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PROJECT SPACE
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BOARD DISCUSSION MATERIALS
MARCH 29, 2000
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TABLE OF CONTENTS
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Section 1 Executive Summary
Section 2 Valuation Analysis
Section 3 Alternative Transaction Structures
Section 4 Operating Business Valuation
Section 5 Venus Overview
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SECTION 1
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EXECUTIVE SUMMARY
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EXECUTIVE SUMMARY
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SUMMARY OF PROPOSAL
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o STAR'S BOARD HAS RECEIVED AN INTEGRATED MERGER PROPOSAL FROM VENUS AND A
FINANCIAL BUYER GROUP
o UNDER THIS PROPOSAL, STAR WOULD MERGE INTO VENUS, WITH THE CONDITION THAT
STAR'S OPERATING BUSINESSES ARE SOLD TO THE FINANCIAL BUYER GROUP
IMMEDIATELY PRIOR TO CLOSING OF THE MERGER
- Star shareholders would receive Venus shares and cash as merger
consideration
- Indicated value of approximately $77.50 per share (0.47 shares of Venus
and $5 of cash), based on current prices(1)
- Prior to the closing of the merger, the Financial Buyer Group would
acquire operating assets (with $800 million of working capital cash) for
$2.0 billion and assume golden parachute liabilities up to $100 million
- Venus would receive Star's 128.1 million Venus shares for 109.3 million
newly issued Venus shares
- Venus would issue additional Venus shares for certain Star
investments, valued at their after tax value and specified liquidity
discounts for a total number of shares of approx. 112.6 million
- Venus may also elect to deliver an additional $750 million of stock
in exchange for additional cash being retained for Venus's benefit
- Additional payments may be available to Star shareholders post-closing
based on potential tax refunds or other credits
o PROPOSED STRUCTURE APPEARS ATTRACTIVE RELATIVE TO ALTERNATIVE TRANSACTION
STRUCTURES
- Significant premium versus most status quo outcomes
- Venus shares received directly by Star shareholders in a tax-efficient
manner
- No uncertainty regarding future trading valuation of drives business
- Eliminates uncertainty related to trading value of an "HoldCo" structure
- Can be executed relatively near-term
Note
1. All values in this presentation relating to the merger consideration are
based on Venus share price of $154.94 as of 3/28/00 and tax assumptions and
transaction mechanics based on Star management estimates.
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EXECUTIVE SUMMARY
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TRANSACTION SUMMARY
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MAJOR TRANSACTION TERMS
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VENUS MERGER:
o At closing of the merger with Venus, Star will hold securities and cash:
- all Venus shares currently held by Star (128.1 million shares post
split)
- other investments (SanDisk, Gadzoox, CVC, Dragon)
- $500 million cash, at Venus' option (decided at closing), can be
increased to $750 million if Star sells $200 million or more of
securities prior to closing
o Venus will issue shares to Star Shareholders (the "Stock Consideration"):
- 109.3 million Venus shares (14.6257% nominal discount to underlying
shares; 10.3% effective discount)
- Additional Venus shares for securities, valued at after-tax values at
specified liquidity discounts(1) (approx. 3.3 million shares based on
current prices)
- Additional shares for $500 million of cash (approx. 3.2 million shares
based on current prices), if applicable
- Actual shares for investments/cash to be determined at closing
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FINANCIAL BUYER ACQUISITION:
o Prior to closing of the merger, the Financial Buyer Group will purchase
Star's operating businesses:
- Operating Assets: Disc Drives, Software, Tape, XIOtech
- $800 million cash
o Consideration Paid:
- $2.0 billion
- assumption of excess parachute payment liability up to $100 million
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OTHER CASH:
o Shareholders will receive cash at closing in the merger (the "Cash
Consideration") (approx. $1.3 billion, or $5 per share)
- excess cash
- tax liability
- debt
- options adjustments
o Star shareholders to receive potential additional cash payment related to
any tax refund after the final tax return has been filed (six to nine months
after closing)
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ESTIMATED VALUE TO BE RECEIVED BY STAR SHAREHOLDERS:
o Approximate value per share: $77.50 (as of 3/28/00)
- 0.47 Venus shares
- $5 cash
o Additional tax payment: up to an estimated $1.60 per share
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Note:
1. Discount is 20% for SanDisk and 40% for other investments.
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EXECUTIVE SUMMARY
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OTHER TRANSACTION TERMS
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ADDITIONAL TRANSACTION TERMS
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ACCOUNTING TREATMENT:
Purchase Accounting for both transactions
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TAX TREATMENT:
o Stock portion of merger consideration tax-free to Star shareholders; cash
portion taxable
o Sale of operating business: taxable transaction to Star
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RESTRICTED STOCK:
vesting TBD
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OPTIONS TREATMENT:
$200 million of in-the-money amount to be rolled into new operating company;
remainder to be accelerated
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TREATMENT OF DEBT:
Debt to be defeased or retired prior to Closing
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EXCLUDED LIABILITIES:
- - Star to assume some operating liabilities: Accrued Interest, Accrued Stock
Purchase Plan Costs, Accrued Bonuses, Accrued Profit Sharing
- - Star to extinguish Canadian tax liability associated with recapitalization
of Star Software prior to closing (ruling, settlement or payment); potential
to obtain refund
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FINANCING COMMITMENT:
Signed commitment letters submitted by Financial Buyer Group
- - $640MM senior debt
- - $400MM subordinated debt
- - $200MM senior revolving debt
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INDEMNIFICATION:
Financial Buyer Group to indemnify Venus against all tax and other liabilities
not relating to the Venus shares
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REPRESENTATIONS AND WARRANTIES:
Customary public company representations and warranties
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CLOSING CONDITIONS:
Star and Venus shareholder votes; regulatory approval; cross-conditioned on
Financial Buyer acquisition
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EXECUTIVE SUMMARY
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ANALYSIS OF ASSETS ACQUIRED
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o TWO STEP TRANSACTION:
- OPERATING BUSINESS IS SOLD TO FINANCIAL BUYER GROUP AND DEBT IS RETIRED
AND OPTIONS ARE EXERCISED
- VENUS MERGES WITH REMAINING STAR FOR STOCK AND CASH
o VENUS MAY ALSO ELECT TO ISSUE ADDITIONAL STOCK FOR $500 MILLION OF CASH
[FLOW CHART]
Notes:
(1) Assumes Venus elects to issue shares for $500 million of cash.
(2) Includes X10tech and telecoms business.
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EXECUTIVE SUMMARY
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SUMMARY OF MERGER CONSIDERATION
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o THE INDICATED VALUE OF THE PROPOSAL IS APPROXIMATELY $77.50 PER SHARE, BASED
ON CURRENT PRICES
o STAR SHAREHOLDERS MAY BE ENTITLED TO ADDITIONAL PAYMENTS FOR TAX REFUNDS
VENUS ISSUES SHARES FOR $500MM OF CASH VENUS ISSUES NO SHARES FOR CASH
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APPROX. APPROX.
VENUS APPROXIMATE VALUE VENUS APPROXIMATE VALUE
SHARES TOTAL PER STAR SHARES TOTAL PER STAR
ISSUED VALUE(1) SHARE(2) ISSUED VALUE(1) SHARE(2)
---------- ----------- ---------- ---------- ----------- ----------
Buyer Purchase Price $ 2,000.0 $ 2,000.0
Less: Cash Retained by Venus ($ 500.0) $ 0.0
Plus: Net Excess Cash ($ 248.9) ($ 248.9)
---------- ---------- ---------- ----------
Cash Consideration $ 1,251.1 $ 5.05 $ 1,751.1 $ 7.07
Venus Shares 109.33 $ 16,939.4 109.33 $ 16,939.4
Investments 3.26 $ 505.1 3.26 $ 505.1
Retained Venus Cash 3.23 $ 500.0 0.00 $ 0.0
---------- ---------- ---------- ---------- ---------- ----------
Stock Consideration 115.82 $ 17,944.4 $ 72.43 112.59 $ 17,444.4 $ 70.41
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TOTAL $ 19,195.5 $ 77.48 $ 19,195.5 $ 77.48
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Potential Tax Refund $ 396.8 $ 1.60 $ 396.8 $ 1.60
POTENTIAL TOTAL $ 19,592.3 $ 79.08 $ 19,592.3 $ 79.08
Notes:
(1) Reflects Venus closing price of $154.94 as of 3/28/00.
(2) Reflects total net shares in merger of 247.7MM.
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EXECUTIVE SUMMARY
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REALIZED VALUE FOR STAR SHAREHOLDERS
($MM, EXCEPT PER SHARE AMOUNTS)
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APPROXIMATE VALUE PER STAR SHARE PREMIUM TO STAR(5) PREMIUM TO UNAFFECTED STAR(6)
-------------------------------- ---------------------- -------------------------------
PREMIUM / 3/28/2000 30-DAY AVG 3/8/2000 10-DAY AVG 30-DAY AVG
PRO FORMA (DISCOUNT) VENUS --------- ---------- -------- ---------- ----------
VENUS PRICE VENUS PRICE TO CURRENT STOCK(1)(2) CASH(3) TOTAL(4) $68.00 $57.38 $54.50 $51.27 $46.53
- ------------- ----------- ---------- ----------- ------- -------- --------- ---------- -------- ---------- ----------
$110.00 (29%) $ 53.55 $ 5.14 $ 58.70 (14%) 2% 8% 14% 26%
30 Day Avg. $119.70 (23%) $ 57.63 $ 5.12 $ 62.75 (8%) 9% 15% 22% 35%
$120.00 (23%) $ 57.76 $ 5.12 $ 62.88 (8%) 10% 15% 23% 35%
$130.00 (16%) $ 61.96 $ 5.09 $ 67.06 (1%) 17% 23% 31% 44%
$140.00 (10%) $ 66.16 $ 5.07 $ 71.24 5% 24% 31% 39% 53%
10 Day Avg. $140.50 (9%) $ 66.37 $ 5.07 $ 71.44 5% 25% 31% 39% 54%
$150.00 (3%) $ 70.36 $ 5.06 $ 75.42 11% 31% 38% 47% 62%
5 Day Avg. $153.25 (1%) $ 71.72 $ 5.05 $ 76.77 13% 34% 41% 50% 65%
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Current $154.94 0% $ 72.43 $ 5.05 $ 77.48 14% 35% 42% 51% 67%
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3/8/2000 $158.81 3% $ 74.06 $ 5.04 $ 79.10 16% 38% 45% 54% 70%
$160.00 3% $ 74.56 $ 5.04 $ 79.60 17% 39% 46% 55% 71%
All-Time High $168.69 9% $ 78.20 $ 5.03 $ 83.23 22% 45% 53% 62% 79%
$170.00 10% $ 78.75 $ 5.03 $ 83.78 23% 46% 54% 63% 80%
$180.00 16% $ 82.94 $ 5.02 $ 87.96 29% 53% 61% 72% 89%
$190.00 23% $ 87.13 $ 5.01 $ 92.14 35% 61% 69% 80% 98%
$200.00 29% $ 91.32 $ 5.00 $ 96.32 42% 68% 77% 88% 107%
$210.00 36% $ 95.51 $ 4.99 $100.50 48% 75% 84% 96% 116%
$220.00 42% $ 99.70 $ 4.98 $104.68 54% 82% 92% 104% 125%
Notes:
(1) Based on exchange discount of 14.6257% post Venus shares post-liquidity,
post-tax investments and $500MM of cash.
