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EXHIBIT 3
THE XXXXXXXX-XXXXXXXX COMPANY, LLC
Corporate Finance Investment Bankers
Department Since 1894
March 29, 2000
Board of Directors
Xxxxxxxx Industries, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
We understand that Xxxxxxxx Industries, Inc. (the "Company") proposes to
enter into a Purchase Agreement dated March 29, 2000 (the "Purchase Agreement")
by and among Tiger Corporation and Tiger Holding Corporation (collectively
"Tiger") and the Company. Pursuant to the terms of the Purchase Agreement, (1)
Tiger will commence a tender offer, at a price of $3.00 per share net to the
seller in cash, for up to all of the outstanding shares of common stock of the
Company (the "Tender Offer") and (2) upon completion of the Tender Offer, Tiger
will purchase shares of the Company's common stock and Series A Preferred Stock
having an aggregate value of $27 million at a price of $3.00 per share (the
"Stock Purchase") (collectively, the "Purchase Consideration"). The Tender Offer
is subject to the "Minimum Tender Condition" whereby Tiger will not be required
to complete the Tender Offer if the number of tendered shares and the number of
shares to be acquired in the Stock Purchase do not aggregate at least 50.1% of
the fully diluted outstanding shares of common stock of the Company. The terms
and conditions of the proposed transaction are set forth in more detail in the
Purchase Agreement.
We have been requested by the Special Committee of the Board of Directors
of the Company to render our opinion with respect to the fairness, from a
financial point of view, to the Company's stockholders of the Purchase
Consideration.
In arriving at our opinion, we reviewed and analyzed: (1) a draft of the
Purchase Agreement dated March 24, 2000, (2) publicly available information
concerning the Company which we believe to be relevant to our inquiry, (3)
financial and operating information with respect to the business, operations and
prospects of the Company furnished to us by the Company, (4) a trading history
of the Company's common stock from March 24, 1997 to the present and a
comparison of that trading history with those of other companies which we deemed
relevant, (5) a comparison of the historical financial results and present
financial condition of the Company with those of other companies which we deemed
relevant, (6) a comparison of the financial terms of the proposed transaction
with the financial terms of certain other recent transactions which we deemed
relevant, and (7) certain historical data relating to acquisitions of publicly
traded companies, including percentage premiums paid in such acquisitions. We
have also had discussions with the management of the Company concerning its
business, operations, assets, present condition and future prospects and
undertook such other studies, analyses and investigations as we deemed
appropriate.
We have assumed and relied upon the accuracy and completeness of the
financial and other information used by us in arriving at our opinion without
independent verification. With respect to the financial projections provided by
the Company, we have assumed that such projections have been reasonably prepared
on bases reflecting the best currently available estimates and judgments of the
management of the Company as to the future financial performance of the Company.
In arriving at our opinion, we have not conducted a physical inspection of the
properties and facilities of the Company and have not made any evaluations or
appraisals of the assets or liabilities of the Company. In addition, you have
not authorized us to solicit, and we have not solicited, any indications of
interest from any third party with respect to the purchase of all or a part of
the Company's business. Our opinion is necessarily based upon market, economic
and other conditions as they exist on, and can be evaluated as of, the date of
this letter.
Based upon and subject to the foregoing, we are of the opinion as of the
date hereof that, from a financial point of view, the Purchase Consideration to
be received in the proposed transaction is fair to the stockholders of the
Company.
Very Truly yours
/s/ THE XXXXXXXX-XXXXXXXX COMPANY
THE XXXXXXXX-XXXXXXXX COMPANY, LLC
