Exhibit 99.17(b)(5)
March 7, 1999 CONFIDENTIAL
Materials Prepared for the Board of Directors
Project Prairie
CONFIDENTIAL 1
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Project Prairie
Overview of Presentation
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o Strategic Benefits of the Transaction
o Summary Terms of the Transaction
o Summary Valuation of Prairie
o Summary of Synergies
o Market and Transaction Perspectives
o Summary Merger Consequences
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CREDIT FIRST
SUISSE BOSTON
CONFIDENTIAL 2
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Project Prairie
Strategic Benefits of the Transaction
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o The transaction represents another step
Increases Emphasis toward Diamond's strategic objective of
On Life Sciences increasing its emphasis on Life Sciences
o 1999E Revenues from Life Sciences
increases to 21% from 17%
o Full integration of the Prairie marketing
Improves Market Access organization will enhance the market
for Ag Enterprise access for Diamond's CPP business
o Prairie has leading positions in key crops
such as corn and soybeans
o Seed industry has undergone dramatic
transformation
Industry Consolidation
o Virtually every publicly traded seed
company, and many private independents,
have been acquired by large agricultural
chemical/biotech companies
o Most extensive library of elite corn
germplasm
Prairie the Premier
Seed Company in World o World class marketing organization
o North American corn market share of 42%
o Diamond has concluded that additional
Opportunity to Extract synergies can be obtained with full
Synergies integration of Prairie with Diamond
o Combination of both revenue enhancement
and cost reduction synergies
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CREDIT FIRST
SUISSE BOSTON
CONFIDENTIAL 3
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Project Prairie
Summary Terms of the Transaction
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Price and Form of o $40 per outstanding Prairie common share,
Consideration or $7.7 billion for the 192 million
outstanding common Prairie shares not
owned by Diamond
o 41 - 45% of Prairie outstanding common
shares not owned by Diamond are acquired
for cash
o 55 - 59% of Prairie outstanding common
shares not owned by Diamond are exchanged
for $40 of Diamond common stock, which, at
Friday's (3/5/99) closing price of $53.56
translates into an exchange ratio of
0.7468 of a Diamond common share for every
Prairie common share
o The actual exchange ratio will be
determined five trading days before the
date of the Prairie shareholder vote,
based on the average closing price of
Diamond common stock for the 10
consecutive trading days ending on the
fifth trading day prior to the shareholder
vote
Structure o Two-step cash and stock merger of Prairie
with a Diamond subsidiary
o First step accomplished through cash
tender offer for up to 45% of outstanding
Prairie common shares not owned by Diamond
o Second step accomplished through the
exchange of the remaining Prairie common
shares not held by Diamond for either
Diamond common shares or cash, at the
election of the holder of Prairie common
stock
o The receipt of Diamond common stock is
expected to be tax-free to Prairie
shareholders
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CREDIT FIRST
SUISSE BOSTON
CONFIDENTIAL 4
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Project Prairie
Summary Terms of the Transaction
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Family Voting o Prairie has agreed to encourage major
Wallace family shareholders to file an
amended Schedule 13D indicating their
support for the transaction
o There is no voting agreement with, or
irrevocable proxy granted by, Wallace
family shareholders
Diamond Voting o [Diamond will exchange its Prairie Class B
common stock for 5-vote common stock of
Prairie]
o Diamond will vote its shares such that its
voting power is no greater than its
percentage equity ownership
Other Terms o No termination fees
o [Prairie agrees to waive standstill
provision of the Investment Agreement,
although such provision would be
reinstated if Diamond did not obtain
majority ownership after the tender offer]
o [Diamond will not acquire or agree to
acquire any entity if there is a
reasonable possibility that it could
adversely affect the antitrust review of
this transaction]
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CREDIT FIRST
SUISSE BOSTON
CONFIDENTIAL 5
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Project Prairie
Summary Valuation of Prairie
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The valuation range for Prairie on a stand-alone basis is $32.17 to $36.85
per share and $38.52 to $43.88 per share including 100% of the synergies.