(2) Based on Star's ownership of 128.1MM Venus shares and Venus closing price of
$154.94 as of 3/28/00.
(3) Assumes Venus elects to retain $500.0MM of cash; Star tax basis of assets
sold of $2,002.2MM, corporate tax rate of 40.0% and transaction costs of
$150.0MM.
(4) Based on Star pro forma shares of 247.7MM, including common shares of
227.1MM and net exercised options of 30.6MM.
(5) Analysis based on trading days; averages are for trading period ending
3/28/00.
(6) Analysis based on trading days; averages are for unaffected trading period
ending 3/8/00.
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EXECUTIVE SUMMARY
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TRANSACTION CONSIDERATIONS
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BENEFITS:
+ Delivers Venus shares to Star shareholders in tax-efficient manner
+ Significant premium to historical share price
+ Fixed cash amount received for drives and other operating businesses (no
exposure to public market valuation)
+ No execution risk on drives business post-closing, including industry
conditions, market conditions, and management retention
ISSUES:
- - Exposure to Venus stock valuation
- - Lose potential upside on other businesses (software, telecom, SAN)
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SECTION 2
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VALUATION ANALYSIS
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VALUATION ANALYSIS
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IMPLIED VALUATION OF THE OPERATING BUSINESSES
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EQUITY VALUE ($MM)
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AFTER-TAX VALUE OF IMPLIED VALUE OF
DATE STAR SECURITIES AND CASH (1) OPERATING BUSINESS
- --------- --------- ----------------------- ------------------
28-Mar-00 $16,915.9 $13,443.8 $ 3,472.1
27-Mar-00 17,896.6 14,535.7 3,361.0
24-Mar-00 17,700.5 14,015.0 3,685.5
23-Mar-00 17,406.3 13,708.7 3,697.6
22-Mar-00 16,965.0 13,959.7 3,005.3
21-Mar-00 16,180.4 12,910.1 3,270.3
20-Mar-00 16,392.9 12,406.5 3,986.4
17-Mar-00 17,112.1 14,096.2 3,015.8
16-Mar-00 16,491.0 13,128.8 3,362.2
15-Mar-00 14,533.7 11,726.6 2,807.0
14-Mar-00 16,147.7 13,438.2 2,709.6
13-Mar-00 17,308.2 14,260.5 3,047.7
10-Mar-00 16,000.6 14,501.1 1,499.5
09-Mar-00 14,545.9 14,129.6 416.3
08-Mar-00 13,385.4 13,829.2 (443.7) 3/8/00 - CNBC story speculates about a
07-Mar-00 13,532.5 14,152.3 (619.8) transaction with Venus
06-Mar-00 13,663.3 13,767.7 (104.4)
03-Mar-00 13,483.5 12,922.8 560.7
02-Mar-00 12,600.9 12,004.3 596.6
01-Mar-00 12,453.8 11,825.8 628.0
29-Feb-00 11,636.5 11,601.4 35.1
28-Feb-00 11,603.8 11,079.9 523.9
25-Feb-00 11,326.0 10,710.5 615.4
24-Feb-00 11,718.3 11,115.9 602.4
23-Feb-00 11,309.6 10,753.7 556.0
22-Feb-00 10,721.2 10,173.7 547.5
18-Feb-00 10,901.0 10,239.0 662.0
17-Feb-00 11,342.3 10,277.2 1,065.1
16-Feb-00 11,554.8 9,873.5 1,681.3
15-Feb-00 11,293.3 9,856.4 1,436.9
14-Feb-00 11,195.2 9,991.4 1,203.8
11-Feb-00 11,276.9 10,179.0 1,097.9
10-Feb-00 11,571.2 10,484.7 1,086.4
09-Feb-00 11,031.8 9,775.6 1,256.2
08-Feb-00 11,129.8 10,025.8 1,104.0
07-Feb-00 10,884.7 9,319.1 1,565.5
04-Feb-00 10,508.7 9,361.6 1,147.2
03-Feb-00 10,165.5 9,284.1 881.4
02-Feb-00 10,034.7 9,179.7 855.0
01-Feb-00 9,854.9 9,224.2 630.8
31-Jan-00 9,528.0 8,770.8 757.2
28-Jan-00 9,658.8 9,177.7 481.1
27-Jan-00 9,724.2 9,407.5 316.7
26-Jan-00 9,953.0 9,320.5 632.6
25-Jan-00 10,002.0 9,466.5 535.6
24-Jan-00 9,756.9 9,026.1 730.7
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21-Jan-00 10,214.5 10,069.8 144.7
20-Jan-00 10,198.2 9,256.8 941.4
19-Jan-00 9,904.0 8,827.6 1,076.3
18-Jan-00 10,230.9 8,817.3 1,413.6
14-Jan-00 10,427.0 8,758.5 1,668.5
13-Jan-00 9,985.7 8,414.1 1,571.6
12-Jan-00 9,854.9 7,705.9 2,149.1
11-Jan-00 10,639.5 8,009.7 2,629.8
10-Jan-00 10,181.8 8,615.4 1,566.5
07-Jan-00 9,773.2 7,616.1 2,157.1
06-Jan-00 9,511.7 7,085.1 2,426.6
05-Jan-00 10,018.4 7,769.5 2,248.9
04-Jan-00 10,083.8 7,931.7 2,152.1
03-Jan-00 11,162.5 8,533.1 2,629.4
31-Dec-99 11,309.6 8,592.1 2,717.5
30-Dec-99 11,375.0 8,276.9 3,098.2
29-Dec-99 11,538.5 8,446.8 3,091.6
28-Dec-99 11,407.7 8,202.0 3,205.7
27-Dec-99 11,800.0 8,115.9 3,684.1
23-Dec-99 11,326.0 8,600.7 2,725.3
22-Dec-99 10,737.6 8,140.2 2,597.4
21-Dec-99 10,373.9 7,608.6 2,765.3
20-Dec-99 10,574.1 7,721.8 2,852.3
17-Dec-99 10,721.2 7,323.7 3,397.5
16-Dec-99 10,835.6 7,108.8 3,726.8
15-Dec-99 9,805.9 6,863.7 2,942.2
14-Dec-99 9,577.1 6,575.2 3,001.8
13-Dec-99 9,871.3 6,859.5 3,011.8
10-Dec-99 9,282.9 6,933.6 2,349.2
09-Dec-99 9,397.3 6,871.9 2,525.4
08-Dec-99 9,462.7 6,706.1 2,756.5
07-Dec-99 9,364.6 6,635.4 2,729.2
06-Dec-99 9,593.4 6,662.4 2,931.0
03-Dec-99 9,528.0 6,774.7 2,753.3
02-Dec-99 9,168.5 6,429.5 2,738.9
01-Dec-99 9,005.0 6,152.2 2,852.8
30-Nov-99 8,808.9 6,026.3 2,782.6
29-Nov-99 9,201.1 6,485.3 2,715.9
26-Nov-99 9,135.8 6,675.4 2,460.3
24-Nov-99 9,315.6 6,520.5 2,795.1
23-Nov-99 9,495.3 6,453.2 3,042.1
22-Nov-99 9,642.5 6,595.5 3,047.0
19-Nov-99 9,266.5 6,295.2 2,971.3
18-Nov-99 8,890.6 6,055.3 2,835.3
17-Nov-99 8,531.0 5,761.2 2,769.8
16-Nov-99 8,939.6 5,826.8 3,112.8
15-Nov-99 9,005.0 5,456.7 3,548.3
12-Nov-99 8,808.9 5,309.2 3,499.6
11-Nov-99 8,269.5 5,233.3 3,036.2
10-Nov-99 8,416.6 5,324.1 3,092.5
09-Nov-99 8,106.0 5,265.4 2,840.6
08-Nov-99 7,893.5 5,130.0 2,763.6
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05-Nov-99 7,517.6 5,007.3 2,510.3
04-Nov-99 7,403.2 5,012.1 2,391.1
03-Nov-99 7,092.6 4,926.1 2,166.5
02-Nov-99 6,912.9 4,815.3 2,097.6
01-Nov-99 6,782.1 4,871.2 1,910.9
29-Oct-99 6,831.1 4,899.4 1,931.8
28-Oct-99 6,536.9 4,660.2 1,876.7
27-Oct-99 6,193.7 4,402.2 1,791.4
26-Oct-99 6,144.6 4,283.8 1,860.8
25-Oct-99 6,210.0 4,452.2 1,757.8
22-Oct-99 6,324.4 4,450.8 1,873.7
21-Oct-99 6,275.4 4,409.6 1,865.8
20-Oct-99 6,716.7 4,322.8 2,393.9
19-Oct-99 6,487.9 4,096.0 2,391.9
18-Oct-99 6,340.8 4,091.7 2,249.1
15-Oct-99 6,618.6 4,324.8 2,293.9
14-Oct-99 6,814.8 4,015.3 2,799.4
13-Oct-99 6,847.5 4,068.3 2,779.1
12-Oct-99 7,337.8 4,128.9 3,208.9
11-Oct-99 7,435.9 4,203.0 3,232.9
08-Oct-99 6,961.9 4,062.7 2,899.2
07-Oct-99 7,092.6 4,114.6 2,978.0
06-Oct-99 7,435.9 4,189.9 3,246.0
05-Oct-99 7,337.8 4,160.3 3,177.5
04-Oct-99 7,272.4 3,916.4 3,356.1
01-Oct-99 7,158.0 3,762.4 3,395.6
30-Sep-99 7,141.7 3,833.4 3,308.2
29-Sep-99 7,043.6 3,872.4 3,171.2
28-Sep-99 6,912.9 4,004.1 2,908.8
27-Sep-99 6,945.5 3,895.6 3,049.9
24-Sep-99 6,831.1 3,905.6 2,925.5
23-Sep-99 6,978.2 3,889.0 3,089.3
22-Sep-99 7,484.9 4,024.2 3,460.7
21-Sep-99 7,566.6 3,880.3 3,686.4
20-Sep-99 7,762.8 3,980.8 3,782.0
17-Sep-99 7,632.0 3,966.7 3,665.4
16-Sep-99 7,484.9 3,743.1 3,741.9
15-Sep-99 7,550.3 3,698.4 3,851.9
14-Sep-99 7,484.9 3,671.0 3,813.9
13-Sep-99 7,762.8 3,613.5 4,149.3
10-Sep-99 7,926.2 3,795.8 4,130.5
09-Sep-99 7,713.8 3,806.4 3,907.4
08-Sep-99 7,795.5 3,696.0 4,099.5
07-Sep-99 8,285.8 3,626.0 4,659.9
03-Sep-99 8,482.0 3,626.4 4,855.5
02-Sep-99 8,024.3 3,513.6 4,510.8
01-Sep-99 7,991.6 3,468.9 4,522.8
31-Aug-99 7,811.8 3,398.9 4,412.9
30-Aug-99 7,860.9 3,348.5 4,512.4
27-Aug-99 7,730.1 3,404.5 4,325.6
26-Aug-99 7,713.8 3,488.1 4,225.7
25-Aug-99 7,713.8 3,521.1 4,192.6
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24-Aug-99 7,828.2 3,460.9 4,367.3
23-Aug-99 7,795.5 3,436.3 4,359.2
20-Aug-99 7,615.7 3,340.9 4,274.8
19-Aug-99 7,632.0 3,124.6 4,507.4
18-Aug-99 7,452.2 3,204.9 4,247.4
17-Aug-99 7,239.8 3,230.7 4,009.1
16-Aug-99 7,158.0 3,227.7 3,930.4
13-Aug-99 6,782.1 3,149.4 3,632.7
12-Aug-99 6,520.6 3,068.6 3,452.0
11-Aug-99 6,618.6 3,125.5 3,493.1
10-Aug-99 6,471.5 2,949.1 3,522.4
09-Aug-99 6,455.2 2,968.0 3,487.2
06-Aug-99 6,455.2 3,103.8 3,351.4
05-Aug-99 6,128.3 3,207.6 2,920.7
04-Aug-99 6,144.6 3,070.4 3,074.3
03-Aug-99 6,242.7 3,143.1 3,099.6
02-Aug-99 6,373.5 3,185.3 3,188.1
30-Jul-99 6,161.0 3,236.5 2,924.5
29-Jul-99 6,193.7 3,103.6 3,090.1
28-Jul-99 6,291.7 3,202.3 3,089.5
27-Jul-99 5,948.5 3,144.8 2,803.7
26-Jul-99 5,866.8 3,255.5 2,611.3
23-Jul-99 5,817.7 3,388.6 2,429.2
22-Jul-99 5,703.3 3,367.4 2,335.9
21-Jul-99 5,899.5 3,336.1 2,563.4
20-Jul-99 5,817.7 3,267.4 2,550.3
