commercial bank 561.00 2,075.95
01/14/97 04/30/97 Tencor Instruments Inc Mnfr measuring devices 1,343.60 1,268.04
01/15/97 08/06/97 Value Health Inc Own, operate hospitals 1,132.30 1,007.30
01/16/97 02/28/97 Epic Design Technology Inc Develop automation software 455.40 435.64
01/16/97 05/30/97 Wellsford Residential Ppty Real estate investment trust 995.50 792.15
01/17/97 06/17/97 Avemco Corp Provide insurance services 246.80 295.32
01/17/97 04/11/97 Studio Plus Hotels Inc Own, op hotels 295.90 261.22
01/20/97 06/27/97 First USA Inc Bank holding company 7,304.30 7,972.55
01/20/97 04/08/97 Target Therapeutics Inc Manufacture catheters 1,218.30 1,183.39
01/21/97 06/26/97 InPhyNet Medical Management Pvd medical services to HMO's 369.70 364.33
01/21/97 07/09/97 Mafco Consolidated Grp (Mafco) Mnfr toilet preparations 116.80 980.32
01/22/97 03/05/97 Norand Corp Pvd oil, gas exploration svcs 320.80 316.14
01/23/97 05/19/97 Amphenol Corp Leverage buyout firm 1,390.40 1,385.99
01/23/97 06/02/98 ESELCO Inc Electric, gas utility; hldg co 74.30 95.65
01/27/97 03/07/97 Measurex Corp Mnfr automation, control sys 597.00 587.36
01/27/97 05/30/97 Revco DS Inc Own and operate drug stores 3,911.70 3,969.97
02/03/97 03/10/97 Kysor Industrial Corp Mnfr refrigeration equipment 359.20 385.36
02/05/97 5/31/97 Morgan Stanley Group Inc Securities brokerage firm 10,573.00 51,167.74
02/10/97 03/31/97 TheraTx Inc Provide healthcare services 378.20 539.63
02/11/97 06/13/97 AMISYS Managed Care Systems Dvlp healthcare software 170.60 146.52
- ------------------------------------------------------------------------------------------------------------------------------------
Premium
----------------------------------------------------------------------------------
Date Date 1 Day Prior 1 Day Prior 4 Weeks Prior 3 Months Prior 1 Year Prior
Announced Effective Target Name to Annc. Date to Annc. Date to Annc. Date to Annc. Date to Annc. Date
- ------------------------------------------------------------------------------------------------------------------------------------
10/14/96 12/12/96 Thrifty Payless Holdings Inc 26.91 28.66 37.18 62.23
10/15/96 06/03/97 Conrail Inc 61.97 60.28 60.28 61.40 74.24
10/15/96 12/23/96 FlightSafety International 13.96 10.80 10.80
10/17/96 01/30/97 OrNda HealthCorp 9.61 19.48 16.56 57.21 40.56
10/21/96 03/31/97 Detroit & Canada Tunnel Corp 64.89 74.19 54.29 110.73 64.89
10/23/96 04/16/97 Syratech Corp 21.91 28.00 29.29 62.03 31.28
10/28/96 05/07/97 Cooper & Chyan Technology Inc 2.54 1.73 31.84 63.54
10/28/96 01/15/97 Lucite Corp 31.89 36.70 34.81 33.33 41.86
10/28/96 05/29/97 Wireless Cable of Atlanta 89.88 80.83 80.83 83.04 20.57
10/30/96 04/08/97 Vons Cos Inc 26.80 21.52 25.71 115.49 32.96
10/31/96 07/01/97 California Jockey Club/Bay 87.23 88.57 103.08 300.61 268.67
10/31/96 12/18/96 Kash N'Karry Food Stores Inc 9.47 33.33 6.67 13.66 (7.96)
11/04/96 02/27/97 Eckerd Corp 21.21 28.44 29.63 67.66 56.42
11/11/96 04/30/97 PHH Corp 60.98 65.00 69.23 120.00 83.33
11/12/96 06/12/97 Leslie's Poolmart 26.09 31.82 31.82 5.45 13.73
11/12/96 02/27/97 SQA Inc 39.44 28.23 39.44 73.06
11/13/96 01/20/97 Medex Inc 54.10 57.98 66.74
11/18/96 01/02/97 Sudbury Inc 19.05 25.00 9.89 53.85 14.94
11/25/96 01/09/97 Opal Inc 52.58 64.44 105.56 270.00 23.33
11/25/96 06/18/97 PanEnergy 18.34 22.70 30.29 80.18 48.15
11/26/96 12/30/96 Armor All Products (McKesson) 9.09 13.97 13.97 4.60 27.27
11/27/96 03/27/97 Central Tractor Farm & Country 17.53 17.53 18.75 67.65 42.50
11/27/96 12/27/96 Central Tractor Farm & Country 15.46 15.46 16.67 64.71 40.00
11/27/96 01/16/97 Milgray Electronics Inc 8.40 16.99 20.57
11/27/96 03/19/97 Owen Healthcare Inc 64.89 100.86 87.25
11/29/96 04/30/97 Chicago Dock and Canal Trust 22.32 22.70 22.70 150.00 68.07
11/29/96 01/06/97 ElectroStar Inc 7.69 27.27 16.67 40.00
12/02/96 01/30/97 Easthay Inc 26.32 28.00 23.08
12/02/96 03/03/97 Health Images Inc 7.39 27.85 34.24 116.52 57.93
12/05/96 02/26/97 Barefoot Inc 25.49 28.00 42.22 31.96 60.00
12/05/96 03/27/97 Cavco Industries Inc 13.23 20.23 30.49 130.11 39.87
12/05/96 04/11/97 Public Storage Properties XIV 29.19 30.82 31.65 49.64 32.48
12/05/96 04/11/97 Public Storage Properties XV 29.19 28.40 32.48 46.48 34.19
12/05/96 05/05/97 Santa Fe Pacific Gold Corp 59.75 66.77 63.18 50.26 45.92
12/05/96 01/10/97 Zycon Corp 12.50 46.94 94.60 39.81 105.71
12/11/96 02/21/97 Alexander & Alexander Services 6.06 8.53 9.38 (16.67) 8.53
12/16/96 01/27/97 Eljer Industries Inc 77.78 84.62 90.10 146.15 140.00
12/16/96 04/16/97 Paragon Group Inc 9.71 12.25 14.00 7.29 19.61
12/16/96 05/30/97 Pioneer Financial Services 47.37 50.34 63.50
12/16/96 01/27/97 Tylan General Inc 39.13 26.73 26.73 13.27 16.36
12/17/96 08/01/97 McDonnell Douglas Corp 0.62 22.71 20.08 41.33 22.41
12/19/96 03/25/97 IWC Resources Corp 31.96 39.13 45.46 64.10 64.10
12/24/96 04/16/97 Home Beneficial Corp 2.80 39.29 50.00 56.00 56.78
12/30/96 05/29/98 LILCO 32.28 33.14 28.96 56.52 49.66
01/07/97 02/25/97 American Medical Response Inc 21.21 23.08 36.75 33.33 31.15
01/07/97 02/10/97 Bonray Drilling Corp 11.11 11.11 30.44 179.07 105.13
01/13/97 04/25/97 OpenVision Technologies Inc 43.67 46.46 50.86 46.49
01/13/97 09/02/97 Zurich Reinsurance Centre 17.07 18.52 11.63 20.50 18.03
01/14/97 04/01/97 Oxford Resources Corp 10.03 23.53 28.05 76.86 52.37
01/14/97 04/30/97 Tencor Instruments Inc 33.06 42.22 70.21 109.15 113.33
01/15/97 08/06/97 Value Health Inc 1.24 0.61 0 (22.64) 17.14
01/16/97 02/28/97 Epic Design Technology Inc (0.60) 8.52 23.63 23.01 30.09
01/16/97 05/30/97 Wellsford Residential Ppty 7.58 9.21 9.77
01/17/97 06/17/97 Avemco Corp 47.74 55.78 89.26 86.21 80.35
01/17/97 04/11/97 Studio Plus Hotels Inc 54.96 51.12 37.48 40.68 28.79
01/20/97 06/27/97 First USA Inc 43.16 53.05 50.85 126.89 80.64
01/20/97 04/08/97 Target Therapeutics Inc 63.65 65.86 93.68 50.39 76.90
01/21/97 06/26/97 InPhyNet Medical Management (0.80) 12.84 25.38 8.77 43.30
01/21/97 07/09/97 Mafco Consolidated Grp (Mafco) 23.50 23.50 27.62 69.62 36.04
01/22/97 03/05/97 Norand Corp 72.90 87.41 94.20 150.47 74.03
01/23/97 05/19/97 Amphenol Corp 12.43 16.85 26.06 16.85 31.65
01/23/97 06/02/98 ESELCO Inc 50.85 49.58 69.52
01/27/97 03/07/97 Measurex Corp 44.33 42.13 45.83 18.14 37.25
01/27/97 05/30/97 Revco DS Inc 7.57 11.47 17.69 50.79 40.73
02/03/97 03/10/97 Kysor Industrial Corp 16.22 17.01 24.64 79.17 48.28
02/05/97 5/31/97 Morgan Stanley Group Inc 11.08 12.80 13.81
02/10/97 03/31/97 TheraTx Inc 30.29 35.45 59.07 50.33 73.16
02/11/97 06/13/97 AMISYS Managed Care Systems 38.58 44.26 43.09 8.64 62.96
Page F-8
Merger Premiums to Market Value Analysis
Mergers with Target Price Equal to or Greater than $10 per Share
Announced and Completed 1/1/96-10/9/98
(continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Date Date
Announced Effective Target Name Target Business Description Acquiror Name
- ------------------------------------------------------------------------------------------------------------------------------------
02/13/97 05/20/97 Reflectone Inc Manufacture flight simulators British Aerospace Holdings
02/13/97 06/17/97 USLIFE Corp Life insurance company American General Corp
02/14/97 10/29/97 Horizon/CMS Healthcare Corp Pvd nursing care services HealthSouth Corp
02/14/97 09/17/97 UNC Inc Mnfr aircraft components Greenwich Air Services Inc
02/14/97 06/25/97 Winthrop Resources Corp Provide computer leasing svcs TCF Finl Corp, Minneapolis, MN
02/18/97 06/27/97 Destec Energy Inc Electric utility NGC Corp
02/20/97 12/09/97 NHP Inc (Apartment Investment) Own, op apartment buildings Apartment investment & Mgmt Co
02/24/97 07/01/97 Security-Connecticut Corp Insurance holding company ReliaStar Financial Corp, MN
02/25/97 08/05/98 Fina Inc Mnfr petroleum refined prods Petrofina SA
02/26/97 07/02/97 Petrolite Corp Mnfr fuel additives, waxes Baker Hughes Inc
02/26/97 06/12/97 US Robotics Corp Mnfr common products, systems 3Com Corp
02/27/97 06/13/97 Production Operators Corp Provide oil and gas field svcs Camco International Inc
02/28/97 08/01/97 Healthsource Inc Own and operate HMO's CIGNA Corp
03/03/97 05/30/97 BHC Financial Inc Provide data processing svcs Flserv Inc
03/07/97 08/01/97 Micro Bio-Medics Inc Whl, mnfr medical equip Henry Schein Inc
03/10/97 09/02/97 Greenwich Air Services Inc. Manufacture aircraft engines General Electric Co
03/14/97 06/26/97 Enterprise Systems Inc Develop hospital mgmt software HBO & Co
03/17/97 08/20/97 Heritage Media Corp Own, op radio and TV stations News Corp Ltd
03/19/97 07/11/97 American List Corp Pvd mail advertising svcs Snyder Communications Inc
03/20/97 06/17/97 Falcon Building Products Inc Manufacture air compressors InvestCorp
03/24/97 08/29/97 Community Bankshares, NH Bank holding company CFX Corp, Keene, new Hampshire
03/24/97 04/28/97 MDL Information Systems Pvd scientific info svcs Elsevier Science
03/24/97 08/05/97 OnTrak Systems Inc Mnfrs semiconductor cap equip Lam Research Corp
03/25/97 05/07/97 Foodbrands America Inc Produce sausages, prepared meat IBP Inc (Occidental Petroleum)
03/25/97 07/10/97 Phamis Inc Pvd integrated systems design IDX Systems Corp
03/26/97 09/03/97 Argyle Television Inc Own, op television stations Hearst Broadcasting Group
03/31/97 06/30/97 Cascade Communications Corp Mnfr frame relays Ascend Communications Inc
04/07/97 09/02/97 Alex.Brown Inc Securities brokerage firm Bankers Trust New York Corp
04/07/97 07/30/97 Pure Atria Corp Dvlp custom computer programs Rational Software Corp
04/08/97 06/12/97 Premiere Radio Networks Inc Own, op radio bdcstg stations Jacor Communications Inc
04/09/97 06/24/97 Public Storage Properties XVI Real estate investment trust Public Storage Inc
04/09/97 06/24/97 Public Storage Ppties XVIII Real estate investmeht trust Public Storage Inc
04/09/97 06/24/97 Public Storage Properties XIX Real estate investment trust Public Storage Inc
04/09/97 05/13/97 Stant Corp Mnfr, whl automotive parts Tomkins PLC
03/09/97 97/21/97 Tambrands Inc Mnfr feminine hygiene products Proctor & Gamble Co
04/14/97 11/12/97 APL Ltd Shipping, trucking company Neptune Orient Lines Ltd
04/14/97 09/03/97 United Waste Systems Inc Provide waste management svcs USA Waste Services Inc
04/14/97 01/05/98 Wyndham Hotel Corp Own and operate hotels Patriot Amer Hosp/Wyndham Intl
04/16/97 01/30/98 Steck Vaughn Publishing Corp Publish books, magazines Harcourt General Inc
04/17/97 07/14/97 Drilex International Inc Pvd prod, svcs used in drilling Baker Hughes Inc
04/18/97 04/21/97 Vitalink Pharmacy Services Inc Pvd health and allied svcs Manor Care Inc
04/21/97 05/28/97 Goulds Pumps Inc Mnfr centrifugal pumps ITT Industries Inc
04/21/97 06/10/97 National Education Corp Vocational training services Harcourt General Inc
04/22/97 09/04/97 International Family Ent Inc Provide cable television svcs Fox Kids Worldwide Inc.
04/23/97 06/25/97 VeriFone Inc Electronic funds transfer mach Hewlett-Packard Co
04/30/97 06/03/97 GKN Sinter Metals Inc(GKN PLC) Mnfr automotive, metal parts GKN PLC
05/01/97 07/30/97 David White Inc Mnfr, whl surveying instruments Choucroute Partners
05/05/97 08/13/97 Fort Howard Corp Mnfr sanitary tissue products James River Corp of Virginia
05/05/97 08/01/97 Logicon Inc Pvd computer svcs to military Northrop Grumman Corp
05/05/97 08/19/97 Riser Foods Inc Own, op grocery stores Giant Eagle Inc
05/05/97 06/13/97 Vivra Inc Provide home health care svcs Incentive AB
05/06/97 08/15/97 BBN Corp Mnfr computer integrated sys GTE Corp
05/06/97 07/22/97 BW/IP Inc Mnfr fluid transfer equip Durco International Inc
05/06/97 01/05/98 Physicians Health Services Inc Own and operate HMO's Foundation Health Systems Inc
05/06/97 07/25/97 Varsity Spirit Pvd cheerleading training svcs Riddell Sports Inc
05/07/97 06/03/98 Reliable Life Insurance Co Insurance company Unitrin Inc
05/08/97 11/04/97 Living Centers of America Inc Pvd long-term health care svcs Apollo Management LP
05/12/97 10/16/97 Dynamics Corp of America Mnfr electrical appliances CTS Corp
05/12/97 09/09/97 Smith's Food & Drug Centers Own and operate supermarkets Fred Meyer Inc
05/13/97 08/26/97 Aurum Software Inc Dvlp sales, mktg info software Baan Co NV
05/13/97 08/28/97 Inbrand Corp Mfnr incontinence products Tyco International Ltd
05/14/97 11/18/97 Enron Global Power & Pipelines Pvd gas transmission svcs Enron Corp
05/20/97 09/02/97 Keystone International Inc Mnfr indi flow control prod Tyco International Ltd
05/21/97 08/14/97 Howell Industries Inc Mnfr automotive parts Oxford Automotive Inc
05/21/97 05/04/98 KU Energy Corp Electric utility holding co LG&E Energy Corp
05/22/97 07/31/97 Biopsys Medical Inc Mnfr surgical, medical instr Johnson & Johnson
- ------------------------------------------------------------------------------------------------------------------------------------
Value of Enter-
Trans- prise
Date Date Acquiror action Value
Announced Effective Target Name Business Description ($ mil) ($ mil)
- ------------------------------------------------------------------------------------------------------------------------------------
02/13/97 05/20/97 Reflectone Inc Whl aircraft ircraft, equip 41.10 98.00
02/13/97 06/17/97 USLIFE Corp Insurance holding company 2,374.40 2,353.34
02/14/97 10/29/97 Horizon/CMS Healthcare Corp Own,op outpatient surgery ctr 1,651.30 1,612.88
02/14/97 09/17/97 UNC Inc Manufacture aircraft engines 442.70 752.15
02/14/97 06/25/97 Winthrop Resources Corp Savings and loan 334.70 350.73
02/18/97 06/27/97 Destec Energy Inc Wholesale natural gas products 1,222.40 1,235.07
02/20/97 12/09/97 NHP Inc (Apartment Investment) Real estate investment trust 114.50 370.58
02/24/97 07/01/97 Security-Connecticut Corp Insurance company 545.40 503.52
02/25/97 08/05/98 Fina Inc Produce, whl petroleum 257.00 2,427.11
02/26/97 07/02/97 Petrolite Corp Mnfr oil, gas field machinery 710.90 709.81
02/26/97 06/12/97 US Robotics Corp Pvd network computer svcs 6,510.70 6,596.65
02/27/97 06/13/97 Production Operators Corp Mnfr oil, gas field equipment 609.60 616.80
02/28/97 08/01/97 Healthsource Inc Insurance company 1,652.70 1,545.42
03/03/97 05/30/97 BHC Financial Inc Pvd finl data processing svcs 220.60 247.84
03/07/97 08/01/97 Micro Bio-Medics Inc Whl med supplies 136.10 113.12
03/10/97 09/02/97 Greenwich Air Services Inc. Electrical, construction prod 519.20 789.39
03/14/97 06/26/97 Enterprise Systems Inc Dvlp healthcare software 275.20 254.54
03/17/97 08/20/97 Heritage Media Corp Publish newspapers, magazines 1,351.80 1,348.41
03/19/97 07/11/97 American List Corp Pvd outsources marketing svcs 117.10 117.72
03/20/97 06/17/97 Falcon Building Products Inc Investor group 584.50 496.47
03/24/97 08/29/97 Community Bankshares, NH Savings and loan 101.60 514.34
03/24/97 04/28/97 MDL Information Systems Publish scientific journals 310.70 299.21
03/24/97 08/05/97 OnTrak Systems Inc Mnfr equip to mnfr semiconduct 217.90 200.19
03/25/97 05/07/97 Foodbrands America Inc Produce beef and pork products 657.50 634.74
03/25/97 07/10/97 Phamis Inc Mnfr health care info systems 142.80 140.39
03/26/97 09/03/97 Argyle Television Inc Own, op radio stations 322.20 487.37
03/31/97 06/30/97 Cascade Communications Corp Dvlp comp network solutions 3,529.30 3,445.04
04/07/97 09/02/97 Alex Brown Inc Bank holding company 2,077.40 2,055.27
04/07/97 07/30/97 Pure Atria Corp Dvlp component-based software 958.40 949.50
04/08/97 06/12/97 Premiere Radio Networks Inc Own, op radio bdcstg stations 208.90 155.81
04/09/97 06/24/97 Public Storage Properties XVI Real estate investment trust 84.20 82.14
04/09/97 06/24/97 Public Storage Ppties XVIII Real estate investment trust 78.60 82.66
04/09/97 06/24/97 Public Storage Properties XIX Real estate investment trust 67.90 66.65
04/09/97 05/13/97 Stant Corp Mnfr, whl plumbing fixtures 574.00 593.71
03/09/97 97/21/97 Tambrands Inc Mnfr household prod, oil, coffee 2,003.90 1,978.69
04/14/97 11/12/97 APL Ltd Pvd deep sea oil transp svcs 878.50 1,482.22
04/14/97 09/03/97 United Waste Systems Inc Pvd waste disposal services 1,682.20 1,899.63
04/14/97 01/05/98 Wyndham Hotel Corp Real estate investment trust 773.10 731.68
04/16/97 01/30/98 Steck Vaughn Publishing Corp Own, op movie theaters, stores 40.30 221.36
04/17/97 07/14/97 Drilex Internationsl Inc Mnfr oil, gas field machinery 120.10 133.64
04/18/97 04/21/97 Vitalink Pharmacy Services Inc Own, op nursing homes, hotels 30.00 278.46
04/21/97 05/28/97 Goulds Pumps Inc Mnfr brakes and chassis sys 922.10 913.49
04/21/97 06/10/97 National Education Corp Own, op movie theaters, stores 776.10 874.09
04/22/97 09/04/97 International Family Ent Inc Pvd motion picture prodn svcs 1,862.90 1,903,50
04/23/97 06/25/97 VeriFone Inc Mnfr computers, testing equip 1,245.10 1,142.30
04/30/97 06/03/97 GKN Sinter Metals Inc(GKN PLC) Mnfr, whl auto parts, metals 469.70 523.10
05/01/97 07/30/97 David White Inc Investment company 5.90 7.47
05/05/97 08/13/97 Fort Howard Corp Mnfr paper, paper-related prods 5,682.60 5,734.86
05/05/97 08/01/97 Logicon Inc Aircraft, aerospace products 1,027.50 949.94
05/05/97 08/19/97 Riser Foods inc Whl, retail grocery prods 468.50 415.19
05/05/97 06/13/97 Vivra Inc Mnfr medical instr, ind epuip 1,660.50 1,768.29
05/06/97 08/15/97 BBN Corp Pvd telecommunicatins svcs 713.80 678.34
05/06/97 07/22/97 BW/IP Inc Mnfr machinery, metal castings 530.70 537.88
05/06/97 01/05/98 Physicians Health Services Inc Own, op HMO's; holding company 268.20 231.41
05/06/97 07/25/97 Varsity Spirit Manufacture football equip 91.00 89.64
05/07/97 06/03/98 Reliable Life Insurance Co Insurance company 261.10 145.97
05/08/97 11/04/97 Living Centers of America Inc Investment management services 1,048.20 1,126.82
05/12/97 10/16/97 Dynamics Corp of America Mnfr electronic components 244.60 255.74
05/12/97 09/09/97 Smith's Food & Drug Centers Own, operate department stores 2,018.00 2,074.87
05/13/97 08/26/97 Aurum Software Inc Develop software 259.90 218.70
05/13/97 08/28/97 Inbrand Corp Mnfr fire protction systems 322.80 367.43
05/14/97 11/18/97 Enron Global Power & Pipelines Own, operate gas pipelines 428.00 866.48
05/20/97 09/02/97 Keystone International Inc Mnfr fire protection systems 1,361.50 1,426.76
05/21/97 08/14/97 Howell Industries Inc Mnfr engineered metal prods 23.00 19.05
05/21/97 05/04/98 KU Energy Corp Electric utility 1,539.40 2,112.89
05/22/97 07/31/97 Biopsys Medical Inc Mnfr medical equip and prods 303.50 293.85
- ------------------------------------------------------------------------------------------------------------------------------------
Premium
----------------------------------------------------------------------------------
Date Date 1 Day Prior 1 Day Prior 4 Weeks Prior 3 Months Prior 1 Year Prior
Announced Effective Target Name to Annc. Date to Annc. Date to Annc. Date to Annc. Date to Annc. Date
- ------------------------------------------------------------------------------------------------------------------------------------
02/13/97 05/20/97 Reflectone Inc 20.00 18.52 25.49 33.33 28.00
02/13/97 06/17/97 USLIFE Corp 20.96 22.80 43.26 57.30 68.33
02/14/97 10/29/97 Horizon/CMS Healthcare Corp 27.65 40.04 36.08 (0.66) (32.28)
02/14/97 09/17/97 UNC Inc 37.93 41.18 36.36 96.72 66.67
02/14/97 06/25/97 Winthrop Resources Corp 7.65 20.00 23.03
02/18/97 06/27/97 Destec Energy Inc 82.32 80.42 63.40 73.20 37.46
02/20/97 12/09/97 NHP Inc (Apartment Investment) 28.26 25.21 16.86 12.69 16.00
02/24/97 07/01/97 Security-Connecticut Corp 43.65 45.10 36.38 105.22 57.86
02/25/97 08/05/98 Fina Inc 19.70 18.52 21.52 23.39 25.33
02/26/97 07/02/97 Petrolite Corp 62.67 83.46 78.10 128.04 38.64
02/26/97 06/12/97 US Robotics Corp 11.38 13.22 0.37 16.35 (6.80)
02/27/97 06/13/97 Production Operators Corp 22.90 13.02 15.93 79.22 25.65
02/28/97 08/01/97 Healthsource Inc 28.89 32.82 64.15 107.14 150.96
03/03/97 05/30/97 BHC Financial Inc 67.50 60.00 82.31 92.81 112.70
03/07/97 08/01/97 Micro Bio-Medics Inc 12.19 12.19 10.44 14.93 3.94
03/10/97 09/02/97 Greenwich Air Services Inc. 21.57 33.33 34.78 (16.78) 30.53
03/14/97 06/26/97 Enterprise Systems Inc 15.29 13.75 30.00 16.88 51.67
03/17/97 08/20/97 Heritage Media Corp 69.07 72.63 69.07 21.03 45.13
03/19/97 07/11/97 American List Corp 17.32 28.05 8.81 27.27 (0.47)
03/20/97 06/17/97 Falcon Building Products Inc 43.43 49.47 52.69 97.22 24.56
03/24/97 08/29/97 Community Bankshares, NH 63.28 64.11 54.68 121.42 102.05
03/24/97 04/28/97 MDL Information Systems 85.51 43.82 54.22 50.59 79.02
03/24/97 08/05/97 OnTrak Systems Inc -0.85 2.96 13.92 81.49 62.24
03/25/97 05/07/97 Foodbrands America Inc 47.40 50.97 61.38 36.64 71.74
03/25/97 07/10/97 Phamis Inc 18.93 23.00 26.47 30.14 95.22
03/26/97 09/03/97 Argyle Television Inc 15.22 16.48 14.60 22.54 8.16
03/31/97 06/30/97 Cascade Communications Corp 28.28 46.70 21.08 (18.89) (33.97)
04/07/97 09/02/97 Alex.Brown Inc 65.00 50.04 17.70
04/07/97 07/30/97 Pure Atria Corp 18.54 23.31 23.77 (40.10) (23.49)
04/08/97 06/12/97 Premiere Radio Networks Inc 17.37 19.23 19.23 36.58 32.96
04/09/97 06/24/97 Public Storage Properties XVI 6.01 5.32 2.62 17.71 2.62
04/09/97 06/24/97 Public Storage Ppties XVIII 4.97 7.12 2.90 15.00 (0.38)
04/09/97 06/24/97 Public Storage Properties XIX 4.89 3.25 3.25 16.96 (2.82)
04/09/97 05/13/97 Stant Corp 29.32 48.28 49.57 79.17 40.98
03/09/97 97/21/97 Tambrands Inc 8.40 14.94 14.94 4.71 21.95
04/14/97 11/12/97 APL Ltd 55.81 65.43 42.55 43.32 40.31
04/14/97 09/03/97 United Waste Systems Inc 0.71 1.05 (1.25) 53.09 13.95
04/14/97 01/05/98 Wyndham Hotel Corp 48.02 44.52 48.93 29.23
04/16/97 01/30/98 Steck Vaughn Publishing Corp 21.65 32.58 24.21 55.26 27.57
04/17/97 07/14/97 Drilex International Inc 31.44 37.88 59.82 31.44
04/18/97 04/21/97 Vitalink Pharmacy Services In 14.29 8.11 (4.19) (8.05) (17.53)
04/21/97 05/28/97 Goulds Pumps Inc 61.75 57.45 60.87 68.18 51.02
04/21/97 06/10/97 National Education Corp 22.63 54.13 40.00 54.13 48.67
04/22/97 09/04/97 International Family Ent Inc 94.44 95.80 107.41 61.38 15.94
04/23/97 06/25/97 VeriFone Inc 67.64 50.19 43.77 24.69 34.67
04/30/97 06/03/97 GKN Sinter Metals Inc (GKN PLC) 37.04 38.32 32.74
05/01/97 07/30/97 David White Inc 11.63 14.29 18.52 (4.00) 52.38
05/05/97 08/13/97 Fort Howard Corp 16.31 27.92 43.30 92.95 33.18
05/05/97 08/01/97 Logicon Inc 75.68 84.23 102.65 134.48 102.66
05/05/97 08/19/97 Riser Foods inc 11.63 29.23 26.79 115.38 28.24
05/05/97 06/13/97 Vivra Inc 26.09 41.77 35.70 23.90 18.24
05/06/97 08/15/97 BBN Corp 26.09 32.57 64.54 5.45 26.09
05/06/97 07/22/97 BW/IP Inc (5.48) 14.15 18.72 (10.60) 11.58
05/06/97 01/05/98 Physicians Health Services In 23.50 26.97 51.68 8.65 46.75
05/06/97 07/25/97 Varsity Spirit 30.35 28.14 23.93 26.00 26.00
05/07/97 06/03/98 Reliable Life Insurance Co 51.11 51.11 52.06
05/08/97 11/04/97 Living Centers of America Inc 17.82 22.73 41.49 9.46 36.71