($ in Billions, except per share)
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METHODOLOGY RANGE
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Prairie Stand-Alone
Discounted Cash Flow Analysis $7.9 - $ 9.1
Comparable Acquisitions Analysis 8.0 - 13.8
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Enterprise Value Reference Range $8.0 - $ 9.1
Potential Value of Litigation(1) 0.2 - 0.3
Less: Estimated Golden Parachute Payments 0.0 - (0.1)
Less: Net Debt (0.4)
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Equity Value Reference Range $7.8 - $ 8.9
Shares Outstanding (MM) 241
Equity Value Per Share $32.17 - $36.85
Market Price at 3/5/99 $22.81
Premium / (Discount) 41% - 62%
Synergies(1)
DCF Value of Synergies $1.2 - $1.3
Shares Not Owned by Diamond 192
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Value of Synergies Per Share $6.36 - $7.03
Stand-Alone plus 100% of the Synergy Value Per Share $38.52 - $43.88
Stand-Alone plus 50% of the Synergy Value Per Share $35.35 - $40.37
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(1) Based on discussions with Diamond Management.
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CREDIT FIRST
SUISSE BOSTON
CONFIDENTIAL 6
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Project Prairie
Summary Valuation of Prairie: Two Methodologies
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The following table outlines the range of multiples implied by the DCF and
Comparable Acquisition value ranges for Prairie.
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MULTIPLE OF FISCAL 1999E(1):
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METHODOLOGY REVENUES EBITDA EBIT
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Discounted Cash Flow Analysis 4.1x - 4.8x 15.4x - 17.7x 18.9x - 21.7x
Comparable Acquisitions Analysis 5.2 - 7.2 19.4 - 26.6 23.7 - 32.6
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Enterprise Value Reference Range 4.2x - 4.8x 15.5x - 17.7x 19.0x - 21.7x
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(1) Diamond Case Projections.
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CREDIT FIRST
SUISSE BOSTON
CONFIDENTIAL 7
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Project Prairie
Summary of Discounted Cash Flow Analysis
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DCF Valuation Summary
($ in Billions)
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DIAMOND CASE(1) PRAIRIE MANAGEMENT CASE(2)
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Base Business (including Biotech pipeline)
PV of Cash Flows $2.7 - $2.8 $1.6 - $1.7
PV of Terminal Value 5.0 - 6.0 8.4 - 9.6
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$7.7 - $8.8 $10.1 - $11.3
Optimum
PV of Cash Flows $0.2 - $0.2 $0.2 - $0.2
PV of Terminal Value 0.4 - 0.5 0.4 - 0.5
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$0.5 - $0.7 $0.5 - $0.7
50% of Optimum $0.3 - $0.4 $0.3 - $0.4
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Enterprise Value Reference Range $7.9 - $9.1 $10.3 - $11.7
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(1) Based on 10 year projections.
(2) Based on 5 year projections provided to CSFB on February 26, 1999.
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CREDIT FIRST
SUISSE BOSTON
CONFIDENTIAL 8
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Project Prairie
Selected Comparable Acquisitions
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($ in Millions)
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IMPLIED ENT. VALUE AS A MULTIPLE OF LTM:
ENTERPRISE --------------------------------
DATE ACQUIROR/TARGET DESCRIPTION VALUE REVENUE EBITDA EBIT
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9/28/98(1) AgrEvo/ Producer of hybrid seeds for the $ 650 6.1x NA NA
Cargill Hybrid Seeds North America North American corn market
6/29/98 Monsanto Co./ International producer of corn, $1,400 5.6x NA NA
Cargill International Seed Operations sunflower, rape seed, alfalfa,
wheat and rice seeds
5/11/98 Monsanto Co./ Marketer and developer of genetic $3,766(2) 8.0x 61x 80x
DEKALB Genetics Corporation hybrid seeds and hybrid swine
breeding stock
5/11/98 Monsanto Co./ Marketer and developer of cotton $1,887 9.8x 52x 58x
Delta and Pine Land Company (pending) planting seeds
8/7/97 DuPont/ Producer of genetic hybrid seeds $8,441(2) 4.5x 18x 22x
Pioneer Hi-Bred International, Inc. and microbial products used in
crop and livestock production
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Source: SDC, news releases and financial documents where available.
(1) Terminated on 2/4/99.
(2) Enterprise value implied for 100% of the target.