19-Jul-99 6,046.6 3,445.6 2,601.0
16-Jul-99 6,079.3 3,396.0 2,683.2
15-Jul-99 6,978.2 3,131.0 3,847.3
14-Jul-99 7,043.6 3,110.9 3,932.7
13-Jul-99 6,471.5 3,028.6 3,443.0
12-Jul-99 6,602.3 2,988.2 3,614.1
09-Jul-99 6,536.9 3,061.5 3,475.4
08-Jul-99 6,275.4 3,063.2 3,212.2
07-Jul-99 6,291.7 3,050.4 3,241.4
06-Jul-99 6,046.6 3,092.8 2,953.8
02-Jul-99 6,144.6 2,925.6 3,219.0
01-Jul-99 6,112.0 2,882.4 3,229.5
30-Jun-99 5,834.1 2,671.5 3,162.6
29-Jun-99 6,259.1 2,641.5 3,617.6
28-Jun-99 6,880.2 2,646.8 4,233.4
25-Jun-99 6,847.5 2,615.0 4,232.5
24-Jun-99 6,847.5 2,642.5 4,204.9
23-Jun-99 6,945.5 2,670.0 4,275.6
22-Jun-99 6,880.2 2,663.4 4,216.7
21-Jun-99 6,961.9 2,636.0 4,325.9
18-Jun-99 6,635.0 2,562.5 4,072.5
17-Jun-99 6,553.3 2,559.2 3,994.1
16-Jun-99 6,716.7 2,575.3 4,141.4
15-Jun-99 6,733.1 2,561.9 4,171.1
14-Jun-99 7,207.1 2,542.8 4,664.3
11-Jun-99 7,190.7 2,570.6 4,620.1
16
10-Jun-99 7,158.0 2,571.0 4,587.0
09-Jun-99 7,174.4 2,632.7 4,541.6
08-Jun-99 7,305.1 2,653.0 4,652.1
07-Jun-99 7,762.8 2,695.2 5,067.6
04-Jun-99 7,354.2 2,631.4 4,722.8
03-Jun-99 7,632.0 2,558.0 5,074.0
02-Jun-99 7,354.2 2,571.2 4,783.0
01-Jun-99 7,043.6 2,550.0 4,493.7
28-May-99 7,027.3 2,540.2 4,487.1
27-May-99 7,010.9 2,542.5 4,468.5
26-May-99 7,043.6 2,434.4 4,609.2
25-May-99 6,961.9 2,379.0 4,582.9
24-May-99 6,978.2 2,387.0 4,591.3
21-May-99 7,174.4 2,411.2 4,763.2
20-May-99 7,435.9 2,411.9 5,024.0
19-May-99 7,484.9 2,431.3 5,053.7
18-May-99 7,337.8 2,422.6 4,915.2
17-May-99 7,043.6 2,376.9 4,666.7
14-May-99 7,321.5 2,380.1 4,941.4
13-May-99 7,370.5 2,363.2 5,007.3
12-May-99 7,828.2 2,310.0 5,518.1
11-May-99 7,746.4 2,262.9 5,483.6
10-May-99 7,583.0 2,219.4 5,363.6
07-May-99 7,076.3 2,243.5 4,832.8
06-May-99 6,667.7 2,268.3 4,399.3
05-May-99 6,978.2 2,274.6 4,703.6
04-May-99 7,207.1 2,273.7 4,933.4
03-May-99 6,782.1 2,250.5 4,531.6
30-Apr-99 6,422.5 2,232.5 4,190.0
29-Apr-99 6,291.7 2,118.0 4,173.8
28-Apr-99 6,700.4 2,179.3 4,521.0
27-Apr-99 7,550.3 2,226.7 5,323.6
26-Apr-99 6,667.7 2,309.4 4,358.3
23-Apr-99 6,586.0 2,322.4 4,263.5
22-Apr-99 6,716.7 2,263.3 4,453.4
21-Apr-99 6,536.9 2,221.0 4,315.9
20-Apr-99 6,340.8 2,200.9 4,139.9
19-Apr-99 6,144.6 2,114.9 4,029.7
16-Apr-99 6,357.1 2,401.9 3,955.3
15-Apr-99 6,635.0 2,445.0 4,190.0
14-Apr-99 6,504.2 2,498.5 4,005.7
13-Apr-99 6,095.6 2,430.8 3,664.8
12-Apr-99 5,997.5 2,364.6 3,632.9
09-Apr-99 6,569.6 2,377.3 4,192.3
08-Apr-99 7,223.4 2,364.2 4,859.2
07-Apr-99 7,060.0 2,430.4 4,629.6
06-Apr-99 7,174.4 2,542.3 4,632.1
05-Apr-99 7,288.8 2,525.1 4,763.7
01-Apr-99 7,010.9 2,432.1 4,578.8
31-Mar-99 6,863.8 2,406.6 4,457.2
30-Mar-99 6,569.6 2,480.9 4,088.8
29-Mar-99 6,536.9 2,509.7 4,027.2
17
26-Mar-99 6,324.4 2,349.8 3,974.6
================================================================================
Note:
1. After-Tax value of securities and net cash based on after-tax value of
holdings of 128.1MM shares of Venus, 4.1MM shares of SanDisk, 5.1MM shares
of Gadzoox Networks, 2.4MM shares of CVC, $225.7MM holding in Dragon
Systems, and $480MM in net cash after repatriation. Assumes tax rate of 40%.
18
PROJECT SPACE
- - The merger consideration reflects a 15% - 45% premium to Star's stock price
over recent trading periods
================================================================================
VALUATION ANALYSIS
================================================================================
IMPLIED HISTORICAL TRANSACTION PREMIUM ANALYSIS
- --------------------------------------------------------------------------------
IMPLIED VALUE OF
MERGER
PERIOD VENUS PRICE CONSIDERATION STAR PRICE IMPLIED PREMIUM
- -------------- ----------- ---------------- ---------------- ---------------
CURRENT(1)
3/28/2000 $155 $ 77 $ 68 14%
30-Day Average $143 $ 73 $ 57 26%
UNAFFECTED(2)
3/8/2000 $159 $ 79 $ 55 45%
5-Day Average $153 $ 77 $ 54 41%
10-Day Average $140 $ 71 $ 51 39%
30-Day Average $120 $ 63 $ 47 35%
60-Day Average $105 $ 56 $ 45 26%
120-Day Average $ 76 $ 45 $ 39 15%
Notes:
(1) Analysis based on trading period ending 3/28/00.
(2) Analysis based on trading days; averages are for trading period ending
3/8/00.
11
19
PROJECT SPACE
- - THE MERGER CONSIDERATION FROM VENUS REFLECTS A 47% PREMIUM TO THE UNDERLYING
AFTER-TAX VALUE OF STAR'S INVESTMENTS
================================================================================
VALUATION ANALYSIS
================================================================================
VALUE REALIZED FOR VENUS SHARES / OTHER INVESTMENTS
($MM)
- --------------------------------------------------------------------------------
VENUS WITH OTHER
SHARES ONLY SECURITIES(1)
----------- -------------
Underlying Shares 128.1 128.1
Shares Received 109.3 112.6
"Nominal Discount"(1) 14.6257% 12.1%
Value of Venus Shares Received by Star Shareholders $ 16,939 $ 17,444
- ------------------------------------------------------------------------------------------------
"Nominal" Premium to After-Tax Value 42% 40%
================================================================================================
Value Lost by Star vs. Pre-Tax Venus Value $ 3,049 $ 3,049
Portion of discount "recovered" by Star shareholders(2) $ 857 $ 857
Total Value to Star Shareholders $ 17,797 $ 18,302
"Effective Discount"(2) 10.3% 7.8%
- ------------------------------------------------------------------------------------------------
"Effective" Premium to After-Tax Value 49% 47%
================================================================================================
Notes:
(1) Reflects discount to underlying shares held by Star.
(2) Reflects benefit accruing to Star shareholders through their pro forma 30%
stake in Venus, based on 5.1% financial accretion to Venus.
- --------------------------------------------------------------------------------
TAXABLE SALE VS. VENUS MERGER
$Bn
- --------------------------------------------------------------------------------
[BAR GRAPH]
$12.5Bn
Current after-tax value of Venus stake and Other Investments(1)
$17.4Bn
Value of Venus stake and investments realized
- --------------------------------------------------------------------------------
Note:
(1) Other investments valued at stipulated liquidity discounts.
12
20
PROJECT SPACE
================================================================================
VALUATION ANALYSIS
================================================================================
OPERATING COMPANY VALUATION MATRIX
($MM)
- --------------------------------------------------------------------------------
Equity Value / Cash Net Income(1)
Aggregate Equity -----------------------------------------------------------------------
Value / Value / Base Case Upside Case Sensitivity Case
Aggregate CY2000E CY2000E ------------------------------------- ----------- ----------------
Equity Value Value(1) Revenue Revenue CY2000E CY2001E CY2002E CY2002E CY2002E
- ------------ --------- --------- --------- --------- --------- --------- ----------- ----------------
- ----------------------------------------------------------------------------------------------------------------------------
Statistic: $7,018 $7,018 $ 147 $ 217 $ 318 $ 584 $ 213
============================================================================================================================
$1,700 $ 950 0.14x 0.24x 11.5x 7.8x 5.3x 2.9x 8.0x
$1,800 $1,050 0.15x 0.26x 12.2x 8.3x 5.7x 3.1x 8.5x
$1,900 $1,150 0.16x 0.27x 12.9x 8.7x 6.0x 3.3x 8.9x
- ----------------------------------------------------------------------------------------------------------------------------
$2,000 $1,250 0.18x 0.28x 13.6x 9.2x 6.3x 3.4x 9.4x
- ----------------------------------------------------------------------------------------------------------------------------
$2,100 $1,350 0.19x 0.30x 14.2x 9.7x 6.6x 3.6x 9.9x
$2,200 $1,450 0.21x 0.31x 14.9x 10.1x 6.9x 3.8x 10.3x
$2,300 $1,550 0.22x 0.33x 15.6x 10.6x 7.2x 3.9x 10.8x
$2,400 $1,650 0.24x 0.34x 16.3x 11.0x 7.5x 4.1x 11.3x
Notes:
(1) Equity value assumes no debt and total cash of $800.0MM and $50.0MM in
golden parachute liabilities.
Base case as provided by management.