05/12/97 10/16/97 Dynamics Corp of America 91.27 94.17 112.70 156.32 107.55
05/12/97 09/09/97 Smith's Food & Drug Centers 9.93 16.48 26.99 63.23 62.85
05/13/97 8/26/97 Aurum Software Inc 32.99 40.38 55.84 9.19
05/13/97 08/28/97 Inbrand Corp 69.98 78.34 107.22 (81.87) (38.18)
05/14/97 11/18/97 Enron Global Power & Pipelin 11.83 13.70 19.74 38.08 12.30
05/20/97 09/02/97 Keystone International Inc 84.19 85.31 102.49 73.73 92.30
05/21/97 08/14/97 Howell Industries Inc 28.70 30.40 32.14 26.50 (21.90)
05/21/97 05/04/98 KU Energy Corp 34.01 31.84 35.69 38.59 32.93
05/22/97 07/31/97 Biopsys Medical Inc 6.99 6.99 22.44 17.23 (6.61)
Page F-9
Merger Premiums to Market Value Analysis
Mergers with Target Price Equal to or Greater than $10 per Share
Announced and Completed 1/1/96-10/9/98
(continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Date Date
Announced Effective Target Name Target Business Description Acquiror Name
- ------------------------------------------------------------------------------------------------------------------------------------
05/22/97 07/09/98 Chaparral Steel Co (Texas Ind) Mnfr primary steel products Texas Industries Inc
05/22/97 11/20/97 Mail Boxes, Etc Pvd franchised postal services US Office Products Co
05/23/97 10/06/97 Palmer Wireless Inc Pvd telephone services Price Communications Corp
05/27/97 08/08/97 Alamco Inc Oil & gas exploration, prod Columbia Natural Resources Inc
05/27/97 12/18/97 HFS Inc Own, op hotel franchises CUC International Inc
05/28/97 02/10/98 CommNet Cellular Inc Cellular telephone services Blackstone Capital Partners
05/28/97 07/03/97 Fibreboard Corp Mnfr fibreboard, paperboard Owens Corning
06/02/97 07/15/97 Acordia Inc (Anthem Inc) Pvd insurance brokerage svcs Anthem Inc
06/03/97 01/15/98 Faulding Inc (FH Faulding & Co) Mnfr pharmaceuticals FH Faulding & Co Ltd
06/04/97 07/28/97 Maxis Inc Develop education software Electronic Arts Inc
06/06/97 10/14/97 Telco Communications Group Inc Pvd switch-based telecom svcs Excel Communications Inc
06/09/97 10/01/97 American States Financial Corp Fire and marine insurance co SAFECO Corp
06/09/97 09/12/97 Amrion Inc Own, op food stores Whole Foods Market Inc
06/09/97 07/15/97 Prime Service Inc Pvd const equip rental svcs Atlas Copco North America Inc
06/10/97 09/30/97 Numar Corp Mnfr imaging logging equip Halliburton Co
06/11/97 10/31/97 Pacific Greystone Corp Pvd general contracting svcs Lennar Corp
06/12/97 10/01/97 Giddings & Lewis Inc Mnfr automated machine tools Thyssen AG
06/13/97 03/26/97 Bally's Grand Inc Own and operate casino hotels Hilton Hotels Corp
06/16/97 08/29/97 Core Industries Inc Manufacture electronic equip United Dominion Industries Ltd
06/16/97 10/10/97 Multicare Cos Inc Own, op nursing care facilities Genesis Eldercare
06/17/97 07/24/97 McFarland Energy Inc Oil and gas exploration, prodn Monterey Resources Inc
06/17/97 07/25/97 Seda Specialty Packaging Corp Mnfr specialty packaging prods CCL Industries Inc
06/19/97 08/15/97 Advanced Logic Research Inc Mnfr micro computer systems Gateway 2000 Inc
06/20/97 03/30/98 Wheelabrator Technologies Inc Mnfr laboratory, medical equip Waste Management Inc
06/23/97 10/17/97 Integon Corp Insurance holding company General Motors Acceptance (GM)
06/23/97 08/29/97 Tandem Computer Inc Mnfr computers, network systems Compaq Computer Corp
06/24/97 10/14/97 American Exploration Co Oil and gas exploration, prodn Louis Dreyfus Natural Gas
06/24/97 09/29/97 SMT Health Services Inc Operate and outpatient facilities Three Rivers Holding Corp
06/26/97 11/26/97 Rhone-Poulenc Rorer Inc Manufacture pharmaceuticals Rhone-Poulenc SA
06/30/97 10/09/97 Fusion Systems Corp Mnfr curing sys, semiconductors Eaton Corp
06/30/97 12/23/97 Rykoff-Sexton Inc Wholesale grocery products JP Foodservice Inc
09/23/97 American Filtrona Corp Mnfr bonded fiber Bunzl PLC
07/03/97 08/05/97 Duty Free International Inc Own, op duty free shops BAA PLC
07/03/97 08/06/97 Wyle Electronics Whl high tech electronic prods Raab Karcher AG (VEBA AG)
07/07/97 11/06/97 Cairn Energy USA Inc Oil and gas exploration, prodn Meridian Resource Corp
07/07/97 10/21/97 RoTech Medical Corp Pvd home health care svcs Integrated Health Services Inc
07/08/97 10/24/97 Equitable of Iowa Cos Life insurance company ING Groep NV
07/09/97 09/23/97 Control Data Systems Inc Mnfr computers, peripherals CDSI Holding Corp
07/09/97 12/23/97 Seaman Furniture Co Own, op ret furniture stores Investor Group
07/10/97 11/18/97 Kinetic Concepts Inc Mnfr medical treatment tables Investor Group
07/10/97 12/31/97 Reading & Bates Corp Pvd oil, gas drilling services Falcon Drilling Co
07/15/97 10/02/97 DH Technology Inc Mnfr, whl computer printers Axiohn SA
07/15/97 10/28/97 Intl Imaging Materials Mnfr thermal transfer ribbons Paxar Corp
07/15/97 09/04/97 Ply-Gem Industries Inc Manufacture wood products Nortek Inc
07/17/97 10/22/97 Louisiana Land & Exploration Oil and gas exploration, prodn Burlington Resources Inc
07/17/97 09/29/97 Octel Communications Corp Mnfr voice processing systems Lucent Technologies Inc
07/23/97 12/18/97 Alliance Imaging Inc Pvd diagnostic imaging svcs Newport Investment LLC
07/24/97 09/15/97 Nellcor Puritan-Bennett Mnfr electn patient monitors Mallinckrodt Inc
07/28/97 02/02/98 Chips and Technologies Inc Design, with integrated circuit Intel Corp
07/28/97 11/17/97 Cyrix Corp Mnfr PC units, microprocessors National Semiconductor Corp
07/28/97 12/22/97 Freeport-McMoRan Inc Own, op chem, fertilizer mines IMC Global Inc
07/28/97 10/08/97 Regency Health Services Inc Pvd nursing services Sun Healthcare Group Inc
07/30/97 09/18/97 Amdahl Corp Develop computer sys, software Fujitsu Ltd
07/30/97 02/02/98 Plasti-Line Inc Mnfr illuminated outdoor signs PL Holdings Corp
07/31/97 09/24/97 Bucyrus International Inc Mnfr surface mining machinery American Industrial Partners
07/31/97 10/03/97 Delaware Otsego Corp Own and operate railroad Investor Group
07/31/97 10/23/97 Sterling House Corp Own, op nursing homes Alternative Living Services
08/04/97 10/24/97 Columbus Realty Trust Real estate investment trust Post Properties Inc
08/04/97 12/23/97 Perkins Family Restaurant LP Own, op franchised restaurants Restaurant Co
08/04/97 11/12/97 Sullivan Dental Products Inc Wholesale dental products Henry Schein Inc
08/08/97 12/22/97 Titan Holdings Inc Auto, property, casualty ins co USF&G Corp
08/11/97 12/19/97 Amscan Holdings Inc Whl paper, plastic party goods Confetti Acquisition Inc
08/11/97 09/30/97 National Sanitary Supply Co Sanitary maintenance supplies Unisource Worldwide Inc
08/11/97 12/22/97 Vacation Break USA Inc Real estate development firm Fairfield Communities Inc
08/12/97 09/17/97 Isomedix Inc Pvd contract sterilization svc Steris Corp
08/12/97 03/03/98 LIN Television Corp Own, op TV bdcstg stations Hicks Muse Tate & Furst Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Value of Enter-
Trans- prise
Date Date Acquiror action Value
Announced Effective Target Name Business Description ($ mil) ($ mil)
- ------------------------------------------------------------------------------------------------------------------------------------
05/22/97 07/09/98 Chaparral Steel Co (Texas Inc) Mnfr cement, steel products 72.80 519.31
05/22/97 11/20/97 Mail Boxes, Etc Whl, retail office supplies 354.80 324.21
05/23/97 10/06/97 Palmer Wireless Inc Own, op TV and radio stations 870.40 865.52
05/27/97 08/08/97 Alamco Inc Operate natural gas pipeline 102.80 94.43
05/27/97 12/18/97 HFS Inc Provide discount club svcs 11,342.90 11,759.19
05/28/97 02/10/98 CommNet Cellular Inc Investment bank 631.20 745.35
05/28/97 07/03/97 Fibreboard Corp Mnfr glass fiber products 631.20 478.00
06/02/97 07/15/97 Acordia Inc (Anthem Inc) Insurance company 193.20 633.96
06/03/97 01/15/98 Faulding Inc (FH Faulding & Co) Mnfr, whl drugs, toiletries 77.30 206.01
06/04/97 07/28/97 Maxis Inc Develop, wholesale software 127.50 116.95
06/06/97 10/14/97 Telco Communications Group Inc Pvd telephone commun svcs 1,046.50 1,017.65
06/09/97 10/01/97 American States Financial Corp Provide insurance services 3,127.10 3,110.92
06/09/97 09/12/97 Amrion Inc Own, op natural foods stores 152.60 152.21
06/09/97 07/15/97 Prime Service Inc Mnfr compressors, machinery 1,112.00 1,110.54
06/10/97 09/30/97 Numar Corp Mnfr oil field machinery 341.60 336.54
06/11/97 10/31/97 Pacific Greystone Corp Construct residential bldgs 459.30 452.05
06/12/97 10/01/97 Giddings & Lewis Inc Manufacture malleable iron 703.00 712.16
06/13/97 03/26/97 Bally's Grand Inc Own, operate hotels 42.60 667.81
06/16/97 08/29/97 Core Industries Inc Mnfr structural metal 275.20 317.27
06/16/97 10/10/97 Multicare Cos Inc Own, op geriatric facilities 1,249.10 1,316.49
06/17/97 07/24/97 McFarland Energy Inc Oil and gas exploration, prodn 111.20 103.59
06/17/97 07/25/97 Seda Specialty Packaging Corp Mnfr pvd specialty packaging 182.60 192.18
06/19/97 08/15/97 Advanced Logic Research Inc Mnfr personal computers 206.80 148.06
06/20/97 03/30/98 Wheelabrator Technologies Inc Pvd chemical waste mgmt svcs 869.70 3,191.55
06/23/97 10/17/97 Integon Corp Provide business finance svcs 517.10 668.02
06/23/97 08/29/97 Tandem Computer Inc Manufacture personal computers 2,780.40 2,873.86
06/24/97 10/14/97 American Exploration Co Oil & gas exploration, prodn 275.50 305.83
06/24/97 09/29/97 SMT Health Services Inc Investment company 75.60 83.10
06/26/97 11/26/97 Rhone-Poulenc Rorer Inc Mnfr chemicals and cosmetics 4,831.60 16,358.07
06/30/97 10/09/97 Fusion Systems Corp Manufacture automotive parts 308.60 278.55
06/30/97 12/23/97 Rykoff-Sexton Inc Wholesale groceries 1,435.90 1,172.90
09/23/97 American Filtrona Corp Whl, mnfr paper, constn material 183.50 137.24
07/03/97 08/05/97 Duty Free International Inc Own, op airports, airfields 674.60 751.31
07/03/97 08/06/97 Wyle Electronics Wholesale petroleum products 633.00 751.33
07/07/97 11/06/97 Cairn Energy USA Inc Oil and gas exploration, prodn 233.60 279.72
07/07/97 10/21/97 RoTech Medical Corp Pvd specialty healthcare svcs 918.90 828.27
07/08/97 10/24/97 Equitable of Iowa Cos Insurance Company 2,626.40 2,586.78
07/09/97 09/23/97 Control Data Systems Inc Investment holding company 273.90 176.78
07/09/97 12/23/97 Seaman Furniture Co Investor Group 45.60 130.12
07/10/97 11/18/97 Kinetic Concepts Inc Investor group 776.70 814.20
07/10/97 12/31/97 Reading & Bates Corp Pvd contract drilling svcs 2,587.00 2,680.96
07/15/97 10/02/97 DH Technology Inc Mnfr, whl computer printers 169.50 167.60
07/15/97 10/28/97 Intl Imaging Materials Mnfr label systems 244.40 267.86
07/15/97 09/04/97 Ply-Gem Industries Inc Mnfr AC, building, wood prods 476.30 388.57
07/17/97 10/22/97 Louisiana Land & Exploration Oil and gas exploration, prodn 2,954.30 2,911.54
07/17/97 09/29/97 Octel Communications Corp Mnfr telecom equip, software 1,824.80 1,772.96
07/23/97 12/18/97 Alliance Imaging Inc Investment company 114.20 205.49
07/24/97 09/15/97 Nellcor Puritan-Bennett Mnfr diagnostic products 1,858.40 1,833.05
07/28/97 02/02/98 Chips and Technologies Inc Mnfr, whl microprocessors 422.90 391.35
07/28/97 11/17/97 Cyrix Corp Mnfr semiconductors, circuits 566.40 623.21
07/28/97 12/22/97 Freeport-McMoRan Inc Mnfr phosphate fertilizers 790.70 1,233.54
07/28/97 10/08/97 Regency Health Services Inc Pvd long-term healthcare svcs 587.90 570.89
07/30/97 09/18/97 Amdahl Corp Mnfr semiconductors, computers 924.80 1,563.05
07/30/97 02/02/98 Plasti-Line Inc Investor group formed by mgmt 30.70 62.00
07/31/97 09/24/97 Bucyrus International Inc Pvd fund mgmt & fin adv svcs 193.30 262.15
07/31/97 10/03/97 Delaware Otsego Corp Investor group 53.40 62.54
07/31/97 10/23/97 Sterling House Corp Pvd residential care svcs 170.00 151.79
08/04/97 10/24/97 Columbus Realty Trust Real estate investment trust 600.00 565.32
08/04/97 12/23/97 Perkins Family Restaurant LP Own, operate restaurants 76.30 215.01
08/04/97 11/12/97 Sullivan Dental Products Inc Whl med supplies 312.80 314.55
08/08/97 12/22/97 Titan Holdings Inc Insurance holding company 278.10 277.43
08/11/97 12/19/97 Amscan Holdings Inc Investment company 334.90 390.42
08/11/97 09/30/97 National Sanitary Supply Co Wholesale printing paper 155.90 149.31
08/11/97 12/22/97 Vacation Break USA Inc Construct vacation resorts 178.10 239.94
08/12/97 09/17/97 Isomedix Inc Mnfr sterile processing sys 139.80 136.20
08/12/97 03/03/98 LIN Television Corp Leverage buyout firm 1,960.60 1,988.60
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Premium
----------------------------------------------------------------------------------
Date Date 1 Day Prior 1 Week Prior 4 Weeks Prior 3 Months Prior 1 Year Prior
Announced Effective Target Name to Annc. Date to Annc. Date to Annc. Date to Annc. Date to Annc. Date
- ------------------------------------------------------------------------------------------------------------------------------------
05/22/97 07/09/98 Chaparral Steel Co (Texas Ind) 20.39 25.25 29.17 5.08 29.17
05/22/97 11/20/97 Mail Boxes, Etc 39.20 40.99 38.31 52.84 33.27
05/23/97 10/06/97 Palmer Wireless Inc 45.08 55.56 64.71 (15.15) 27.27
05/27/97 08/08/97 Alamco Inc 7.69 11.50 16.67 44.83 11.50
05/27/97 12/18/97 HFS Inc 5.93 2.99 5.23 (3.97) (12.17)
05/28/97 02/10/98 CommNet Cellular Inc 21.78 28.64 39.81 449.62 605.88
05/28/97 07/03/97 Fibreboard Corp 15.79 22.22 49.66 120.00 65.41
06/02/97 07/15/97 Acordia Inc (Anthem Inc) 12.68 11.50 25.98 317.39 207.69
06/03/97 01/15/98 Faulding Inc (FH Faulding & Co) 25.58 22.73 45.95 111.76 56.52
06/04/97 07/28/97 Maxis Inc 2.27 2.27 40.63 (50.55) 18.42
06/06/97 10/14/97 Telco Communications Group Inc 32.91 23.77 26.44 61.32
06/09/97 10/01/97 American States Financial Corp 45.74 48.62 57.32 104.35 41.89
06/09/97 09/12/97 Amrion Inc 8.12 19.22 47.04 68.37 43.69
06/09/97 07/15/97 Prime Service Inc 28.64 29.95 31.28 60.00
06/10/97 09/30/97 Numar Corp 90.94 99.35 95.65 126.40 115.62
06/11/97 10/31/97 Pacific Greystone Corp 75.27 83.30 98.45 110.67
06/12/97 10/01/97 Giddings & Lewis Inc 10.53 9.80 0.60 24.44 46.09
06/13/97 03/26/97 Bally's Grand Inc 27.88 29.85 31.06 32.70 66.14
06/16/97 08/29/97 Core Industries Inc 26.58 37.93 49.25 76.99 60.00
06/16/97 10/10/97 Multicare Cos Inc 9.27 13.71 34.94 38.27 55.56
06/17/97 07/24/97 McFarland Energy Inc 11.58 41.33 44.78 89.04 57.87
06/17/97 07/25/97 Seda Specialty Packaging Corp 31.82 36.47 52.63 40.61 68.12
06/19/97 08/15/97 Advanced Logic Research Inc 29.17 30.53 34.78 87.88 67.57
06/20/97 03/30/98 Wheelabrator Technologies Inc 26.92 28.16 30.69 4.76 15.79
06/23/97 10/17/97 Integon Corp 173.68 92.59 74.79 30.00 73.33
06/23/97 08/29/97 Tandem Computer Inc 49.33 51.86 51.86 113.33 99.11
06/24/97 10/14/97 American Exploration Co 12.99 15.03 21.60 28.97 41.87
06/24/97 09/29/97 SMT Health Services Inc 4.44 2.17 8.05 43.69 44.62
06/26/97 11/26/97 Rhone-Poulenc Rorer Inc 22.11 22.79 29.33 44.51 29.12
06/30/97 10/09/97 Fusion Systems Corp 11.43 9.86 24.30 57.58 50.00
06/30/97 12/23/97 Rykoff-Sexton Inc 24.40 26.00 27.65 69.81 38.50
09/23/97 American Filtrona Corp 8.82 2.24 3.38 53.79 3.38
07/03/97 08/05/97 Duty Free International Inc 39.13 50.00
07/03/97 08/06/97 Wyle Electronics 16.79 38.41 35.14 52.67 49.25
07/07/97 11/06/97 Cairn Energy USA Inc 22.30 28.97 26.67 (5.84) 13.19
07/07/97 10/21/97 RoTech Medical Corp 19.79 12.70 22.22 25.61 15.95
07/08/97 10/24/97 Equitable of Iowa Cos 18.52 20.35 21.70 86.30 38.78
07/09/97 09/23/97 Control Data Systems Inc 29.08 30.65 35.00 28.57 31.71
07/09/97 12/23/97 Seaman Furniture Co 21.46 25.25 21.46 43.14 27.64
07/10/97 11/18/97 Kinetic Concepts Inc 6.94 7.69 9.22 24.19 32.76
07/10/97 12/31/97 Reading & Bates Corp 16.55 14.52 30.47 53.19 69.09
07/15/97 10/02/97 DH Technology Inc 57.48 56.25 57.48 6.38 45.99
07/15/97 10/28/97 Intl Imaging Materials 67.35 60.18 64.89 32.69 69.88
07/15/97 09/04/97 Ply-Gem Industries Inc 20.00 16.42 19.08 30.00 48.57
07/17/97 10/22/97 Louisiana Land & Exploration 20.76 25.47 39.98 17.72 48.08
07/17/97 09/29/97 Octel Communications Corp 15.89 37.40 41.31 54.04 87.88
07/23/97 12/18/97 Alliance Imaging Inc 7.32 3.53 14.29 134.67 44.26
07/24/97 09/15/97 Nellcor Puritan-Bennett 36.12 43.40 57.24 26.67 67.65
07/28/97 02/02/98 Chips and Technologies Inc 25.00 32.08 68.68 77.22 115.38
07/28/97 11/17/97 Cyrix Corp 30.31 29.54 29.54 97.79 34.66
07/28/97 12/22/97 Freeport-McMoRan Inc 14.35 13.55 5.20 (16.77) 5.21
07/28/97 10/08/97 Regency Health Services Inc 34.35 50.43 43.09 104.65 107.06
07/30/97 09/18/97 Amdahl Corp 4.97 22.47 25.57 (49.13)
07/30/97 02/02/98 Plasti-Line Inc 36.47 36.47 30.34 84.13 65.71
07/31/97 09/24/97 Bucyrus International Inc 33.33 46.94 71.43 108.70 94.59
07/31/97 10/03/97 Delaware Otsego Corp 0 15.03 17.33 160.28 32.33
07/31/97 10/23/97 Sterling House Corp 30.36 29.47 40.46 48.69 88.44
08/04/97 10/24/97 Columbus Realty Trust 4.23 4.23 4.51 247.75 191.08
08/04/97 12/23/97 Perkins Family Restaurant LP 28.74 26.55 31.77 17.89 5.66
08/04/97 11/12/97 Sullivan Dental Products Inc 28.85 40.71 66.20 186.70 79.19
08/08/97 12/22/97 Titan Holdings Inc 15.99 19.06 24.85 57.29 30.26
08/11/97 12/19/97 Amscan Holdings Inc 36.08 37.50 46.67 23.36
08/11/97 09/30/97 National Sanitary Supply Co (6.67) 20.00 47.37
08/11/97 12/22/97 Vacation Break USA Inc 41.57 39.09 95.75 80.18 147.75
08/12/97 09/17/97 Isomedix Inc 5.81 15.49 13.89 47.75 38.98
08/12/97 03/03/98 LIN Television Corp 15.85 18.75 18.01
Page F-10
Merger Premiums to Market Value Analysis
Mergers with Target Price Equal to or Greater than $10 per Share
Announced and Completed 1/1/96-10/9/98
(continued)
- --------------------------------------------------------------------------------
Date Date
Announced Effective Target Name Target Business Description Acquiror Name
- ---------------------------------------------------------------------------------------------------------------------------------
08/14/97 12/13/97 Allied Capital Commercial Corp Real estate investment trusts Allied Capital Lending Corp
08/14/97 12/31/97 Allied Capital Corp Pvd bus, personal fin svcs Allied Capital Lending Corp
08/14/97 09/16/97 American Medserve Corp Wholesale pharmaceuticals Omnicare Inc
08/14/97 09/24/97 Talbert Medical Management Own, op medical, dental clinics MedPartners Inc
08/14/97 12/29/97 Tuesday Morning Corp Own, operate giftware stores Madison Dearborn Partners
08/14/97 12/05/97 Uniforce Services Inc Pvd temporary personnel svcs Comforce Corp
08/18/97 11/04/97 Monterey Resources Inc Oil and gas exploration, prodn Texaco Inc
08/21/97 01/14/98 Boston Technology Inc Mnfr voice processing systems Comverse Technology Inc
08/25/97 10/21/97 ACC Consumer Finance Corp Pvd auto financing services Household International Inc
08/25/97 12/17/97 Mosince Paper Corp Manufacture paper Wausau Paper Mills
08/26/97 12/22/97 Savannah Foods & Industries Produce sugar, sugar by-prod Imperial Holly Corp
08/28/97 12/23/97 Evans Withycombe Residential Real estate investment trust Equity Residential Pptys Trust
08/28/97 02/25/98 Value Property Trust Real estate investment trust Wellsford Real Properties Inc
08/28/97 10/10/97 Versa Technologies Inc Mnfr rubber components, molds Applied Power Inc
08/29/97 12/29/97 Rexel Inc Whl electrical components Rexel SA (Pinault-Printemps)
09/03/97 12/30/97 Zytec Corp Mnfr electric power supplies Computer Products Inc
09/04/97 01/09/98 Hudson Foods Inc Produce poultry products Tyson Foods Inc
09/05/97 11/26/97 Medic Computer Systems Inc Pvd mgmt info sys design svcs Misys PLC
09/05/97 01/16/98 Technology Modeling Assoc Inc Dvlp simulation software Avant! Corp
09/08/97 02/02/98 CompuServe Inc (H&R Block) Internet service provider WorldCom Inc
09/08/97 12/31/97 Fuqua Enterprises Inc Manufacture tanned leather Graham-Field Health Products
09/10/97 11/28/97 Data Documents Inc Manufacture tabulating cards Corporate Express Inc
09/10/97 12/02/97 Tinsley Laboratories Inc Mnfr optical instr, lenses Silicon Valley Group Inc
09/11/97 12/22/97 Fieldcrest Cannon Inc Mnfr broadwoven fabrics Pillowtex Corp
09/12/97 12/09/97 Unison Software Inc Develop network mgmt software Tivoli Systems Inc (IBM Corp)
09/12/97 01/16/98 WHG Resort & Casino Inc Own, op resorts and casino Patriot Amer Hosp/Wyndham Intl
09/12/97 02/25/98 Western National Corp Insurance holding co American General Corp
09/15/97 12/19/97 Beacon Properties Corp Real estate investment trust Equity Office Properties Trust
09/16/97 11/04/97 All American Communications Pvd motion picture & video svc Pearson PLC
09/16/97 02/02/98 Quick & Reilly Group Inc Securities brokerage firm Fleet Financial Group Inc, MA
09/18/97 12/16/97 Guaranty National Corp Insurance company Orion Capital Corp
09/18/97 12/22/97 USLD Communications Corp Pvd long distance commun svcs LCI International Inc
09/19/97 01/16/98 Sterling Electronics Corp Whl electronic components Marshall Industries
09/21/97 12/16/97 Computer Data Systems Inc Design computer program data Affiliated Computer Services
09/22/97 12/05/97 Washington National Corp Insurance company Conseco Inc
09/23/97 01/12/98 Tejas Gas Corp Own, op natural gas lines Shell Oil (Royal Dutch Petro)
09/24/97 11/24/97 Allergan Ligand Retinoid Manufacture pharmaceuticals Ligand Pharmaceuticals Inc
09/24/97 12/12/97 Game Financial Corp Pvd fund access svcs Travelers Express Co (Viad)
09/24/97 11/28/97 Salomon Inc Investment bank, finl advisory Travelers Group Inc
09/25/97 02/19/98 Talley Industries Inc Mnfr guided missiles, space veh Carpenter Technology Corp
09/29/97 12/22/97 Graphic Industries Inc Pvd financial printing svcs Wallace Computer Services Inc
09/29/97 12/23/97 HPR Inc Pvd computer programming svcs HBO & Co
09/29/97 12/01/97 Morningstar Group Inc Produce dairy products Suiza Foods Corp
09/30/97 11/26/97 Arbor Health Care Co Own and operate nursing homes AHC Acquisition Corp
10/01/97 01/29/98 Brooks Fiber Properties Inc Pvd communication installation WorldCom Inc
10/01/97 09/14/98 MCI Communications Corp Pvd telecommunication services WorldCom Inc
10/02/97 04/30/98 Kapson Senior Quarters Corp Provide residential care svcs Prometheus Senior Quarters
10/03/97 12/29/97 Natl Health Enhancement Sys Develop healthcare software HBO & Co
10/06/97 01/28/98 Caliber Systems Inc Trucking holding company FDX Corp
10/06/97 12/19/97 EndoVascular Technologies Inc Mnfr surgical instruments Guidant Corp
10/06/97 03/20/98 Orion Network Systems Inc Pvd Communications svcs Loral Space & Communications
10/08/97 04/07/98 Associates First Capital Corp Pvd finance, leasing services Shareholders
10/09/97 12/23/97 Melamine Chemicals Inc Manufacture melamine crystal Borden Chemical Inc (Borden)
10/10/97 11/19/97 Greenfield Industries Inc Mnfr steel cutting tools Kennametal Inc
10/13/97 01/22/98 Netcom On-Line Communication Internet service provider ICG Communications Inc
10/13/97 12/01/97 Network General Corp Pvd computer sys design svcs McAfee Associates Inc
