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Exhibit 14
[PAINEWEBBER LETTERHEAD]
[PAINEWEBBER LOGO]
August 13, 1999
Board of Directors
The Xxxxxx Corporation
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Gentlemen:
The Xxxxxx Corporation (the "Company"), Hochtief AG (the "Acquiring
Company") and Beta Acquisition Corp., a wholly-owned subsidiary of the
Acquiring Company (the "Purchaser"), propose to enter into an agreement (the
"Agreement") pursuant to which the Purchaser will make a tender offer (the
"Offer") for all shares of the Company's common stock, par value $1.00 per
share including all shares issuable upon conversion of the Company's Series B,
C, and D Convertible Preferred Stock into common stock (the "Shares"), at a
cash price of $28.625 per Share. The Offer is expected to commence on or about
August 20, 1999. The Agreement also provides that, following consummation of
the Offer, the Purchaser will be merged with and into the Company (the
"Merger"). In the Merger, each Share will be converted into the right to
receive $28.625 per Share in cash.
You have asked us whether or not, in our opinion, the proposed cash
consideration to be received by the shareholders of the Company pursuant to the
Offer and the Merger is fair to such shareholders from a financial point of
view.
In arriving at the opinion set forth below, we have, among other things:
(1) Reviewed the Company's Annual Reports, Forms 10-K and related
financial information for the three years ended December 31,
1998, the Company's Form S-3 registration statement filed on
March 4, 1999 with the Securities Exchange Commission and the
Company's Form 10-Q and the related unaudited financial
information for the six months ended June 30, 1999;
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(2) Reviewed certain information, including financial forecasts, relating
to the business, earnings, cash flow, assets and prospects of the
Company, furnished to us by the Company;
(3) Conducted discussions with members of senior management of the Company
concerning its businesses and prospects;
(4) Reviewed the historical market prices and trading activity for the
Shares and compared them with that of certain publicly traded
companies which we deemed to be relevant;
(5) Compared the financial position and results of operations of the
Company with that of certain companies which we deemed to be relevant;
(6) Compared the proposed financial terms of the transactions contemplated
by the Agreement with the financial terms of certain other mergers and
acquisitions which we deemed to be relevant;
(7) Reviewed a draft Agreement dated August 11, 1999;
(8) Reviewed such other financial studies and analyses and performed such
other investigations and took into account such other matters as we
deemed necessary, including our assessment of general economic,
regulatory, market and monetary conditions.
In preparing our opinion, we have relied on the accuracy and completeness
of all information publicly available, supplied or otherwise communicated to us
by or on behalf of the Company, and we have not assumed any responsibility to
independently verify such information. With respect to the financial forecasts
examined by us, we have assumed that they were reasonably prepared on bases
reflecting the best currently available estimates and good faith judgements of
the management of the Company as to the future performance of the Company. We
have also relied upon the assurances of the management of the Company that they
are unaware of any facts that would make the information or financial forecasts
provided to us incomplete or misleading. We have not made any independent
evaluation or appraisal of the assets or liabilities (contingent or otherwise)
of the Company nor have we been furnished with any such evaluations or
appraisals.
This opinion is directed to the Board of Directors of the Company and does
not constitute a recommendation to any shareholder of the Company as to whether
any such shareholder should or should not tender his or her shares in the Offer
or as to how any such shareholder should vote on the Merger. This opinion does
not address the relative merits of the Offer or the Merger and any other
transactions or business strategies discussed by the Board of Directors of the
Company as alternatives to the Offer and the Merger or the decision of the
Board of Directors of the Company with respect to the Offer and the Merger. We
were not requested to, and did not, solicit third party indications of interest
in
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acquiring all or any portion of the Company. Our opinion is based on
regulatory, economic, monetary and market conditions existing on the date
hereof.
In the ordinary course of business, PaineWebber Incorporated may trade in
the securities of the Company and the Acquiring Company for our own account and
for the accounts of our customers and, accordingly, may at any time hold long
or short positions in such securities.
PaineWebber Incorporated is currently acting as financial advisor to the
Company in connection with the Offer and the Merger and will be receiving a fee
in connection with the rendering of this opinion and upon consummation of the
Offer. In the past, PaineWebber Incorporated and its affiliates have provided
investment banking and other financial services to the Company and have received
fees for rendering these services.
On the basis of, and subject to the foregoing, we are of the opinion that
the proposed cash consideration to be received by the shareholders of the
Company pursuant to the Offer and the Merger is fair to such shareholders from
a financial point of view.
This opinion has been prepared for the information of the Board of
Directors of the Company in connection with the Offer and the Merger and shall
not be reproduced, summarized, described or referred to, provided to any person
or otherwise made public or used for any other purpose without the prior
written consent of PaineWebber Incorporated, provided, however, that this
letter may be reproduced in full in a Schedule 14D-9 filed by the Company
related to the Offer.
Very truly yours,
PAINEWEBBER INCORPORATED
/s/ PaineWebber Incorporated
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