Upside case as provided by management.
Sensitivity case same as base case but assuming 2000E gross margins for
desktop segment of disc drive business remain constant throughout 2008E.
13
21
PROJECT SPACE
- - THE PROPOSED TRANSACTION REFLECTS A 12% - 36% PREMIUM TO A HYPOTHETICAL
AFTER-TAX SUM-OF-THE-PARTS ANALYSIS
- - THESE VALUES WOULD NOT BE REALIZABLE TODAY GIVEN LIQUIDITY AND OTHER
CONSTRAINTS
================================================================================
VALUATION ANALYSIS
================================================================================
HYPOTHETICAL SUM-OF-THE-PARTS VALUE
- --------------------------------------------------------------------------------
LOW HIGH
-------- --------
Operating Businesses(1) $ 1,000 $ 4,000
Venus Shares(2) $ 11,969 $ 11,969
Other Investments(3) $ 712 $ 712
Cash (after-tax)(4) $ 1,185 $ 1,185
Debt $ (755) $ (705)
-------- --------
TOTAL $ 14,161 $ 17,161
Per Share $ 57.16 $ 69.27
- ------------------------------------------------------------------------------
INDICATED TRANSACTION VALUE(5) $ 19,196 $ 19,196
Per Share $ 77.48 $ 77.48
% Premium to Sum-of-the-Parts 36% 12%
==============================================================================
Notes:
(1) Excludes cash, includes Drives, Tape, Software and XIOtech. Range reflects
base case discounted equity value up to the hypothetical sum-of-the-parts
value.
(2) After-tax value.
(3) After-tax value of SanDisk, CVC, Gadzoox and Dragon Systems.
(4) Includes SanDisk proceeds.
(5) Based on prices as of 3/28/00.
14
22
PROJECT SPACE
================================================================================
SECTION 3
================================================================================
ALTERNATIVE TRANSACTION STRUCTURES
- --------------------------------------------------------------------------------
23
PROJECT SPACE
================================================================================
ALTERNATIVE TRANSACTION STRUCTURES
================================================================================
OVERVIEW OF STRUCTURES
- --------------------------------------------------------------------------------
- - Each structure must be evaluated on a number of dimensions
- Value for shareholders
- Timing / certainty
- Management impact
- Risk / uncertainty
- - The proposed structure (Venus Merger / Sale of Businesses) has many benefits
versus other structures
- Most certainty of value (fixed number of Venus shares, cash portion
determined with fixed formula)
- Achievable near-term
- Management support
- "Permanent" resolution of embedded Venus investments
16
24
PROJECT SPACE
- - The current proposal offers the most certainty to Star shareholders in terms
of value and completion risk
================================================================================
ALTERNATIVE TRANSACTION STRUCTURES
================================================================================
SUMMARY VALUATION
- --------------------------------------------------------------------------------
VALUE PER STAR SHARE (1)
$
- --------------------------------------------------------------------------------
VALUE PER STAR SHARE (1)
------------------------
LOW HIGH
------ ------
Current Proposal (Venus Merger/Sale) (2) $77.48 $82.47
Status Quo (3) 33.69 95.39
HoldCo / Tax-Free Spin (4) 69.75 88.78
HoldCo / Taxable Spin (5) 69.75 88.78
Venus Merger / Spin (6) 75.76 86.78
- --------------------------------------------------------------------------------
Notes:
(1) Reflects Venus share price of $154.94 as of 3/28/00.
(2) High end includes pick-up related to Venus EPS accretion and includes
amount from tax refund, shown in different color.
(3) Assumes operating business trades at 10 - 15 P/E, annual Venus share price
increases /(decreases) 40%-(20%). Star continues to sell Venus shares and
repurchases own shares, 20% discount rate applied.
(4) Assumes tax-free spin-off of operating businesses, which is assumed to
trade at equity values of $1,500 - 3,500 million, remaining Star holding
Venus shares as well as Software and Tape businesses will trade at 5-20%
discount to the pre-tax value of underlying Venus shares.
(5) Assumes taxable spin-off of all assets excluding Venus shares, SpinCo is
assumed to trade at equity values of $1,500 - 3,500 million. Remaining Star
(holding only Venus shares) will trade at 5-20% discount to the pre-tax
value of the underlying Venus shares.
(6) Assumes spin-off of all assets excluding Venus shares and investments,
SpinCo is assumed to trade at equity values of $1,500 - 3,500 million.
Remaining Star (holding Venus shares and other investments) will merge
with Venus under same structure as current proposal.
17
25
PROJECT SPACE
================================================================================
ALTERNATIVE TRANSACTION STRUCTURES
================================================================================
OVERVIEW OF POTENTIAL STRUCTURES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. CURRENT PROPOSAL (VENUS MERGER / SALE)
- Sale of Operating Business to Financial Buyer
- Merge remaining Star (holding Venus shares and investments) with Venus
- Star shareholders to receive Venus shares and cash
- --------------------------------------------------------------------------------
2. STATUS QUO
- Continue current business model
- Manage Operating Businesses under scrutiny of public markets
- Sell Venus shares (taxable transaction)
- Buy-back Star stock
- --------------------------------------------------------------------------------
3. HOLDCO / TAX-FREE SPIN
- Spin-off Drives in tax-free transaction
- HoldCo would hold Venus shares, software and tape
- Continue to manage under scrutiny of public markets
- --------------------------------------------------------------------------------
4. HOLDCO / TAXABLE SPIN
- Spin-off all operating businesses, investments and excess net cash
- Remaining shell would hold only Venus shares
- --------------------------------------------------------------------------------
5. VENUS MERGER / SPIN
- Spin off Operating Businesses to shareholders (tax-free to shareholders,
taxable to Star)
- Merge remaining Star (holding Venus shares and investments) with Venus
- Star shareholders to receive Venus shares and shares in Operating
Company
- --------------------------------------------------------------------------------
18
26
PROJECT SPACE
================================================================================
SECTION 4
================================================================================
OPERATING BUSINESS VALUATION
- --------------------------------------------------------------------------------
27
PROJECT SPACE
================================================================================
OPERATING BUSINESS VALUATION
================================================================================
SUMMARY VALUATION
($MM, EXCEPT PER SHARE AMOUNTS)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OPERATING BUSINESSES EQUITY VALUE (1)
- --------------------------------------------------------------------------------
OPERATING BUSINESSES EQUITY VALUE(1)
------------------------------------
PROPOSAL LOW HIGH
---------- ------ ------
TRADING VALUATION
Comparable Companies
.20x - .45x CY2000E Revenue $2,000 $2,200 $4,000
Discounted Equity Value
8x - 16x CY2001E Net Income
Upside 2,000 2,900 6,000
Base 2,000 1,500 3,100
Sensitivity 2,000 1,200 2,400
8x - 16x CY2002E Net Income
Upside 2,000 3,400 7,300
Base 2,000 1,800 4,000
Sensitivity 2,000 1,200 2,700
PRIVATE MARKET VALUATION
DCF Analysis Upside Case 2,000 5,400 6,900
DCF Analysis Base Case 2,000 3,500 4,400
DCF Analysis Sensitivity Case 2,000 2,400 2,900
Hypothetical Sum-of-the-Parts Analysis 2,000 2,600 4,700
Note:
(1) Reflects all operating businesses with a balance sheet of $800MM of cash
and $50 million of non-operating liabilities.
20
28
================================================================================
OPERATING BUSINESS VALUATION
================================================================================
SUMMARY VALUATION
($MM, EXCEPT PER SHARE AMOUNTS)
- --------------------------------------------------------------------------------
AGGREGATE
MULTIPLE RANGE VALUE(1) EQUITY VALUE(1)
FINANCIAL --------------- ---------------- ----------------
VALUATION METHODOLOGY STATISTIC LOW HIGH LOW HIGH LOW HIGH
- ---------------------------------------------------------- --------- ------ ------ ------- ------ ------- ------
TRADING VALUATION
Value Based on Comparable Companies
CY2000E Revenue(2) $7,135 0.20x- 0.45x $1,425- $3,200 $2,175- $3,950
Value Based on Discounted Equity Value Analysis CY2001E(3)
15.0% - 20.0% Discount Rate - Upside Case $ 419 8.0x- 16.0x $2,060- $5,164 $2,910- $6,014
15.0% - 20.0% Discount Rate - Base Case $ 217 8.0x- 16.0x $663- $2,276 $1,513- $3,126
15.0% - 20.0% Discount Rate - Sensitivity Case $ 166 8.0x- 16.0x $303- $1,532 $1,153- $2,382
Value Based on Discounted Equity Value Analysis CY2002E(3)
15.0% - 20.0% Discount Rate - Upside Case $ 584 8.0x- 16.0x $2,531- $6,440 $3,381- $7,290
15.0% - 20.0% Discount Rate - Base Case $ 318 8.0x- 16.0x $998- $3,133 $1,848- $3,983
15.0% - 20.0% Discount Rate - Sensitivity Case $ 213 8.0x- 16.0x $382- $1,807 $1,232- $2,657
PRIVATE MARKET VALUATION
Value Based on Discounted Cash Flow Analysis - Upside Case
6.0x - 9.0x EBITA exit multiple, 15.0% Discount Rate $4,681- $6,139 $5,431- $6,889
Value Based on Discounted Cash Flow Analysis - Base Case
6.0x - 9.0x EBITA exit multiple, 15.0% Discount Rate $2,789- $3,696 $3,539- $4,446
Value Based on Discounted Cash Flow Analysis - Sensitivity Case
6.0x - 9.0x EBITA exit multiple, 15.0% Discount Rate $1,624- $2,169 $2,374- $2,919
Value Based on Hypothetical Sum-of-the-Parts Valuation $1,880- $3,960 $2,630- $4,710
Notes:
(1) Based on $800.0MM of cash and no debt and assumed $50.0MM in golden
parachute liabilities.
(2) Based on MSDW research.
(3) Discounted to 3/28/00.