10/15/97 12/04/97 Viewlogic Systems Inc Dvlp automation software Synopsys Inc
10/16/97 02/12/98 Omni Insurance Group Inc Insurance company Hartford Financial Services
10/17/97 12/29/97 Computational Systems Inc Manufacture measuring devices Emerson Electric Co
10/17/97 11/19/97 Exide Electronics Group Inc Manufacture power supplies BTR PLC
10/17/97 01/02/98 Infinity Financial Technology Dvlp financial software SunGard Data Systems Inc
10/20/97 02/24/98 ITT Corp Own and operate hotels Starwood Hotels & Resorts
10/20/97 03/06/98 Santa Fe Pacific Pipeline Operate petroleum pipelines Kinder Morgan Energy Partners
10/20/97 06/24/98 Ticketmaster Group Inc Own, operate ticket agencies HSN Inc
10/21/97 01/07/98 International Dairy Queen Inc Whl dairy desserts, hamburgers Berkshire Hathaway Inc
10/23/97 12/19/97 Premenos Technology Corp Develop EDT software Harbinger Corp
Value of Enterprise
Date Date Acquiror Transaction Value
Announced Effective Target Name Business Description ($ mil) ($ mil)
- ---------------------------------------------------------------------------------------------------------------------------------
08/14/97 12/13/97 Allied Capital Commercial Corp Closed-end mgmt investment co 381.30 621.24
08/14/97 12/31/97 Allied Capital Corp CLosed-end mgmt investment co 130.00 210.64
08/14/97 09/16/97 American Medserve Corp Whl, retail pharmaceuticals 233.20 240.47
08/14/97 09/24/97 Talbert Medical Management Pvd medical services to HMO's 189.00
08/14/97 12/29/97 Tuesday Morning Corp Investors 298.60 337.36
08/14/97 12/05/97 Uniforce Services Inc Pvd help supply services 140.70 133.72
08/18/97 11/04/97 Monterey Resources Inc Oil and gas exploration, prodn 1,435.30 1,320.89
08/21/97 01/14/98 Boston Technology Inc Mnfr telecommunication equip 873.90 906.34
08/25/97 10/21/97 ACC Consumer Finance Corp Provide financial services 186.90 219.83
08/25/97 12/17/97 Mosince Paper Corp Manufacture, wholesale paper 446.30 512.46
08/26/97 12/22/97 Savannah Foods & Industries Produce sugar 582.90 609.91
08/28/97 12/23/97 Evans Withycombe Residential Real estate investment trust 932.40 1,068.03
08/28/97 02/25/98 Value Property Trust Real estate investment trust 186.60 163.55
08/28/97 10/10/97 Versa Technologies Inc Mnfr tools, equip, consumables 141.90 140.65
08/29/97 12/29/97 Rexel Inc Whl radios, televisions 302.00 647.89
09/03/97 12/30/97 Zytec Corp Design, mnfr electronic prod 412.30 428.02
09/04/97 01/09/98 Hudson foods Inc Poultry, meat processing 648.40 1,021.87
09/05/97 11/26/97 Medic Computer Systems Inc Manufacture computers 915.80 882.60
09/05/97 01/16/98 Technology Modeling Assoc Inc Develop software 144.30 140.54
09/08/97 02/02/98 CompuServe Inc (H&R Block) Pvd telecommunication svcs 1,185.90 1,052.17
09/08/97 12/31/97 Fuqua Enterprises Inc Mnfr medical supply, healthcare 231.00 229.95
09/10/97 11/28/97 Data Documents Inc Retail office supplies 159.40 212.19
09/10/97 12/02/97 Tinsley Laboratories Inc Mnfr semiconductor equipment 40.50 40.89
09/11/97 12/22/97 Fieldcrest Cannon Inc Mnfr, whl home textile products 768.20 787.17
09/12/97 12/09/97 Unison software Inc Dvlp systems mgmt software 183.00 180.26
09/12/97 01/16/98 WHG Resort & Casino Inc Real estate investment trust 266.00 169.94
09/12/97 02/25/98 Western National Corp Insurance holding company 1,215.00 2,340.92
09/15/97 12/19/97 Beacon Properties Corp Real estate investment trust 4,039.40 3,358.85
09/16/97 11/04/97 All American Communications Publish newspapers, periodicals 500.20 498.59
09/16/97 02/02/98 Quick & Reilly Group Inc Bank holding company 1,525.50 1,440.08
09/18/97 12/16/97 Guaranty National Corp Insurance company; holding co 117.20 647.41
09/18/97 12/22/97 USLD Communications Corp Pvd telecommunications svcs 402.80 407.07
09/19/97 01/16/98 Sterling Electronics Corp Whl electronic components 217.60 208.73
09/21/97 12/16/97 Computer Data Systems Inc Pvd date processing services 383.70 389.58
09/22/97 12/05/97 Washington National Corp Insurance holding company 424.00 433.68
09/23/97 01/12/98 Tejas Gas Corp Oil and gas exploration, prodn 2,165.60 2,203.96
09/24/97 11/24/97 Allergan Ligand Retinoid Manufacture diagnostic tests 71.40 39.70
09/24/97 12/12/97 Game Financial Corp Pvd money order issuance svcs 50.60 42.63
09/24/97 11/28/97 Salomon Inc Insurance firm 8,852.10 141,077.45
09/25/97 02/19/98 Talley Industries Inc Mnfr zirconium, steel products 309.40 264.39
09/29/97 12/22/97 Graphic Industries Inc Mnfr manifold business forms 424.50 418.75
09/29/97 12/23/97 HPR Inc Dvlp healthcare software 389.60 376.01
09/29/97 12/01/97 Morningstar Group Inc Produce milk, related prod 972.00 932.58
09/30/97 11/26/97 Arbor Health Care Co Investment holding company 424.20 419.33
10/01/97 01/29/98 Brooks Fiber Properties Inc Pvd telecommunication svcs 2,532.60 3,112.89
10/01/97 09/14/98 MCI Communications Corp Pvd telecommunication svcs 41,906.90 43,588.51
10/02/97 04/30/98 Kapson Senior Quarters Corp Pvd nursing care services 247.40 231.85
10/03/97 12/29/97 Natl Health Enhancement Sys Devlp healthcare software 97.80 96.52
10/06/97 01/28/98 Caliber Systems Inc Provide express delivery svcs 2,471.40 2,681.17
10/06/97 12/19/97 EndoVascular Technologies Inc Mnfr cardiovascular equipment 187.80 190.46
10/06/97 03/20/98 Orion Network Systems Inc Manufacture satellite equip 425.60 1,265.08
10/08/97 04/07/98 Associates First Capital Corp Investor Group 26,624.60 75,189.21
10/09/97 12/23/97 Melamine Chemicals Inc Mnfr formaldehyde, resins 119.70 87.78
10/10/97 11/19/97 Greenfield Industries Inc Mnfr metalworking tools 957.00 1,062.17
10/13/97 01/22/98 Netcom On-Line Communication Pvt telecommunications svcs 269.40 214.02
10/13/97 12/01/97 Network General Corp Develop network software 1,142.50 1,113.34
10/15/97 12/04/97 Viewlogic Systems Inc Develop automation software 530.90 492.99
10/16/97 02/12/98 Omni Insurance Group Inc Provide insurance services 184.70 184.72
10/17/97 12/29/97 Computational Systems Inc Mnfr appliance componments 158.60 160.45
10/17/97 11/19/97 Exide Electronics Group Inc Mnfr plastic, rubber,indl prods 583.20 590.91
10/17/97 01/02/98 Infinity Financial Technology Provide data processing svcs 358.00 347.76
10/20/97 02/24/98 ITT Corp Real estate investment trust 13,748.20 13,534.84
10/20/97 03/06/98 Santa Fe Pacific Pipeline Operate natural gas pipelines 1,473.00 1,352.15
10/20/97 06/24/98 Ticketmaster Group Inc Operate television stations 413.20 845.30
10/21/97 01/07/98 International Dairy Queen Inc Property, casualty insurance co 596.90 558.69
10/23/97 12/19/97 Premenos Technology Corp Dvle elctn commerce software 234.70 211.13
1 Day 1 Week 4 Weeks 3 Months 1 Year
Date Date Prior to Prior to Prior to Prior to Prior to
Announced Effective Target Business Description Annc. Date Annc. Date Annc. Date Annc. Date Annc. Date
- ------------------------------------------------------------------------------------------------------------------------
08/14/97 12/13/97 Allied Capital Commercial Corp 7.49 7.77 10.64 18.18 8.90
08/14/97 12/31/97 Allied Capital Corp 7.83 7.83 9.10 19.93 23.12
08/14/97 09/16/97 American Medserve Corp 2.49 16.13 25.76
08/14/97 09/24/97 Talbert Medical Management 10.53 18.87 36.96 72.60
08/14/97 12/29/97 Tuesday Morning Corp 22.70 25.79 11.11 197.03 28.21
08/14/97 12/05/97 Uniforce Services Inc 37.56 37.56 52.62 48.23 101.50
08/18/97 11/04/97 Monterey Resources Inc 39.42 39.42 54.13 30.23
08/21/97 01/14/98 Boston Technology Inc (0.32) 16.22 10.37 103.42 15.71
08/25/97 10/21/97 ACC Consumer Finance Corp 35.82 34.75 29.64 125.16 96.69
08/25/97 12/17/97 Mosince Paper Corp 15.62 15.91 5.64 52.89 11.73
08/26/97 12/22/97 Savannah Foods & Industries 8.36 14.89 17.39 65.31 31.71
08/28/97 12/23/97 Evans Withycombe Residential 14.16 21.39 18.88 21.40 22.88
08/28/97 02/25/98 Value Property Trust 24.99 20.90 18.68 32.00 25.59
08/28/97 10/10/97 Versa Technologies Inc 36.81 33.11 31.33 72.84 72.84
08/29/97 12/29/97 Rexel Inc 19.21 26.32 21.62 62.16 23.29
09/03/97 12/30/97 Zytec Corp 45.35 48.22 71.17 283.18
09/04/97 01/09/98 Hudson Foods Inc 23.49 31.63 28.64 51.64 25.81
09/05/97 11/26/97 Medic Computer Systems Inc 7.69 12.00 25.00 17.15 89.19
09/05/97 01/16/98 Technology Modeling Assoc Inc 29.52 52.81 43.16 36.00
09/08/97 02/02/98 CompuServe Inc (H&R Block) 1.39 2.92 8.36 1.39 16.36
09/08/97 12/31/97 Fuqua enterprises Inc 42.32 52.82 78.75 57.24 81.87
09/10/97 11/28/97 Data Documents Inc 10.91 14.87 26.13 53.14 26.12
09/10/97 12/02/97 Tinsley Laboratories Inc 96.36 96.36 96.36 301.64 132.53
09/11/97 12/22/97 Fieldcrest Cannon Inc 1.49 8.58 31.72 86.30 76.62
09/12/97 12/09/97 Unison Software Inc 9.09 25.00 22.45 4.65 100.00
09/12/97 01/16/98 WHG Resort & Casino Inc 35.08 72.35 78.50 117.30
09/12/97 02/25/98 Western National Corp 9.58 7.43 14.41 68.88 13.62
09/15/97 12/19/97 Beacon Properties Corp 28.39 30.62 30.85 69.44 45.80
09/16/97 11/04/97 All American 12.71 41.67 37.84 175.68 100.00
09/16/97 02/02/98 Quick & Reilly Group Inc 18.23 33.10 69.63 103.58 60.91
09/18/97 12/16/97 Guaranty National Corp 10.77 23.87 27.72 125.00 44.00
09/18/97 12/22/97 USLD Communications Corp 18.86 34.13 120.92 40.10
09/19/97 01/16/98 Sterling Electronics Corp 16.26 30.23 57.01 91.74 69.70
09/21/97 12/16/97 Computer Data Systems Inc 42.54 47.63 73.68 129.64 84.54
09/22/97 12/05/97 Washington National Corp 2.70 4.11 12.24 10.37 17.70
09/23/97 01/12/98 Tejas Gas Corp 24.09 22.39 33.70 75.71 50.23
09/24/97 11/24/97 Allergan Ligand Retinoid 13.03 11.59 7.83
09/24/97 12/12/97 Game Financial Corp 4.88 4.88 4.88 10.26 11.69
09/24/97 11/28/97 Salomon Inc 21.43 24.09 34.60 77.50 44.76
09/25/97 02/19/98 Talley Industries Inc 6.67 10.98 34.27 54.84 34.27
09/29/97 12/22/97 Graphic Industries Inc 8.75 19.18 34.88 155.88 65.71
09/29/97 12/23/97 HPR Inc 22.92 24.54 32.38 57.08 30.54
09/29/97 12/01/97 Morningstar Group Inc 14.62 11.48 53.46
09/30/97 11/26/97 Arbor Health Care Co 15.39 19.60 26.76 92.51 39.53
10/01/97 01/29/98 Brooks Fiber Properties Inc 35.71 58.40 83.65 121.34 93.47
10/01/97 09/14/98 MCI Communications Corp 65.17 63.55 58.10 96.15 20.35
10/02/97 04/30/98 Kapson Senior Quarters Corp (0.86) 9.43 1.75 45.00 34.88
10/03/97 12/29/97 Natl Health Enhancement Sys 16.69 41.48 121.93 76.88 85.57
10/06/97 01/28/98 Caliber Systems Inc 13.90 19.72 42.57 284.73 68.28
10/06/97 12/19/97 EndoVascular Technologies Inc 22.14 22.14 73.91 56.86 87.13
10/06/97 03/20/98 Orion Network Systems Inc 20.16 27.94 32.62 91.91 68.16
10/08/97 04/07/98 Associates First Capital Corp 32.67 36.32 31.24 96.48 39.00
10/09/97 12/23/97 Melamine Chemicals Inc 70.83 72.63 70.83 177.97 46.43
10/10/97 11/19/97 Greenfield Industries Inc 19.69 26.67 44.08 35.71 34.22
10/13/97 01/22/98 Netcom On-Line Communication 49.75 70.94 78.52 51.00 64.73
10/13/97 12/01/97 Network General Corp 19.65 25.27 42.72
10/15/97 12/04/97 Viewlogic Systems Inc 24.44 25.14 29.48 215.49 82.11
10/16/97 02/12/98 Omni Insurance Group Inc 78.87 75.78 130.91 252.78 154.00
10/17/97 12/29/97 Computational Systems Inc 45.08 48.25 62.47 91.29 101.02
10/17/97 11/19/97 Exide Electronics Group Inc 125.24 133.17 149.46 146.81 30.34
10/17/97 01/02/98 Infinity Financial Technology 19.00 17.93 17.40 (0.09)
10/20/97 02/24/98 ITT Corp 94.29 98.25 95.40 98.83 34.12
10/20/97 03/06/98 Santa Fe Pacific Pipeline 31.82 33.24 38.56 51.64 34.27
10/20/97 06/24/98 Ticketmaster Group Inc 32.00 28.43 56.32 68.51
10/21/97 01/07/98 International Dairy Queen Inc 11.92 9.09 9.37 35.00 8.54
10/23/97 12/19/97 Premenos Technology Corp 55.20 49.12 27.82 8.63 117.26
Merger Premiums to Market Value Analysis
Mergers with Target Price Equal to or Greater than $10 per Share
Announced and Completed 1/1/96-10/9/98
(continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Date Date
Announced Effective Target Name Target Business Description Acquiror Name
- ------------------------------------------------------------------------------------------------------------------------------------
10/23/97 04/02/98 Universal Outdoor Holdings Inc Pvd outdoor advertising svcs Clear Channel Communications
10/29/97 01/30/98 Carson Pirie Scott & Co Own, op department stores Proffitt's Inc
10/31/97 03/12/98 ILC Technology Inc Mnfr high intensity lamps BEC Group Inc
10/31/97 02.27/98 Xpedite Systems Inc Pvd enhanced fax services Premiere Technologies Inc
11/03/97 03/24/98 Oregon Metallurgical Corp Mnfr, whl titanium Allegheny Teledyne Inc
11/03/97 01/09/98 Sequana Therapeutics Mnfr diagnostic substances Arris Pharmaceuticals Corp
11/04/97 05/20/98 Safety-Kleen Corp (Laidlaw) Pvd vehicular cleaning svcs Laidlaw Environmental Services
11/05/97 01/16/98 Mac Frugal's Bargains Whl, ret general merchandise Consolidated Stores Corp
11/07/97 03/10/98 Quality Food Centers Inc Own and operate supermarkets Fred Meyer Inc
11/11/97 02/11/98 Healthdyne Technologies Inc Mnfr specialized med devices Respironics Inc
11/13/97 03/25/98 Chartwell Leisure Inc Own, op hotels and motels Investor Group
11/13/97 03/11/98 Hugoton Energy Corp Oil and gas exploration prodn Chesapeake Energy Corp
11/17/97 02/26/98 Grantic Financial Inc Pvd business credit services Fidelity National Financial
11/18/97 01/08/98 Jackson Hewitt Pvd tax preparation services Cendant Corp
11/19/97 02/27/98 Amati Communications Corp Mnfr data communications equip Texas Instruments Inc
11/19/97 04/01/98 Renal Treatment Centers Inc Own, op kidney dialysis centers Total Renal Care Holdings Inc
11/19/97 08/12/98 Telemundo Group Inc Own. op Spanish TV stations Investor Group
11/21/97 01/28/98 BDM International Inc Pvd comp info technology svcs TRW Inc
11/24/97 03/30/98 MAPCO Inc Gas utility, petro refining Williams Cos Inc
11/26/97 04/23/98 ACC Corp Pvd telecommunications svcs Teleport Communications Group
11/26/97 02/25/98 Universal Hospital Services Pvd med equip rental services Investor Group
11/28/97 12/30/97 Deflecta-Shield Corp Mnfr truck accessories Lund International Holdings
12/01/97 02/19/98 Raptor Systems Inc Develop security mgmt software AXENT Technologies Inc
12/02/97 06/02/98 Interstate Hotels Co Own, op hotels and motels Patriot Amer Hosp/Wyndam Ind
12/11/97 01/20/98 TriMas Corp Mnfr specialty closures, caps MascoTech Inc
12/12/97 05/29/98 Lukens Inc Mnfr steel plates Bethlehem Steel Corp
12/15/97 03/27/98 Gulf South Medical Supply Inc Wholesale medical supplies Physician Sales & Services Inc
12/15/97 05/01/98 Piper Jaffray Cos Investment bank; holding co U.S. Bancorp, Minneapolis, MN
12/15/97 03/02/98 Sano Corp Mnfr pharmaceuticals Elan Corp PLC
12/16/97 05/08/98 Ambassador Apartments Inc Real estate investment trust Apartment Investment & Mgmt Co
12/16/97 01/30/98 Spine-Tech Inc Mnfr spinal implants Sulzer Medical (Gebrueder Sulzer)
12/17/97 04/08/98 Oasis Residential Inc Real estate investment trust Camden Property Trust
12/17/97 01/23/98 Suburban Ostomy Supply Co Inc Whl medical and hospital equip InvaCare Corporation
12/19/97 03/30/98 ASR Investments Corp Real estate investment trust United Dominion REalty Tr Inc
12/19/97 06/17/98 Chemi-Trol Chemical Co Mnfr steel pressure tanks Harsco Corp
12/19/97 04/20/98 Continental Homes Holding Construct, design homes DR Horton Inc
12/19/97 05/01/98 IPC Information Systems Inc Mnfr telecommunications equip Cable Systems International
12/19/97 06/04/98 Panavision Inc Mnfr camera systems Mafco Holdings Inc
12/19/97 01/20/98 Showboat Inc Own, operate hotel casinos Harrah's Entertainment
12/19/97 01/27/98 Software Artistry Inc Develop help-desk software Tivoli Systems Inc (IBM Corp)
12/19/97 02/03/98 Synmetrics Industries Inc Mnfr communications equip Tel-Save Holdings
12/22/97 05/21/98 Dynatech Corp Mnfr test, analysis products Investor Group
12/22/97 09/30/98 Essex County Gas Gas utility Eastern Enterprises
12/23/97 04/01/98 Union Corp Pvd adjustment collection svcs Outsourcing Solutions Inc
01/01/98 07/31/98 GoodMark Foods Inc Produce meat snacks ConAgra Inc
01/05/98 07/17/98 La Quinta Inns Inc Own, op motor inns Medtrust Acquisition Co
01/06/98 04/01/98 Schult Homes Corp Manufacture mobile homes Oakwood Homes Corp
01/08/98 07/23/98 Teleport Communications Group Pvd telecommunication services AT&T Corp
01/12/98 02/19/98 Computer Language Research Inc Dvlp tax processing software Research Institute of America
01/14/98 06/01/98 Continental Can Co Inc Mnfr metal, plastic cans Suiza Foods Corp
01/14/98 06/19/98 Price REIT Inc Real estate investment trust Kimco Realty Corp
01/19/98 04/24/98 USF&G Corp Insurance holding company St Paul Cos Inc
01/20/98 10/05/98 Buttrey Food and Drug Stores Own, op supermarkets, drug store Albertson's Inc
01/20/98 04/16/98 NACT Telecommunications (GST) Pvd telephone commun svcs World Access Inc
01/20/98 05/27/98 Regal Cinemas Inc Pvd movie exhibition services Investor Group
01/21/98 05/22/98 Thermadyne Holdings Corp Mnfr welding equip, indl mach DLJ Merchant Bkg Partners II
01/23/98 04/13/98 Handy & Harman Mnfr, whl metal wire, cable WHX Corp
01/26/98 06/11/98 Digital Equipment Corp Mnfr computers, equip Compaq Computer Corp
01/27/98 03/03/98 State of the Art Inc Develop financial software Sage Group PLC
02/02/98 03/27/98 BGS Systems Inc Develop utilities software BMC Software Inc
02/02/98 04/20/98 Source Services Corp Provide help supply services Romac International Inc
02/04/98 03/20/98 Industrial Acoustics Inc Mnfr noise reducing products IAC Holdings Corp
02/09/98 03/31/98 Arbor Drugs Inc Own, operate drug stores CVS Corp
02/09/98 06/15/98 Culligan Water Technologies Mnfr, whl purification products United States Filter Corp
02/09/98 04/16/98 Summit Care Corp Provide nursing services Fountain View (Heritage)
02/10/98 06/04/98 Illinois Central Corp Railroad transportation svcs Canadian National Railway Co
- ------------------------------------------------------------------------------------------------------------------------------------
Value of Enter-
Trans- prise
Date Date Acquiror action Value
Announced Effective Target Name Business Description ($ mil) ($ mil)
- ------------------------------------------------------------------------------------------------------------------------------------
10/23/97 04/02/98 Universal Outdoor Holdings Inc Own, op TV, radio bdscstg station 1,627.80 1,729.53
10/29/97 01/30/98 Carson Pirie Scott & Co Own and operate dept stores 867.70 992.38
10/31/97 03/12/98 ILC Technology Inc Mnfr, whl eyeglass lenses, frame 130.80 135.55
10/31/97 02.27/98 Xpedite Systems Inc Pvd computer telephony svcs 496.40 468.79
11/03/97 03/24/98 Oregon Metallurgical Corp Mnfr specialty materials, metal 557.20 566.80
11/03/97 01/09/98 Sequana Therapeutics Manufacture synthetic drugs 169.40 169.97
11/04/97 05/20/98 Safety-Kleen Corp (Laidlaw) Pvd waste removal svcs 1,804.00 2,054.95
11/05/97 01/16/98 Mac Frugal's Bargains General merchandise ret stores 994.10 1,040.90
11/07/97 03/10/98 Quality Food Centers Inc Own, operate department stores 1,703.40 1,671.77
11/11/97 02/11/98 Healthdyne Technologies Inc Mnfr, whl respiratory prod 341.90 344.16
11/13/97 03/25/98 Chartwell Leisure Inc Investor group 240.80 272.75
11/13/97 03/11/98 Hugoton Energy Corp Oil and gas exploration, prodn 377.00 377.46
11/17/97 02/26/98 Grantic Financial Inc Title insurance company 132.40 151.93
11/18/97 01/08/98 Jackson Hewitt Provide discount club svcs 468.20 442.64
11/19/97 02/27/98 Amati Communications Corp Mnfr semiconductors, computers 459.80 463.30
11/19/97 04/01/98 Renal Treatment Centers Inc Pvd kidney dialysis services 1,362.60 1,457.03
11/19/97 08/12/98 Telemundo Group Inc Investor group 521.40 710.48
11/21/97 01/28/98 BDM International Inc Elec equip, credit reporting 888.00 923.01
11/24/97 03/30/98 MAPCO Inc Gas utility 2,634.10 3,405.65
11/26/97 04/23/98 ACC Corp Pvd telecommunication services 906.80 930.23
11/26/97 02/25/98 Universal Hospital Services Investor group 133.00 122.73
11/28/97 12/30/97 Deflecta-Shield Corp Mnfr automobile parts 89.80 87.26
12/01/97 02/19/98 Raptor Systems Inc Develop software 253.70 225.83
12/02/97 06/02/98 Interstate Hotels Co Real estate investment trust 2,055.90 2,095.27
12/11/97 01/20/98 TriMas Corp Mnfr motor vehicle components 911.70 1,384.00
12/12/97 05/29/98 Lukens Inc Manufacture steel products 700.20 751.93
12/15/97 03/27/98 Gulf South Medical Supply Inc Wholesale medical equipment 678.90 629.50
12/15/97 05/01/98 Piper Jaffray Cos Bank holding company 767.80 991.44
12/15/97 03/02/98 Sano Corp Mnfr drug delivery systems 396.80 395.98
12/16/97 05/08/98 Ambassador Apartments Inc real estate investment trust 663.00 620.98
12/16/97 01/30/98 Spine-Tech Inc Mnfr medical implants 621.10 618.51
12/17/97 04/08/98 Oasis Residential Inc Real estate investment trust 395.20 825.51
12/17/97 01/23/98 Suburban Ostomy Supply Co Inc Mnfr surgical, medical supplies 130.80 128.54
12/19/97 03/30/98 ASR Investments Corp real estate investment trust 277.00 264.20
12/19/97 06/17/98 Chemi-Trol Chemical Co Mnfr scaffolding, pipes 46.10 55.83
12/19/97 04/20/98 Continental Homes Holding Construct residential bldgs 590.20 569.49
12/19/97 05/01/98 IPC Information Systems Inc Mnfr telecommun equip 201.70 252.03
12/19/97 06/04/98 Panavision Inc Mnfr toilet preparation 296.60 np
12/19/97 01/20/98 Showboat Inc Own, op hotel casinos 1,147.60 987.48
12/19/97 01/27/98 Software Artistry Inc Dvlp systems mgmt software 201.90 190.51
12/19/97 02/03/98 Synmetrics Industries Inc ,Pvd telecommunications svcs 25.00 31.51
12/22/97 05/21/98 Dynatech Corp Investor group 762.90 783.40
12/22/97 09/30/98 Essex County Gas Gas utility holding company 79.20 117.58
12/23/97 04/01/98 Union Corp Pvd outsourcing svcs 193.00 202.64
01/01/98 07/31/98 GoodMark Foods Inc Produce meats, eggs, cooking oil 217.80 230.60
01/05/98 07/17/98 La Quinta Inns Inc Real estate investment trust 2,907.50 3,040.50
01/06/98 04/01/98 Schult Homes Corp Mnfr, ret factory-built homes 101.40 104.04
01/08/98 07/23/98 Teleport Communications Group Own, op telecommunications sys 11,187.70 4,612.51
01/12/98 02/19/98 Computer Language Research Inc Publish tax law information 325.40 320.43
01/14/98 06/01/98 Continental Can Co Inc Produce milk, related prod 330.50 334.44
01/14/98 06/19/98 Price REIT Inc Real estate investment trust 870.60 804.79
01/19/98 04/24/98 USF&G Corp Insurance holding company 3,782.20 3,382.59
01/20/98 10/05/98 Buttrey Food and Drug Stores Supermarkets, department stores 139.20 175.71
01/20/98 04/16/98 NACT Telecommunications (GST) Pvd telecommunication services 53.10 144.63
01/20/98 05/27/98 Regal Cinemas Inc Investor group 1,462.70 1,408.72
01/21/98 05/22/98 Thermadyne Holdings Corp Merchant banking firm 790.00 742.65
01/23/98 04/13/98 Handy & Harman Mnfr steel and steel prods 625.10 613.20
01/26/98 06/11/98 Digital Equipment Corp Manufacture personal computers 9,123.70 8,620
01/27/98 03/03/98 State of the Art Inc Dvlp, whl accounting software 245.20 244.44