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CREDIT FIRST
SUISSE BOSTON
CONFIDENTIAL 9
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Project Prairie
Summary of Comparable Acquisitions Analysis
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Comparable Acquisitions Valuation Summary
($ in Billions)
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PRAIRIE RESULTS MULTIPLE RANGE IMPLIED ENTERPRISE VALUE
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Base Business
LTM Revenues $1.8 5.5x - 8.0x $10.1 - $14.7
LTM EBITDA 0.4 18.0x - 3.0x $ 7.8 - $13.0
LTM EBIT 0.3 22.0x - 40.0x $ 7.4 - $13.6
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Enterprise Value Reference Range $ 8.0 - $13.8
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CREDIT FIRST
SUISSE BOSTON
CONFIDENTIAL 10
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Project Prairie
Summary of Synergies
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VALUE
PEAK EBIT IMPACT -----------------
SOURCE OF SYNERGIES KEY ASSUMPTIONS ($MM) $MM
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Distribution and o Savings of about 10% of combined costs in $ 50 $ 250 - $ 275
Marketing North America
Substitute Roundup o Possible settlement of litigation could result in 44 160 - 180
Ready ("RUR") for substitution of RUR (premium: $3/acre) for LL
Liberty Link ("LL") (premium: $1.15/acre) on 14 million acres
Increased CPP o Incremental revenues of $75MM at a margin of 38 165 - 185
Revenues 50%
Admin. and Other Cost o R&D cost savings of $40MM 100 510 - 560
Savings o Administration cost savings of $60MM
Information o Savings of about 20% of combined IS costs, or 25 135 - 150
Systems Cost Savings $25MM annually
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$256 $1,220 - $1,350
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Source: Diamond Management.
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CREDIT FIRST
SUISSE BOSTON
CONFIDENTIAL 11
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Project Prairie
Prairie Stock Price Performance
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[GRAPH]
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CREDIT FIRST
SUISSE BOSTON
CONFIDENTIAL 12
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Project Prairie
Diamond Stock Price Performance
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[GRAPH]
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CREDIT FIRST
SUISSE BOSTON
CONFIDENTIAL 13
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Project Prairie
Relative Stock Price Performance Since August 1997
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Indexed Stock Price Performance
[GRAPH]
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CREDIT FIRST
SUISSE BOSTON
CONFIDENTIAL 14
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Project Prairie
Prairie/Diamond Historical Trading Relationship
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[GRAPH]
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CREDIT FIRST
SUISSE BOSTON
CONFIDENTIAL 15
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Project Prairie
Trading vs. Transaction Multiples
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(Dollars in Billions)
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3/5/99 PRAIRIE AUGUST 7, 1997
CLOSE ACQUISITION TRANSACTION (1)
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Premium to Current Market ($22.81) -- 75% 36%(2)
Premium to 30-Day Average ($25.33) (10)% 58% --
Premium to 52-Week High ($41.38) (45)% (3)% --
Premium to 52-Week Low ($21.56) 6% 86% --
Equity Value $ 5.5 $ 9.6 --
Net Debt 0.4 0.4 --
Enterprise Value $ 5.9 $ 10.0 $ 8.4
Enterprise Value as a Multiple of:
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Net Sales
FY 1998A/LTM 3.2x 5.5x 4.5x
FY 1999E 3.1 5.2 --
FY 2000E 2.8 4.9 --
EBITDA
FY 1998A/LTM 13.1x 22.4x 18.0x
FY 1999E 11.4 19.4 --
FY 2000E 9.4 16.1 --
EBIT
FY 1998A/LTM 16.3x 28.0x 22.0x
FY 1999E 13.9 23.8 --
FY 2000E 11.2 19.2 --
Equity Value as a Multiple of:
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Net Income
FY 1998A/LTM 22.1x 39.0x --
FY 1999E 21.1 37.2 --
FY 2000E 16.9 29.7 --
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(1) Enterprise value implied for 100% of Prairie.
(2) Represents deal price of $34.67 over August 6, 1997 close of $25.52.
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CREDIT FIRST
SUISSE BOSTON
CONFIDENTIAL 16
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Project Prairie
Summary Merger Consequences
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2000 2001
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Stand-Alone EPS(1)
Diamond(2) $ 3.56 $ 4.81
Prairie $ 1.35 $ 1.66
With 40% R&D Write-off
Diamond Pro Forma EPS $ 3.27 $ 4.55
Accretion/(Dilution) (8.0)% (5.4)%
Without 40% R&D Write-off
Diamond Pro Forma EPS $ 3.15 $ 4.43
Accretion/(Dilution) (11.4)% (7.9)%
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(1) Source: Management Projections.
(2) Pro forma for Leopard split-off.
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CREDIT FIRST
SUISSE BOSTON