21
29
================================================================================
OPERATING BUSINESS VALUATION
================================================================================
HISTORICAL AGGREGATE VALUE / REVENUE
- --------------------------------------------------------------------------------
[PERFORMANCE GRAPH]
REVENUE MULTIPLE
---------------------------------------------------------
DATE MXTR WDC HDD CURRENT PROPOSAL
- -------- ---- ---- ---- ----------------
3/28/00 0.56 x 0.44 x 0.17 x 0.18 x
3/27/00 0.60 0.47 0.19 0.18
3/24/00 0.56 0.49 0.18 0.18
3/23/00 0.53 0.49 0.18 0.18
3/22/00 0.53 0.45 0.18 0.18
3/21/00 0.51 0.41 0.17 0.18
3/20/00 0.47 0.40 0.18 0.18
3/17/00 0.51 0.42 0.17 0.18
3/16/00 0.51 0.43 0.16 0.18
3/15/00 0.47 0.37 0.13 0.18
3/14/00 0.47 0.39 0.13 0.18
3/13/00 0.50 0.39 0.15 0.18
3/10/00 0.46 0.30 0.12 0.18
3/9/00 0.47 0.32 0.14 0.18
3/8/00 0.40 0.27 0.12 0.18
3/7/00 0.37 0.27 0.11 0.18
3/6/00 0.33 0.28 0.11 0.18
3/3/00 0.31 0.27 0.10 0.18
3/2/00 0.31 0.28 0.11 0.18
3/1/00 0.33 0.28 0.12 0.18
2/29/00 0.30 0.27 0.09 0.18
2/28/00 0.26 0.24 0.08 0.18
2/25/00 0.23 0.24 0.07 0.18
2/24/00 0.24 0.25 0.08 0.18
2/23/00 0.25 0.26 0.09 0.18
2/22/00 0.22 0.25 0.09 0.18
2/18/00 0.23 0.26 0.08 0.18
2/17/00 0.24 0.27 0.08 0.18
2/16/00 0.24 0.27 0.09 0.18
2/15/00 0.24 0.27 0.09 0.18
2/14/00 0.22 0.28 0.09 0.18
2/11/00 0.23 0.29 0.09 0.18
2/10/00 0.24 0.28 0.09 0.18
2/9/00 0.25 0.29 0.09 0.18
2/8/00 0.25 0.30 0.09 0.18
2/7/00 0.26 0.31 0.09 0.18
2/4/00 0.27 0.30 0.10 0.18
2/3/00 0.27 0.30 0.10 0.18
2/2/00 0.27 0.28 0.10 0.18
2/1/00 0.27 0.28 0.10 0.18
1/31/00 0.24 0.28 0.08 0.18
1/28/00 0.27 0.28 0.08 0.18
1/27/00 0.28 0.27 0.09 0.18
1/26/00 0.30 0.30 0.09 0.18
1/25/00 0.29 0.31 0.09 0.18
1/24/00 0.28 0.28 0.10 0.18
22
30
1/21/00 0.30 0.30 0.12 0.18
1/20/00 0.31 0.32 0.16 0.18
1/19/00 0.31 0.34 0.14 0.18
1/18/00 0.31 0.30 0.13 0.18
1/14/00 0.30 0.27 0.12 0.18
1/13/00 0.30 0.26 0.12 0.18
1/12/00 0.29 0.27 0.12 0.18
1/11/00 0.29 0.31 0.10 0.18
1/10/00 0.31 0.29 0.11 0.18
1/7/00 0.28 0.33 0.11 0.18
1/6/00 0.26 0.27 0.10 0.18
1/5/00 0.25 0.26 0.09 0.18
1/4/00 0.24 0.27 0.10 0.18
1/3/00 0.26 0.24 0.09 0.18
12/31/99 0.26 0.25 0.07 0.18
12/30/99 0.25 0.23 0.06 0.18
12/29/99 0.23 0.23 0.05 0.18
12/28/99 0.22 0.22 0.06 0.18
12/27/99 0.22 0.23 0.07 0.18
12/23/99 0.23 0.23 0.06 0.18
12/22/99 0.22 0.23 0.07 0.18
12/21/99 0.21 0.23 0.07 0.18
12/20/99 0.22 0.24 0.07 0.18
12/17/99 0.23 0.25 0.07 0.18
12/16/99 0.18 0.24 0.06 0.18
12/15/99 0.18 0.22 0.04 0.18
12/14/99 0.18 0.22 0.05 0.18
12/13/99 0.18 0.22 0.05 0.18
12/10/99 0.18 0.22 0.05 0.18
12/9/99 0.19 0.22 0.06 0.18
12/8/99 0.21 0.22 0.06 0.18
12/7/99 0.21 0.23 0.06 0.18
12/6/99 0.21 0.23 0.06 0.18
12/3/99 0.20 0.23 0.07 0.18
12/2/99 0.20 0.23 0.06 0.18
12/1/99 0.20 0.23 0.06 0.18
11/30/99 0.21 0.23 0.07 0.18
11/29/99 0.22 0.25 0.06 0.18
11/26/99 0.23 0.23 0.06 0.18
11/24/99 0.23 0.23 0.06 0.18
11/23/99 0.23 0.23 0.06 0.18
11/22/99 0.24 0.23 0.08 0.18
11/19/99 0.24 0.23 0.08 0.18
11/18/99 0.26 0.24 0.08 0.18
11/17/99 0.26 0.24 0.08 0.18
11/16/99 0.25 0.23 0.07 0.18
11/15/99 0.25 0.23 0.07 0.18
11/12/99 0.25 0.23 0.07 0.18
11/11/99 0.23 0.23 0.07 0.18
11/10/99 0.26 0.25 0.08 0.18
11/9/99 0.20 0.20 0.06 0.18
11/8/99 0.20 0.19 0.05 0.18
31
11/5/99 0.19 0.18 0.04 0.18
11/4/99 0.17 0.18 0.04 0.18
11/3/99 0.17 0.20 0.04 0.18
11/2/99 0.17 0.20 0.04 0.18
11/1/99 0.18 0.20 0.05 0.18
10/29/99 0.18 0.20 0.05 0.18
10/28/99 0.17 0.20 0.05 0.18
10/27/99 0.16 0.20 0.04 0.18
10/26/99 0.16 0.19 0.05 0.18
10/25/99 0.17 0.19 0.06 0.18
10/22/99 0.18 0.21 0.04 0.18
10/21/99 0.18 0.21 0.04 0.18
10/20/99 0.19 0.21 0.04 0.18
10/19/99 0.18 0.21 0.04 0.18
10/18/99 0.19 0.21 0.04 0.18
10/15/99 0.19 0.22 0.04 0.18
10/14/99 0.20 0.22 0.05 0.18
10/13/99 0.19 0.22 0.05 0.18
10/12/99 0.21 0.22 0.06 0.18
10/11/99 0.21 0.23 0.06 0.18
10/8/99 0.22 0.22 0.04 0.18
10/7/99 0.22 0.23 0.05 0.18
10/6/99 0.22 0.24 0.06 0.18
10/5/99 0.22 0.23 0.06 0.18
10/4/99 0.23 0.24 0.07 0.18
10/1/99 0.23 0.25 0.07 0.18
9/30/99 0.23 0.23 0.08 0.18
9/29/99 0.22 0.23 0.07 0.18
9/28/99 0.21 0.24 0.06 0.18
9/27/99 0.21 0.25 0.08 0.18
9/24/99 0.19 0.26 0.08 0.18
9/23/99 0.20 0.27 0.07 0.18
9/22/99 0.21 0.26 0.08 0.18
9/21/99 0.21 0.25 0.09 0.18
9/20/99 0.20 0.27 0.09 0.18
9/17/99 0.21 0.28 0.10 0.18
9/16/99 0.21 0.27 0.09 0.18
9/15/99 0.23 0.29 0.11 0.18
9/14/99 0.24 0.30 0.10 0.18
9/13/99 0.24 0.31 0.12 0.18
9/10/99 0.25 0.31 0.12 0.18
9/9/99 0.25 0.32 0.12 0.18
9/8/99 0.24 0.33 0.11 0.18
9/7/99 0.26 0.34 0.11 0.18
9/3/99 0.26 0.35 0.10 0.18
9/2/99 0.25 0.35 0.10 0.18
9/1/99 0.23 0.37 0.09 0.18
8/31/99 0.22 0.35 0.07 0.18
8/30/99 0.22 0.33 0.07 0.18
8/27/99 0.21 0.32 0.08 0.18
8/26/99 0.22 0.33 0.09 0.18
8/25/99 0.22 0.34 0.10 0.18
32
8/24/99 0.23 0.34 0.09 0.18
8/23/99 0.22 0.33 0.09 0.18
8/20/99 0.22 0.34 0.10 0.18
8/19/99 0.24 0.39 0.12 0.18
8/18/99 0.22 0.33 0.10 0.18
8/17/99 0.20 0.28 0.07 0.18
8/16/99 0.18 0.26 0.08 0.18
8/13/99 0.16 0.23 0.07 0.18
8/12/99 0.16 0.22 0.06 0.18
8/11/99 0.16 0.23 0.07 0.18
8/10/99 0.16 0.23 0.05 0.18
8/9/99 0.16 0.23 0.05 0.18
8/6/99 0.16 0.24 0.05 0.18
8/5/99 0.16 0.25 0.05 0.18
8/4/99 0.16 0.24 0.06 0.18
8/3/99 0.17 0.25 0.08 0.18
8/2/99 0.18 0.27 0.08 0.18
7/30/99 0.18 0.29 0.07 0.18
7/29/99 0.17 0.29 0.08 0.18
7/28/99 0.17 0.29 0.08 0.18
7/27/99 0.16 0.29 0.06 0.18
7/26/99 0.15 0.29 0.06 0.18
7/23/99 0.16 0.30 NA 0.18
7/22/99 0.16 0.33 NA 0.18
7/21/99 0.16 0.35 NA 0.18
7/20/99 0.16 0.34 NA 0.18
7/19/99 0.16 0.35 NA 0.18
7/16/99 0.17 0.36 NA 0.18
7/15/99 0.21 0.39 NA 0.18
7/14/99 0.22 0.40 NA 0.18
7/13/99 0.18 0.34 NA 0.18
7/12/99 0.18 0.35 NA 0.18
7/9/99 0.18 0.36 NA 0.18
7/8/99 0.17 0.36 NA 0.18
7/7/99 0.18 0.37 NA 0.18
7/6/99 0.18 0.37 NA 0.18
7/2/99 0.17 0.37 NA 0.18
7/1/99 0.17 0.37 NA 0.18
6/30/99 0.16 0.37 NA 0.18
6/29/99 0.14 0.36 NA 0.18
6/28/99 0.14 0.37 NA 0.18
6/25/99 0.14 0.36 NA 0.18
6/24/99 0.14 0.37 NA 0.18
6/23/99 0.15 0.38 NA 0.18
6/22/99 0.15 0.38 NA 0.18
6/21/99 0.15 0.38 NA 0.18
6/18/99 0.15 0.38 NA 0.18
6/17/99 0.15 0.37 NA 0.18
6/16/99 0.15 0.39 NA 0.18
6/15/99 0.14 0.39 NA 0.18
6/14/99 0.17 0.41 NA 0.18
6/11/99 0.18 0.42 NA 0.18
33
6/10/99 0.18 0.43 NA 0.18
6/9/99 0.17 0.44 NA 0.18
6/8/99 0.17 0.42 NA 0.18
6/7/99 0.19 0.44 NA 0.18
6/4/99 0.18 0.43 NA 0.18
6/3/99 0.19 0.44 NA 0.18
6/2/99 0.20 0.44 NA 0.18
6/1/99 0.20 0.45 NA 0.18
5/28/99 0.20 0.45 NA 0.18
5/27/99 0.20 0.44 NA 0.18
5/26/99 0.20 0.44 NA 0.18
5/25/99 0.21 0.47 NA 0.18
5/24/99 0.21 0.49 NA 0.18
5/21/99 0.23 0.50 NA 0.18
5/20/99 0.23 0.52 NA 0.18
5/19/99 0.24 0.50 NA 0.18
5/18/99 0.25 0.50 NA 0.18
5/17/99 0.27 0.50 NA 0.18
5/14/99 0.26 0.51 NA 0.18
5/13/99 0.25 0.51 NA 0.18
5/12/99 0.27 0.49 NA 0.18
5/11/99 0.26 0.47 NA 0.18
5/10/99 0.24 0.47 NA 0.18
5/7/99 0.22 0.43 NA 0.18
5/6/99 0.22 0.43 NA 0.18
5/5/99 0.23 0.44 NA 0.18
5/4/99 0.22 0.43 NA 0.18
5/3/99 0.22 0.45 NA 0.18
4/30/99 0.19 0.46 NA 0.18
4/29/99 0.17 0.47 NA 0.18
4/28/99 0.19 0.46 NA 0.18
4/27/99 0.19 0.50 NA 0.18
4/26/99 0.18 0.42 NA 0.18
4/23/99 0.19 0.43 NA 0.18
4/22/99 0.28 0.42 NA 0.18
4/21/99 0.25 0.38 NA 0.18
4/20/99 0.24 0.40 NA 0.18
4/19/99 0.25 0.40 NA 0.18
4/16/99 0.28 0.40 NA 0.18
4/15/99 0.27 0.41 NA 0.18
4/14/99 0.31 0.40 NA 0.18
4/13/99 0.30 0.40 NA 0.18
4/12/99 0.28 0.42 NA 0.18
4/9/99 0.29 0.41 NA 0.18
4/8/99 0.29 0.42 NA 0.18
4/7/99 0.27 0.42 NA 0.18
4/6/99 0.26 0.43 NA 0.18
4/5/99 0.27 0.44 NA 0.18
4/1/99 0.27 0.45 NA 0.18
3/31/99 0.25 0.45 NA 0.18
3/30/99 0.25 0.45 NA 0.18
3/29/99 0.26 0.47 NA 0.18
34
3/26/99 0.26 0.48 NA 0.18
================================================================================
35
================================================================================
OPERATING BUSINESS VALUATION
================================================================================
HISTORICAL FINANCIAL PERFORMANCE
- --------------------------------------------------------------------------------
HISTORICAL(1) ESTIMATED PROJECTED - BASE CASE
---------------------------------------------------------- --------- --------------------------------
1995A 1996A 1997A 1998A 1999A 2000E 2001E 2002E 2003E
-------- -------- -------- -------- -------- --------- -------- -------- --------
TOTAL REVENUE $7,256.2 $8,588.4 $8,507.4 $6,522.2 $6,539.2 $6,619.0 $7,417.1 $8,563.8 $9,503.5
% Growth 18.4% N.M. (23.3%) 0.3% 1.2% 12.1% 15.5% 11.0%
GROSS PROFIT 1,373.4 1,581.0 1,846.8 820.1 1,357.1 1,261.3 1,405.8 1,692.1 2,042.1
% of Sales 18.9% 18.4% 21.7% 12.6% 20.8% 19.1% 19.0% 19.8% 21.5%
EBITA 495.2 575.6 1,021.2 (144.3) 360.5 141.3 188.8 316.1 448.9
% of Sales 6.8% 6.7% 12.0% (2.2%) 5.5% 2.1% 2.5% 3.7% 4.7%
Note:
(1) Data from 1997 onwards excludes NSMG contribution.