02/02/98 03/27/98 BGS Systems Inc Develop software 306.90 288.51
02/02/98 04/20/98 Source Services Corp Pvd specialty staffing svcs 454.40 431.09
02/04/98 03/20/98 Industrial Acoustics Inc Investment company 25.30 48.96
02/09/98 03/31/98 Arbor Drugs Inc Own and operate drug stores 1,423.30 957.18
02/09/98 06/15/98 Culligan Water Technologies Mnfr water treatment equip 1,474.30 1,927.57
02/09/98 04/16/98 Summit Care Corp Own, op healthcare facilities 275.10 276.92
02/10/98 06/04/98 Illinois Central Corp Pvd railroad services 2,931.00 2,996.58
- ------------------------------------------------------------------------------------------------------------------------------------
Premium
----------------------------------------------------------------------------------
Date Date 1 Day Prior 1 Week Prior 4 Weeks Prior 3 Months Prior 1 Year Prior
Announced Effective Target Name to Annc. Date to Annc. Date to Annc. Date to Annc. Date to Annc. Date
- ------------------------------------------------------------------------------------------------------------------------------------
10/23/97 04/02/98 Universal Outdoor Holdings Inc 2.32 5.17 20.46 20.65 21.75
10/29/97 01/30/98 Carson Pirie Scott & Co 38.83 39.30 31.80 109.29 56.87
10/31/97 03/12/98 ILC Technology Inc 108.72 107.62 108.72 125.56 128.19
10/31/97 02.27/98 Xpedite Systems Inc 69.02 73.02 68.05 78.29 73.02
11/03/97 03/24/98 Oregon Metallurgical Corp 45.50 61.66 40.62 9.12 35.05
11/03/97 01/09/98 Sequana Therapeutics 44.00 47.27 23.43 6.23 82.54
11/04/97 05/20/98 Safety-Kleen Corp (Laidlaw) 26.16 38.06 47.32
11/05/97 01/16/98 Mac Frugal's Bargains 2.92 18.49 23.46 62.78 33.31
11/07/97 03/10/98 Quality Food Centers Inc 13.86 23.43 27.96 46.76 42.28
11/11/97 02/11/98 Healthdyne Technologies Inc 44.36 40.15 44.36 166.67 44.36
11/13/97 03/25/98 Chartwell Leisure Inc 11.29 4.55 11.29 25.45 12.20
11/13/97 03/11/98 Hugoton Energy Corp 7.68 11.04 26.91 52.34 12.25
11/17/97 02/26/98 Grantic Financial Inc 89.79 89.79 87.61 155.00 87.59
11/18/97 01/08/98 Jackson Hewitt 26.51 21.70 47.83 1,600.00 156.60
11/19/97 02/27/98 Amati Communications Corp 31.69 44.14 13.48 13.58 26.48
11/19/97 04/01/98 Renal Treatment Centers Inc 8.63 17.04 26.87 64.55 16.63
11/19/97 08/12/98 Telemundo Group Inc 19.66 29.07 24.96 47.72 30.76
11/21/97 01/28/98 BDM International Inc 31.11 43.47 38.01 19.19 13.46
11/24/97 03/30/98 MAPCO Inc 21.05 35.99 43.66 36.24 53.83
11/26/97 04/23/98 ACC Corp 14.94 19.05 84.33 65.29 71.67
11/26/97 02/25/98 Universal Hospital Services 29.17 29.17 25.25 67.57 26.53
11/28/97 12/30/97 Deflecta-Shield Corp 33.33 33.33 77.78 82.86 70.67
12/01/97 02/19/98 Raptor Systems Inc 5.40 20.73 16.49 (24.55) 22.40
12/02/97 06/02/98 Interstate Hotels Co 2.56 8.70 27.39 45.63 30.15
12/11/97 01/20/98 TriMas Corp 12.65 9.96 18.97 42.27 13.58
12/12/97 05/29/98 Lukens Inc 92.00 94.33 69.61 64.38 48.61
12/15/97 03/27/98 Gulf South Medical Supply Inc 38.50 21.97 16.04 36.44 49.07
12/15/97 05/01/98 Piper Jaffray Cos 25.21 24.17 54.01 132.81 44.66
12/15/97 03/02/98 Sano Corp 52.71 42.64 95.13 105.08 71.32
12/16/97 05/08/98 Ambassador Apartments Inc 4.44 5.42 5.42 4.10 (13.30)
12/16/97 01/30/98 Spine-Tech Inc 14.29 52.94 55.81 121.28 16.20
12/17/97 04/08/98 Oasis Residential Inc 9.47 10.72 7.95 12.32 (2.60)
12/17/97 01/23/98 Suburban Ostomy Supply Co Inc 8.05 13.25 13.25 2.17 22.08
12/19/97 03/30/98 ASR Investments Corp 4.38 1.09 2.56 3.76 (5.16)
12/19/97 06/17/98 Chemi-Trol Chemical Co 61.40 61.40 64.29 113.95 75.24
12/19/97 04/20/98 Continental Homes Holding 26.28 27.64 35.97 114.69 61.02
12/19/97 05/01/98 IPC Information Systems Inc 14.29 31.25 14.29 182.35 100.00
12/19/97 06/04/98 Panavision Inc 3.42 19.10 24.71 21.14
12/19/97 01/20/98 Showboat Inc 66.78 62.91 67.35 50.46
12/19/97 01/27/98 Software Artistry Inc 61.98 57.43 237.93 67.52
12/19/97 02/03/98 Synmetrics Industries Inc 36.36 172.73 110.53 114.29
12/22/97 05/21/98 Dynatech Corp 29.93 37.16 29.93 (41.41) (42.38)
12/22/97 09/30/98 Essex County Gas 26.56 55.46 61.17 97.44 74.73
12/23/97 04/01/98 Union Corp 14.55 13.51 23.53 41.57 29.90
01/01/98 07/31/98 GoodMark Foods Inc 54.49 75.88 69.36 73.21 68.12
01/05/98 07/17/98 La Quinta Inns Inc 28.40 35.95 35.95 41.50 47.00
01/06/98 04/01/98 Schult Homes Corp 1.12 10.43 19.21 15.51 25.00
01/08/98 07/23/98 Teleport Communications Group (2.45) 1.72 16.96 76.12 20.38
01/12/98 02/19/98 Computer Language Research Inc 60.71 62.16 69.81 767.47 1,025.00
01/14/98 06/01/98 Continental Can Co Inc 45.83 74.37 71.16 198.35 72.98
01/14/98 06/19/98 Price REIT Inc 13.48 14.33 18.21 26.42 17.50
01/19/98 04/24/98 USF&G Corp 18.19 22.47 14.51 18.55 17.52
01/20/98 10/05/98 Buttrey Food and Drug Stores 44.19 44.19 47.62 89.31 39.33
01/20/98 04/16/98 NACT Telecommunications (GST) 12.00 12.45 16.67 20.69
01/20/98 05/27/98 Regal Cinemas Inc 14.29 10.71 34.78 29.17 19.23
01/21/98 05/22/98 Thermadyne Holdings Corp 19.48 21.05 18.46 30.19 15.72
01/23/98 04/13/98 Handy & Harman 8.67 14.63 1.62 118.60 30.56
01/26/98 06/11/98 Digital Equipment Corp 32.06 50.25 62.45 61.07 25.65
01/27/98 03/03/98 State of the Art Inc 33.33 35.39 35.39 57.14 38.58
02/02/98 03/27/98 BGS Systems Inc 23.29 32.35 42.86 57.89 37.93
02/02/98 04/20/98 Source Services Corp 51.12 56.69 50.24 140.98 59.65
02/04/98 03/20/98 Industrial Acoustics Inc 0 4.76 10.00 2.33 10.00
02/09/98 03/31/98 Arbor Drugs Inc 1.86 14.12 18.13 82.45 30.81
02/09/98 06/15/98 Culligan Water Technologies 57.49 62.89 27.35 56.96 43.47
02/09/98 04/16/98 Summit Care Corp 14.29 31.25 37.71 97.65 27.27
02/10/98 06/04/98 Illinois Central Corp 10.64 20.00 18.86 17.74 8.71
F-12
Merger Premiums to Market Value Analysis
Mergers with Target Price Equal to or Greater than $10 per Share
Announced and Completed 1/1/96-10/9/98
(continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Date Date
Announced Effective Target Name Target Business Description Acquiror Name
- ------------------------------------------------------------------------------------------------------------------------------------
02/11/98 06/10/98 MTL Inc Pvd tank truck carrier svcs Sombrero Acquisition Corp
02/11/98 05/20/98 Waverly Inc Publish books, periodicals Wotlers Kluwer NV
02/16/98 08/04/98 Coherent Communications Sys Mnfr voice enhancement prods Tellabs Inc
02/17/98 05/27/98 Devon Group Inc Pvd graphic arts services Applied Graphics Technologies
02/17/98 06/11/98 Zurn Industries Inc Mnfr environmental equipment US Industries Inc
02/18/98 06/27/98 Republic Automotive Parts Inc Mnfr, who automotive parts Keystone Automotive Inds Inc
02/19/98 04/21/98 Mastering Inc Provide computer training svcs PLATINUM Technology Inc
02/23/98 06/30/98 Money Store Inc. Provide mtg svcs, loans First Union Corp, Charlotte, NC
02/23/98 04/28/98 Trusted Information Systems Develop security software Network Associates Inc
02/24/98 04/06/98 Wonderware Corp Dvlp process control software Siehe PLC
02/26/98 09/30/98 Dresser Industries Inc Mnfr oil & gas field machinery Halliburton Co
03/02/98 08/03/98 Benchmarq Microelectronics Inc Mnfr microprocessors Unitrode Corp
03/02/98 08/17/98 DeepTech International Oil and gas exploration, prodn El Paso Natural Gas Co
03/02/98 05/19/98 Scopus Technology Inc Dvlp Client/server software Siebel Systems Inc
03/03/98 05/27/98 EVI Weatherford Inc Provide oil field services EVI Inc
03/05/98 05/20/98 XL Connect Solutions Inc Pvd integrated sys design svcs Xerox Corp
03/06/98 07/31/98 Alumax Inc Mnfr aluminum products Aluminum Co of America (Alcoa)
03/09/98 06/05/98 LCI International Inc Pvd telecommunications svcs Qwest Communications Corp
03/09/98 06/25/98 PriCellular Corp Pvd cellular telephone svcs American Cellular Corp
03/10/98 06/05/98 Portec Inc Mnfr railroad track components J Richard Industries Inc
03/11/98 07/16/98 Waste Management Inc Pvd chemical waste mgmt svcs USA Waste Services Inc
03/12/98 04/20/98 Metromail Corp Pvd direct-mail advg svcs Great Universal Stores PLC
03/13/98 07/31/98 MedCath Inc Pvd cardiology related svcs Investor Group
03/16/98 08/03/98 American General Hospitality Real estate investment trust CapStar Hotel Co
03/16/98 05/28/98 Logic Works Inc Develop client/server software PLATINUM Technology Inc
03/16/98 07/01/98 360 Communications Co Pvd telecommunication svcs ALLTEL Corp
03/17/98 07/31/98 BET Holdings Inc Own and operate TV stations Investor Group
03/17/98 05/27/98 ForeFront Group Inc Develop software CBT Group PLC
03/18/98 06/30/98 Medusa Corp Manufacture cement Southdown Inc
03/24/98 08/17/98 Insilco Corp Mnfr auto, elec, & electn parts DLJ Merchant Bkg Partners II
03/24/98 06/24/98 Walsh International Inc Provide programming svcs Cognizant Corp
03/27/98 07/01/98 Grand Prix Assoc Of Long Beach Own, op motorsport facilities Dover Downs Entertainment Inc
03/27/98 07/15/98 Intl Specialty Prods Mnfr speciality chemicals ISP Holdings Inc
03/30/98 05/11/98 Children's Discovery Centers Operate child care centers Knowledge Beginnings Inc
04/02/98 06/30/98 Security Capital Atlantic Inc Real estate investment trust Security Capital Pacific Trust
04/06/98 07/10/98 MoneyGram Payment Systems Inc Pvd money wire transfer svcs Viad Corp
04/06/98 07/31/98 Zero Corp Manufacture metal encasements Applied Power Inc
04/07/98 06/30/98 Beneficial Corp Pvd consumer financing svcs Household International Inc.
04/07/98 06/30/98 Green Tree Financial Corp Pvd consumer, coml finance svcs Conseco Inc
04/08/98 05/19/98 Blessings Corp Mnfr plastic film products Huntsman Packaging Corp
04/09/98 07/27/98 Claremont Technology Group Inc Pvd comp integrated sys svc Complete Business Solutions
04/09/98 05/15/98 Dart Group Corp Own, operate auto part stores Richfood Holdings Inc
04/13/98 07/31/98 Mariner Health Group Inc Provide sub-acute care svcs Paragon Health Network Inc
04/15/98 08/11/98 Harborside Healthcare Corp Pvd long-term med services Investcorp
04/16/98 09/28/98 Award Software International Develop software Phoenix Technologies Ltd
04/17/98 07/21/98 XcelleNet Inc Dvlp remote computing software Sterling Commerce Inc
04/20/98 09/15/98 Atria Communities Inc Provide residential care svcs Kapson Senior Quarters Corp
04/21/98 08/25/98 PCA International Inc Pvd photo processing services Investor Group
04/21/98 06/24/98 Tracor Inc Mnfr defense electronics General Electric Co PLC
04/27/98 07/09/98 Fluke Corp Mnfr electronic test equipment Danaher Corp
04/27/98 08/30/98 Vitalink Pharmacy Services Inc Pvd health and allied svcs Genesis Health Ventures Inc
04/27/98 06/01/98 Yuric Systems Inc Mnfr communications equip Lucent Technologies Inc
04/29/98 08/14/98 Neurex Corp Mnfr, whl biopharmaceuticals Elan Corp PLC
05/04/98 07/09/98 Echlin Inc Mnfr, whl automotive parts Dana Corp
05/04/98 06/29/98 Union Texas Petroleum Holdings Oil and gas exploration, prodn ARCO
05/06/98 08/06/98 Mountbatten Inc Surety insurance company Fidelity & Deposit Co of MD
05/08/98 06/15/98 Authentic Specialty Foods Inc Whl, mnfr Mexican foods Agrobios (Desc SA de CV)
05/13/98 06/26/98 Sage Laboratories Inc Mnfr electronic components Filtronic Comick PLC
05/14/98 09/25/98 New Plan Realty Trust Real estate investment trust Excel Realty Trust Inc
05/18/98 08/19/98 Mercantile Stores Co Inc Own, op department stores Dillard's Inc
05/18/98 08/07/98 RP Scherer Corp Mnfr soft gelatin capsules Cardinal Health Inc
05/18/98 08/26/98 Viking Office Products Inc Whl. retail office products Office Depot Inc.
05/25/98 10/01/98 US Surgical Corp Manufacture surgical staples Tyco International Ltd
05/26/98 08/24/98 Hyperion Software Corp Develop software Arbor Software Corp
05/27/98 09/17/98 May & Speh Inc Pvd computer-based direct mktg Acxioin Corp
05/28/98 07/07/98 Donnelley Enterprise Solutions Pvd info management services Bowne & Co Inc
- ------------------------------------------------------------------------------------------------------------------------------------
Value of Enter-
Trans- prise
Date Date Acquiror action Value
Announced Effective Target Name Business Description ($ mil) ($ mil)
- ------------------------------------------------------------------------------------------------------------------------------------
02/11/98 06/10/98 MTL Inc Investment company 250.10 250.36
02/11/98 05/20/98 Waverly Inc Publish newspapers,books 375.60 390.05
02/16/98 08/04/98 Coherent Communications Sys Mnfr voice data transport sys 664.30 514.18
02/17/98 05/27/98 Devon Group Inc Pvd digital prepress services 474.40 25.32
02/17/98 06/11/98 Zurn Industries Inc Mfnr consumer building prods 790.80 699.54
02/18/98 06/27/98 Republic Automotive Parts Inc Whl auto parts and supplies 62.80 85.90
02/19/98 04/21/98 Mastering Inc Develop integrated software 198.70 180.54
02/23/98 06/30/98 Money Store Inc. Commercial bank holding co 2,215.20 3,631.37
02/23/98 04/28/98 Trusted Information Systems Develop network software 322.10 255.45
02/24/98 04/06/98 Wonderware Corp Mnfr appliance controls 362.70 343.26
02/26/98 09/30/98 Dresser Industries Inc Mnfr oil field machinery 7,783.20 8,429.13
03/02/98 08/03/98 Benchmarq Microelectronics Inc Mnfr semiconductors, capacitors 150.60 145.10
03/02/98 08/17/98 DeepTech International Oil and gas exploration, prodn 375.40 526.65
03/02/98 05/19/98 Scopus Technology Inc Dvlp sales automation software 490.70 455.88
03/03/98 05/27/98 EVI Weatherford Inc Mnfr oil field products 2,670.70 2,826.43
03/05/98 05/20/98 XL Connect Solutions Inc Mnfr business machine; fin co 88.00 348.57
03/06/98 07/31/98 Alumax Inc manufacture aluminum products 3,944.20 3,698.41
03/09/98 06/05/98 LCI International Inc Pvd telephone commun svcs 4,401.40 4,808.21
03/09/98 06/25/98 PriCellular Corp Pvd cellular common services 1,385.20 1,070.55
03/10/98 06/05/98 Portec Inc Investment firm 76.50 79.77
03/11/98 07/16/98 Waste Management Inc Pvd waste disposal services 13,313.60 19,980.86
03/12/98 04/20/98 Metromail Corp Own, op mail order house 837.90 830.34
03/13/98 07/31/98 MedCath Inc Investor group 227.80 354.05
03/16/98 08/03/98 American General Hospitality Own, operate hotels 1,211.80 979.19
03/16/98 05/28/98 Logic Works Inc Develop integrated software 212.90 190.35
03/16/98 07/01/98 360 Communications Co Pvd telecommunication svcs 5,948.60 6,021.37
03/17/98 07/31/98 BET Holdings Inc Investor group 462.30 768.07
03/17/98 05/27/98 ForeFront Group Inc Dev educational software 147.50 127.13
03/18/98 06/30/98 Medusa Corp Mnfr cement; limestone mining 1,052.50 1,084.12
03/24/98 08/17/98 Insilco Corp Merchant banking firm 425.30 446.51
03/24/98 06/24/98 Walsh International Inc pvd information services 176.80 179.22
03/27/98 07/01/98 Grand Prix Assoc Of Long Beach Own, op race track, casinos 91.00 114.96
03/27/98 07/15/98 Intl Specialty Prods Mnfr industrial chemicals 324.50 2,125.81
03/30/98 05/11/98 Children's Discovery Centers Own, operate child care centers 89.10 98.06
04/02/98 06/30/98 Security Capital Atlantic Inc Real estate investment trust 1,681.40 1,688.36
04/06/98 07/10/98 MoneyGram Payment Systems Inc Provide food catering services 293.60 268.95
04/06/98 07/31/98 Zero Corp Mnfr tools, equip, consumables 431.60 456.24
04/07/98 06/30/98 Beneficial Corp Provide financial services 8,703.80 21,875.73
04/07/98 06/30/98 Green Tree Financial Corp Insurance holding company 7,358.80 8,515.19
04/08/98 05/19/98 Blessings Corp Prod printed, laminated films 269.70 244.61
04/09/98 07/27/98 Claremont Technology Group Inc Pvd computer programming svcs 282.50 278.53
04/09/98 05/15/98 Dart Group Corp Wholesale groceries 193.30 565.17
04/13/98 07/31/98 Mariner Health Group Inc Own, op nursing care facilities 622.30 1,089.72
04/15/98 08/11/98 Harborside Healthcare Corp Investment firm 263.20 280.42
04/16/98 09/28/98 Award Software International Develop systems software 129.50 101.81
04/17/98 07/21/98 XcelleNet Inc Dvlp electn commerce software 214.30 196.34
04/20/98 09/15/98 Atria Communities Inc Provide residential care svcs 238.90 501.89
04/21/98 08/25/98 PCA International Inc Investor group 210.40 268.01
04/21/98 06/24/98 Tracor Inc Mnfr radios and televisions 1,323.50 1,377.62
04/27/98 07/09/98 Fluke Corp Mnfr tools, control equipment 718.90 657.51
04/27/98 08/30/98 Vitalink Pharmacy Services Inc Own, op geriatric facilities 678.40 680.28
04/27/98 06/01/98 Yuric Systems Inc Mnfr telecom equip, software 1,044.10 1,002.06
04/29/98 08/14/98 Neurex Corp Mnfr drug delivery systems 824.50 800.83
05/04/98 07/09/98 Echlin Inc Mnfr motor vehicle products 4,124.80 4,345.06
05/04/98 06/29/98 Union Texas Petroleum Holdings Oil and gas exploration, prodn 2,741.40 3,124.56
05/06/98 08/06/98 Mountbatten Inc Surety insurance co 43.40 41.43
05/08/98 06/15/98 Authentic Specialty Foods Inc Mnfr, whl foods products 141.90 148.06
05/13/98 06/26/98 Sage Laboratories Inc Mnfr mobile telephone devices 20.20 16.61
05/14/98 09/25/98 New Plan Realty Trust Real estate investment trust 1,715.30 2,270.33
05/18/98 08/19/98 Mercantile Stores Co Inc Own, op department stores 2,943.10 3,022.02
05/18/98 08/07/98 RP Scherer Corp Whl pharmaceutical products 2,541.60 2,518.70
05/18/98 08/26/98 Viking Office Products Inc. Own. op stationerly stores 3,082.20 3,049.42
05/25/98 10/01/98 US Surgical Corp Mnfr fire protection systems 3,394.20 3.969.78
05/26/98 08/24/98 Hyperion Software Corp Dvlp software 837.30 751.40
05/27/98 09/17/98 May & Speh Inc Provide on-line database svcs 502.50 526.15
05/28/98 07/07/98 Donnelley Enterprise Solutions Pvd printing svcs 105.20 114.54
- ------------------------------------------------------------------------------------------------------------------------------------
Premium
----------------------------------------------------------------------------------
Date Date 1 Day Prior 1 Week Prior 4 Weeks Prior 3 Months Prior 1 Year Prior
Announced Effective Target Name to Annc. Date to Annc. Date to Annc. Date to Annc. Date to Annc. Date
- ------------------------------------------------------------------------------------------------------------------------------------
02/11/98 06/10/98 MTL Inc 37.93 38.53 56.10 79.78 46.79
02/11/98 05/20/98 Waverly Inc 42.47 50.73 50.73 77.27 -3.11
02/16/98 08/04/98 Coherent Communications Sys 30.36 43.23 81.37 104.76 40.24
02/17/98 05/27/98 Devon Group Inc 29.19 32.03 37.91 108.07 52.10
02/17/98 06/11/98 Zurn Industries Inc 19.53 22.00 36.05 80.82 28.17
02/18/98 06/27/98 Republic Automotive Parts Inc 33.03 33.33 28.57 9.09 20.00
02/19/98 04/21/98 Mastering Inc 31.58 25.00 33.33 -1.96 36.99
02/23/98 06/30/98 Money Store Inc. 37.26 28.50 87.43 25.81 34.20
02/23/98 04/28/98 Trusted Information Systems 59.92 84.59 92.29 25.21 119.76
02/24/98 04/06/98 Wonderware Corp 50.00 59.34 79.44 125.88 32.41
02/26/98 09/30/98 Dresser Industries Inc 13.73 15.03 18.32 43.09 17.73
03/02/98 08/03/98 Benchmarq Microelectronics Inc 15.77 14.02 67.22 5.97 4.86
03/02/98 08/17/98 DeepTech International 8.74 9.80 15.46 138.30 30.23
03/02/98 05/19/98 Scopus Technology Inc 58.51 93.64 100.13 2.35 84.66
03/03/98 05/27/98 EVI Weatherford Inc 39.85 59.59 41.33 74.50 6.18
03/05/98 05/20/98 XL Connect Solutions Inc -11.11 15.11 22.14 180.70 19.40
03/06/98 07/31/98 Alumax Inc 35.08 33.26 36.25 30.83 52.85
03/09/98 06/05/98 LCI International Inc 22.18 24.21 54.84 133.33 55.20
03/09/98 06/25/98 PriCellular Corp 7.69 16.67 16.06 58.87 23.76
03/10/98 06/05/98 Portec Inc 8.48 13.78 10.35 43.82 13.27
03/11/98 07/16/98 Waste Management Inc 12.62 15.78 15.78 -12.03 5.07
03/12/98 04/20/98 Metromail Corp 32.69 28.37 30.19 117.32 77.49
03/13/98 07/31/98 MedCath Inc 15.15 10.95 34.51 26.67 26.67
03/16/98 08/03/98 American General Hospitality 56.60 58.43 52.01 27.67 37.49
03/16/98 05/28/98 Logic Works Inc 12.96 36.18 57.13 131.25 70.22
03/16/98 07/01/98 360 Communications Co 15.41 30.39 49.84 84.49 68.97
03/17/98 07/31/98 BET Holdings Inc 53.66 58.49 58.24 109.13 17.76
03/17/98 05/27/98 ForeFront Group Inc 17.27 29.36 48.50 258.63 81.91
03/18/98 06/30/98 Medusa Corp 17.16 24.29 35.28 60.58 53.29
03/24/98 08/17/98 Insilco Corp 4.65 11.11 12.85
03/24/98 06/24/98 Walsh International Inc 36.84 53.33 105.29 59.10
03/27/98 07/01/98 Grand Prix Assoc Of Long Beach 11.81 22.06 21.55 42.21 31.37
03/27/98 07/15/98 Intl Specialty Prods 4.29 1.74 14.51 43.14 22.18
03/30/98 05/11/98 Children's Discovery Centers 20.99 16.67 25.64 139.02 28.95
04/02/98 06/30/98 Security Capital Atlantic Inc 14.88 14.88 14.20 10.31 12.56
04/06/98 07/10/98 MoneyGram Payment Systems Inc 11.49 15.67 42.36 87.57 61.40
04/06/98 07/31/98 Zero Corp 16.46 17.99 33.18 84.27 24.56
04/07/98 06/30/98 Beneficial Corp 82.38 82.10 86.06 131.23 84.34
04/07/98 06/30/98 Green Tree Financial Corp 82.51 86.12 94.23 60.39 110.14
04/08/98 05/19/98 Blessings Corp 18.73 18.31 34.94 118.18 41.77
04/09/98 07/27/98 Claremont Technology Group Inc 21.35 77.05 118.18 21.35 60.00
04/09/98 05/15/98 Dart Group Corp 14.29 11.89 19.40 71.81 46.79
04/13/98 07/31/98 Mariner Health Group Inc 6.04 10.88 28.98 139.39 27.42
04/15/98 08/11/98 Harborside Healthcare Corp 18.34 22.70 5.82 117.39 35.59
04/16/98 09/28/98 Award Software International 12.83 21.34 53.12 44.54 96.40
04/17/98 07/21/98 XcelleNet Inc 6.11 12.55 7.73
04/20/98 09/15/98 Atria Communities Inc 2.53 7.29 -0.31 82.02 16.13
04/21/98 08/25/98 PCA International Inc 23.26 17.78 20.46 80.43 19.10
04/21/98 06/24/98 Tracor Inc 9.97 16.79 25.00 100.00 33.89
04/27/98 07/09/98 Fluke Corp 61.73 61.29 57.90 64.38 64.84
04/27/98 08/30/98 Vitalink Pharmacy Services Inc 13.57 12.15 6.51 23.29 6.51
04/27/98 06/01/98 Yuric Systems Inc 11.11 17.40 49.73 268.42 62.55
04/29/98 08/14/98 Neurex Corp 65.56 46.75 41.40 197.27 88.20
05/04/98 07/09/98 Echlin Inc 41.48 42.86 52.78 67.94 49.41
05/04/98 06/29/98 Union Texas Petroleum Holdings 41.46 46.84 36.47 53.64 49.68
05/06/98 08/06/98 Mountbatten Inc 2.46 6.18 4.29 66.86 24.26
05/08/98 06/15/98 Authentic Specialty Foods Inc 6.25 13.33 37.37 20.35
05/13/98 06/26/98 Sage Laboratories Inc 37.26 34.62 35.92 29.63 38.61
05/14/98 09/25/98 New Plan Realty Trust 13.43 15.44 14.29 29.55 11.49
05/18/98 08/19/98 Mercantile Stores Co Inc 9.12 9.59 15.42 56.48 19.40
05/18/98 08/07/98 RP Scherer Corp 17.47 23.34 30.06 83.76 51.76
05/18/98 08/26/98 Viking Office Products Inc 43.86 42.38 44.24 107.16 49.74
05/25/98 10/01/98 US Surgical Corp 7.91 25.73 39.73 35.01 51.62
05/26/98 08/24/98 Hyperion Software Corp 4.97 3.78 -3.57 114.87 -1.79
05/27/98 09/17/98 May & Speh Inc 2.65 12.58 20.35 58.64 34.23
05/28/98 07/07/98 Donnelley Enterprise Solutions 60.77 61.54 83.61 102.41 118.18
Page F-13
Merger Premiums to Market Value Analysis
Mergers with Target Price Equal to or Greater than $10 per Share
Announced and Completed 1/1/96-10/9/98
(continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Date Date
Announced Effective Target Name Target Business Description Acquiror Name
- ------------------------------------------------------------------------------------------------------------------------------------
