1
Exhibit (b)(4)
Project CAN / Exhibit 13E13
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EXTREMELY CONFIDENTIAL
PROJECT CAN
TIN PURCHASE OF CAN MINORITY PUBLIC STAKE
XXXXXX, READ & CO. INC.
MAY 22, 1997
2
Project CAN
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The accompanying material was compiled on a confidential basis for use by the
Board of Directors of TIN (the "Company") in evaluating the proposal described
therein and not with a view to public disclosures or filing thereof under the
Securities Act of 1933 or the Securities Exchange Act of 1934 (the "Federal
Securities Laws"). This material was prepared for the Company for the specific
use by specific persons and was not prepared to conform with any disclosure
standards under the Federal Securities Laws. Neither the Company nor Xxxxxx,
Read & Co. Inc. ("Xxxxxx Xxxx") nor any of their representative officers,
directors, employees, affiliates, advisors, agents or representatives warrants
the accuracy or completeness of any of the material set forth herein. Nothing
contained in the accompanying material is, or shall be relied upon as, a
promise or representation as to the past or the future.
It should be understood that any estimates, valuations and/or projections
contained in the accompanying material were prepared or derived from
information supplied by the Company without any independent verification
thereof by Xxxxxx Xxxx. Accordingly, no representation or warranty can be or is
made by Xxxxxx Read as to the accuracy or achievability of any such valuations,
estimates and/or projections.
XXXXXX READ
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Project CAN
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TABLE OF CONTENTS
Overview of Current Situation . . . . . . . . . . . . . . . . . . . .A
Preliminary Valuation Discussion . . . . . . . . . . . . . . . . . . .B
Discussion of Minority Buy-In Transactions . . . . . . . . . . . . . .C
Pro Forma Impact of Buy-In . . . . . . . . . . . . . . . . . . . . . .D
Timing and Process . . . . . . . . . . . . . . . . . . . . . . . . . .E
Exhibits
Detailed Comparable Steel Company Analysis . . . . . . . . . .1
Shareholder Profile Summary . . . . . . . . . . . . . . . . .2
XXXXXX READ
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Project CAN
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TIN PURCHASE OF CAN MINORITY PUBLIC STAKE
OVERVIEW OF CURRENT SITUATION . . . . . . . . . . . A
XXXXXX READ
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Project CAN / A - 1
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OVERVIEW OF CURRENT SITUATION
o TIN HAS INFORMED XXXXXX READ THAT IT IS CONSIDERING
THE REPURCHASE OF THE 15% OF CAN THAT IT DOES NOT
CURRENTLY OWN
x XXXXXX READ UNDERSTANDS THIS COURSE OF ACTION
- Eliminates management distractions related to
governance, IR, etc.
- Simplifies cash flow and accounting
- If financed properly, can be modestly
accretive to TIN
- Little benefit to valuation for either Company
under current structure
x XXXXXX READ IS WILLING TO ASSIST XXX IN EVALUATING
AND EXECUTING A BUY-IN INCLUDING:
- Presentation to Board on valuation of CAN
- Review process of buy-in with Board
- Negotiate on behalf of TIN Board
- Assist TIN in formulating communication
- Assist in drafting of disclosure documents
including proxy statement
- Render opinion to TIN Board
XXXXXX READ
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Project CAN / A - 2
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OVERVIEW OF PROCESS
x XXXXXX READ EXPECTS THE CONTEMPLATED TRANSACTION WILL BE
STRAIGHTFORWARD AND LIKELY COMPLETED IN APPROXIMATELY FOUR
MONTHS FROM ANNOUNCEMENT OF OFFER:
Day of May 22 Presentation to TIN
Board of Directors Offer made
to CAN's Board Public
announcement made
Week of July 14 Agreement reached
Week of July 21 File proxy statement with SEC
Week of August 18 Mail proxy materials to
shareholders
Week of September 15 Hold special shareholders meeting
Close merger
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Project CAN / A - 3
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OVERVIEW OF STRATEGIC RATIONALE
o TIN HAS DELIVERED SUBSTANTIAL SHARE APPRECIATION TO INVESTORS
WHILE CAN HAS TRAILED TIN OVER THE LAST FIVE YEARS. DESPITE A
RECENT PULLBACK IN THE STOCK RELATED TO THE ANNOUNCEMENT OF
CAN EAST, TIN HAS STILL DELIVERED SUPERIOR RETURNS TO
INVESTORS.