23
36
================================================================================
OPERATING BUSINESS VALUATION
================================================================================
COMPARISON OF PROJECTIONS(1)
- --------------------------------------------------------------------------------
[PERFORMANCE GRAPH]
COMPARISON OF PROJECTIONS (1)
--------------------------------------------------------------------------------------------------------
REVENUES ($MM) GROSS MARGIN (%)
------------------------------------------------- ----------------------------------------------------
UPSIDE BUYER SENSITIVITY UPSIDE BUYER SENSITIVITY
FISCAL YEAR BASE CASE CASE CASE CASE BASE CASE CASE CASE CASE
- ----------- --------- --------- --------- ----------- --------- --------- --------- -----------
1997A $ 8,507.4 21.7%
1998A 6,522.2 12.6
1999A 6,539.2 20.8
2000E 6,619.0 $ 6,619.0 $ 6,619.0 $ 6,619.0 19.1 19.1% 19.1% 19.1%
2001E 7,417.1 8,185.1 7,393.2 7,417.1 19.0 19.5 18.9 18.1
2002E 8,563.8 10,145.9 7,797.4 8,563.8 19.8 22.4 19.4 18.9
2003E 9,503.5 11,283.1 8,309.7 9,503.5 21.5 23.0 19.4 19.3
2004E 10,416.3 12,626.1 8,801.2 10,416.3 22.2 23.7 19.3 20.1
2005E 11,359.0 13,960.5 9,269.1 11,359.0 23.1 24.5 19.4 21.1
2006E 12,349.7 15,404.2 9,759.1 12,349.7 24.5 25.4 19.6 22.1
2007E 13,582.6 17,131.5 10,355.1 13,582.6 26.0 26.8 20.3 23.8
2008E 15,132.2 19,298.7 11,087.7 15,132.2 27.8 28.2 21.2 25.7
================================================================================
Notes:
1. Sources:
Base Case: Base Case as provided by management
Upside Case: Upside Case as provided by management
Buyer Case: Projections developed by Financial Buyer
Sensitivity Case: same as Base Case but assuming 2000E gross margins for
desktop segment of disc drive business remain constant throughout 2008.
24
37
================================================================================
OPERATING BUSINESS VALUATION
================================================================================
COMPARISON OF PROJECTIONS(1)
- --------------------------------------------------------------------------------
COMPARISON OF PROJECTIONS (1)
--------------------------------------------------------------------------------------------------------
EBITA ($MM) EBITA MARGIN (%)
------------------------------------------------- ----------------------------------------------------
Upside Buyer Sensitivity Upside Buyer Sensitivity
Fiscal Year Base Case Case Case Case Base Case Case Case Case
- ----------- --------- --------- --------- ----------- --------- --------- --------- -----------
1997A $ 1,021.2 12.0%
1998A -144.3 -2.2
1999A 360.5 5.5
2000E 141.3 $ 141.3 $ 141.3 $ 141.3 2.1 2.1% 2.1% 2.1%
2001E 188.8 364.5 188.8 124.7 2.5 4.5 2.6 1.7
2002E 316.1 689.0 322.1 242.3 3.7 6.8 4.1 2.8
2003E 448.9 782.6 363.2 242.1 4.7 6.9 4.4 2.5
2004E 498.6 866.8 377.9 281.5 4.8 6.9 4.3 2.7
2005E 613.9 999.8 403.4 385.9 5.4 7.2 4.4 3.4
2006E 724.2 1167.0 406.5 436.4 5.9 7.6 4.2 3.5
2007E 842.1 1348.9 443.2 539.8 6.2 7.9 4.3 4.0
2008E 988.2 1563.3 492.8 670.8 6.5 8.1 4.4 4.4
================================================================================
Notes:
1. Sources:
Base Case: Base Case as provided by management
Upside Case: Upside Case as provided by management
Buyer Case: Projections developed by Financial Buyer
Sensitivity Case: same as Base Case but assuming 2000E gross margins for
desktop segment of disc drive business remain constant throughout 2008.
25
38
================================================================================
OPERATING BUSINESS VALUATION
================================================================================
PROJECTED FUTURE PROFITABILITY(1)
- --------------------------------------------------------------------------------
- - ALL OF THE PROJECTIONS REFLECT FINANCIAL IMPROVEMENT VERSUS 2000E RESULTS
- - GIVEN THE CYCLICALITY OF THE DRIVES BUSINESS, FUTURE EARNINGS ARE DIFFICULT
TO PREDICT
EBITA ($MM)
------------------------------------------------------------------------
DRIVES SOFTWARE TAPES SAN / NAS CONSUMER
------ -------- ------ --------- --------
2000 $161.0 ($28.0) $ 23.0 $ 1.3 ($16.0)
2003-Sensitivity 144.8 41.3 39.1 12.0 5.0
2003-Buyer 298.4 22.8 36.0 6.0 0.0
2003-Base 351.6 41.3 39.1 12.0 5.0
2003-Upside 635.5 41.3 39.1 25.5 41.3
================================================================================
Notes:
1. Sources:
Base Case: Base Case as provided by management
Upside Case: Upside Case as provided by management
Buyer Case: Projections developed by Financial Buyer
Sensitivity Case: same as Base Case but assuming 2000E gross margins for
desktop segment of disc drive business remain constant throughout 2008.
26
39
================================================================================
SECTION 5
================================================================================
VENUS OVERVIEW
- --------------------------------------------------------------------------------
40
================================================================================
VENUS OVERVIEW
================================================================================
VENUS STOCK PRICE PERFORMANCE
LAST TWELVE MONTHS
- --------------------------------------------------------------------------------
[PERFORMANCE GRAPH]
DATE VOLUME (000'S) PRICE
- -------- -------------- --------
3/26/99 2,339.1 $ 17.17
3/29/99 3,135.6 19.25
3/30/99 2,318.0 18.90
3/31/99 2,689.2 17.94
4/1/99 1,107.9 18.28
4/5/99 2,669.0 19.50
4/6/99 2,207.7 19.72
4/7/99 6,528.2 18.28
4/8/99 6,229.4 17.44
4/9/99 3,214.8 17.67
4/12/99 2,558.7 17.51
4/13/99 2,951.6 18.36
4/14/99 5,129.6 19.19
4/15/99 4,016.7 18.53 < April 15, 1999 - Announces 1Q99 revenues of $71.9MM,
4/16/99 6,046.7 17.94 up 84% Y/Y, and EPS of $0.06, up 45% Y/Y
4/19/99 10,915.2 14.25
4/20/99 7,219.8 15.36
4/21/99 3,730.5 15.61
4/22/99 4,271.0 16.14
4/23/99 3,118.1 16.92
4/26/99 3,351.6 16.75
4/27/99 2,849.4 15.68
4/28/99 8,463.2 15.08
4/29/99 4,913.1 14.29
4/30/99 3,765.6 15.78
5/3/99 2,471.4 16.00
5/4/99 4,438.8 16.21
5/5/99 6,324.3 16.22
5/6/99 2,763.0 16.11
5/7/99 3,077.6 15.75
5/10/99 3,123.0 15.44
5/11/99 2,332.4 16.03
5/12/99 4,878.5 16.63
5/13/99 7,093.4 17.32
5/14/99 6,663.6 17.56
5/17/99 2,088.5 17.51
5/18/99 4,417.7 18.11
5/19/99 3,461.0 18.19
5/20/99 5,087.7 17.92
5/21/99 1,494.0 17.92
5/24/99 3,691.8 17.64
5/25/99 3,231.0 17.56
5/26/99 7,851.2 18.24
5/27/99 15,427.4 19.65
5/28/99 8,571.6 19.61
6/1/99 11,040.8 19.69
6/2/99 6,521.0 19.99
28
41
6/3/99 4,578.3 19.82
6/4/99 5,519.7 20.78
6/7/99 8,307.9 21.58 < June 7, 1999 - Announces 2-for-1 stock split
6/8/99 5,582.7 21.03
6/9/99 3,935.7 20.75
6/10/99 3,483.9 19.96
6/11/99 2,894.0 19.99
6/14/99 5,490.0 19.61
6/15/99 2,339.6 19.85
6/16/99 6,268.5 20.00
6/17/99 2,599.7 19.79
6/18/99 3,864.2 19.78 < June 18, 1999 - Adopts shareholder rights plan
6/21/99 5,574.2 20.67
6/22/99 6,844.5 21.00
6/23/99 2,653.2 21.14
6/24/99 2,914.2 20.78
6/25/99 2,231.6 20.44
6/28/99 2,158.2 20.83
6/29/99 3,461.4 20.69
6/30/99 4,742.6 21.10
7/1/99 3,456.5 20.86
7/2/99 2,541.2 21.39
7/6/99 7,449.3 23.53
7/7/99 4,715.6 22.99
7/8/99 3,398.4 23.17
7/9/99 1,627.7 23.11
7/12/99 3,938.4 22.14
7/13/99 2,138.4 22.67
7/14/99 2,948.4 23.67
7/15/99 2,989.1 23.69 < July 15, 1999 - Announces 2Q99 revenues of $155.7MM,
7/16/99 10,101.6 27.19 up 70% Y/Y, and EPS of $0.97, up 51% Y/Y
