Exhibit 99.(c)(4)
Highly Confidential
Project Mars
Board Meeting
Goldman Sachs International
January 24, 2001
Benefits to doing the Mars Minority Buyout [LOGO OF GOLDMAN SACHS]
- ---------------
o Access to Mars cash flows
Strategic o Regroup all Milky Way US activities with the rest of
the group
o Enable more efficient combination of present and
future Mars and Milky Way US operations
- ---------------
Financial o Eliminate lower Mars valuation impact on Milky Way
o Transaction is slightly earnings accretive
- ---------------
Capital Markets o Better investor perception of Milky Way stock
o Consolidate investor demand in more liquid stock
o Replace US investor base with European investors more
knowledgeable about the industry
- ---------------
o Eliminate perception of complexity in intra-group
Corporate/ transactions
Employee
Incentive o Use of same stock for incentive scheme on a worldwide
basis
o Provide an incentive to US employees based on the
stock of a company operating in an international
market
- ---------------
Key Financing Assumptions [LOGO OF GOLDMAN SACHS]
We assume:
o Milky Way share price is [EURO]200
o Foreign exchange rate is [EURO]1 for $0.95
o Transaction is 50% equity - financed, through a rights issue
o Rights are issued at a 15% discount
Transaction Mars [LOGO OF GOLDMAN SACHS]
Sensitivity Analysis
Assuming a 50% equity financing through a rights issue 2002 Pre Transaction FFO/Net Debt 59%
Based on a Mars share price at 23/01: $25.44 2002 Pre Transaction EBITDA Interest Cover 6.3
2002 Deal
2002 EPS 2003 EPS 2002 EPS 2003 EPS EBITDA 2002 Capital Considera-
Accretion pre Accretion pre Accretion Accretion Interest FFO/Net Increase tion
goodwill goodwill post goodwill post goodwill Cover Debt (EURO) (EURO)
------------- ------------- ------------- ------------- -------- ------- -------- -----------
Implied
Premium on
Cash the 23/01
Offer/share stock price
- ------------ -----------
25.00 -2% 8.8% 10.9% 5.5% 8.5% 5.10 33.6% 466 933
26.00 2% 8.2% 10.4% 4.5% 7.7% 5.07 33.2% 484 968
27.00 6% 7.7% 9.9% 3.4% 6.9% 5.04 32.7% 502 1004
28.00 10% 7.1% 9.4% 2.4% 6.0% 5.01 32.3% 520 1039
29.00 14% 6.5% 8.9% 1.4% 5.2% 4.98 31.9% 537 1075
Exchange Rate Assumption $/ of 0.95 with a Milky Way share price of 200.00
Mars Stock Price Performance [LOGO OF GOLDMAN SACHS]
Daily Indexed Trading History Since Inception
[This graph sets forth MARS stock price performance. The indexed
trading price for shares of MARS on March 27, 1998 was $26.13 and on January 16,
2001 was $22.69, down 13.2%. The indexed trading price for shares of MARS on the
occurrence of the following events were as follows:
Date Price Event
December 22, 1998 $28.00 Net income up 58%, sales up 2% and operating profit up 11% from previous
year. EPS of $0.52 is lower than analysts expectations of $0.84.
May 3, 1999 $22.94 Charles O'Dell resigns as CEO of SMS, Michel Landel named president, CEO
and board member. MARS reports decreased contract retention rates and
sluggish sales growth.
November 3, 1999 $18.00 Lawrence E. Hyatt resigns as senior vice president and chief financial
officer of SMS.
January 11, 2000 $12.69 Reported net income of $27.8 million down 2% from previous quarter and
down 16% from previous year. Sales for the quarter increased 6.5% from
the previous year. Profit growth lagged sales growth due to higher labor
and start-up costs for quarter. EPS of $0.94 meets analysts' expectations.
April 7, 2000 $13.75 Earnings up 5% and sales up 8% from previous quarter.
July 14, 2000 $16.88 3rd quarter earnings up 22% from previous quarter driven by double digit
growth in operating profits in the health care and corporate divisions.
October 19, 2000 $17.25 7 % rise in sales and 11% rise in earnings from previous quarter. First
profitable fourth quarter since 1998. EPS of $1.00 meets analysts'
expectations.
January 11, 2001 $21.75 Quarterly net income of $36 million, up 29% compared to same period
previous year. Sales up 6% and operating profit up 14% from previous
year.]
Note: S&P 500 up 21.1% for the same period
Analysis of Premiums in Acquisition Transactions [LOGO OF GOLDMAN SACHS]
Involving Insiders
Inside Ownership Greater Than 40% and Cash Consideration Only
Buyouts (a) (greater than $100m)
----------------------------------------------------
Initial Final
Premium (b) Premium (c)
------------ -------------
Low 0.0% 0.0%
Median 18.4% 26.4%
Mean 15.9% 21.8%
High 88.9% 88.9%
(a) Acquiror had more than 40% ownership prior to transaction. Sample size
includes 59 transactions from 11/1989 - 5/2000.
(b) Initial premiums were found by calculating the percentage difference
between the earliest mentioned offer price and the undisturbed target stock
price. Source: Company filings and public information.
(c) Final premiums were found by calculating the percentage difference between
the consideration ultimately paid and the undisturbed target stock price.
Source: Company filings and public information.