06/04/98 09/08/98 DSC Communications Corp Dvlp, mnfr digital telecom sys Alcatel Alsthom CGE
06/04/98 07/20/98 Pollo Tropical Inc Own and operate restaurants Carrols Corp
06/10/98 08/18/98 Ceanic Corp Pvd subsea services, products Stolt Comex Seaway SA
06/10/98 09/25/98 Manor Care Inc Own, op nursing homes, hotels Health Care and Retirement
06/12/98 07/21/98 Triangle Pacific Corp Mnfr, whl wood cabinets Armstrong World Industries Inc
06/15/98 08/31/98 Bay Networks Inc Mnfr, whl data networking prods Northern Telecom Ltd (BCE Inc)
06/16/98 08/31/98 Personnel Management Inc Employment agency Linsalata Capital Partners
06/17/98 09/24/98 Intersolv Inc. Develop software products Micro Focus Group PLC
06/17/98 09/08/98 Nimbus CD International Inc Mnfr compact discs Carlton Communications PLC
06/18/98 07/28/98 ARCO Chemical Co (ARCO) Mnfr, whl intermediate chems Lyondell Petrochemical Co
06/18/98 09/24/98 PMT Services Inc Pvd credit card services NOVA Corp
06/19/98 08/31/98 Camco International Inc Mnfr oil, gas field equipment Schlumberger Technology Corp
06/22/98 08/31/98 Broderbund Software Inc Dvlp, whl educational software Learning Co Inc
06/24/98 10/05/98 Penederm Inc Mnfr pharmaceutical products Mylan Laboratories Inc
06/29/98 09/22/98 Dawson Production Services Inc Oil and gas exploration, prodn Key Energy Group Inc
06/29/98 09/30/98 Physio-Control International Mnfr, whl cardiac defibrilator Medtronic Inc
07/01/98 08/20/98 Leeg Inc Provide management services Metzler Group Inc
07/03/98 09/18/98 Saks Holdings (Investcorp Bk) Own and operate dept stores Proffitt's Inc
07/17/98 09/02/98 DeCrane Aircraft Holdings Inc Mnfr avionics components DLJ Merchant Banking Inc
07/20/98 10/06/98 General Signal Corp Mnfr electric control equip SPX Corp
09/29/98 10/07/98 Newmont Gold Co Gold mining Newmont Mining Corp
- ------------------------------------------------------------------------------------------------------------------------------------
Value of Enter-
Trans- prise
Date Date Acquiror action Value
Announced Effective Target Name Business Description ($ mil) ($ mil)
- ------------------------------------------------------------------------------------------------------------------------------------
06/04/98 09/08/98 DSC Communications Corp Mnfr telephone, common equip 4685.30 5084.93
06/04/98 07/20/98 Pollo Tropical Inc Own and operate restaurants 94.60 93.28
06/10/98 08/18/98 Ceanic Corp Pvd oil/gas contracting svcs 222.80 247.21
06/10/98 09/25/98 Manor Care Inc Own, operate nursing homes 2474.40 2986.16
06/12/98 07/21/98 Triangle Pacific Corp Mnfr interior furnishings 1124.30 1124.59
06/15/98 08/31/98 Bay Networks Inc Mnfr telecommunications equip 9268.60 9008.96
06/16/98 08/31/98 Personnel Management Inc Investment firm 34.90 37.50
06/17/98 09/24/98 Intersolv Inc. Manufacture lenses, computers 532.00 511.38
06/17/98 09/08/98 Nimbus CD International Inc Pvd motion picture prodn svcs 264.90 288.46
06/18/98 07/28/98 ARCO Chemical Co (ARCO) Mnfr petrochems, polyolefins 5645.70 6512.54
06/18/98 09/24/98 PMT Services Inc Pvd information retrieval svcs 1266.60 1238.70
06/19/98 08/31/98 Camco International Inc Develop software 3376.30 3307.25
06/22/98 08/31/98 Broderbund Software Inc Pvd serv dev consumer software 424.30 287.22
06/24/98 10/05/98 Penederm Inc Mnfr, whl pharmaceuticals 193.10 190.48
06/29/98 09/22/98 Dawson Production Services Inc Pvd oil well services 348.80 309.40
06/29/98 09/30/98 Physio-Control International Mnfr medical technology prods 529.10 543.04
07/01/98 08/20/98 Leeg Inc Pvd business consulting svcs 294.40 272.58
07/03/98 09/18/98 Saks Holdings (Investcorp Bk) Own and operate dept stores 3282.30 3381.20
07/17/98 09/02/98 DeCrane Aircraft Holdings Inc Merchant banking firm 181.50 174.11
07/20/98 10/06/98 General Signal Corp Mnfr engine components, tools 2318.70 2309.41
09/29/98 10/07/98 Newmont Gold Co Gold, coal mining, oil, gas expl 264.80 4235.41
- ------------------------------------------------------------------------------------------------------------------------------------
Premium
----------------------------------------------------------------------------------
Date Date 1 Day Prior 1 Week Prior 4 Weeks Prior 3 Months Prior 1 Year Prior
Announced Effective Target Name to Annc. Date to Annc. Date to Annc. Date to Annc. Date to Annc. Date
- ------------------------------------------------------------------------------------------------------------------------------------
06/04/98 09/08/98 DSC Communications Corp 81.64 111.91 98.67 46.71 105.08
06/04/98 07/20/98 Pollo Tropical Inc 10.00 7.32 18.12 66.04 37.50
06/10/98 08/18/98 Ceanic Corp 29.56 34.45 79.78 52.38
06/10/98 09/25/98 Manor Care Inc 21.77 25.31 17.97 21.29 (1.47)
06/12/98 07/21/98 Triangle Pacific Corp 26.14 26.50 24.02
06/15/98 08/31/98 Bay Networks Inc 34.97 18.49 44.88 61.74 59.21
06/16/98 08/31/98 Personnel Management Inc 25.49 23.08 23.08 66.23 21.90
06/17/98 09/24/98 Intersolv Inc. 56.16 41.05 52.09 161.01 24.91
06/17/98 09/08/98 Nimbus CD International Inc 6.98 5.75 10.84 8.24 12.20
06/18/98 07/28/98 ARCO Chemical Co (ARCO) 14.22 12.27 3.36 23.20 18.92
06/18/98 09/24/98 PMT Services Inc 21.98 35.54 31.98 57.25 53.65
06/19/98 08/31/98 Camco International Inc 32.57 39.88 19.50 51.78 36.41
06/22/98 08/31/98 Broderbund Software Inc 21.21 16.36 18.96 (19.60) (16.23)
06/24/98 10/05/98 Penederm Inc 38.97 39.52 88.28 76.89 75.12
06/29/98 09/22/98 Dawson Production Services In 40.70 50.54 66.67 29.63 38.61
06/29/98 09/30/98 Physio-Control International 19.57 31.74 31.34 86.44 57.14
07/01/98 08/20/98 Leeg Inc 46.50 48.98 41.77 69.08
07/03/98 09/18/98 Saks Holdings (Investcorp Bk) 34.46 39.02 40.85 39.55 (12.07)
07/17/98 09/02/98 DeCrane Aircraft Holdings Inc 30.50 28.67 33.82 33.33 31.90
07/20/98 10/06/98 General Signal Corp 19.60 22.66 19.40 (13.46) 0.28
09/29/98 10/07/98 Newmont Gold Co (5.16) 20.81 62.37 (44.55) 4.35
Mean: 28.1% 32.7% 39.6% 77.9% 53.2%
Source: Securities Data Company, Inc.; Three month and one-year premiums
calculated using security prices from FactSet Research Systems, Inc. Commercial
banks and other similar financial institutions were excluded for the purpose of
this analysis.
Page F-14
RELATIVE CONTRIBUTION ANALYSIS (a)
($ IN THOUSANDS)
STAR GAS' AVERAGE
GROSS PROFIT
CONTRIBUTION
96-97 26.7%
98-99 28.8%
96-99 27.8%
STAR GAS' AVERAGE
EBITDA CONTRIBUTION
96-97 35.4%
98-99 32.8%
96-99 34.0%
[_] A.G. Edwards analyzed the relative pro forma contribution of both Star Gas
and Petro to the ownership of capital in the pro forma entity based on Star
Gas' and Petro's historical results from operations and their respective
projections.
[GROSS PROFIT CHART APPEARS HERE]
[EBITDA (c) CHART APPEARS HERE]
______________________________________
(a) For purposes of its analysis, A.G. Edwards converted Petro's historical
December 31st fiscal year-end to a September 30th fiscal year-end for
comparison purposes. Petro's projections are based on a December 31st
calendar year end. Other measures of relative contribution analysis are
non-meaningful.
(b) Assumes normalized weather.
(c) Includes only heating oil EBITDA for Petro.
Page G-1
RELATIVE CONTRIBUTION ANALYSIS
($ IN THOUSANDS)
(continued)
FOR STAR GAS' CONTRIBUTION IMPLIED FIRM VALUE
OF APPROXIMATELY 27.8% OF THE
COMBINED ENTITY'S GROSS [PIE CHART APPEARS HERE]
PROFIT AND 34.0% OF THE COMBINED
ENTITY'S EBITDA, IT WILL RECEIVE
APPROXIMATELY 37.1% OF THE
IMPLIED FIRM VALUE.
Page G-2
DISCOUNTED CASH FLOW ANALYSIS
[_] A.G. Edwards performed discounted cash flow
analyses for Petro, Star Gas and Star Gas Pro
Forma using projected tax-adjusted operating cash
flows for 1999 through 2002, terminal values
calculated on 2002 EBITDA, and discount rates
based on the related weighted average cost of
capital.
Assumptions:
[_] Weighted average cost of capital ("WACC")
- Petro Stand Alone of 13.4% to 13.9%
(calculated WACC of 13.6%)
- Star Gas Stand Alone of 6.8% to 7.2%
(calculated WACC of 7.0%)
- Star Gas Pro Forma of 7.3% to 7.7%
(calculated WACC of 7.5%)
[_] Terminal value EBITDA multiple
- Petro Stand Alone of 6.0x to 8.0x (calculated
normalized 1998 EBITDA multiple of 6.5x)
- Star Gas Stand Alone and Star Gas Pro Forma
of 9.0x to 11.0x (calculated normalized 1998
EBITDA multiple of 10.6x)
Page H-1
Discounted Cash Flow Analysis
(continued)
Petro Stand Alone
------------------------------------------------------------
Terminal Value EBITDA Multiple
30 Year
-------------------------------------------------
6.0x 6.5x 7.0x 7.5x 8.0x
------------------------------------------------------------
13.4% $ 64,921 $ 81,662 $ 98,403 $ 115,143 $ 131,884
WACC 13.6% 62,511 79,110 95,709 112,308 128,908
13.9% 60,124 76,583 93,042 109,502 125,961
------------------------------------------------------------
Star Gas Stand Alone
------------------------------------------------------------
Terminal Value EBITDA Multiple
30 Year
-------------------------------------------------
9.0x 9.5x 10.0x 10.5x 11.0x
------------------------------------------------------------
6.8% $103,675 $110,428 $117,181 $ 123,935 $ 130,688
WACC 7.0% 102,537 109,240 115,942 122,645 129,347
7.2% 101,410 108,062 114,714 121,367 128,019
------------------------------------------------------------
Star Gas Pro Forma
------------------------------------------------------------
Terminal Value EBITDA Multiple
30 Year
-------------------------------------------------
9.0x 9.5x 10.0x 10.5x 11.0x
------------------------------------------------------------
7.3% $139,743 $148,282 $156,820 $ 165,358 $ 173,896
WACC 7.5% 138,338 146,815 155,291 163,767 172,243
7.7% 136,946 145,360 153,775 162,190 170,605
------------------------------------------------------------
Page H-2
DISCOUNTED CASH FLOW ANALYSIS
PETRO -- STAND ALONE
EXCLUDING DISTRIBUTIONS FROM STAR GAS
($ IN THOUSANDS)
====================================================================================================================================
NORMALIZED
CASH FLOW SUMMARY (a): 1998 1999 2000 2001 2002 TERMINAL
- ---------------------- ------------ ------ ------ ------ ------ ----------
EBITDA $46,900 $48,706 $51,196 $53,390 $55,385
Taxes (500) (500) (500) (500) (500)
Maintenance capital expenditures (3,000) (3,060) (3,121) (3,184)
Working capital increases (b) (500) (500) (500) (500)
------- ------- ------- -------
Net operating cash flow (free cash flow) 44,706 47,136 49,269 51,201
--------------
WEIGHTED AVERAGE COST OF CAPITAL (C) 13.6%
--------------
--------------
Terminal EBITDA multiple (d) 6.5x
--------------
Discount factor 0.8799 0.7742 0.6812 0.5994 0.5994
Terminal value (e) $360,003
--------------
PRESENT VALUE $355,875 $39,337 $36,494 $33,564 $30,691 $215,791
-------------- ------- ------- ------- ------- --------
Current net debt and preferred stock (f) ($276,765)
--------------
--------------
NET PRESENT VALUE OF EQUITY $ 79,110
--------------
___________________________________________________________
(a) Based on management projections.
(b) A.G. Edwards' estimate.
(c) Based on comparable companies' WACC.
(d) Petro's current firm value of $304.4 million/$46.9 million normalized
1998 EBITDA = 6.5x, which represents a multiple of current year
normalized EBITDA.
(e) Terminal value calculated using EBITDA multiple.
(f) Net of $33.2 million of cash. Market value of debt used.
Page H-3
DISCOUNTED CASH FLOW ANALYSIS
PETRO - STAND ALONE USING STAR GAS' PRO FORMA WACC
EXCLUDING DISTRIBUTIONS FROM STAR GAS
($ in thousands)
====================================================================================================================================
NORMALIZED
CASH FLOW SUMMARY (a): 1998 1999 2000 2001 2002 TERMINAL
- ----------------- ---------- ---------- ---------- ---------- ---------- ----------
EBITDA $46,900 $48,706 $51,196 $53,390 $55,385
Taxes (500) (500) (500) (500) (500)
Maintenance capital expenditures (3,000) (3,060) (3,121) (3,184)
Working capital increases (b) (500) (500) (500) (500)
---------- ---------- ---------- ----------
Net operating cash flow
(free cash flow) 44,706 47,136 49,269 51,201
-----------------
WEIGHTED AVERAGE COST OF CAPITAL (c) 7.5%
-----------------
-----------------
TERMINAL EBITDA MULTIPLE (d) 6.5x
-----------------
Discount factor 0.9299 0.8647 0.8041 0.7477 0.7477
Terminal value (e) $360,003
-----------------
PRESENT VALUE $429,392 $41,571 $40,758 $39,615 $38,282 $269,166
----------------- ---------- ---------- ---------- ---------- ----------
Current net debt and preferred
stock (f) ($276,765)
-----------------
=================
NET PRESENT VALUE OF EQUITY $152,627
=================
- ------------------------------------------------------------------------------------------------------------------------------------
(a) Based on management projections.
(b) A.G. Edwards' estimate.
(c) Based on comparable companies' WACC.
(d) Petro's current term value of $304.4 million/$46.9 million normalized 1998
EBITDA = 6.5x, which represents a multiple of current year normalized
EBITDA.
(e) Terminal value calculated using EBITDA multiple.
(f) Net of $33.2 million of cash. Market value of debt used.
Page H - 4
DISCOUNTED CASH FLOW ANALYSIS
STAR GAS - STAND ALONE
($ IN THOUSANDS)
==========================================================================================================================
NORMALIZED
INCOME STATEMENT SUMMARY (a): 1998 1999 2000 2001 2002 TERMINAL
- ---------------------------- ---- ---- ---- ---- ---- --------
EBITDA 22,135 24,491 26,029 27,566 29,104
% increase 10.6% 6.3% 5.9% 5.6%
Net income 2,799 3,297 3,281 3,439 3,761
CASH FLOW SUMMARY:
- -----------------
After-tax EBI 12,108 12,658 13,317 14,141
Depreciation and amortization 12,358 13,346 14,224 14,938
Maintenance capital expenditures (2,632) (2,679) (2,728) (2,777)
Working capital increases (b) (500) (500) (500) (500)
------- ------- ------- -------
Net operating cash flow (free cash flow) 21,334 22,825 24,313 25,802
-------------
WEIGHTED AVERAGE COST OF CAPITAL (c) 7.0%
-------------
-------------
TERMINAL EBITDA MULTIPLE (d) 10.6x
-------------
Discount factor 0.9342 0.8728 0.8154 0.7618 0.7618
Terminal value (e) $308,502
-------------
PRESENT VALUE $314,355 $19,931 $19,922 $19,825 $19,656 $235,020
------------- ------- ------- ------- ------- --------
Current net debt (f) ($109,285)
-------------
NET PRESENT VALUE OF EQUITY $205,070
=============
Common units/Total units (g) 60.5%
=============
EQUITY VALUE TO COMMON UNITS (h) $123,985
=============
- --------------------------------------------------------------------------------
(a) Based on management projections.
(b) A.G. Edwards' estimate.
(c) Based on comparable companies' WACC.
(d) Star's current firm value of $234.1 million $22.1 million normalized 1998
EBITDA = 10.6x, which represents a multiple of current year normalized
EBITDA.
(e) Terminal value calculated using EBITDA multiple.
(f) Represents total projected 9/30/98 debt less cash.
(g) Total units include common, subordinated and GP units.
(h) Current market value of common units is 3,858 units* $19.563 unit price =
$75,472
Page H-5
Discounted Cash Flow Analysis
Star Gas - Pro Forma
($ in thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
Normalized
Income Statement Summary (a): 1998 1999 2000 2001 2002 Terminal
- ------------------------ ---------- -------- -------- --------- ---------- ------------
EBITDA 69,535 73,697 77,725 81,456 84,989
% increase 6.0% 5.5% 4.8% 4.3%
Net income (102) (456) (4,315) (7,751) (10,944)
Cash Flow Summary:
- ------------------
After-tax EBI 29,012 27,234 25,266 23,258
Depreciation and amortization 43,661 49,466 55,166 60,705
Maintenance capital expenditures (5,632) (5,739) (5,849) (5,961)
Working capital increases (b) (1,000) (1,000) (1,000) (1,000)
-------- -------- --------- ----------
Net operating cash flow (free cash flow) 66,041 69,961 73,583 77,002
----------------
Weighted average cost of capital (c) 7.5%
----------------
----------------
Terminal EBITDA multiple (d) 10.6
----------------
Discount factor 0.9299 0.8647 0.8041 0.7477 0.7477
Terminal value (e) $900,883
----------------
Present value $912,213 $61,410 $60,494 $59,165 $57,573 $673,571
---------------- ------- ------- ------- ------- --------
Less net debt (f) ($291,997)
----------------
Net present value of equity $620,216
================
Original common units/Total units (g) 26.7%
----------------
Equity value to common units (h) $165,462
----------------
- ------------------------------------------------------------------------------------------------------------------------------------
(a) Based on management projections. See Appendix K for model.
(b) A.G. Edwards' estimate.
(c) Based on comparable companies' WACC.
(d) Star's current firm value of $234.1 million/$22.1 million normalized 1998
EBITDA = 10.6x, which represents a multiple of current year normalized
EBITDA.
(e) Terminal value calculated using EBITDA multiple.
(f) Represents total proforma projected 9/30/98 debt less cash and cash
collateral.
(g) Total units include common, newly issued common, senior subordinated,
subordinated and GP units.
(h) Current market value of common units is 3,858 units *$19.563 unit price =
$75,472.
Page H-6
DISCOUNTED CASH FLOW ANALYSIS
PETRO - STAND ALONE
WEIGHTED AVERAGE COST OF CAPITAL DERIVATION
($ in millions)
================================================================================
TOTAL IMPLIED TOTAL TOTAL
MARKET UNIT TOTAL MARKET DEBT/ DEBT AS % UN-
LEVERED VAL. DEBT PRICE AT UNITS VALUE OF TOTAL OF TOTAL LEVERED
COMPARABLE COMPANY BETA (a) (BK = MKT) (10/14/98) OUT. (MIL) EQUITY EQUITY CAPITAL BETA
- ------------------------------------------------------------------------------------------------------------------------------------
AmeriGas Partners, L.P. 0.42 $711.1 $24.125 41.9 $1,031.2 69.0% 40.8% 0.249
Cornerstone Propane Partners, L.P. 0.45 240.9 18.000 19.9 365.2 66.0% 39.8% 0.271
Ferrellgas Partners, L.P. 0.46 504.1 20.000 31.3 638.6 78.9% 44.1% 0.257
Heritage Propane Partners, L.P. 0.42 177.8 20.813 8.5 180.0 98.8% 49.7% 0.211
National Propane Partners, L.P. 0.61 145.5 9.438 11.2 108.2 134.5% 57.4% 0.260
Star Gas Partners, L.P. 0.39 109.8 19.563 6.3 124.9 87.9% 46.8% 0.208
Suburban Propane Partners, L.P. 0.40 427.9 19.625 28.7 575.3 74.4% 42.7% 0.229
----------------------------------------------------------
Petro's capitalization - at market
Comparable group's average unlevered beta: 0.24 Total debt (b) $310.0 91.8%
Petro's debt - to - equity ratio: 1123.5% Common equity 27.6 8.2%
------ -----
Petro's debt as a percent of total capital: 91.8% $337.6 100.0%
----------------------------------------------------------
Comparable group's beta relevered for Petro's capital structure: 2.945%
=====
DERIVATION OF WEIGHTED AVERAGE COST OF CAPITAL:
- ----------------------------------------------
MARKET RISK PREMIUM RANGE (e)
---------------------------------
11.3% 12.3% 13.3%
---------------------------------
Petro's theoretical levered beta (d): 2.945
Assumed % of equity in Petro's capital structure: 8.2%
Risk - free rate of return (c): 4.6%
Petro's cost of equity range (at various market risk premiums): 37.9% 40.8% 43.8%
==== ==== ====
Petro's assumed tax rate: 0.0%
Assumed % of debt in capital structure (b): 91.8%
Petro's estimated cost of debt (f): 11.2%
Petro's estimated after - tax cost of debt: 11.2% 11.2% 11.2% 11.2%
---------------------------------
Petro's weighted average cost of capital range (g): 13.4% 13.6% 13.9%
---------------------------------
_______________________________________________
(a) Source: Bloomberg. 143 week (maximum weekly time period allowed, or the
number of weeks available, which may be less than 143) adjusted beta
relative to the S&P 500 index.
(b) Includes preferred stock; not net of cash.
(c) Ten - year Treasury rate on October 14, 1998.
(d) Bloomberg's reported beta for Petro is .60.
(e) Ibbotson Associates 1997. Total returns for small company stocks of 17.7%
minus the risk-free rate.
(f) Based on Petro's current debt structure.
(g) Calculation based upon use of the capital Asset Pricing Model (CAPM).
Page H-7
Discounted Cash Flow Analysis
Star Gas -- Stand Alone
Weighted Average Cost of Capital Derivation
($ in millions)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Implied Total Total
Market Unit Total Market Debt/ Debt as % Un-
Levered Val. Debt Price at Units Value of Total of Total levered
Comparable Company Beta (a) (Bk=Mkt) (10/14/98) Out. (Mil) Equity Equity Capital Beta
- ------------------------------------------------------------------------------------------------------------------------------------
AmeriGas Partners, L.P. 0.42 $711.1 $24.125 41.9 $1,031.2 69.0% 40.8% 0.249
Cornerstone Propane Partners, L.P. 0.45 240.9 18.000 19.9 365.2 66.0% 39.8% 0.271
Ferrellgas Partners, L.P. 0.46 504.1 20.000 31.3 638.6 78.9% 44.1% 0.257
Heritage Propane Partners, L.P. 0.42 177.8 20.813 8.5 180.0 98.8% 49.7% 0.211
National Propane Partners, L.P. 0.61 145.5 9.438 11.2 108.2 134.5% 57.4% 0.260
Star Gas Partners, L.P. 0.39 109.8 19.563 6.3 124.9 87.9% 46.8% 0.208
Suburban Propane Partners, L.P. 0.40 427.9 19.625 28.7 575.3 74.4% 42.7% 0.229
Star's capitalization -
at market (b)
Comparable group's average unlevered beta: 0.24 Total debt $109.8 46.8%
Star's debt-to-equity ratio (b): 87.9% Common equity 124.9 53.2%
Star's debt as a percent of total capital (b): 46.8% --------- -----
Comparable group's beta relevered for Star's capital structure 0.378% $234.6 100.0%
=====
Derivation of Weighted Average Cost of Capital: Market Risk Premium Range (d)
- ---------------------------------------------- --------------------------------------
11.3% 12.3% 13.3%
--------------------------------------
Star's theoretical levered beta: 0.378
Assumed % of equity in Star's capital structure (b): 53.2%
Risk-free rate of return (c): 4.6%
Star's cost of equity range (at various market risk premiums): 8.9% 9.3% 9.6%
Star's assumed tax rate: 35.0% ==== ==== ====
Assumed % of debt in capital structure (b): 46.8%
Star's estimated cost of debt (e): 6.9%
Star's estimated after-tax cost of debt: 4.5% 4.5% 4.5% 4.5%
--------------------------------------
Star's weighted average cost of capital range (f): 6.8% 7.0% 7.2%
- ----------------------------------------
(a) Source: Bloomberg. 143 week (maximum weekly time period allowed, or the
number of weeks available, which may be less than 143) adjusted beta
relative to the S&P 500 Index.
(b) Market value of debt is assumed to equal book value; debt is not net of
cash.
(c) Ten-year Treasury rate on October 14, 1998.
(d) Ibbotson Associates 1997. Total returns for small company stocks of 17.7%
minus the risk-free rate.
(e) Based on Star current debt structure.
(f) Calculation based upon use of the Capital Asset Pricing Model (CAPM).