7/19/99 4,661.6 27.89 < July 19, 1999 - Terry Cunningham resigns as President
7/20/99 7,461.9 25.56 and Chief Operating Officer
7/21/99 6,146.6 26.22
7/22/99 3,936.8 26.58
7/23/99 2,558.3 27.11
7/26/99 3,112.2 25.44
7/27/99 7,606.1 24.28
7/28/99 3,552.8 24.46
7/29/99 3,183.8 23.42
7/30/99 2,375.3 24.94
8/2/99 2,183.2 24.56
8/3/99 2,813.2 24.28
8/4/99 2,110.1 23.72
8/5/99 5,115.8 24.86
8/6/99 2,431.6 23.72
8/9/99 4,244.4 22.14 < August 8, 1999 - Acquires assets of Noview for
8/10/99 18,937.1 21.81 undisclosed terms
8/11/99 8,119.1 23.75
8/12/99 5,185.6 22.86
8/13/99 4,044.4 23.33
8/16/99 5,060.9 24.14
42
8/17/99 3,904.7 24.44
8/18/99 2,178.7 24.31
8/19/99 2,180.5 23.39
8/20/99 5,815.8 26.14
8/23/99 7,795.6 27.25
8/24/99 4,291.2 27.11
8/25/99 2,353.1 27.50
8/26/99 1,738.6 27.25
8/27/99 2,578.1 26.28
8/30/99 1,567.1 25.74
8/31/99 2,098.6 26.33
9/1/99 2,652.1 27.44
9/2/99 3,730.1 27.97
9/3/99 4,974.8 29.17
9/7/99 2,600.1 29.28
9/8/99 3,169.6 30.03
9/9/99 3,258.2 31.49
9/10/99 4,839.1 31.54
9/13/99 4,855.3 29.61
9/14/99 3,970.4 30.50
9/15/99 4,519.4 31.19
9/16/99 3,336.3 31.83
9/17/99 5,405.0 34.69
9/20/99 3,927.6 34.47
9/21/99 3,431.3 33.47
9/22/99 2,967.3 35.33
9/23/99 2,537.8 34.17
9/24/99 4,168.6 34.33
9/27/99 3,140.3 34.14
9/28/99 4,052.7 35.67
9/29/99 3,808.1 34.04
9/30/99 6,537.6 33.75
10/1/99 4,090.5 32.94
10/4/99 3,339.5 34.71
10/5/99 8,388.7 37.78 < October 5, 1999 - Announces agreement with Microsoft
10/6/99 4,331.7 38.03 to provide data-protection software to Microsoft
10/7/99 3,647.9 36.92
10/8/99 3,010.1 36.47
10/11/99 2,786.0 38.47
10/12/99 3,123.2 37.56
10/13/99 2,460.4 36.94
10/14/99 3,924.0 36.21 < October 14, 1999 - Announces 3Q99 revenues of
10/15/99 12,585.4 40.49 $183.4MM, up 75% Y/Y, and EPS of $0.09, up 76% Y/Y;
10/18/99 12,255.8 37.67 also announces 3-for-2 stock split
10/19/99 5,020.4 37.44
10/20/99 6,399.5 40.06
10/21/99 4,926.6 41.31
10/22/99 5,819.0 41.86
10/25/99 3,436.2 41.75
10/26/99 3,185.6 39.92
10/27/99 4,008.4 41.61
10/28/99 6,510.8 44.94
43
10/29/99 6,155.6 47.94
11/1/99 4,491.2 47.11
11/2/99 5,449.7 46.56
11/3/99 6,678.9 47.64
11/4/99 9,453.8 48.36
11/5/99 6,780.2 48.03
11/8/99 5,043.2 49.11
11/9/99 7,067.9 51.06
11/10/99 4,122.2 51.50
11/11/99 3,770.3 50.53 < November 11, 1999 - Announces that it plans to
11/12/99 3,546.7 51.58 release new versions of its products that run on
11/15/99 3,813.8 53.39 multiple operating systems
11/16/99 5,587.7 58.19
11/17/99 5,731.0 57.56
11/18/99 5,397.1 61.39
11/19/99 8,323.2 64.67
11/22/99 6,625.5 68.71
11/23/99 6,042.5 67.08
11/24/99 3,672.6 68.00
11/26/99 1,366.1 69.83
11/29/99 4,280.1 66.79
11/30/99 10,845.8 61.04
12/1/99 5,845.5 62.83
12/2/99 4,778.7 66.25
12/3/99 5,847.3 70.75
12/6/99 3,851.6 69.42
12/7/99 3,027.9 69.00
12/8/99 5,064.5 69.67
12/9/99 5,503.7 71.96
12/10/99 3,990.8 72.71
12/13/99 3,546.5 71.71
12/14/99 3,136.8 68.50
12/15/99 4,928.7 72.13
12/16/99 6,672.3 75.33
12/17/99 7,726.2 78.31
12/20/99 3,943.7 83.58
12/21/99 5,455.8 82.63
12/22/99 3,536.0 89.67
12/23/99 4,334.1 95.42
12/27/99 4,469.7 89.08
12/28/99 2,682.2 90.04
12/29/99 2,488.5 93.33
12/30/99 2,785.2 91.25
12/31/99 3,435.9 95.42
1/3/00 5,201.9 94.67
1/4/00 5,553.3 86.88
1/5/00 8,132.9 84.79
1/6/00 6,312.5 76.04
1/7/00 8,425.1 83.00
1/10/00 9,742.7 95.88
1/11/00 5,247.8 88.04
1/12/00 5,166.0 84.00
44
1/13/00 4,296.8 93.00
1/14/00 4,891.2 97.61
1/18/00 3,276.0 98.42
1/19/00 2,645.6 98.50
1/20/00 5,800.4 103.83
1/21/00 6,030.8 114.38
1/24/00 8,909.4 100.83
1/25/00 5,244.6 106.63
1/26/00 4,091.9 104.75
1/27/00 5,247.3 105.17 < January 27, 2000 - Announces 4Q99 revenues of
1/28/00 13,607.0 102.67 $226.2MM, up 80% Y/Y, and EPS of $0.13, up 46% Y/Y;
1/31/00 6,764.0 97.25 also announces 3-for-2 stock split
2/1/00 5,081.1 103.13
2/2/00 4,901.9 102.42
2/3/00 3,907.7 103.71
2/4/00 6,167.3 104.63
2/7/00 3,489.3 103.92
2/8/00 6,392.9 113.13
2/9/00 4,644.6 109.83
2/10/00 4,622.1 118.92
2/11/00 3,665.1 115.01
2/14/00 2,609.3 112.38
2/15/00 4,359.3 110.67
2/16/00 3,740.0 110.79
2/17/00 2,913.6 115.67
2/18/00 4,621.7 115.38
2/22/00 3,595.7 114.63
2/23/00 5,486.9 122.08
2/24/00 5,214.0 126.50
2/25/00 4,142.3 120.79
2/28/00 4,318.8 125.38
2/29/00 4,124.9 131.92
3/1/00 3,965.1 134.17
3/2/00 3,619.7 136.42
3/3/00 5,690.9 148.25
3/6/00 5,443.6 159.06
3/7/00 5,648.7 163.69
3/8/00 5,231.9 158.81
3/9/00 4,972.5 162.94
3/10/00 4,819.2 168.69
3/13/00 4,886.2 165.75
3/14/00 4,164.1 154.75
3/15/00 8,699.3 133.44
3/16/00 8,592.2 151.75
3/17/00 4,678.7 164.38
3/20/00 6,372.9 142.50
3/21/00 7,392.6 148.56
3/22/00 4,627.9 162.25
3/23/00 3,537.7 158.94
3/24/00 3,655.2 162.56
3/27/00 3,681.6 168.44
3/28/00 5,084.6 154.94
45
================================================================================
Source: Factset and Bloomberg
46
================================================================================
VENUS OVERVIEW
================================================================================
INDEXED PRICE PERFORMANCE
- --------------------------------------------------------------------------------
[PERFORMANCE GRAPH]
LTM INDEX (BASE 100)
------------------------------------------------------
DATE VENUS COMPARABLES (1) NASDAQ S&P500
- -------- ------- --------------- ------ ------
03/26/99 100.0 100.0 100.0 100.0
03/29/99 112.1 102.6 103.0 102.1
03/30/99 110.1 102.1 102.5 101.4
03/31/99 104.5 100.5 101.7 100.3
04/01/99 106.5 98.2 103.1 100.9
04/05/99 113.6 95.8 105.8 103.0
04/06/99 114.9 91.4 106.0 102.7
04/07/99 106.5 87.9 105.2 103.4
04/08/99 101.6 91.6 106.4 104.8
04/09/99 102.9 93.5 107.2 105.1
04/12/99 102.0 92.1 107.4 105.9
04/13/99 107.0 88.8 106.8 105.2
04/14/99 111.8 90.9 103.6 103.6
04/15/99 107.9 91.6 104.2 103.1
04/16/99 104.5 88.6 102.7 102.8
04/19/99 83.0 82.4 97.0 100.5
04/20/99 89.5 85.7 99.6 101.8
04/21/99 90.9 92.2 102.9 104.2
04/22/99 94.0 97.7 105.9 105.9
04/23/99 98.5 98.5 107.1 105.8
04/26/99 97.6 103.2 109.6 106.0
04/27/99 91.3 102.2 107.6 106.2
04/28/99 87.9 100.0 105.4 105.3
04/29/99 83.3 97.2 104.5 104.7
04/30/99 91.9 98.1 105.1 104.1
05/03/99 93.2 97.3 104.8 105.6
05/04/99 94.4 94.1 102.7 103.8
05/05/99 94.5 95.3 104.8 105.0
05/06/99 93.9 93.4 102.2 103.8
05/07/99 91.7 94.4 103.5 104.8
05/10/99 90.0 95.5 104.4 104.5
05/11/99 93.4 99.3 106.1 105.7
05/12/99 96.8 101.7 107.7 106.3
05/13/99 100.9 99.7 106.7 106.6
05/14/99 102.3 99.3 104.5 104.3
05/17/99 102.0 101.0 105.9 104.4
05/18/99 105.5 100.8 105.8 103.9
05/19/99 106.0 104.2 106.5 104.8
05/20/99 104.4 104.6 105.1 104.4
05/21/99 104.4 103.5 104.2 103.7
05/24/99 102.8 102.3 101.4 101.9
05/25/99 102.3 99.2 98.4 100.1
05/26/99 106.2 100.2 100.3 101.7
05/27/99 114.5 100.6 100.0 99.9
05/28/99 114.2 103.3 102.1 101.5
06/01/99 114.7 102.9 99.7 100.9
06/02/99 116.4 104.5 100.5 100.9
29
47
06/03/99 115.5 105.7 99.3 101.3
06/04/99 121.0 109.6 102.4 103.5
06/07/99 125.7 112.8 104.3 104.0
06/08/99 122.5 109.6 102.3 102.7
06/09/99 120.9 109.1 104.1 102.8
06/10/99 116.3 108.1 102.7 101.6
06/11/99 116.4 106.8 101.2 100.8
06/14/99 114.2 105.1 99.1 100.9
06/15/99 115.6 106.0 99.8 101.4
06/16/99 116.5 118.7 104.1 103.7
06/17/99 115.3 121.9 105.2 104.5
06/18/99 115.2 122.3 106.0 104.7
06/21/99 120.4 125.5 108.7 105.2
06/22/99 122.3 124.5 106.7 104.1
06/23/99 123.1 125.7 107.4 103.9
06/24/99 121.0 123.3 105.6 102.6
06/25/99 119.1 125.5 105.5 102.5
06/28/99 121.4 128.0 107.6 103.8
06/29/99 120.6 129.2 109.2 105.4
