Tender-Offer Solicitation/Recommendation Statement — Schedule 14D-9
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 14D9 Tender-Offer Solicitation/Recommendation Statement 17 96K
2: EX-99.1 Agreement and Plan of Merger 57 186K
11: EX-99.10 Letter to Stockholders 1 9K
12: EX-99.11 Option of Houlihan, Lokey, Howard & Zukin 3 15K
3: EX-99.2 Second Amended & Restated Mgmt. Agreement 15 55K
4: EX-99.3 Management Agreement - Rick Ferguson 8 33K
5: EX-99.4 Management Agreement - Roy Breneman 6 26K
6: EX-99.5 Form of Option Agreement Dated February 3, 1997 8 34K
7: EX-99.6 1996-97 Stock Option 8 36K
8: EX-99.7 Form of Option Agreement Dated February 4, 1997 8 32K
9: EX-99.8 Confidentiality Agreement Dated February 26, 1997 4 17K
10: EX-99.9 Press Release 2± 9K
EX-99.11 — Option of Houlihan, Lokey, Howard & Zukin
EX-99.11 | 1st Page of 3 | TOC | ↑Top | Previous | Next | ↓Bottom | Just 1st |
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EXHIBIT 11
[LETTERHEAD OF HOULIHAN LOKEY HOWARD & ZUKIN]
February 28, 1997
To The Board of Directors
of Seven-Up/RC Bottling Company
of Southern California, Inc.
Gentlemen:
We understand that Dr Pepper Bottling Company of Texas, Inc., a Texas
corporation ("DP Texas"), proposes to make a cash tender offer (the "Offer") to
purchase 100% of the outstanding shares of common stock, par value $0.01 per
share ("Common Stock"), of Seven-Up/RC Bottling Company of Southern California,
Inc., a Delaware corporation (the "Company"), for $12.00 per share. In
connection with the Offer, the Company, DP Texas and a wholly owned subsidiary
of DP Texas ("Sub") will enter into an Agreement and Plan of Merger (the
"Merger Agreement") pursuant to which Sub will merge with and into the Company
("the Merger"). The Offer, the Merger and all transactions related thereto are
referred to collectively herein as the "Transaction."
You have requested our opinion (the "Opinion") as to the matters set forth
below. The Opinion does not address the Company's underlying business decision
to effect the Transaction. We have not been requested to, and did not, solicit
third party indications of interest in acquiring all or any part of the Company.
Furthermore, at your request, we have not negotiated the Transaction. We
express no opinion with regard to the terms and/or fairness of the Merger
Agreement, except with regard to the consideration to be received by the
Company's stockholders in the Transaction.
In connection with this Opinion, we have made such reviews, analyses and
inquiries as we have deemed necessary and appropriate under the circumstances.
Among other things, we have:
1. reviewed (a) the Company's annual reports to shareholders and on
Form 10-K for the fiscal years ended December 31, 1995 and December
31, 1994, (b) quarterly report on Form 10-Q for the quarter ended
September 30, 1996, and (c) Company-prepared financial and
operating statements for the fiscal years ended December 31, 1992,
December 31, 1993, December 31, 1994, December 31, 1995 and
December 31, 1996, which the Company's management has identified as
being the most current financial statements available;
Board of Directors
Seven-Up/RC Bottling Company
of Southern California, Inc.
February 28, 1997 -2-
2. reviewed copies of the following documents:
a) the Merger Agreement,
b) the Company's 1996-1997 Stock Option Plan,
c) the Company's Management Incentive Plan, and
d) the Company's 1997 Cost Reduction Plan;
3. reviewed the various company prepared operating and other
statements, and other documentation presented to DP Texas by the
Company on February 7, 1997;
4. reviewed the Company's Disclosure Statement dated June 19, 1996;
5. met with certain members of senior management of the Company to
discuss the operations, financial condition, future prospects
and projected operations and performance of the Company;
6. visited certain facilities and business offices of the Company;
7. reviewed management-prepared forecasts and projections of the
Company's financial performance for the years ended December 31,
1997 through 2000;
8. reviewed the historical market prices and trading volume for
the Company's publicly traded securities and selected individual
block trades;
9. reviewed certain confidential detailed information regarding the
Company's 1997 financial performance, the Company's compensation
arrangements and employee benefit plans, and the Company's
franchise assets and fixed assets;
10. reviewed certain other publicly available financial data for
selected companies that we deem comparable to the Company, and
publicly available prices and premiums paid in other
transactions that we considered similar to the Transaction; and
11. conducted such other studies, analyses and inquiries as we have
deemed appropriate.
We have relied upon and assumed, without independent verification, that the
financial forecasts and projections provided to us have been reasonably prepared
and reflect the best currently available estimates of the future financial
results and condition of the Company, and that there has been no material change
in the assets, financial condition, business or prospects of the Company since
the date of the most recent financial statements made available to us.
Board of Directors
Seven-Up/RC Bottling Company
of Southern California, Inc.
February 28, 1997 -3-
We have not independently verified the accuracy and completeness of the
information supplied to us with respect to the Company and do not assume any
responsibility for independent verification with respect to it. We have not
made any physical inspection or independent appraisal of any of the properties
or assets of the Company. Our opinion is necessarily based on business,
economic, market and other conditions as they exist and can be evaluated by us
at the date of this letter.
For purposes of this opinion, we have assumed that the Company's capital stock
consists of five million shares of outstanding Common Stock, outstanding
warrants to purchase 280,899 shares of Common Stock exercisable at $7.30 per
share, outstanding options to purchase 337,079 shares of Common Stock
exercisable at $7.30 per share, and outstanding options to purchase 382,022
shares of Common Stock exercisable at $8.00 per share.
Based upon the foregoing, and in reliance thereon, it is our opinion that the
consideration to be received by the stockholders of the Company in connection
with the Transaction is fair to them from a financial point of view.
HOULIHAN, LOKEY, HOWARD & ZUKIN, INC.
/s/ Houlihan Lokey Howard & Zukin
Dates Referenced Herein and Documents Incorporated by Reference
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