Page H-8
Discounted Cash Flow Analysis
Star Gas - Pro Forma
Pro Forma Weighted Average Cost of Capital Derivation
($ in millions)
- ----------------------------------------------------------------------------------------------------------------------------------
Total Implied Total Total
Market Unit Total Market Debt/ Debt as % Un-
Levered Val. Debt Price at Units Value of Total of Total levered
Comparable Company Beta (a) (Bk = Mkt) (10/14/98) Out. (Mil) Equity Equity Capital Beta
- ----------------------------------------------------------------------------------------------------------------------------------
AmeriGas Partners, L.P. 0.42 $711.1 $24.125 41.9 $1,031.2 69.0% 40.8% 0.249
Cornerstone Propane Partners, L.P. 0.45 240.9 18.000 19.9 365.2 66.0% 39.8% 0.271
Ferrellgas Partners, L.P. 0.46 504.1 20.000 31.3 638.6 78.9% 44.1% 0.257
Heritage Propane Partners, L.P. 0.42 177.8 20.813 8.5 180.0 98.8% 49.7% 0.211
National Propane Partners, L.P. 0.61 145.5 9.438 11.2 108.2 134.5% 57.4% 0.260
Star Gas Partners, L.P. 0.39 109.8 19.563 6.3 124.9 87.9% 46.8% 0.208
Suburban Propane Partners, L.P. 0.40 427.9 19.625 28.7 575.3 74.4% 42.7% 0.229
Comparable group's average unlevered beta: 0.24 -------------------------------------------
Pro forma debt - to - equity ratio (b): 113.5% Pro forma capitalization - at market (b)
Pro forma debt as a percent of total Total debt $313.9 53.2%
capital (b): 53.2% Total equity 276.5 46.8%
Comparable group's beta relevered for ------ -----
Pro Forma capital structure 0.418 $590.5 100.0%
====== --------------------------------------------
Derivation of Weighted Average Cost of Capital: Market Risk Premium Range (d)
- ----------------------------------------------- -----------------------------
Pro forma theoretical levered beta: 0.418 11.3% 12.3% 13.3%
Assumed % of equity in Pro forma capital -----------------------------
structure (b): 46.8%
Risk - free rate of return (c): 4.6%
Pro forma cost of equity range (at various
market risk premiums): 9.3% 9.8% 10.2%
Pro forma assumed tax rate: 35.0% ===== ===== =====
Assumed % of debt in capital structure (b): 53.2%
Pro forma estimated cost of debt (e): 8.6%
Pro forma estimated after - tax cost of debt: 5.6% 5.6% 5.6% 5.6%
-----------------------------
Pro forma weighted average cost of capital range (f): 7.3% 7.5% 7.7%
- --------------------------------------------------------------- -----------------------------
(a) Source: Bloomberg. 143 week (maximum weekly time period allowed, or the
number of weeks available, which may be less than 143) adjusted beta
relative to the S&P 500 index.
(b) Market value of debt is assumed to equal book value. See page C-6 for
equity calculation.
(c) Ten-Year Treasury rate on October 14, 1998.
(d) Ibbotson Associates 1997. Total returns for small company stocks of 17.7%
minus the risk-free rate.
(e) Based on Pro forma debt structure.
(f) Calculation based upon use of the Capital Asset Pricing Model (CAPM).
Page H-9
COMPARABLE TRANSACTIONS ANALYSIS
FIRM VALUATION
[_] A.G. Edwards noted that public disclosure regarding transactions in the
retail home heating oil distribution industry was extremely limited.
[_] A.G. Edwards analyzed the financial terms related to divestitures by
Petro of certain of its retail home heating oil branches and compared
them to the implied multiples of the aggregate purchase price of Petro's
heating oil assets.
[_] Petro has sold three branches for an average EBITDA multiple of 9.0x.
[_] A.G. Edwards calculated the purchase price of Petro's heating oil assets
and calculated multiples based on Petro's EBITDAs.
========================================================================
PURCHASE PRICE OF HEATING OIL ASSETS
------------------------------------
Equity purchase price of heating oil assets
including CUs (see page C-5) $25,549
Cost of Debt to be Redeemed ($206,250 + $2,844 premium) 209,094
Cost of Debt to be Assumed 69,646
Cost of Preferred stock at Redemption Value 31,767
Consent Fees 2,110
Transaction Fees 19,343
---------
Aggregate purchase price of heating oil assets $ 357,509
=========
Multiples
----------------------------------
Multiples Notes
-------------- ----------------------------------------
1997 Normalized EBITDA (a) 43,040 8.3 x As a multiple of aggregate transaction value
Normalized 1998 EBITDA budget (a) 46,900 7.6 x As a multiple of aggregate transaction value
1999 Projected EBITDA (a) 48,706 7.3 x As a multiple of aggregate transaction value
--------------
_______________________________________
(a) Calculated as gross profit minus SG&A expense and direct delivery
expense.
Page I-1
PUBLIC COMPANY ANALYSIS
[__] A.G. Edwards compared certain financial and market information of Star
Gas on a historical and pro forma basis to that of certain public
propane master limited partnerships which A.G. Edwards deemed relevant
for the purposes of this analysis. In addition to Star Gas, A.G. Edwards
reviewed the trading multiples from a total of six master limited
partnerships.
[__] The selected propane master limited partnerships are as follows:
- AmeriGas Partners, L.P. - Heritage Propane Partners, L.P.
- Cornerstone Propane Partners, L.P. - National Propane Partners, L.P.
- Ferrellgas Partners, L.P. - Suburban Propane Partners, L.P.
[__] No company used in the analysis is identical to Star Gas.
----------------------------------------------------------------------------------------------------
PUBLIC COMPARABLE COMPANIES (a)
----------------------------------------------------------------------------------------------------
PUBLIC PUBLIC
PRO FORMA COMPANY COMPANY
STAR STAR MEDIANS RANGES
----------------------------------------------------------------------------------------------------
Yield 11.2% 11.8% 10.1% 9.1% to 22.3%
Firm value/LTM EBITDA 12.5x (b) 10.0x (b) 11.6x 9.0x to 12.7x
Firm value/1999E EBITDA 9.6x 7.7x 9.2x 8.4x to 11.1x
Equity Market Cap/LTM DCF 15.4x (c) 12.5x (c) 13.4x 8.1x to 15.3x
Equity Market Cap/1999E DCF 9.6x 7.4x 9.8x 4.9x to 12.2x
LTM common unit coverage 1.0x (d) 0.9x (d) 1.5x 0.6x to 1.6x
1999E common unit coverage 1.5x 1.5x 2.1x 1.1x to 2.3x
LTM total unit coverage 0.6x (d) 0.7x (d) 0.7x 0.4x to 1.2x
1999E total unit coverage 0.9x 1.1x 1.0x 0.7x to 1.2x
---------------------------------------------------------------------------------------------------
(a) Public comparable companies include: APU, CNO, FGP,HPG, NPL AND
SPH.
(b) Firm value/adjusted for actual 1998 budget EBITDA.
(c) Equity market cap/adjusted for actual 1998 budget EBITDA.
(d) Adjusted for actual 1998 budget.
Page J-1
Public Company Analysis
($ in millions, except per unit data)
- ------------------------------------------------------------------------------------------------------------------------
Closing Implied
Price Market Implied Common
on Value Firm Distribution Units/
Company Ticker (10/14/98) of Equity Value per Unit Yield Total Units
- ------------------------------------------------------------------------------------------------------------------------
Star Gas Partners, L.P. (a) SGU $19.563 $ 124.9 $ 234.1 $2.20 11.2% 60.5%
AmeriGas Partners, L.P. APU 24.125 1,031.2 1,739.4 2.20 9.1% 52.8%
Cornerstone Propane Partners, L.P. (c) CNO 18.000 365.2 596.7 2.16 12.0% 66.8%
Ferrellgas Partners, L.P. (d) FGP 20.000 638.6 1,131.2 2.00 10.0% 47.0%
Heritage Propane Partners, L.P. HPG 20.813 180.0 354.6 2.00 9.6% 56.3%
National Propane Partners, L.P. NPL 9.438 108.2 250.9 2.10 22.3% 59.6%
Suburban Propane Partners, L.P. (c) SPH 19.625 575.3 922.5 2.00 10.2% 75.1%
- ------------------------------------------------------------------------------------------------------------------------
Mean 12.2% 59.6%
Median 10.1% 58.0%
- ------------------------------------------------------------------------------------------------------------------------
Pro Forma $19.563 $276.5 (f) $568.5 (g) $2.30 11.8% 74.9%
LTM Common LTM Total FY99E FY99E Common FY99E Total
Company Unit Coverage Unit Coverage DCF/Unit Unit Coverage Unit Coverage
- --------------------------------------------------------------------------------------------------------------------------------
Star Gas Partners, L.P. 1.0x (b) 0.6x (h) $2.02 1.5x 0.9x
AmeriGas Partners, L.P. 1.4x 0.8x 2.39 2.1x 1.1x
Cornerstone Propane Partners, L.P. 0.8x 0.6x 1.51 1.1x 0.7x
Ferrellgas Partners, L.P. 1.5x 0.7x 2.15 2.3x 1.1x
Heritage Propane Partners, L.P. 1.5x 0.8x 2.38 2.2x 1.2x
National Propane Partners, L.P. 0.6x 0.4x 1.87 NA 0.9x
Suburban Propane Partners, L.P. 1.6x 1.2x 1.98 1.3x 1.0x
- --------------------------------------------------------------------------------------------------------------------------------
Mean 1.3x 0.7x 1.8x 1.0x
Median 1.5x 0.7x 2.1x 1.0x
- --------------------------------------------------------------------------------------------------------------------------------
Pro Forma 0.9x (b) 0.7x (b) 2.60 1.5x 1.1x
- -------------------------------------------------------
1999 estimates per A.G. Edwards' research, except for Star and Pro Forma. 1999
estimates for National Propane from Merrill Lynch research report dated
July 29, 1998.
Implied Firm Value equals common, subordinated and GP units multiplied by the
market price of common units plus debt, less cash.
(a) Pro Forma for the Pearl Gas acquisition and the common unit offering.
(b) For Star and Pro Forma only, LTM DCF figures are adjusted for actual 1998
budget DCF estimates.
(c) Financial information pro forma for common unit offering. Maintenance
capital expenditures assumed to be 8% of EBITDA due to lack of disclosure.
(d) Maintenance capital expenditures assumed to be 8% of EBITDA due to lack of
disclosure.
(e) Financial figures exclude $5.1 million gain from sale of minority interest.
(f) Calculated as: (10,841 common units X $19,563)+(2,767 senior subordinated
units X $18.52)+ (857 junior subordinated and GP units X $15.41).
(g) $276.5 in equity plus $313.9 pro forma debt, less $21.9 cash and cash
collateral.
Page J-2
PUBLIC COMPANY ANALYSIS
($ IN MILLIONS, EXCEPT PER UNIT DATA)
(continued)
- --------------------------------------------------------------------------------
LONG TERM LTM FIRM VALUE/ FIRM VALUE/ EQUITY EQUITY
DEBT/ EBITDA/ LTM 1999E MARKET CAP/ MARKET CAP/
FIRM VALUE INT. EXP. EBITDA EBITDA LTM DCF 1999E DCF
-------------------------------------------------------------------------------------------
STAR GAS PARTNERS, L.P. 44.8% 2.4x (a) 12.5x (a) 9.6x 15.4x (a) 9.6x
AmeriGas Partners, L.P. 39.9% 2.2x 11.8x 9.9x 14.8x 10.4x
Cornerstone Propane Partners, L.P. 39.7% 2.4x 12.7x 11.1x 15.3x 12.2x
Ferrellgas Partners, L.P. 44.1% 2.1x 11.4x 9.0x 14.2x 9.5x
Heritage Propane Partners, L.P. 49.8% 2.6x 9.7x 9.0x 12.6x 8.8x
National Propane Partners, L.P. 55.2% 2.6x 12.7x 9.3x 12.0x 4.9x
Suburban Propane Partners, L.P. 46.4% 3.3x 9.0x 8.4x 8.1x 10.1x
- ---------------------------------------------------------------------------------------------------------------------------
MEAN 45.8% 2.6x 11.2x 9.5x 12.9x 9.3x
MEDIAN 45.2% 2.5x 11.6x 9.2x 13.4x 9.8x
- ---------------------------------------------------------------------------------------------------------------------------
PRO FORMA 55.2% 2.0x (a) 10.0x (a) 7.7x 12.5x (a) 7.4x
______________________________________________________________________________
EBITDA is defined as net income (loss) before extraordinary items plus interest,
income taxes, depreciation and amortization, impairment expense, and other
non-recurring and non-operating items.
(a) For Star and Pro forma only, LTM figures use adjusted for actual 1998 budget
estimates.
Page J-3
PUBLIC COMPANY DESCRIPTIONS
AMERIGAS PARTNERS, L.P. AmeriGas Partners operates the largest retail
propane distribution business in the U.S.,
serving approximately 968,000 residential,
commercial, industrial, agricultural, and
motor-fuel customers in 45 states. AmeriGas
Partners also sells propane-related supplies
and equipment, including home appliances. The
company owns or leases a fleet of about 385
transport trucks, 680 railroad tank cars, and
2,300 bobtail and rack trucks. It also owns or
leases propane-storage facilities in Arizona
and Rhode Island. AmeriGas Propane, a wholly
owned subsidiary of UGI Corp., owns 58% of
AmeriGas Partners.
[GRAPH APPEARS HERE]
CORNERSTONE PROPANE Cornerstone Propane Partners, L.P. distributes
PARTNERS, L.P. propane for residential, commercial,
industrial, agricultural and other retail uses;
markets and distributes propane and natural gas
liquids; services propane heating systems and
appliances; and sells propane-related supplies,
appliances and other equipment. It is the fifth
largest retail marketer of propane in the U.S.
in terms of volume. The partnership's
operations are concentrated in the east coast,
south-central and west coast regions of the
U.S.
[GRAPH APPEARS HERE]
Page J-4
PUBLIC COMPANY DESCRIPTIONS
(continued)
FERRELLGAS PARTNERS, L.P. Ferrellgas is the second largest U.S.
distributor of propane serving more than
800,000 residential and commercial customers.
The company also engages in propane/natural
gas trading, wholesale propane marketing, and
chemical feedstock marketing. It markets its
products primarily in the Midwest, the Great
Lakes area, and the Southeast. With a
delivery fleet of approximately 4,000
vehicles, Ferrellgas sells almost 700 million
gallons of fuel annually to its retail
customers, which represents about 8% of all
retail propane bought in the U.S. The company
has acquired more than 100 companies in 11
years.
[GRAPH APPEARS HERE]
HERITAGE PROPANE Heritage Propane Partners distributes propane
PARTNERS, L.P. to more than 220,000 residential, commercial,
industrial, and agricultural customers. The
propane is used primarily for heating,
drying, cooking, as fuel for engines, as a
cutting gas for mining operations, and for
curing tobacco. The company's retail
operations distribute propane to customers in
23 states in the western, southeastern, and
northeastern U.S. The company also
distributes wholesale propane and sells,
installs, and repairs propane-related
equipment. Heritage has acquired 40 retail
propane operations since 1989, bringing
annual propane sales to over 125 million
gallons.
[GRAPH APPEARS HERE]
Page J-5
PUBLIC COMPANY DESCRIPTIONS
(continued)
NATIONAL PROPANE PARTNERS, L.P. National Propane L.P. markets propane
on a retail basis to residential,
commercial, industrial and agricultural
customers and dealers in 25 states; and
also sells propane-related supplies and
equipment, including home and
commercial appliances. It is the sixth
largest retail marketer of propane in
the U.S. in terms of volume, supplying
approximately 250,000 active retail and
wholesale customers in 25 states
through 166 service centers located in
24 states. Operations are concentrated
in the Midwest, Northeast, Southeast
and Southwest regions of the
U.S.
[GRAPH APPEARS HERE]
SUBURBAN PROPANE PARTNERS, L.P. Suburban Propane Partners markets and
distributes propane to residential,
commercial, industrial and agricultural
customers through a retail distribution
network consisting of 352 district
locations in 41 states. The company,
the third largest retail marketer of
propane in the U.S., serves over
730,000 active customers primarily
located in the east and west coast
regions of the country. Suburban
Propane also sells, installs and
services equipment related to its
propane distribution business,
including heating and cooking
appliances and, at some locations,
propane fuel systems.
[GRAPH APPEARS HERE]
Page J-6
TRANSACTIONS SUMMARY AND ASSUMPTIONS
(In thousands except per share and per unit data)
- ------------------------------------------------------------------------------------------------------------------------------------
SUMMARY CASH FLOW AND COVERAGE ANALYSIS
- ------------------------------------------------------------------------------------------------------------------------------------
($ on per Unit basis)
Estimated Normalized Projected
------------------------------------------------------------
1998 1998 1999 2000 2001 2002
----------- ------------ ----------- ------------ ----------- ------------
STAR STAND ALONE
EBITDA $ 18,781 $ 22,135 $ 24,491 $ 26,029 $ 27,566 $ 29,104
Interest Expense (7,922) (7,662) (8,811) (9,377) (9,878) (10,380)
Maintenance CapEx (2,710) (2,710) (2,632) (2,679) (2,728) (2,777)
Other (25) (25) (25) (25) (25) (25)
----------- ------------ ----------- ------------ ----------- ------------
Distributable Cash Flow $ 8,124 $ 11,738 $ 13,023 $ 13,948 $ 14,935 $ 15,922
=========== ============ =========== ============ =========== ============
DCF per Common Unit $ 2.11 $ 3.04 $ 3.32 $ 3.42 $ 3.51 $ 3.62
DCF / Common Unit MQD 0.96 x 1.38 x 1.51 x 1.55 x 1.60 x 1.65 x
DCF per Total Unit $ 1.27 $ 1.84 $ 2.02 $ 2.11 $ 2.20 $ 2.30
DCF / Total MQD 0.58 x 0.84 x 0.92 x 0.96 x 1.00 x 1.04 x
Indicated Distribution per Common
Unit $ 2.20 $ 2.20 $ 2.20 $ 2.20 $ 2.20 $ 2.20
STAR PRO FORMA
EBITDA
------
Star $ 18,781 $ 22,135 $ 24,491 $ 26,029 $ 27,566 $ 29,104
Petro 37,650 46,900 48,706 51,196 53,390 55,385
Synergies 500 500 500 500 500 500
----------- ------------ ----------- ------------ ----------- ------------
Total 56,911 69,535 73,697 77,725 81,456 84,989
----------- ------------ ----------- ------------ ----------- ------------
Interest Expense (28,307) (28,253) (29,468) (31,549) (33,017) (34,202)
Maintenance CapEx (5,486) (5,486) (5,632) (5,739) (5,849) (5,961)
Other (1,025) (1,025) (1,025) (1,025) (1,025) (1,025)
----------- ------------ ----------- ------------ ----------- ------------
Distributable Cash Flow 22,093 34,771 37,572 39,412 41,565 43,801
=========== ============ =========== ============ =========== ============
DCF per Common Unit $ 2.04 $ 3.21 $ 3.47 $ 3.54 $ 3.51 $ 3.45
DCF per Sr. Sub & Common Unit $ 1.62 $ 2.56 $ 2.76 $ 2.78 $ 2.73 $ 2.73
DCF per Total Unit $ 1.53 $ 2.40 $ 2.60 $ 2.62 $ 2.59 $ 2.59
Indicated Distribution per Common $ 2.30 $ 2.30 $ 2.30 $ 2.30 $ 2.30 $ 2.30
Unit
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
ACCRETION/DILUTION
- ------------------------------------------------------------------------------------------------------------------------------------
DCF per Unit - Star Stand Alone $ 1.27 $ 1.84 $ 2.02 $ 2.11 $ 2.20 $ 2.30
DCF per Unit - Pro Forma $ 1.53 $ 2.40 $ 2.60 $ 2.62 $ 2.59 $ 2.59
- ------------------------------------------------------------------------------------------------------------------------------------
Accretive ($/Unit) $ 0.25 $ 0.56 $ 0.58 $ 0.51 $ 0.39 $ 0.29
Accretive (%) 20.0% 30.7% 28.6% 24.1% 17.5% 12.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Pro Forma Heating Oil DCF per Unit $ 3.06 $ 3.02 $ 2.87 $ 2.79
DPUs Issued as Sr Sub Units at Beg of
Year - - - 303 303 -
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Pro Forma Credit Analysis
- ------------------------------------------------------------------------------------------------------------------------------------
EBITDA/Interest 2.01 x 2.46 x 2.50 x 2.46 x 2.47 x 2.48 x
LT Debt/EBITDA 5.43 4.45 4.68 4.73 4.72 4.71
LT Debt/EBITDA (Pro Forma for
Full-Year Acquisitions) 5.27 4.32 4.44 4.50 4.50 4.50
# of Units Issued to Meet Debt
Covenant - - - 574 846 874
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Pro Forma Coverage Ratios
- ------------------------------------------------------------------------------------------------------------------------------------
MQD Coverage
------------
Common Unit 0.89 x 1.39 x 1.51 x 1.54 x 1.53 x 1.50 x
Senior Subordinated Units 0.71 1.11 1.20 1.21 1.19 1.18
Total Unit 0.66 1.05 1.13 1.14 1.12 1.12
Indicated Distribution Coverage
-------------------------------
Common Unit 0.89 x 1.39 x 1.51 x 1.54 x 1.53 x 1.50 x
Senior Subordinated Unit 0.71 1.11 1.20 1.21 1.19 1.18
Total Unit 0.66 1.05 1.13 1.14 1.12 1.12
- ------------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
CURRENT MODEL ASSUMPTIONS
- -------------------------------------------------------------------------------------------------------------
Scenario Version 30-yrs, $30mm @ 4.75x mid-year, $.01 '99, $.005 '00-'01, flat att.
Petro Acqs/yr $30,000
Star Acqs/yr $10,000 G.P. Interest Subordinate
Price per Petro Share $ 2.42
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
EQUITY RESTRUCTURING
- -------------------------------------------------------------------------------------------------------------
PETRO
--------------------------------------
PUBLIC INSIDERS
-------- ----------
Securities Offered Sr Sub Sub & GP
Insentive Rights 76% 24%
Value Offered $ 2.42 $ 2.45
Current Market $ 1.31 $ 1.31
Premium to Market 84.1% 86.7%
Implied Value of Security Offered $18.52 $15.41
Security Offered per Share 0.13064 0.15920
Total Shares 14,609 11,953
Insiders to Receive Sr. Sub 6,572 (6,572)
Shares to Be Converted 21,181 5,382
Units Offered 2,767 857
DPUs Offered 909
Implied Value of GP/Unit $15.41
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
SOURCES AND USES OF FUNDS
- -------------------------------------------------------------------------------------------------------------
Sources: Uses:
Excess Cash on Hand $841 Repay Debt Principal $206,250
New Sar Debt 120,000 Redeem Preferred 31,767
New MLP Equity 139,363 Premium on Redemption/
New MLP E Equity - Exchange/Defeasance 2,844
Equity for Contest Fees 2,110 Consent Fees 2,110
Cash Balance 0 Transaction Fees 19,343
--------- ---------
$262,314 $262,314
========= =========
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
FINANCING SUMMARY
- -------------------------------------------------------------------------------------------------------------
AMOUNT RATE UNIT PRICE
--------- ---------- ----------
New Common Raised $139,363 $20.26
New Debt Raised 120,000 9.00%
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
UNITS OUTSTANDING
- -------------------------------------------------------------------------------------------------------------
CURRENT PRO FORMA
----------------------------- -----------------------------
UNITS % UNITS %
------------- ------------- ------------- -------------
Existing Common 3,858 60.5% 3,858 26.7%
New Common 0 0.0% 6,983 48.5%
New Common for Acquisitions 0 0.0% 0 0.0%
Common to Petro Shareholders 0 0.0% 0 0.0%
Sr Sub (Petro S/Hs) 0 0.0% 2,767 19.1%
Existing Sub 2,395 37.5% 567 3.9%
Implied GP 128 2.0% 289 2.0%
------------- ------------- ------------- -------------
Total Units 6,382 100.0% 14,465 100.0%
============= ============= ============= =============
- -------------------------------------------------------------------------------------------------------------
Main Model Oct-7 Rev I with new Star & AGE 30 yr Petro
Projections and tax effect. For discussion purposes only.
1 of 19
TRANSACTION SUMMARY AND ASSUMPTIONS
(in thousands except per share and per unit data)
30-yr.; $30mm @ 4.75x mid-year; $.01 '99, $.005 '00-'01 flat att.
$10,000 Star Acqs/yr
$30,000 Petro Acqs/yr G.P. Interest Subordinate
$2.42 /Petro Share
OPERATING ASSUMPTIONS
- ---------------------
PETRO STAR STAR NORMAL
----- ---- -----------
Normalized Maintenance CapEx $2,776 $2,710 $2,710
Maintenance CapEx Life 15 yrs 15 yrs
Growth CapEx Life 6.5 yrs 15 yrs
Marginal Tax Rate 33.0% 33.0%
Deferred Tax Percent 0.0%
Required Cash at Beginning for Initial
Distribution 7,956
Minimum Star Stand Alone Cash Balance $500
Minimum Star Pro Forma Cash Balance $10,142
Consolidation Savings $500
Annual Bank Fees $692 $222
Last 20 Days Average Stock Price @ 10/14 $1.31 $20.26
Annual Transaction/Deal Expenses $450
Debt/EBITDA Bank Covenant Ratio 4.5x
Issue Equity to Meet Bank Debt Covenants (Y/N)? yes
DEBT RESTRUCTURING
- ------------------
PROJECTED
12/31/97
PRIVATES: % TENDERED PRINCIPAL STRATEGY PRICE
---------- --------- -------- -----
11.96% Sr Notes 100.0% 60,000 Exchange 105.2%
14.10% Sr Notes 100.0% 3,100 Exchange 105.2%
14.10% Sub Notes 100.0% 3,100 Exchange 105.2%
14.33% Pfd Stock 100.0% 4,167 Neg. Tender 100.0%
PUBLICS:
10.13% Sub Notes & Sr Notes 100.0% 50,000 Neg. Tender 100.0%
9.38% Sub Notes & Sr Notes 100.0% 75,000 Tender 100.0%
12.25% Sub Notes & Sr Notes 100.0% 81,250 Tender 103.5%
12.88% Pfd Stock 100.0% 30,000 Tender 92.0%
NEW SECURITY ASSUMPTIONS
- ------------------------
New MLP Equity
- --------------
Gross Proceeds $139,363
Common Units for Consent Fee 2,110
Common Units to Enron --
--------
Total New Equity Value $141,473
Common Units to Public 6,983 units
New Star Debt
-------------
Gross Proceeds 120,000
Gross Spread % 5.0% Gross Spread % 3.0%
Gross Spread $ $6,968 Gross Spread $ $3,600
Offering Price/Share (current market price) $20.26 Coupon 9.00%
Main Model Oct-7 Rev 1 with new Star & AGE 30 yr Petro Projections and tax
effect
ACQUISITION ASSUMPTIONS
- -----------------------
Petro Multiple 1998 1999 2000 2001 2002
- ----- -------- ------ ------ ------ ------ ------
Amount 4.75x $0 $30,000 $30,000 $30,000 $30,000
Timing End Mid Mid Mid Mid
% EBITDA 0.0% 50.0% 50.0% 50.0% 50.0%
Amount 4.75x $0
Timing Beg
% EBITDA in Initial Yr. 100.0%
Units Issued at: Common $22.00
Sr Sub $18.52
Star Stand-Alone
- ----------------
Weather 30 year
Amount 6.50x $10,000 $10,000 $10,000 $10,000 $10,000
Timing End Mid Mid Mid Mid
% EBITDA in Initial Year 0.0% 50.0% 50.0% 50.0% 50.0%
Amount Financed with Equity $600 $2,948 $4,127 $3,521 $2,853
New Units @: 27 134 188 160 130
Units Issued at Price of: $22.00 $22.00 $22.00 $22.00 $22.00
Amount 6.50x $0
Timing Beg
% EBITDA in Initial Year 100.0%
EXCHANGE ASSUMPTIONS
- --------------------
GETS NEW UNITS OF:
EXISTING --------------------------------------------------
SHAREHOLDERS OF: SHARES COMMON SR SUB JNR SUB G.P. DPUs(1)
- ---------------- ---------- ------ ------ ------- ------ -------
Public Class A Shareholders 14,609 0 1,909 0 0 479
Insider Class B Shares 11 0 0 0 0
Insider Class C Shareholders 0
Class A & C Shares to Receive
Jr Sub & GP 5,382 0 0 567 289 215
Class A Shares to Receive
Sr Sub 6,572 0 859 0 0 215
------- --- ----- --- --- ---
26,574 0 2,767 567 289 909
E Sr. Sub -- --
----- ---
Total 2,767 909
===== ===
(1) Includes 2.0% G.P. Interest.
TRANSACTION COSTS SUMMARY
- -------------------------
New MLP Equity $6,968
New Star Debt 3,600
Fairness Opinion 1,000
Financial Advisory 1,500
Exchange Fees on Public Petro Debt/Preferred 1,375
Legal Fees 2,500
Printing 1,000
Accounting Fees 250
Other:
- ------
Environmental 350
Rating Agencies 100
Roadshow 200
Asset Appraisal 250
Solicitation expenses 100
Other Bank Fees 150
-------
$19,343
=======
HEATING OIL DPU TRIGGER
- -----------------------
DCF/Unit: % Convert
$2.90 33.3%
CONSENT FEE CALCULATION
- -----------------------
% of Petro Stock 3.0%
New Petro Shares 797
Exchange Ratio 7.65x
------
New Common Units 104
Common Unit Price $20.26
------
Implied Value $2,110
======
Main Model Oct-7 Rev I with new Star & AGE 30 yr Petro
Projections and tax effect. For discussion purposes only.
