ANNEX A
August 15, 1999
Board of Directors
Xxxxxxx Media Research, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Members of the Board:
We understand that Xxxxxxx Media Research, Inc. ("Target" or the "Company"), VNU
USA, Inc. ("Buyer") and Niner Acquisition, Inc., a wholly owned subsidiary of
Buyer ("Acquisition Sub"), propose to enter into the Agreement and Plan of
Merger dated as of August 15, 1999 (the "Merger Agreement"), which provides,
among other things, for (i) the commencement by Acquisition Sub of a tender
offer (the "Tender Offer") for all outstanding shares of common stock, par value
$0.01 per share (the "Common Stock"), of Target for $37.75 per share net to the
seller in cash, and (ii) the subsequent merger (the "Merger") of Acquisition Sub
with and into Target. Pursuant to the Merger, Target will become a wholly owned
subsidiary of Buyer and each outstanding share of Common Stock, other than
shares held in treasury or held by Buyer or any subsidiary of Buyer or as to
which dissenters' rights have been perfected, will be converted into the right
to receive $37.75 per share in cash. The terms and conditions of the Tender
Offer and the Merger are more fully set forth in the Merger Agreement.
You have asked for our opinion as to whether the consideration to be received by
the holders of shares of Common Stock pursuant to the Tender Offer and the
Merger, as provided in the Merger Agreement, is fair from a financial point of
view to such holders.
For purposes of the opinion set forth herein, we have:
(i) reviewed certain publicly available financial statements and other
information of the Company;
(ii) reviewed certain internal financial statements and other financial and
operating data concerning the Company prepared by the management of the
Company;
(iii) analyzed certain financial forecasts prepared by the management of the
Company;
(iv) discussed the past and current operations and financial condition and
the prospects of the Company with senior executives of the Company;
(v) reviewed the reported prices and trading activity for the Common Stock;
(vi) compared the financial performance of the Company and the prices and
trading activity of the Common Stock with that of certain other
comparable publicly-traded companies and their securities;
(vii) reviewed the financial terms, to the extent publicly available, of
certain comparable acquisition transactions;
(viii) participated in discussions and negotiations among representatives of
the Company, Buyer and their financial and legal advisors;
(ix) reviewed the Merger Agreement and certain related documents;
(x) performed such other analyses and considered such other factors as we
have deemed appropriate.
We have assumed and relied upon without independent verification the accuracy
and completeness of the information reviewed by us for the purposes of this
opinion. With respect to the financial forecasts, we have assumed that they have
been reasonably prepared on bases reflecting the best currently available
A-1
estimates and judgments of the future financial performance of the Company. In
addition, we have assumed that the Tender Offer and Merger will be consummated,
in all material respects, in accordance with the terms of the Merger Agreement.
We have not made any independent valuation or appraisal of the assets or
liabilities of the Company, nor have we been furnished with any such appraisals.
Our opinion is necessarily based on economic, market and other conditions as in
effect on, and the information made available to us as of, the date hereof.
In arriving at our opinion, we were not authorized to solicit, and did not
solicit, interest from any party with respect to the acquisition of the Company
or any of its assets.
We have acted as financial advisor to the Board of Directors of the Company in
connection with this transaction and will receive a fee for our services. In the
past, Xxxxxx Xxxxxxx & Co. Incorporated and its affiliates have provided
financial advisory and financing services for the Company and have received fees
for the rendering of these services.
It is understood that this letter is for the information of the Board of
Directors of the Company, except that this opinion may be included in its
entirety in any filing made in respect of the Tender Offer or the Merger with
the Securities and Exchange Commission and delivered to shareholders. This
letter does not constitute a recommendation to any shareholder as to how such
shareholder should respond to the Tender Offer.
Based upon and subject to the foregoing, we are of the opinion on the date
hereof that the consideration to be received by the holders of shares of Common
Stock pursuant to the Tender Offer and the Merger as provided in the Merger
Agreement is fair from a financial point of view to such holders.
Very truly yours,
XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxx
Managing Director
A-2