[CHART]
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Project CAN / A - 4
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REASONS FOR BUY-IN
o CURRENT CONFIGURATION (85% OWNERSHIP) DOES NOT APPEAR TO
ENHANCE:
- Valuation
- Credit standing
- Capital raising capabilities
o BUY-IN STREAMLINES TIN CREDIT PROFILE:
- Ability to consolidate debt at holding company level
- Capture of 100% of cash flow from CAN that is
substantially greater than amount TIN receives in
dividends
- Cash flows of TIN could be available to CAN
o ELIMINATES MINORITY INTEREST ACCOUNTING FROM CONSOLIDATED
FINANCIAL STATEMENTS
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Project CAN / A - 5
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TRANSACTION IMPLICATIONS - INVESTOR PERSPECTIVE
o ELIMINATION OF PURE "STEEL" PLAY OPPORTUNITY
- Current illiquidity makes CAN a difficult investment
for institutions
- Many current investors own the stock based upon
financial or technical play and not as a "Steel"
company
- Potential loss of steel analyst coverage
o BUY-IN INCREASES STEEL PROFILE OF TIN
o CAPITAL EXPENDED TO FUND BUY-IN
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Project CAN / A - 6
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TRANSACTION IMPLICATIONS - FINANCIAL
o TIN MAY INCUR ADDITIONAL GOODWILL FROM THE TRANSACTION
- Purchase price may exceed minority share book value
in CAN
o DEPENDING ON SOURCE AND COST OF FUNDS USED, TRANSACTIONS CAN
BE MODESTLY ACCRETIVE TO TIN EARNINGS PER SHARE
o GIVEN PRIOR CONSIDERATIONS, TRANSACTIONS WILL LIKELY HAVE
LITTLE OTHER IMPACT ON FINANCIAL STATEMENTS
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Project CAN
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TIN PURCHASE OF CAN MINORITY PUBLIC STAKE
OVERVIEW OF CURRENT SITUATION . . . . . . . . . . . A
PRELIMINARY VALUATION DISCUSSION . . . . . . . . . B
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Project CAN / B - 1
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CURRENT STOCK PRICE
o CURRENTLY, CAN IS VALUED ON AN EQUITY BASIS AS FOLLOWS:
------------------------------------------------
(in millions, except per share data)
Stock Price (5/8/97) $12.00
Shares Outstanding 28.4
Total Equity Market Capitalization $340.6
------------------------------------------------
o SINCE ITS IPO ON JULY 7, 1988, CAN HAS TRADED IN A RANGE OF
$16.75 TO $6.00 PER SHARE
[GRAPH]
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Project CAN / B - 2
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COMPARABLE STEEL COMPANY OVERVIEW
o IN EVALUATING THE PROSPECTS OF STEEL COMPANIES, INVESTORS TEND
TO VALUE COMPANIES BASED UPON:
- Company prospects for growth
- Price (and business) cycle of steel products in
respective markets
- Cost structure
- Individual characteristics of each company
o OTHER FACTORS ALSO IMPACT A STOCK'S VALUE:
- Wall Street sponsorship (research coverage)
- Public float and average trading volume
- Aggregate equity market capitalization
(dollars in millions)
# of Equity Public Float as a LTM Avg. Daily Equity Market
Research Analysts % of Total Float Trading Volume 1 Capitalization
----------------- ----------------- ---------------- --------------
Tier I
Commercial Metals 13 85% 18,123 $430
Steel of West Virginia 4 91 10,633 52
Kentucky Electric 4 92 6,130 20
NS Group 9 66 16,236 78
Tier II
Birmingham Steel 17 95 89,566 $441
Oregon Steel 15 91 97,059 437
NW Steel & Wire 5 51 30,791 71
CAN 9 15% 9,600 $341
Rank 5/8 8/8 7/8 4/8
Note 1: Average daily trading volumes have been reduced by 50% to eliminate double counting where appropriate.
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Project CAN / B - 3
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COMPARABLE STEEL COMPANY ANALYSIS -- STOCK PRICE PERFORMANCE
o can HAS A HISTORY OF LAGGING PERFORMANCE COMPARED TO ITS PEERS
[CHART ]
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Project CAN / B - 4
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COMPARABLE STEEL COMPANY ANALYSIS -- FORWARD P/E MULTIPLES
o ON A FORWARD EARNINGS BASIS, CAN CONSISTENTLY TRADES AT A
DISCOUNT
[GRAPH]
Note 1: Steel Index is comprised of Birmingham Steel, Oregon Steel,
Commercial Metals, Steel of West Virginia.
Note 2: P/E is defined as price at end of each month divided by EPS
1 yr. forward.
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Project CAN / B - 5
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COMPARABLE STEEL COMPANY ANALYSIS
o BASED ON FUTURE EARNINGS ESTIMATES, CAN IS REASONABLY VALUED
COMPARED TO ITS PEERS
IMPLIED EQUITY VALUE
(dollars in millions)
ACTUAL IMPLIED EQUITY VALUE IMPLIED EQUITY
EQUITY TIER 1 TIER 2
VALUE CY98 MULTIPLE CY98 MULTIPLE
------ -------------------- --------------
$341 $323 $370
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Project CAN
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TIN PURCHASE OF CAN MINORITY PUBLIC STAKE
OVERVIEW OF CURRENT SITUATION . . . . . . . . . . . . . . . . . . . . . . . . A
PRELIMINARY VALUATION DISCUSSION . . . . . . . . . . . . . . . . . . . . . . B
DISCUSSION OF MINORITY BUY-IN TRANSACTIONS . . . . . . . . . . . . . . . . . C
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Project CAN / C - 1
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MINORITY BUY-IN OVERVIEW
o MINORITY SHAREHOLDERS ARE NOT ENTITLED TO A CONTROL PREMIUM.
o UNDER DELAWARE LAW, TIN COULD EFFECT A NON-PREMIUM MERGER WITH CAN.