2 of 19
-------------------------------------------------------------------------
Summary 30-yr; $30mm @ 4.75x mid year; $.01 `99, $.005 `00-`01, flat std.
Distributions $10,000 Star Acqs/yr
$30,000 Petro Acqs/yr G.P. Interest Subordinate
$2.42 / Petro Share
-------------------------------------------------------------------------
Projected
---------------------------------------------------------------
Unitholder Class (1) 1998 1999 2000 2001 2002
------------- --------------- -------------- -------------- --------------
Common Unitholders
MQD $24,936 $25,596 $27,229 $29,207
Incentive Distributions - - - -
--------------- -------------- -------------- --------------
Total $24,936 $25,596 $27,229 $29,207
E Capital
Existing Sr. Sub Units - - - -
Number of DPUs Issued as Sr Sub Units - - - -
New Sr. Sub Units - - - -
--------------- -------------- -------------- --------------
Total Sr. Sub Units - - - -
Existing Common - - - -
New Common - - - -
--------------- -------------- -------------- --------------
Total Common - - - -
Common MQD - - - -
Common Incentive Distributions - - - -
Sr. Sub MQD - - - -
Sr. Sub Incentive Distributions - - - -
--------------- -------------- -------------- --------------
Total Distributions
Senior Subordinated Unitholders (1) - 237 237 -
Number of DPUs Issued on Sr. Sub Units
Base MQD $ 6,364 $ 6,378 $ 6,392 $ 6,392
Incremental MQD from DPUs Issued as
Sr. Sub Units - 545 1,089 1,089
Incentive Distributions - - - -
Incremental Incentive Distributions
from DPUs Issued as Sr. Sub Units - - - -
--------------- -------------- -------------- --------------
Total $ 6,364 $ 6,923 $ 7,481 $ 7,481
Subordinated Unitholders (1)
Number of DPUs Issued as Sr. Sub Units - 60 60 -
Base MQD $1,305 $ 1,305 $ 1,305 $ 1,305
Incremental MQD from DPUs Issued as
Sr. Sub Units - 138 277 277
Incentive Distributions - - - -
Incremental Incentive Distributions
from DPUs Issued as Sr. Sub Units - - - -
--------------- -------------- -------------- --------------
Total $1,305 $ 1,443 $ 1,582 $ 1,582
General Partner
Number of DPUs Issued on Sr. Sub Units - - - -
Base MQD $665 $651 $638 $638
Incremental MQD from DPUs Issued as
Sr. Sub Units - 14 28 28
Incentive Distributions - - - -
Incremental Incentive Distributions
from DPUs Issued as Sr. Sub Units - - - -
--------------- -------------- -------------- --------------
Total $665 $665 $665 $665
Unitholder Class Total
Common Unitholders $24,936 $25,596 $27,279 $29,207
Senior Subordinated Unitholders $ 6,364 $ 6,923 $ 7,481 $ 7,481
Subordinated Unitholders 1,305 1,443 1,582 1,582
General Partner 665 665 665 665
--------------- -------------- -------------- --------------
Total $33,270 $34,628 $36,957 $38,935
Distributions to DPUs converted to
Senior Subordinated Units
MQD $ 0 $ 697 $ 1,394 $ 1,394
Incentive Distributions - - - -
--------------- -------------- -------------- --------------
Total - 697 1,394 1,394
check - - - -
- ------------
(1) Reflects distributions for respective Unitholder class. All DPUs are issued
as Senior Subordinated Units but are distributed pro rata to all Petro
shareholders. Consequently, the Subordinated Unitholder class includes DPUs
which have been issued as Senior Subordinated Units.
Main Model Oct-7 Rev I with new Star & AGE 30 yr Petro
Projections and tax effect. For discussion purposes only.
3 of 19
TRANSACTION SUMMARY AND ASSUMPTIONS
(in thousands except per share and per unit data) 30-yr; $30mm @ 4.75x mid-year;$.01 '99,$.005 '00-'O1, flat att.
RECAPITALIZATION ASSUMPTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
(D)EFEASE
(T)ENDER
(R)EDEEM PRINCIPAL
LOCKUP (E)XCHANGE AS OF MATURITY PERIOD COUPON/ SINKING FUND PAYMENT % RED/
--------------- --------------------
PETRO INSTRUMENTS: PREMIUM (N)OTHING 9/30/98 M/D YR DIVIDEND PAYMENT YEAR START EXCHANGED
- ------------------ ------- ---------- ---------- --------------- -------- -------------------- ---------
11.96% Sr Notes e $ 60,000 v 1-Oct 0 11.960% $ 0 0 100.0%
14.10% Sr Notes e 3,100 v 15-Jan 2001 14.100% - 1997 100.0%
14.10% Sub Notes e 3,100 v 15-Jan 2001 14.100% - 1997 100.0%
10.13% Sub Notes & Sr Notes 0.0% t 50,000 v 1-Apr 2003 10.130% - 100.0%
9.38% Sub Notes & Sr Notes 0.0% t 75,000 v 1-Feb 2006 9.375% - 100.0%
12.25% Sub Notes & Sr Notes 0.0% t 81,250 v 1-Feb 2005 12.250% - 100.0%
8.00% Acq. & Other Notes Pay n 14,508 v 0 8.000% - 0 0.0%
8.25% Existing Credit Facility n 0 v 1998 8.250% - 0.0%
0.00% Other Notes n 0 v NA NA 0.000% 0 NA 0.0%
--------
$286,958
PFRD STOCK:
- -----------
14.33% Pfd Stock t 4,167 v 1-Aug 1999 14.330% 4,167 1997 100.0%
12.88% Pfd Stock 0.0% t 30,000 v 15-Feb 2009 12.875% 0 100.0%
0.00% n 0 0.000%
--------
$ 34,167
--------
Total Petro $321,125
--------
STAR INSTRUMENTS:
- ------------------
8.04% 1st Mortgage Notes 0.07 n 85,000 v NA NA 8.040% - 0 0.0%
7.25% WC Revolver 0.00 n 4,785 NA NA 7.250% - NA 0.0%
7.25% Acquisition Facility 0.01 n 9,000 v NA NA 7.250% - NA 0.0%
9.00% New Debt n 120,000 v NA NA 9.000% 0 NA 0.0%
7.17% Pearl Notes 0.01 n 11,000 NA NA 7.170% 0 NA 0.0%
--------
8.21% $218,785
--------
Total Combined $539,910
========
RED/EXCHG DEFEASANCE RED/EXCHG/DEFEASE EXCHANGED
-------------------------
PETRO INSTRUMENTS: PRICE PRICE VALUE PREMIUM INT RATE SECURITY TYPE
- ------------------ --------- ---------- ----------- --------- --------- -------------
11.96% Sr Notes 105.2% $63,126 $ 0 9.0% Sr Notes
14.10% Sr Notes 105.2% 3,260 - 11.5% Sr Notes
14.10% Sub Notes 105.2% 3,260 - 11.5% Sub Notes
10.13% Sub Notes & Sr Notes 100.0% 106.2% 50,000 - Sub Notes & Sr Notes
9.38% Sub Notes & Sr Notes 100.0% 108.2% 75,000 - Sub Notes & Sr Notes
12.25% Sub Notes & Sr Notes 103.5% 116.2% 84,094 2,844 Sub Notes & Sr Notes
8.00% Acq. & Other Notes Pay 100.0% - - Acq. & Other Notes
Pay
8.25% Existing Credit Facility 100.0% - - Existing Credit
Facility
0.00% Other Notes 0.0% - - 11.0% Other Notes
----------
$ 2,844
PFRD STOCK:
- -----------
14.33% Pfd Stock 100.0% 4,167 - Pfd Stock
12.88% Pfd Stock 92.0% 27,600 - Pfd Stock
0.00% - -
----------
$ 0
Total Petro ----------
$ 2,844
----------
STAR INSTRUMENTS:
- ------------------
8.04% 1st Mortgage Notes 0.0% - - 1st Mortgage Notes
7.25% WC Revolver 0.0% - - WC Revolver
7.25% Acquisition Facility 0.0% - - Acquisition
Facility
9.00% New Debt 0.0% - - New Notes
7.17% Pearl Notes 0.0% - - Pearl Notes
----------
$ 0
----------
Total Combined $ 2,844
----------
2,843.75
STAR STAND ALONE DISTRIBUTION ASSUMPTIONS
- -----------------------------------------------------------------------------
Distribution
------------
Minimum Quarterly Distribution $ 2.20
First Target Distribution $ 2.42
Second Target Distribution $ 2.84
Third Target Distribution $ 3.70
Thereafter NM
Target Distribution Level $ 2.20
Annual Distribution Increase $ 0.00
------------
Standard Distributions Structure ("S") or Target ("T") t
------------
STAR PRO FORMA DISTRIBUTION ASSUMPTIONS
- -------------------------------------------------------------
Distribution
------------
Minimum Quarterly Distribution $ 2.30
First Target Distribution $ 2.42
Second Target Distribution $ 2.84
Third Target Distribution $ 3.70
Thereafter NM
----------------------------------------------------
1998 1999 2000 2001 2002 Thereafter
--------- -------- -------- -------- --------
Annual Indicated Distribution Increase $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00
Target Indicated Distribution Level $ 2.30 $ 2.30 $ 2.30 $ 2.30 $ 2.30
-----------
Standard Distribution Structure ("S") or Target ("T") t
-----------
- ----------------------------------------------------------------------------------------------------------
Main Model Oct-7 Rev I with new Star & AGE 30 yr Petro
Projections and tax effect. For discussion purposes only.
4 of 19
- --------------------------------------------------------------------------------
Pro Forma Opening Balance Sheet
(In thousands except per share and per unit data)
Opening Balance Sheet Star Gas Petro Pro Forma
-------- -----
---------- ---------- Merger Star Gas
9/30/98 9/30/98 Adjustments 9/30/98
---------- ---------- ----------- --------
Assets
Cash $ 500 $ 9,642 $ 0 $ 10,142
Other Current Assets 15,376 71,498 - 86,874
-------- --------- -------- --------
Total Current Assets 15,876 81,140 - 97,016
PP&E and Intangibles, Net 161,292 106,695 - 267,987
Investments in Unconsolidated Affiliates - 1,582 (1,582) -
Other Assets - 12,802 - 12,802
-------- --------- -------- --------
Total Assets 177,168 202,219 (1,582) 377,805
======== ========= ========
Liabilities
Current Liabilities 10,101 80,870 - 90,971
8.25% Existing Credit Facility 4,785 - - 4,785
Long Term Debt 105,000 286,958 (82,804) 309,154
Total Preferred Stock - 34,167 (34,167) -
Other Liabilities 76 10,710 - 10,786
-------- --------- -------- --------
Total Liabilities 119,962 412,705 (116,971) 415,696
Common Shareholder's/Partner's Equity 57,206 (210,486) 115,389 (37,891)
-------- --------- -------- --------
Total Liabilities and Equity Check $177,168 $202,219 ($ 1,582) $377,805
======== ========= ========
0 -
PRO FORMA CAPITAL STRUCTURE Star Gas Petro
-------- -----
---------- ---------- % Not Merger Star Gas
9/30/98 9/30/98 Tendered Adjustments 9/30/98
---------- ---------- -------- ----------- --------
DEBT:
8.04% 1st Mortgage Notes $ 85,000 $0 $ 0 $85,000
7.25% WC Revolver 4,785 - - 4,785
7.25% Acquisition Facility 9,000 - - 9,000
7.17% Pearl Notes 11,000 - - 11,000
11.96% Sr Notes - 60,000 100.0% (60,000) -
14.10% Sr Notes - 3,100 100.0% (3,100) -
14.10% Sub Notes - 3,100 100.0% (3,100) -
10.13% Sub Notes & Sr Notes - 50,000 100.0% (50,000) -
9.38% Sub Notes & Sr Notes - 75,000 100.0% (75,000) -
12.25% Sub Notes & Sr Notes - 81,250 100.0% (81,250) -
0.00% Other Notes - 0 - -
8.00% Acq. & Other Notes Pay - 14,508 - 14,508
8.25% Existing Credit Facility - 0 - -
9.00% Exchange Debt - - 63,126 65,126
11.50% Exchanged Debt 6,520 6,520
9.00% New Debt - - 120,000 120,000
-------- --------- -------- --------
Total L.T. Debt 109,785 286,958 (82,804) 313,939
-------- --------- --------
Preferred Stock
14.33% Pfd. Stock - 4,167 - (4,167) -
12.88% Pfd. Stock - 30,000 (30,000) -
-------- --------- -------- --------
Total Preferred - 34,167 (34,167) -
-------- --------- --------
Common Equity 57,206 (210,486) 115,389 (37,891)
-------- --------- --------
Total Capital $166,991 $ 110,639 $276,048
======== ========= ========
Main Model Oct-7 Rev I with new Star & AGE 30 yr Petro
Projections and tax effect. For discussion purposes only.
5 of 19
STAR GAS STAND ALONE INCOME STATEMENT
(In thousands except per share and per unit data)
Estimated Normalized Projected
---------------------------------------
1998 1998 1999 2000 2001 2002
------- ------- ------- ------- ------- -------
EBITDA $18,781 $22,133 $24,491 $26,029 $27,566 $29,104
Depreciation and Amortization 11,927 11,649 12,358 13,346 14,224 14,938
------- ------- ------- ------- ------- -------
EBIT 6,854 10,486 12,133 12,683 13,342 14,166
Interest Expense (7,922) (7,662) (8,811) (9,377) (9,878) (10,380)
Interest Income - - - - - -
Other Income - - - - - -
------- ------- ------- ------- ------- -------
Income Before Taxes (1,068) 2,824 3,322 3,306 3,464 3,786
Current Income Taxes (25) (25) (25) (25) (25) (25)
Deferred Income Taxes - - - - - -
------- ------- ------- ------- ------- -------
Net income Available to Common ($1,093) $ 2,799 $ 3,297 $ 3,281 $ 3,439 $ 3,761
======= ======= ======= ======= ======= =======
STAR GAS STAND ALONE UNITS OUTSTANDING
Common Units
Beginning Balance 3,832 3,832 3,858 3,990 4,174 4,330
Issuance 27 27 131 184 157 127
Buyback 0 0 0 0 0 0
------- ------- ------- ------- ------- -------
Ending Balance 3,858 3,858 3,990 4,174 4,330 4,458
------- ------- ------- ------- ------- -------
Average Common Units Outstanding 3,858 3,858 3,924 4,082 4,252 4,394
Subordinated Units
Beginning Balance 2,396 2,396 2,396 2,396 2,396 2,396
Issuance 0 0 0 0 0 0
Buyback 0 0 0 0 0 0
------- ------- ------- ------- ------- -------
Ending Balance 2,396 2,396 2,396 2,396 2,396 2,396
------- ------- ------- ------- ------- -------
Average Subordinated Units Outstanding 2,396 2,396 2,396 2,396 2,396 2,396
GP Implied Units
Beginning Balance 127 127 128 130 134 137
Issuance 1 1 3 4 3 3
Buyback 0 0 0 0 0 0
------- ------- ------- ------- ------- -------
Ending Balance 128 128 130 134 137 140
------- ------- ------- ------- ------- -------
Average Implied GP Units Outstanding 128 128 129 132 136 139
Total Units 6,382 6,382 6,516 6,704 6,864 6,993
======= ======= ======= ======= ======= =======
Average Units Outstanding 6,382 6,382 6,449 6,610 6,784 6,929
======= ======= ======= ======= ======= =======
Main Model Oct-7 Rev I with new Star & AGE 30 yr Petro
Projections and tax effect. For discussion purposes only.
6 of 19
(In thousands except per share and per unit data)
Estimated Projected
-------------------------------------------
Star Gas Stand Alone Balance Sheet 1998 1999 2000 2001 2002
--------- -------- -------- -------- --------
Assets:
Cash $ 500 $ 500 $ 500 $ 500 $ 500
Other Current Assets 15,376 18,447 19,274 20,101 20,928
-------- -------- -------- -------- --------
Total Current Assets 15,876 18,947 19,774 20,601 21,428
PP&E and Intangibles, Net 161,292 162,016 161,799 160,753 159,042
Other Assets - - - - -
-------- -------- -------- -------- --------
Total Assets 177,168 180,963 181,573 181,354 180,470
======== ======== ======== ======== ========
Liabilities:
Current Liabilities - Excluding Working Capital Borrowing 10,101 13,172 13,999 14,826 15,653
Total Debt 109,785 118,453 125,370 132,288 139,207
Other Liabilities 76 76 76 76 76
-------- -------- -------- -------- --------
Total Liabilities 119,962 131,701 139,445 147,190 154,936
Partner's Equity 57,206 49,262 42,128 34,164 25,534
======== -------- -------- -------- --------
Total Liabilities and Equity $177,168 $180,963 $181,573 $181,354 $180,470
======== ======== ======== ======== ========
Check 0 0 0 0 0
Star Gas Stand Alone Cash Flow Statement
Net Income $ 3,297 $ 3,281 $ 3,439 $ 3,761
Depreciation and Amortization 12,358 13,346 14,224 14,938
Deferred Taxes - - - -
Other Income - - - -
Other Assets/Liabilities - - - -
Change in Working Capital 0 - (0) 0
-------- -------- -------- --------
Cash from Operations 15,655 16,627 17,663 18,699
-------- -------- -------- --------
Maintenance CapEx (2,632) (2,679) (2,728) (2,777)
Internal Growth CapEx - - - -
External Growth CapEx (10,000) (10,000) (10,000) (10,000)
-------- -------- -------- --------
Cash from Investments (12,632) (12,679) (12,728) (12,777)
-------- -------- -------- --------
Acquisition Borrowing 7,052 5,873 6,479 7,147
Remaining Distributions to Repay Debt (0) (0) (11) (678)
Amortization of Mortgage Notes - - - -
Borrowing to Repay Exisitng Debt - - - -
Borrowing for Changes in WC (0) - 0 (0)
Borrowing to Pay Full MQD 1,166 594 - -
Change in Equity 2,949 4,127 3,521 2,853
Transaction/Deal Expenses (450) (450) (450) (450)
Distributions (14,188) (14,542) (14,924) (15,243)
-------- -------- -------- --------
Cash from Financing (3,473) (4,398) (5,385) (6,372)
-------- -------- -------- --------
Net Cash Flow (450) (450) (450) (450)
Initial Cash Balance 500 500 500 500
-------- -------- -------- --------
Cash Available for Paydown on WC Revolver and Acq. Facility 50 50 50 50
Minimum Cash Balance 500 500 500 500
Borrowing/(Paydown) on WC Revolver and Acq. Facility 450 450 450 450
-------- -------- -------- --------
Net Change in Cash - - - -
-------- -------- -------- --------
Ending Cash Balance $ 500 $ 500 $ 500 $ 500
======== ======== ======== ========
Main Model Oct-7 Rev I with new Star & AGE 30 yr Petro
Projections and tax effect. For discussion purposes only.
7 of 19
(In thousands except per share and per unit data)
Estimated Normalized Projected
----------------------------------
1998 1998 1999 2000 2001 2002
--------- ---------- ---- ---- ---- ----
STAR GAS STAND ALONE EBITDA CALCULATION
(See Tab 3: Cases)
- -------------------------------------------------------------------------------------------------------------------------------
Year 1 Year 2 Year 3 Year 4 Year 5
EBITDA Growth Rate 17.9% 10.6% 6.3% 5.9% 5.6%
- -------------------------------------------------------------------------------------------------------------------------------
Base EBITDA: Timing
------
End 1998
Mid 1999
Mid 2000
Mid 2001
Mid 2002
Mid 2003
Mid 2004
Mid 2005
------- ------- ------- ------- ------- -------
Total EBITDA $18,781 $22,135 $24,491 $26,029 $27,566 $29,104
======= ======= ======= ======= ======= =======
Pro Forma Full-Year EBITDA for Debt Covenant Analysis 18,781 22,135 25,260 26,798 28,335 29,873
STAR GAS STAND ALONE DEPRECIATION CALCULATION
Existing Depreciation $11,927 $11,649 $11,649 $11,649 $11,649 $11,649
1998 Normal 2,710
Maintenance CapEx: 1998 2,710 $ 0 $ 0 $ 181 $ 181 $ 181 $ 181
Annual Growth 1.8% 1999 2,632 88 175 175 175
2000 2,679 89 179 179
2001 2,728 91 182
2002 2,777 93
Internal Growth CapEx 1998 0 - - - - - -
Annual Growth: 0.0% 1999 0 - - - -
2000 0 - 0 0
2001 0 - 0
2002 0 -
2003 0
2004 0
2005 0
External Growth CapEx: 1998 10,000 - - 667 667 667 667
Annual Growth: 0.00/6 1999 10,000 333 667 667 667
2000 10,000 333 667 667
2001 10,000 333 667
2002 10,000 333
2003 10,000
2004 10,000
2005 10,000
------- ------- ------- ------- ------- -------
Total Depreciation: $11,927 $11,649 $12,358 $13,346 $14,224 $14,938
======= ======= ======= ======= ======= =======
Main Model Oct-7 Rev I with new Star & AGE 30 yr Petro
Projections and tax effect. For discussion purposes only.
8 of 19
Star Gas Stand Alone Schedule
(In thousands except per share and per unit share)
Estimated Normalized Projected
----------------------------------------------------
1998 1998 1999 2000 2001 2002
---------- ------------ ------------ --------- -------- ---------
8.04% 1st Mortgage Notes
Beginning Balance $ 85,000 $85,000 $ 85,000 $ 85,000 $85,000 $ 85,000
Borrowing 0 0 0 0 0 0
Amortization 0 0 0 0 0 0
---------- ------------ ------------ --------- -------- ---------
Ending Balance 85,000 85,000 85,000 85,000 85,000 85,000
Interest Payment 8.04% 6,834 6,834 6,834 6,834 6,834 6,834
Make-Whole Payment 0 0 0 0 0 0
7.17% Pearl Notes
Beginning Balance $ 0 $ 0 $ 11,000 S11,000 $11,000 S11,000
Borrowing 11,000 11,000 0 0 0 0
Amortization 0 0 0 0 0 0
---------- ------------ ------------ --------- -------- ---------
Ending Balance 11,000 11,000 11,000 11,000 11,000 11,000
Interest Payment 7.17% 613 613 789 789 789 789
% of year Pearl Notes
Outstanding 77.7% 77.7% 0 0 0 0
7.25% WC Revolver
Beginning Balance - - $ 4,785 $ 4,785 $ 4,785 $ 4,785
Borrowing for Change in WC - - (0) 0 (0)
Borrowing/(Payment) 4,785 4,785 0 0 0 0
---------- ------------ ------------ --------- -------- ---------
Ending Balance 4,785 4,785 4,785 4,785 4,785 4,795
Effective Avg WC Balance 3,490 (97) 0 14 0 14
Interest Payment 7.25% 253 (7) 0 1 0 1
7.25% Acquisition Facility
Beginning Balance - $ 9,000 $ 17,668 $24,585 $ 31,503
External Acquisitions 9,400 9,400 7,052 5,873 6,479 7,147
External Acquisitions at
Beginning of 1999 - - - - - -
Internal Acquisitions (400) (400) - - - -
Borrowing to Pay Full MQD - - 1,166 594 - -
Borrowings to Repay - - - - - -
Existing Debt - - - - - -
Borrowings/(Payment) - - 450 450 450 450
Remaining Distributions
to Repay Debt - - (0) (0) (11) (678)
---------- ------------ ------------ --------- -------- ---------
Ending Balance 9,000 9,000 17,668 24,585 31,503 38,422
Interest Payment 7.25% 0 0 967 1,532 2,033 2,535
Total Debt
Beginning Balance $ 85,000 $85,000 $109,785 $118,453 $125,370 $132,288
Amortization of Mortgage Notes - - - - - -
Borrowing for Pearl Notes 11,000 11,000 - - - -
Borrowing for Changes in WC - - (0) - 0 (0)
Borrowing to Pay Full MQD - - 1,166 594 - -
Acquisition Borrowing 9,000 9,000 7,052 5,873 6,479 7,147
Borrowing to Repay
Existing Debt - - - - - -
Remaining Distributions
to Repay Debt - - (0) (0) (11) (678)
Borrowing/(Payment) on WC Revolver
and Acq. Facility 4,785 4,785 450 450 450 450
---------- ------------ ------------ --------- -------- ---------
Ending Balance $109,785 $109,785 $118,453 $125,370 $132,288 $139,207
========== ============ ============ ========= ======== =========
Interest Expense
Interest Expense $ 7,700 $ 7,440 $ 8,589 $ 9,155 $ 9,656 $ 10,158
Bank Fee 222 222 222 222 222 222
---------- ------------ ------------ --------- -------- ---------
Total Interest Payment $ 7,922 $ 7,662 $ 8,811 $ 9,377 $ 9,878 $ 10,380
========== ============ ============ ========= ======== =========
Main Model Oct-7 Rev I with new Star & AGE 30 yr Petro
Projections and tax effect. For discussion purposes only.
9 of 19
Star Gas Stand Alone Schedule of Actual Distributions
(In thousands except per share and per unit data)
Estimated Normalized Projected
------------------------------------------------
ASSUMES REVISED TARGET
DISTRIBUTION STRUCTURE 1998 1998 1999 2000 2001 2002
--------- -------- ---------- --------- -------- --------
Distributable Cash
- ------------------
Cash from Operations $10,834 $14,448 $15,655 $16,627 $17,663 $18,699
Maintenance CapEx (2,710) (2,710) (2,632) (2,679) (2,728) (2,777)
Other 0 0 0 0 0 0
--------- -------- ---------- --------- -------- --------
Total MLP Distributable Cash
Flow 8,124 11,738 13,023 13,948 14,935 15,922
Distributable Cash Flow / Unit $ 1.27 $ 1.84 $ 2.02 $ 2.11 $ 2.20 $ 2.30
Average Units for Calculating Annual
- ------------------------------------
Distributions 2 2 2 2
-------------
Common Units 3,858 3,858 3,924 4,082 4,252 4,394
Subordinated Units 2,396 2,396 2,396 2,396 2,396 2,396
General Partner Interest Unit
Equivalent 128 128 129 132 136 139
--------- -------- ---------- --------- -------- --------
Total Units Outstanding 6,382 6,382 6,449 6,610 6,784 6,929
Distribution Levels
- -------------------
MQD $ 2.20 $ 2.20 $ 2.20 $ 2.20 $ 2.20 $ 2.20
First Target $ 2.42 $ 2.42 $ 2.42 $ 2.42 $ 2.42 $ 2.42
Second Target $ 2.84 $ 2.84 $ 2.84 $ 2.84 $ 2.84 $ 2.84
Third Target $ 3.70 $ 3.70 $ 3.70 $ 3.70 $ 3.70 $ 3.70
Indicated Cash Distribution $ 2.20 $ 2.20 $ 2.20 $ 2.20 $ 2.20 $ 2.20
Distribution of MQD
- -------------------
Cash Available 8,124 11,738 13,023 13,948 14,935 15,922
Cash Borrowed to Pay Full MQD, 5,917 2,303 1,166 594 0 0
Allocation to:
Common Units 8,489 8,489 8,633 8,980 9,354 9,667
Subordinated Units 5,271 5,271 5,271 5,271 5,271 5,271
General Partner Interest 281 281 284 291 298 305
First Target Distribution
- -------------------------
Cash Available 0 0 0 0 11 678
Cash Required for Target
Distribution 0 0 0 0 1,492 1,524
Cash Required for Indicated
Distribution 0 0 0 0 0 0
Actual Cash Distributed 0 0 0 0 0 0
Allocation to:
Common units 0 0 0 0 0 0
Subordinated Units 0 0 0 0 0 0
General Partner Interest 0 0 0 0 0 0
Second Target Distribution
- --------------------------
Cash Available 0 0 0 0 0 0
Cash Required for Target
Distribution 0 0 0 0 0 0
Cash Required for Indicated
Distribution 0 0 0 0 0 0
Actual Cash Distributed 0 0 0 0 0 0
Allocation to:
Common Units 0 0 0 0 0 0
Subordinated Units 0 0 0 0 0 0
General Partner Interest 0 0 0 0 0 0
Incentive Distribution 0 0 0 0 0 0
Third Target Distribution
- -------------------------
Cash Available 0 0 0 0 0 0
Cash Required for Target
Distribution 0 0 0 0 0 0
Cash Required for Indicated
Distribution 0 0 0 0 0 0
Actual Cash Distributed 0 0 0 0 0 0
Allocation to:
Common Units 0 0 0 0 0 0
Subordinated Units 0 0 0 0 0 0
General Partner Interest 0 0 0 0 0 0
Incentive Distribution 0 0 0 0 0 0
Main Model Oct-7 Rev I with new Star & AGE 30 yr Petro
Projections and tax effect. For discussion purposes only.
