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Xxxxxxx Xxxxx & Co. 00 Xxxxx XxxxxxxXxx Xxxx, Xxx Xxxx 00000
Tel 000 000-0000
PERSONAL AND CONFIDENTIAL
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EXHIBIT 17
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April 26, 1999
Board of Directors
FORE Systems, Inc.
0000 XXXX Xxxxx
Xxxxxxxxxx, XX 00000
Gentlemen:
You have requested our opinion as to the fairness from a financial point of view
to the holders (other than General Electric Company plc ("Buyer") and its
affiliates) of the outstanding shares of Common Stock, par value $0.01 per share
(the "Shares"), of FORE Systems, Inc. (the "Company") of the $35.00 per Share in
cash to be paid by Buyer in the Tender Offer and the Merger (as defined below)
pursuant to the Agreement and Plan of Merger, dated as of April 26, 1999, among
Buyer, GEC Acquisition Corp., a wholly-owned subsidiary of Buyer, and the
Company (the "Agreement"). The Agreement provides for a tender offer for all of
the Shares (the "Tender Offer") pursuant to which GEC Acquisition Corp. will pay
$35.00 per Share in cash for each Share accepted. The Agreement further provides
that following completion of the Tender Offer, the Company will be merged into
GEC Acquisition Corp. (the "Merger") and each outstanding Share (other than
Shares already owned by Buyer and GEC Acquisition Corp.) will be converted into
the right to receive $35.00 in cash.
Xxxxxxx, Xxxxx & Co., as part of its investment banking business, is continually
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placements
and valuations for estate, corporate and other purposes. We are familiar with
the Company having provided certain investment banking and financial advisory
services to the Company from time to time, including having acted as its
financial advisor in connection with, and having participation in certain of the
negotiations leading to, the Agreement.
In connection with this opinion, we have reviewed, among other things, the
Agreement; Annual Reports to Stockholders and Annual Reports on Form 10-K of the
Company for the four fiscal years ended March 31, 1998; certain interim reports
to stockholders and Quarterly Reports on Form 10-Q of the Company; certain other
communications from the Company; certain other communications from the Company
to its stockholders; and certain internal financial analyses and forecasts for
the Company prepared by its management. We also have held discussions with
members of the senior management of the Company regarding its past and current
business operations, financial condition and future prospects. In addition, we
have reviewed the reported price and trading activity for the Shares, compared
certain financial and stock market information for the Company with similar
information for certain other companies the securities of which are publicly
traded, reviewed the financial terms of certain recent business
FORE Systems, Inc.
April 26, 1999
Page Two
combinations in the networking and telecommunications equipment industries
specifically and in other industries generally and performed such other studies
and analyses as we considered appropriate.
We have relied upon the accuracy and completeness of all of the financial and
other information reviewed by us and have assumed such accuracy and completeness
for purposes of rendering this opinion. In addition, we have not made an
independent evaluation or appraisal of the assets and liabilities of the Company
or any of its subsidiaries and we have not been furnished with any such
evaluation or appraisal. As you are aware, we have been in the process of
soliciting third party proposals regarding the acquisition of the Company, and
did receive a written proposal from another third party to acquire the Company
in a "stock-for-stock" transaction. Our opinion does not address the relative
merits of the transaction contemplated pursuant to the Agreement as compared to
any alternative business transaction that might be available to the Company. Our
advisory services and the opinion expressed herein are provided for the
information and assistance of the Board of Directors of the Company in
connection with its consideration of the transaction contemplated by the
Agreement and such opinion does not constitute a recommendation as to whether or
not any holder of Shares should tender such Shares in connection with such
transaction.
Based upon and subject to the foregoing and based upon such other matters as we
consider relevant, it is our opinion that as of the date hereof the $35.00 per
Share in cash to be received by the holders (other than Buyer and its
affiliates) of Shares in the Tender Offer and the Merger is fair from a
financial point of view to such holders.
Very truly yours,
/s/ Xxxxxxx, Xxxxx & Co.
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XXXXXXX, XXXXX & CO.
