Exhibit (A)(2)
April 30, 2001
Board of Directors
Curtis International Ltd.
315 Atwell Drive
Toronto, ON M9W 5C1
Dear Gentlemen:
We understand that Curtis International Ltd. ("Curtis" or the
"Company") and Curtis Acquisition Corp. (the "Acquiror") intend, subject to
approval by its shareholders, to undertake the following: (i) the Company would
commence a tender offer (the "Tender Offer") for all of the outstanding shares
of the Company's common stock (the "Common Shares"), other than those held by
Jacob Herzog, Aaron Herzog, the A&E Herzog Family Trust and the Herzog Family
Trust (collectively, the "Herzog Group"), for $0.80 per share, net to the seller
in cash (the "Consideration") and (ii) the Company would be merged with the
Acquiror in a merger (the "Merger"), in which each Common Share not acquired in
the Tender Offer, other than Company Shares held in treasury or held by the
Acquiror or as to which dissenters rights have been perfected, would be
converted into the right to receive the Consideration. The Tender Offer and the
Merger, taken together, are referred to as the "Transaction." Further, we
understand that the Herzog Group beneficially owns approximately 65.8% of the
Company's currently outstanding Common Shares.
You have asked for our opinion, as investment bankers, as to whether
the sum of $0.80 per share, is fair to the Company's shareholders, excluding the
Herzog Group, from a financial point of view.
Rodman & Renshaw, Inc., as part of our investment banking business, is
regularly engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, secondary
distributions of listed and unlisted securities, private placements and
valuations for estate, corporate and other purposes. We have acted as financial
advisor to the Board of Directors of Curtis in connection with the Transaction
and have received fees for financial advisory services upon execution of our
financial advisory engagement with the Company and will receive additional fees
for our financial advisory services upon the delivery of this opinion.
In arriving at the opinion set forth below, with respect to the
Company, we have, among other things: (a) reviewed certain publicly available
historical business and financial information relating to the Company which we
deemed to be relevant; (b) reviewed, from a financial point of view, the Offer
to Purchase; (c) reviewed certain publicly available financial and operating
data relating to the Company's business and prospects, which historical
information and data the senior management of Curtis has represented to us
fairly represents the financial condition and operating results of the Company
as of the dates presented; (d) discussed certain financial information and the
business and prospects of the Company with Curtis's senior management; (e)
reviewed the reported historical and recent market prices and trading volumes of
the Curtis Common Shares; (f) reviewed the listing status of the Company's
Common Shares and the potential impact of delisting on the value of the
Company's Common Shares; (g) compared the financial, operating and stock price
performance of Curtis with certain other companies deemed comparable; (h)
reviewed the financial terms, to the extent publicly available, of certain other
acquisition transactions deemed comparable; and (i) made such other analyses and
examinations as we deemed necessary or appropriate. We also have taken into
account our assessment of economic, market and financial conditions generally
and within the industry in which Curtis is engaged.
In rendering our opinion, we have assumed and relied upon the accuracy
and completeness of all information supplied or otherwise made available to us
by Curtis or obtained by us from other sources, and we have relied upon the
representations of senior management of the Company that they are unaware of any
information or facts that would make the information provided to us incomplete
or misleading. We have not independently verified such information, undertaken
an independent appraisal of the assets or liabilities (contingent or otherwise)
of Curtis nor have we been furnished with any such appraisals. In addition, we
have relied on representations from senior management of Curtis (a) that the
distribution to be made to each holder of Common Shares of Curtis will be made
as promptly after closing as is practicable; and (b) that the Common Shares of
Curtis will continue to be traded in the over-the-counter market until such
distribution. With respect to our discussions pertaining to future prospects and
our analysis of the available financial forecasts of the Company which we have
reviewed, we have relied on the representations of the senior management of
Curtis that such available forecasts are reasonable, reflect the best currently
available estimates and judgments of senior management of Curtis as to the
future financial position of the Company and that: (a) as to the respective
forecasts, they are unaware of any facts that would make such information
incomplete, in any material respect, or misleading; and (b) there have been no
material developments in the business (financial or otherwise) or prospects of
the Company, since February 28, 2001.
Our opinion is necessarily based on economic, market and other
conditions as they exist, and the information made available to us, as of the
date hereof. We disclaim any undertaking or obligation to advise any person of
any change in any fact or matter affecting our opinion that may come or be
brought to our attention after the date of this opinion. In the performance of
our financial advisory services, we were not engaged to solicit, and did not
solicit, interest from any party with respect to the acquisition of Curtis or
any of its assets. No limitations were imposed upon us by Curtis with respect to
the investigations to be made or procedures to be followed by us in rendering
our opinion.
The opinion expressed herein does not constitute a recommendation as to
any action the Board of Directors of Curtis or any shareholder of Curtis should
take in connection with the Transaction. Further, we express no opinion herein
as to the structure, terms or effect of any other aspect of the Transaction,
including, without limitation, the tax consequences thereof.
It is understood that this letter is for the information of the Board
of Directors of Curtis in connection with its evaluation of the fairness, from a
financial point of view, as of the date hereof, of the distribution to be made
to the holders of Curtis Common Shares pursuant to the Transaction and for
inclusion in the Offer to Purchase. Without limiting the foregoing, in rendering
this opinion, we have not been engaged to act as an agent or fiduciary for the
Company's common shareholders or any other third party.
Based on and subject to the foregoing, we are of the opinion that the
sum of $0.80 per share, is fair to the Company's shareholders, excluding the
Herzog Group, from a financial point of view.
Very truly yours,
RODMAN & RENSHAW, INC.
By: /s/ John J. Borer
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John J. Borer, III
Senior Managing Director