10 of 19
Star Gas Stand Alone Schedule of Actual Distributions (cont'd)
(In thousands except per share and per unit data)
Estimated Normalized Projected
----------------------------------------------------
1998 1998 1999 2000 2001 2002
----------- ----------- ------------ --------- ---------- --------
Remaining Distributions
- -----------------------
Cash Available 0 0 0 0 0 0
Allocation to:
Common Units 0 0 0 0 0
Subordinated Units 0 0 0 0 0 0
General Partner Interest 0 0 0 0 0 0
Incentive Distribution 0 0 0 0 0 0
Repay Indebtedness (0) (0) 0 0 11 678
Total Distributions
- -------------------
Common Units 8,489 8,489 8,633 8,980 9,354 9,667
Subordinated Units 5,271 5,271 5,271 5,271 5,271 5,271
General Partner Interest 281 281 284 291 298 305
Incentive Distribution 0 0 0 0 0 0
------- ------- ------- ------- ------- -------
Total Distributions $14,041 $14,041 $14,188 $14,542 $14,924 $15,243
======= ======= ======= ======= ======= =======
Total Distributions Per Unit
- ----------------------------
Common Unit $ 2.20 $ 2.20 $ 2.20 $ 2.20 $ 2.20 $ 2.20
Subordinated Unit 2.20 2.20 2.20 2.20 2.20 2.20
GP Unit 2.20 2.20 2.20 2.20 2.20 2.20
Main Model Oct-7 Rev I with new Star & AGE 30 yr Petro
Projections and tax effect. For discussion purposes only.
11 of 19
(In thousands except per share and per unit data)
Petro EBITDA Calculation Estimated Normalized Projected
----------------------------------------------------
1998 1998 1999 2000 2001 2002
----------- ----------- ------------ --------- ---------- --------
- ------------------------------------------------------------------------------------------------------------------------------------
Year 1 Year 2 Year 3 Year 4 Year 5
EBITDA Growth Rate
- ------------------------------------------------------------------------------------------------------------------------------------
Base EBITDA: Timing
------
Acquisitions: End 1998 $ 0
Mid 1999 30,000
Mid 2000 30,000
Mid 2001 30,000
Mid 2002 30,000
Mid 2003 30,000
Mid 2004 30,000
Mid 2005 30,000
------- ------- ------- ------- ------- -------
Total EBITDA. $37,630 $46,900 $48,706 $51,196 $53,390 $55,385
======= ======= ======= ======= ======= =======
Pro Forma Full-Year EBITDA for Debt Covenent
Analysis 37,630 46,900 51,864 54,354 56,548 58,543
Petro Depreciation Calculation
Existing Depreciation $28,710 $28,710 $28,710 $28,710 $28,710 $28,710
Maintenance CapEx: 1998 $ 2,776 - - 185 185 185 185
Annual Growth: 2.0% 1999 3,000 100 200 200 200
2000 3,060 102 204 204
2001 3,121 104 208
2002 3,184 106
2003 3,247
2004 3,312
2005 3,378
Internal Growth CapEx: 1998 $ 0 - - - - - -
Annual Growth: 0.0% 1999 0 - - - -
2000 0 - - -
2001 0 - -
2002 0 -
2003 0
2004 0
2005 0
External Growth CapEx: 1998 $ 0 - - 0 0 0 0
Annual Growth: 0.0% 1999 30,000 2,308 4,615 4,615 4,615
2000 30,000 2,308 4,615 4,615
2001 30,000 2,308 4,615
2002 30,000 2,308
2003 30,000
2004 30,000
2005 30,000
------- ------- ------- ------- ------- -------
Total Depreciation: 28,710 28,710 31,303 36,120 40,942 45,767
======= ======= ======= ======= ======= =======
Main Model Oct-7 Rev I with new Star & AGE 30 yr Petro
Projections and tax effect. For discussion purposes only.
12 of 19
- ------------------------------------------------------------------------------------------------------------------------------------
(in thousands except per share and per unit data)
STAR PRO FORMA INCOME STATEMENT PROJECTED
ESTIMATED NORMALIZED -----------------------------------------
1998 1998 1999 2000 2001 2002
-------- ---------- -------- -------- -------- --------
Combined EBITDA $ 56,411 $ 69,035 $ 73,197 $ 77,225 $ 80,956 $ 84,489
Consolidated Savings 500 500 500 500 500 500
-------- ---------- -------- -------- -------- --------
Pro Forma EBITDA 56,911 69,535 73,697 77,725 81,456 84,989
Depreciation and Amortization 40,637 40,359 43,661 49,466 55,166 60,705
-------- ---------- -------- -------- -------- --------
EBIT 16,274 29,176 30,036 28,259 26,290 24,284
Interest Expense (28,307) (28,253) (29,468) (31,549) (33,017) (34,202)
Interest Income - - - - - -
Other Income - - - - - -
EBT (12,033) 923 569 (3,290) (6,726) (9,919)
-------- ---------- -------- -------- -------- --------
Current Income Taxes (1,025) (1,025) (1,025) (1,025) (1,025) (1,025)
Deferred Income Taxes - - - - - -
-------- ---------- -------- -------- -------- --------
Net Income Available to Common $(13,058) $ (102) $ (456) $ (4,315) $ (7,751) $(10,944)
======== ========== ======== ======== ======== ========
Pro Forma Full-Year EBITDA for Debt Covenant Analysis 56,911 69,535 77,624 81,652 85,383 88,916
STAR PRO FORMA UNITS OUTSTANDING
Common Units
Beginning Balance 10,842 10,842 10,842 11,416 12,261
Issuance - - - - -
Issued to Meet Debt Covenant Ratio - - 574 846 874
Issued to E - - - - -
Buyback - - - - -
-------- ---------- -------- -------- -------- --------
Ending Balance 10,842 10,842 10,842 11,416 12,261 13,136
-------- ---------- -------- -------- -------- --------
Average Common Units Outstanding 10,842 10,842 10,842 11,129 11,839 12,699
Deferred Participation Units -
Beginning Balance - - 909 909 606 303
DPUs Issued at Beginning of Year - - - (303) (303) -
-------- ---------- -------- -------- -------- --------
Ending Balance - - 909 606 303 303
SR Subordinated Units
Beginning Balance - Sr Sub Units 2,767 2,767 2,767 3,070 3,373
DPUs Issued - - 303 303 -
Sr. Sub Issuance - - - - -
Sr. Sub to E - - - - -
Sr. Sub Converted to G.P. Interest - - - - -
-------- ---------- -------- -------- -------- --------
Ending Balance 2,767 2,767 2,767 3,070 3,373 3,373
-------- ---------- -------- -------- -------- --------
Average Sr Subordinated Units Outstanding 2,767 2,767 2,767 3,070 3,373 3,373
Subordinated Units
Beginning Balance 567 567 567 567 567
Issuance - - - - -
Buyback - - - - -
-------- ---------- -------- -------- -------- --------
Ending Balance 567 567 567 567 567 567
-------- ---------- -------- -------- -------- --------
Average Subordinated Units Outstanding 567 567 567 567 567 567
GP Implied Units
Beginning Balance 289 289 289 289 289
Issued in conjunction with DPUs - - - - -
Issued to Meet Debt Covenant Ratio - - - - -
Issued in conjunction with E Equity - - - - -
Buyback - - - - -
-------- ---------- -------- -------- -------- --------
289 289 289 289 289 289
-------- ---------- -------- -------- -------- --------
Average Implied GP Units Outstanding 289 289 289 289 289 289
Total Units Outstanding 14,465 14,465 14,465 15,343 16,491 17,366
-------- ---------- -------- -------- -------- --------
Average Total Units Outstanding 14,465 14,465 14,465 15,055 16,068 16,928
======== ========== ======== ======== ======== ========
Pro Forma Heating Oil Units Used for DPU Issue Calculation 8,016 8,446 9,285 10,000
(In thousands except per share and per unit data}
STAR PRO FORMA BALANCE SHEET Estimated Projected
--------------------------------------------------
1998 1999 2000 2001 2002
--------- --------- --------- --------- ---------
ASSETS
Cash $ 10,142 $ 10,142 $ 10,142 $ 10,142 $ 10,142
Other Current Assets 86,874 92,319 97,589 102,470 107,092
--------- --------- --------- --------- ---------
Total Current Assets 97,016 102,461 107,731 112,612 117,354
PP&E and Intangibles, Net 267,987 269,958 266,231 256,915 242,170
Other Assets 12,802 12,802 12,802 12,802 12,802
--------- --------- --------- --------- ---------
Total Assets 377,805 385,221 386,764 382,329 372,206
========= ========= ========= ========= =========
LIABILITIES
Current Liabilities 90,978 96,416 101,686 106,567 111,189
8.25% Existing Credit Facility 4,785 4,785 4,785 4,785 4,785
Total LT Debt 309,154 344,852 367,434 384,224 400,122
Other Liabilities 10,786 10,786 10,786 10,786 10,786
--------- --------- --------- --------- ---------
Total Liabilities 415,696 456,839 484,691 506,361 $ 526,882
PREFERRED STOCK - - - - -
Common Shareholder's Equity (37,891) (71,618) (97,927) (124,033) (154,676)
--------- --------- --------- --------- ---------
Total Liabilities and Equity $ 377,805 $ 385,221 $ 386,764 $ 382,329 $ 372,206
========= ========= ========= ========= =========
Check - - 0 (0) (0)
STAR PRO FORMA CASH FLOW STATEMENT
Net Income ($456) ($4,315) ($7,751) (10,944)
Depreciation and Amortization 43,661 49,466 55,366 60,705
Deferred Taxes - - - -
Other Assets/Liab - - - -
--------- --------- --------- ---------
Change in Non-Cash Working Capital - - - -
Cash from Operations 43,204 45,151 47,414 49,762
Maintenance CapEx (5,632) (5,739) (5,849) (5,961)
Internal Growth CapEx - - - -
External Growth CapEx (40,000) (40,000) (40,000) (40,000)
--------- --------- --------- ---------
Cash from Investments (45,632) (45,739) (45,849) (45,961)
Acquisition Borrowing 40,000 40,000 40,000 40,000
Remaining Distributions to Repay Debt (4,302) (4,785) (4,608) (4,866)
Amortization of Existing Debt (6,127) (8,141) (60) (60)
Borrowing to Repay Existing Debt 6,127 8,141 60 60
Borrowing for Changes in WC - - - -
Change in Common Equity & GP Interest - 12,634 18,603 19,236
Repayment of Preferred Stock - - - -
Distributions (33,270) (34,628) (36,957) (38,935)
--------- --------- --------- ---------
Cash from Financing 2,428 13,221 17,038 15,435
Net Cash Flow 0 12,634 18,603 19,236
Initial Cash Balance 10,142 10,142 10,142 10,142
--------- --------- --------- ---------
Cash Available for Paydown on WC Revolver and Acq. Facility 10,142 22,776 28,745 29,378
Minimum Cash Balance 10,142 10,142 10,142 10,142
Borrowing (Paydown) on WC Revolver and Acq. Facility 0 (12,634) (18,603) (19,236)
--------- --------- --------- ---------
Ending Cash Balance 10,142 10,142 10,142 10,142
Net Change in Cash $ 0 $ 0 $ 0 $ 0
========= ========= ========= =========
Main Model Oct-7 Rev I with new Star & AGE 30 yr Petro
Projections and tax effect. For discussion purposes only.
14 of 19
(In thousands except per share and per unit data)
Estimated Normalized Projected
Star Pro Forma Debt Schedule ------------------------------------------------
1998 1998 1999 2000 2001 2002
---------- ------------ ---------- ---------- ---------- ----------
8.04% 1 st Mortgage Notes
Beginning Balance $85,000 $85,000 85,000 $85,000 $85,000 $85,000
Borrowing - - - - - -
Amortization - - - - - -
---------- ------------ ---------- ---------- ---------- ----------
Ending Balance 85,000 85,000 85,000 85,000 85,000 85,000
Interest Payment 8.04% 6,834 6,834 6,834 6,834 6,834 6,834
7.17% Pearl Notes
Beginning Balance 11,000 11,000 11,000 11,000 11,000 11,000
Borrowing - - - - - -
Amortization - - - - - -
---------- ------------ ---------- ---------- ---------- ----------
Ending Balance 11,000 11,000 11,000 11,000 11,000 11,000
Interest Payment 7.17% 613 613 789 789 789 789
% of year Pearl Notes Outstanding 77.7% 77.7%
10.13% Sub Notes & Sr Notes
Beginning Balance 50,000 50,000 - - - -
Borrowing - - - - - -
Amortization (50,000) (50,000) - - - -
---------- ------------ ----------- ---------- ---------- ----------
Ending Balance - - - - - -
Interest Payment 10.13% - - - - - -
9.38% Sub Notes & Sr Notes
Beginning Balance 75,000 75,000 - - - -
Borrowing - - - - - -
Amortization (75,000) (75,000) - - - -
----------- ------------ ----------- ---------- ---------- -----------
Ending Balance - - - - - -
Interest Payment 9.38% - - - - - -
12.25% Sub Notes & Sr Notes
Beginning Balance 81,250 81,250 - - - -
Borrowing - - - - - -
Amortization (81,250) (81,250) - - - -
----------- ------------ ----------- ---------- ---------- ----------
Ending Balance - - - - - -
Interest Payment 12.25% - - - - - -
9.00% New Debt
Beginning Balance - - 120,000 126,127 134,268 134,328
Borrowing 120,000 120,000 6,127 8,141 60 60
Amortization - - - - - -
----------- ------------ ----------- ---------- ---------- ----------
Ending Balance 120,000 120,000 126,127 134,268 134,328 134,388
Interest Payment 9.00% 10,800 10,800 11,076 11,718 12,087 12,092
Exchange of 11.96% Senior Notes
Beginning Balance - - 63,126 63,126 63,126 63,126
Borrowing 63,126 63,126 - - - -
Amortization - - - - - -
----------- ------------ ----------- ---------- ---------- ----------
Ending Balance 63,126 63,126 63,126 63,126 63,126 63,126
Interest Payment 9.00% 5,681 5,681 5,681 5,681 5,681 5,681
8.00% Acq. & Other Notes Pay
Beginning Balance 16,507 16,507 14,508 8,381 240 180
Borrowing - - - - - -
Amortization (1,999) (1,999) (6,127) (8,141) (60) (60)
----------- ------------ ----------- ---------- ---------- ----------
Ending Balance 14,508 14,508 8,381 240 180 120
Interest Payment 8.00% 1,241 1,241 916 345 17 12
Main Model Oct-7 Rev I with new Star & AGE 30 yr Petro
Projections and tax effect. For discussion purposes only.
15 of 19
- -------------------------------------------------------------------------------
(In thousands except per share and per unit data)
Estimated Normalized Projected
---------------------------------------------------
Star Pro Forma Debt Schedule (cont'd) 1998 1998 1999 2000 2001 2002
-------- --------- ---- ---- ---- ----
Exchange of 14.10% Senior Notes
Beginning Balance - - 6,520 6,520 6,520 6,520
Borrowing 6,520 6,520 - - - -
Amortization - - - - - -
--------- --------- -------- -------- -------- --------
Ending Balance 6,520 6,520 6,520 6,520 6,520 6,520
Interest Payment 11.50% 750 750 750 750 750 750
7.25% WC Revolver
Beginning Balance - - 4,785 4,785 4,785 4,785
Borrowing for Change in WC - - - - - -
Borrowing to Pay Full MQD - - - - - -
Borrowing (Payment) 4,785 4,785 - - - -
--------- --------- -------- -------- -------- --------
Ending Balance 4,785 4,785 4,785 4,785 4,785 4,785
Effective Avg WC Balance 23,600 23,600 10,814 9,393 9,393 9,393
Interest Payment 7.25% 1,711 1,711 784 681 681 681
7.25% Acquisition Facility
Beginning Balance - - 9,000 44,698 67,280 84,069
External Acquisitions 9,400 9,400 40,000 40,000 40,000 40,000
External Acquisitions at Beginning of 1999 - - - - - -
Internal Growth CapEx (400) (400) - - - -
Payment - - (0) (12,634) (18,603) (19,236)
Remaining Distributions to Repay Debt - (1,501) (4,302) (4,785) (4,608) (4,866)
--------- --------- -------- -------- -------- --------
Ending Balance 9,000 7,499 44,698 67,280 84,069 99,968
Interest Payment 7.25% ($15) ($69) $ 1,947 $ 4,059 $ 5,486 $ 6,671
Total Pro Forma Debt
Beginning Balance $ 318,757 $ 318,757 $313,939 $349,637 $372,219 $389,009
Amortization of Existing Debt (208,249) (208,249) (6,127) (8,141) (60) (60)
Exchange of Notes 69,646 69,646 - - - -
Borrowing for Changes in WC - - - - - -
Acquisition Borrowing 9,000 9,000 40,000 40,000 40,000 40,000
Borrowing to Pay Full MQD - - - - - -
Borrowing to Repay Existing Debt 120,000 120,000 6,127 8,141 60 60
Remaining Distributions to Repay Debt - (1,501) (4,302) (4,785) (4,608) (4,866)
Borrowing (Payments) on WC Revolver and
Acq. Facility 4,785 4,785 (0) (12,634) (18,603) (19,236)
--------- --------- -------- -------- -------- --------
Ending Balance 313,939 312,439 349,637 372,219 389,009 404,907
Preferred Stock
Beginning Balance 34,167 34,167 - - - -
Repayments (34,167) (34,167) - - - -
--------- --------- -------- -------- -------- --------
Ending Balance - - - - - -
Dividend Payment 14.33% - - - - - -
Interest Expense/Dividends 27,615 27,561 28,776 30,857 32,325 33,510
Chase Fees 692 692 692 692 692 692
--------- --------- -------- -------- -------- --------
Total Interest Payment/Dividends $ 28,307 $ 28,253 $ 29,468 $ 31,549 $ 33,017 $ 34,202
========= ========= ======== ======== ======== ========
Main Model Oct-7 Rev I with new Star & AGE 30 yr Petro
Projections and tax effect. For discussion purposes only.
16 of 19
STAR PRO FORMA DISTRIBUTION SCHEDULE OF ACTUAL DISTRIBUTIONS
(In thousands except per share and per unit data)
Estimated Normalized Projected
----------------------------------------------------
1998 1998 1999 2000 2001 2002
--------- ---------- ---------- ---------- --------- ----------
Distributable Cash
- ------------------
Cash from Operations (excl chg in WC) 27,579 40,257 $ 43,204 $ 45,151 $ 47,414 $49,762
Maintenance CapEx (5,486) (5,486) (5,632) (5,739) (5,849) (5,961)
Other - - - - -
--------- ---------- ---------- ---------- --------- ----------
Total MLP Distributable
Cash Flow 22,093 34,771 37,572 39,412 41,565 43,801
Distributable Cash Flow Unit $ 1.53 $ 2.40 $ 2.60 $ 2.62 $ 2.59 $ 2.59
Distributable Cash Flow /
Unit Pro Forma for DPU Conversion
Average Units for Calculating Annual
- ------------------------------------
Distribution
- -------------
Common Units 10,842 10,842 10,842 11,129 11,839 12,699
SR Subordinated Units 2,767 2,767 2,767 3,070 3,373 3,373
Subordinated Units 567 567 567 567 567 567
General Partner Interest Unit
Equivalent 289 289 289 289 289 289
--------- ---------- ---------- ---------- --------- ----------
Total Units Outstanding 14,465 14,465 14,465 15,055 16,068 16,928
Distribution Levels $ 2.30 $ 2.30 $ 2.30 $ 2.30 $ 2.30 $ 2.30
- -------------------
MQD $ 2.30 $ 2.30 $ 2.30 $ 2.30 $ 2.30 $ 2.30
First Target $ 2.42 $ 2.42 $2.42 $ 2.42 $ 2.42 2.42
Second Target $ 2.84 $ 2.84 $2.84 $ 2,84 $ 2.84 2.84
Third Target $ 3.70 $ 3.70 $ 170 $ 3.70 $ 3.70 $ 3.70
Indicated Cash Distribution $ 2.30 $ 2.30 $2.30 $ 2.30 $ 2.30 $ 2.30
Distribution of MQD
- -------------------
Cash Available 22,093 34,771 37,572 39,412 41,565 43,801
Allocation to:
Common Units 22,093 24,936 24,936 25,596 27,229 29,207
SR Subordinated Units 0 6,364 6,364 7,061 7,758 7,758
Subordinated Units 0 1,305 1,305 1,305 1,305 1,305
General Partner Interest 0 665 665 665 665 665
First Target Distribution
- -------------------------
Cash Available 0 1,501 4,302 4,785 4,608 4,866
Cash Required for Target Distribution 0 1,736 1,736 1,808 1,932 2,037
Cash Required for Indicated
Distribution 0 0 0 0 0 0
Actual Cash Distributed 0 0 0 0 0 0
Allocation to:
Common Units 0 0 0 0 0 0
SR Subordinated Units 0 0 0 0 0 0
Subordinated Units 0 0 0 0 0 0
General Partner Interest 0 0 0 0 0 0
Total Distributions to:
Common Units 0 0 0 0 0 0
Sr. Subordinated Units 0 0 0 0 0 0
Subordinated Units 0 0 0 0 0 0
General Partner Interest 0 0 0 0 0 0
Main Model Oct-7 Rev I with new Star & AGE 30 yr Petro
Projections and tax effect. For discussion purposes only.
17 of 19
STAR GAS PRO FORMA SCHEDULE OF ACTUAL DISTRIBUTIONS (CONT'D)
(In thousands except per share and per unit data)
Estimated Normalized Projected
-----------------------------------------------------
1998 1998 1999 2000 2001 2002
--------- ---------- ----------- --------- ---------- -----------
Second Target Distribution
- --------------------------
Cash Available 0 0 0 0 0 0
Cash Required for Target Distribution 0 0 0 0 0 0
Cash Required for Indicated Distribution 0 0 0 0 0 0
Actual Cash Distributed 0 0 0 0 0 0
Allocation to:
Common Units 0 0 0 0 0 0
SR Subordinated Units 0 0 0 0 0 0
Subordinated Units 0 0 0 0 0 0
General Partner Interest 0 0 0 0 0 0
Incentive Right 0 0 0 0 0 0
Incentive Right to GP Interest 0 0 0 0 0 0
Incentive Right to Sub Units 0 0 0 0 0 0
Incentive Right to Sr. Sub Units 0 0 0 0 0 0
Total Distributions to:
Common Units 0 0 0 0 0 0
Sr. Subordinated Units 0 0 0 0 0 0
Subordinated Units 0 0 0 0 0
General Partner Interest 0 0 0 0 0 0
Third Target Distribution
- -------------------------
Cash Available 0 0 0 0 0 0
Cash Required for Target Distribution 0 0 0 0 0 0
Cash Required for Indicated Distribution 0 0 0 0 0 0
Actual Cash Distributed 0 0 0 0 0 0
Allocation to:
Common Units 0 0 0 0 0 0
Sr. Subordinated Units 0 0 0 0 0 0
Subordinated Units 0 0 0 0 0 0
General Partner Interest 0 0 0 0 0 0
Incentive Right 0 0 0 0 0 0
Incentive Right to GP Interest 0 0 0 0 0 0
Incentive Right to Sub Units 0 0 0 0 0 0
Incentive Right to Sr. Sub Units 0 0 0 0 0 0
Total Distributions to:
Common Units 0 0 0 0 0 0
Sr. Subordinated Units 0 0 0 0 0 0
Subordinated Units 0 0 0 0 0 0
General Partner Interest 0 0 0 0 0 0
Remaining Distribution
- ----------------------
Cash Available 0 0 0 0 0 0
Cash Required for Indicated
Distribution 0 0 0 0 0 0
Actual Cash Distributed 0 0 0 0 0 0
Allocation to:
Common Units 0 0 0 0 0 0
Sr. Subordinated Units 0 0 0 0 0 0
Subordinated Units 0 0 0 0 0 0
General Partner Interest 0 0 0 0 0 0
Incentive Right 0 0 0 0 0 0
Incentive Right to GP Interest 0 0 0 0 0 0
Incentive Right to Sub Units 0 0 0 0 0 0
Incentive Right to Sr. Sub Units 0 0 0 0 0 0
Repay Indebtedness 0 1,501 4,302 4,785 4,608 4,866
Total Distributions to:
Common Units 0 0 0 0 0 0
Sr. Subordinated Units 0 0 0 0 0 0
Subordinated Units 0 0 0 0 0 0
General Partner Interest 0 0 0 0 0 0
Main Model Oct-7 Rev I with new Star & AGE 30 yr Petro
Projections and tax effect. For discussion purposes only.
Page 18 of 19
STAR GAS PRO FORMA SCHEDULE OF ACTUAL DISTRIBUTIONS (CONT,D)
(In thousands except per share and per unit data)
Estimated Normalized Projected
----------------------------------------------------------------
1998 1998 1999 2000 20O1 2002
---------- ---------- ----------- ------------ ----------- -----------
Total Distributions
- -------------------
Common units $22,093 $24,936 $24,936 $25,596 $27,229 $29,207
SR Subordinated Units 0 6,364 6,364 7,061 7,758 7,758
Subordinated Units 0 1,305 1,305 1,305 1,305 1,305
General Partner Interest 0 665 665 665 665 665
---------- --------- ----------- ------------ ---------- -----------
Total Distributions $22,093 $33,270 $33,270 $34,628 $36,957 $38,935
========== ========= =========== ============ ========== ===========
14,041 14,041 14,188 14,542 14,924 15,243
Total Distributions Per Units
- -----------------------------
Common Units $ 2.04 $ 2.30 $ 2.30 $ 2.30 $ 2.30 $ 2.30
SR Subordinated Units 0.00 2.30 2.30 2.30 2.30 2.30
Subordinated & GP Units 0.00 2.30 2.30 2.30 2.30 2.30
Main Model Oct-7 Rev I with new Star & AGE 30 yr Petro
Projections and tax effect. For discussion purposes only.
19 of 19
PETRO PRO FORMA, WORKING CAPITAL REQUIREMENTS
(IN 000S, EXCEPT PER SHARE AMOUNTS)
- -------------------------------------------------------------------------------------------------------
ASSUMPTIONS
- -------------------------------------------------------------------------------------------------------
DEBT ATTRIBUTED TO PETRO:
9/30/98
Pro Forma Interest Annual
Balance Rate Interest
---------- --------- --------
8.00 % Acquisition & Other Notes Pay $ 14,508 8.00% $ 1,161
9.00 % Exchanged Debt 63,126 9.00% 5,681
11.50% Exchanged Debt 6,520 11.50% 750
9.25% New Debt (a) 120,000 9.25% 11,100
--------
$18,692
NEW COMMON UNITS TO REFINANCE OLD DEBT & CONSENT FEE:
Price Per Number Annual
Amount to be Raised Share of Units MQD Distribution
- ---------------------------------------------------------- ---------- -------- ---------------
$141,473 $20.259 6,983 $2.30 $16,061
INCREASE IN MQD ON OLD COMMON UNITS Number Increase in Annual
of Units MQD Distribution
---------- ----------- --------------
Old Common Units 3,832 $0.10 $ 383
OPERATING WORKING CAPITAL REQUIRE $ 500
Tax Liability: $ 5,000
(a) AGE assumed rate of 9.25%
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
REQUIREMENT CALCULATION
- -------------------------------------------------------------------------------------------------
Closing Date
----------------------------------------
Jan 31 Feb 28 Mar 31
1999 1999 1999
------------ ---------- -----------
Interest on Debt Attributed to Petro: $ 17,134 $ 15,576 $14,019
MQD on New Common Units 16,061 16,061 16,061
Increase in MQD on old Common Units 383 383 383
Operating Working Capital Requirement 500 500 500
Tax Liability 5,000 5,000 5,000
--------- -------- -------
Sub Total $ 39,078 $ 37,521 $35,963
Petro EBITDA
Historical Quarter Ended:
6/30/98 ($6,355) ($6,355) ($ 6,355)
9/30/97 (20,908) (20,908) (20,908)
12/31/97 16,716 16,716 16,716
-------
Projected Month Ended:
2/28/99 20,434
3/31/99 13,281 13,281
--------- --------
Sub Total $ 23,168 $ 2,734 ($10,547)
TOTAL $ 15,910 $ 34,787 $46,510
- -------------------------------------------------------------------------------------------------
WORKING CAPITAL REQUIREMENT 18,000 35,000 46,500
- -------------------------------------------------------------------------------------------------
Projected Month Ended Working Capital:
Standard Calculation $ 20,670 $ 36,836 $47,341
Excess Cash Assuming a March 31 Close $ 841