06/30/99 122.9 132.2 111.0 107.0
07/01/99 121.5 132.8 111.9 107.7
07/02/99 124.6 134.4 113.3 108.5
07/06/99 137.1 134.2 113.1 108.2
07/07/99 133.9 135.1 113.4 108.8
07/08/99 135.0 136.4 114.6 108.7
07/09/99 134.6 137.3 115.5 109.4
07/12/99 129.0 137.1 115.3 109.1
07/13/99 132.0 135.6 114.8 108.6
07/14/99 137.9 135.6 116.5 109.0
07/15/99 138.0 139.2 117.4 109.9
07/16/99 158.4 144.5 118.4 110.6
07/19/99 162.5 143.7 117.0 109.7
07/20/99 148.9 134.2 112.9 107.4
07/21/99 152.8 139.1 114.2 107.5
07/22/99 154.9 131.1 111.0 106.1
07/23/99 157.9 131.5 111.3 105.8
07/26/99 148.2 127.2 108.3 105.1
07/27/99 141.4 130.1 110.8 106.2
07/28/99 142.5 131.7 111.8 106.4
07/29/99 136.4 127.7 109.1 104.5
07/30/99 145.3 127.2 109.1 103.6
08/02/99 143.0 126.1 108.5 103.5
08/03/99 141.4 121.7 107.0 103.1
08/04/99 138.2 119.8 105.0 101.8
08/05/99 144.8 124.6 106.1 102.4
08/06/99 138.2 123.8 105.3 101.4
08/09/99 129.0 120.8 104.1 101.2
08/10/99 127.0 118.9 102.9 99.9
08/11/99 138.3 124.2 106.0 101.5
08/12/99 133.2 123.8 105.4 101.2
08/13/99 135.9 131.1 109.0 103.5
08/16/99 140.6 132.1 109.3 103.7
48
08/17/99 142.4 132.3 110.4 104.8
08/18/99 141.6 130.9 109.9 103.9
08/19/99 136.2 129.6 108.4 103.2
08/20/99 152.3 132.2 109.5 104.2
08/23/99 158.7 136.8 112.4 106.0
08/24/99 157.9 140.7 113.8 106.3
08/25/99 160.2 142.8 116.0 107.7
08/26/99 158.7 142.0 114.7 106.2
08/27/99 153.1 140.8 114.0 105.1
08/30/99 149.9 137.3 112.1 103.2
08/31/99 153.4 138.9 113.2 102.9
09/01/99 159.9 141.1 113.7 103.8
09/02/99 162.9 139.4 113.0 102.8
09/03/99 169.9 147.2 117.5 105.8
09/07/99 170.6 148.7 117.3 105.3
09/08/99 174.9 149.4 116.1 104.8
09/09/99 183.4 153.5 117.9 105.1
09/10/99 183.7 159.7 119.3 105.4
09/13/99 172.5 157.4 117.6 104.8
09/14/99 177.7 158.5 118.6 104.2
09/15/99 181.7 152.0 116.3 102.7
09/16/99 185.4 149.2 116.0 102.8
09/17/99 202.1 156.0 118.6 104.1
09/20/99 200.8 158.0 119.3 104.1
09/21/99 195.0 152.6 116.6 101.9
09/22/99 205.8 155.5 118.1 102.2
09/23/99 199.0 149.8 113.7 99.8
09/24/99 200.0 146.9 113.3 99.6
09/27/99 198.9 147.9 114.2 100.0
09/28/99 207.8 149.5 113.9 100.0
09/29/99 198.3 147.4 112.9 98.9
09/30/99 196.6 149.1 113.5 100.0
10/01/99 191.9 148.2 113.1 100.0
10/04/99 202.2 155.2 115.6 101.7
10/05/99 220.1 157.9 115.7 101.4
10/06/99 221.5 164.0 118.1 103.3
10/07/99 215.0 163.1 118.3 102.7
10/08/99 212.5 167.5 119.3 104.1
10/11/99 224.1 172.5 120.5 104.1
10/12/99 218.8 171.0 118.7 102.4
10/13/99 215.2 167.9 115.8 100.2
10/14/99 210.9 168.7 116.0 100.0
10/15/99 235.8 166.1 112.9 97.2
10/18/99 219.4 163.9 111.2 97.8
10/19/99 218.1 165.0 111.1 98.3
10/20/99 233.3 172.6 115.3 100.5
10/21/99 240.6 172.1 115.8 100.1
10/22/99 243.9 174.1 116.4 101.5
10/25/99 243.2 175.5 116.4 100.8
10/26/99 232.5 177.3 116.2 99.9
10/27/99 242.4 176.8 115.8 101.1
10/28/99 261.8 184.0 118.9 104.6
49
10/29/99 279.3 195.6 122.6 106.2
11/01/99 274.4 199.9 122.7 105.6
11/02/99 271.2 199.5 123.3 105.1
11/03/99 277.5 203.7 125.2 105.6
11/04/99 281.7 205.0 126.3 106.2
11/05/99 279.8 214.7 128.2 106.8
11/08/99 286.1 217.3 130.0 107.3
11/09/99 297.4 211.1 129.2 106.4
11/10/99 300.0 217.8 130.5 107.1
11/11/99 294.3 220.8 132.2 107.7
11/12/99 300.5 223.3 133.2 108.8
11/15/99 311.0 225.6 133.1 108.7
11/16/99 339.0 231.8 136.1 110.7
11/17/99 335.3 239.2 135.1 110.0
11/18/99 357.6 247.4 138.4 111.1
11/19/99 376.7 246.0 139.3 110.9
11/22/99 400.2 243.0 140.2 110.8
11/23/99 390.8 237.6 138.2 109.5
11/24/99 396.1 243.3 141.4 110.5
11/26/99 406.8 245.2 142.5 110.4
11/29/99 389.1 242.0 141.4 109.7
11/30/99 355.6 236.8 137.9 108.3
12/01/99 366.0 240.7 138.6 109.0
12/02/99 385.9 252.3 142.7 109.8
12/03/99 412.1 268.8 145.5 111.7
12/06/99 404.4 273.5 146.6 111.0
12/07/99 401.9 281.4 148.3 109.9
12/08/99 405.8 277.6 148.2 109.4
12/09/99 419.2 284.2 148.6 109.8
12/10/99 423.5 291.8 149.6 110.5
12/13/99 417.7 290.3 151.2 110.3
12/14/99 399.0 282.7 147.6 109.4
12/15/99 420.1 296.5 149.7 110.2
12/16/99 438.8 305.1 153.6 110.6
12/17/99 456.2 306.7 155.1 110.8
12/20/99 486.9 312.9 156.4 110.5
12/21/99 481.3 327.5 161.7 111.7
12/22/99 522.3 340.5 162.8 112.0
12/23/99 555.8 343.3 164.1 113.7
12/27/99 518.9 337.1 164.3 113.6
12/28/99 524.5 336.1 164.2 113.6
12/29/99 543.7 340.8 167.1 114.1
12/30/99 531.6 340.3 166.9 114.2
12/31/99 555.8 335.4 168.2 114.5
01/03/00 551.5 336.8 170.8 113.4
01/04/00 506.1 315.8 161.3 109.1
01/05/00 493.9 306.9 160.3 109.3
01/06/00 443.0 296.3 154.1 109.4
01/07/00 483.5 316.7 160.5 112.4
01/10/00 558.5 331.5 167.4 113.6
01/11/00 512.9 310.3 162.1 112.1
01/12/00 489.3 299.0 159.1 111.7
50
01/13/00 541.7 308.6 163.6 113.0
01/14/00 568.6 322.7 168.0 114.2
01/18/00 573.3 325.6 170.8 113.4
01/19/00 573.8 329.6 171.6 113.5
01/20/00 604.9 316.5 173.2 112.7
01/21/00 666.3 319.1 175.1 112.4
01/24/00 587.4 302.0 169.3 109.3
01/25/00 621.1 304.8 172.3 109.9
01/26/00 610.2 305.9 168.2 109.5
01/27/00 612.6 305.4 167.0 109.0
01/28/00 598.1 287.1 160.7 106.0
01/31/00 566.5 286.7 162.9 108.7
02/01/00 600.7 309.3 167.5 109.9
02/02/00 596.6 310.7 168.4 109.8
02/03/00 604.1 327.9 174.1 111.1
02/04/00 609.5 329.3 175.4 111.0
02/07/00 605.3 330.7 178.6 111.0
02/08/00 659.0 338.8 183.0 112.4
02/09/00 639.8 343.2 180.4 110.0
02/10/00 692.7 356.4 185.4 110.4
02/11/00 670.0 348.0 181.7 108.1
02/14/00 654.6 349.9 182.6 108.4
02/15/00 644.7 341.9 182.7 109.3
02/16/00 645.4 350.3 183.0 108.2
02/17/00 673.8 362.8 188.0 108.2
02/18/00 672.1 350.6 182.4 104.9
02/22/00 667.7 373.1 181.1 105.4
02/23/00 711.2 394.1 188.1 106.1
02/24/00 736.9 405.6 190.9 105.5
02/25/00 703.6 395.1 189.8 103.9
02/28/00 730.3 391.2 189.2 105.1
02/29/00 768.4 394.9 194.1 106.5
03/01/00 781.6 391.2 197.8 107.5
03/02/00 794.7 395.2 196.5 107.7
03/03/00 863.6 420.6 203.2 109.9
03/06/00 926.6 410.8 202.7 108.5
03/07/00 953.5 413.7 200.4 105.7
03/08/00 925.1 433.7 202.4 106.5
03/09/00 949.2 455.3 208.6 109.3
03/10/00 982.6 443.0 208.7 108.8
03/13/00 965.5 431.5 202.8 107.9
03/14/00 901.5 408.1 194.6 106.0
03/15/00 777.3 394.7 189.4 108.5
03/16/00 884.0 414.0 195.0 113.7
03/17/00 957.5 423.2 198.3 114.2
03/20/00 830.1 412.1 190.6 113.6
03/21/00 865.4 413.8 194.8 116.5
03/22/00 945.1 435.9 201.1 117.0
03/23/00 925.8 445.4 204.2 119.1
03/24/00 947.0 450.0 205.2 119.1
03/27/00 981.2 465.3 205.0 118.8
03/28/00 902.5 446.9 199.8 117.5
================================================================================
Note:
1. Comparable companies include Microsoft, Cisco, Oracle, i2 Technologies,
Siebel Systems and Legato Systems.
51
================================================================================
VENUS OVERVIEW
================================================================================
TRADING STATISTICS OF SELECTED COMPARABLE COMPANIES
- --------------------------------------------------------------------------------
CALENDAR YEAR 2001 ESTIMATES
-------------------------------------------------
AGG VALUE /
COMPANY P/E RATIO P/E 5 YR GROWTH SALES
- ------- --------- --------------- -----------
VeriSign 625 x 10.4 x 91.8 x
Broadvision 396 7.9 47.7
i2 Technologies 304 6.8 23.6
- -------------------------------------------------------------------------
Venus 231 4.6 42.2
- -------------------------------------------------------------------------
Siebel Systems 140 3.0 15.3
Cisco 108 3.6 19.2
Oracle 97 3.9 18.4
Microsoft 50 2.1 16.5
Legato Systems 44 0.9 6.3
=========================================================================
30