- Appraisal rights would be available to dissenting CAN shareholders.
o HOWEVER, PREMIUMS TO ACQUIRE REMAINING INTERESTS HAVE AVERAGED 22%, ONE
DAY PRIOR TO ANNOUNCEMENT, AND 32% FOUR WEEKS PRIOR TO ANNOUNCEMENT.
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Project CAN / C - 2
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AVERAGE PREMIUMS PAID FOR MINORITY BUY-IN TRANSACTIONS
=========================================================================
AVERAGE PREMIUMS PAID OVER TARGET STOCK PRICE BEFORE DATE OF ANNOUNCEMENT
Acquisition of Remaining Interest(1)
----------------------------------------------------------------------
Average Premium
---------------------------------------------
One Day Four Weeks
Prior to Announcement Prior to Announcement Number of Transactions
--------------------------------------------- ----------------------
1992 23.6% 21.7% 4
1993 24.6 35.1 3
1994 20.6 22.8 7
1995 28.2 34.1 7
1996 14.1 47.7 5
1997(2) NA NA 0
'92 - 96 22.2% 32.3%
--------------------------------------------------------------------------------
Note 1: Transaction values at $10MM or greater.
Note 2: Year to date.
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Project CAN
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TIN PURCHASE OF CAN MINORITY PUBLIC STAKE
OVERVIEW OF CURRENT SITUATION . . . . . . . . . . . . . . . . . . . . A
PRELIMINARY VALUATION DISCUSSION . . . . . . . . . . . . . . . . . . B
DISCUSSION OF MINORITY BUY-IN TRANSACTIONS . . . . . . . . . . . . . C
PRO FORMA IMPACT OF BUY-IN . . . . . . . . . . . . . . . . . . . . . X
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Project CAN / D - 1
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PRO FORMA IMPACT OF BUY-IN - BALANCE SHEET
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Balance Sheet Data
(dollars in millions)
TIN Pro Forma
2/28/97 Acq. Adjust. 2/28/97
------- ------------ ---------
Cash $ 4.0 $ 0.0 $ 4.0
Current 321.7 321.7
PPE, net 397.1 397.1
Other assets 101.5 101.5
Acquisition-related goodwill -- 17.6 17.6
------ ------
Total Assets $824.3 17.6 $841.9
Current liabilities $ 86.5 $ 86.5
Other liabilities 79.2 79.2
Total debt 198.2 -- 198.2
Debt acquisitions-related -- 52.8 52.8
------ ------
Total debt 198.2 52.8 251.0
Minority interest 35.3 (35.3) 0.0
Common stock 425.2 -- 425.2
------ ------
Total Liabilities & Equity $824.3 $841.9
--------------------------------------------------------------------------------
Note 1: Assumes a transaction price based upon closing stock price of $12.00.
Source: Company available documents.
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Project CAN / D - 2
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PRO FORMA IMPACT OF BUY-IN - INCOME STATEMENT
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Income Statement Data
(dollars in millions)
TIN
TIN Pro Forma
LTM 2/28/97 Acq. Adjust. LTM 2/28/97
----------- ------------ -----------
EBIT $140.0 $140.0
Interest expense 19.1 19.1
------ ------
EBT 120.9 120.9
Tax expense 41.0 41.0
Minority interest (6.6) (6.6)
------ ------
Pre-acquisition net income 73.3 73.3
Acquisition-related adjustments
Less: Goodwill -- $0.5 0.5
Plus: Minority interest -- 6.6 6.6
Less: Interest expense -- 3.4 3.4
------ ------
Pro-forma net income -- $ 75.9
EPS
Pre-Acquisition EPS $ 3.29 $ 3.27
Pro Forma EPS -- 3.41
Shares Outstanding
Fully-diluted shares outstanding 22.3 22.3
Acquisition-related shares issued -- --
------ ------
Pro forma shares outstanding 22.3 22.3
--------------------
Note 1: Assumes a transaction price based upon closing stock price of $12.00
as if it had occurred at the beginning of the period.
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Project CAN
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TIN PURCHASE OF CAN MINORITY PUBLIC STAKE
OVERVIEW OF CURRENT SITUATION . . . . . . . . . . . . . . . . . . . . A
PRELIMINARY VALUATION DISCUSSION . . . . . . . . . . . . . . . . . . B
DISCUSSION OF MINORITY BUY-IN TRANSACTIONS . . . . . . . . . . . . . C
PRO FORMA IMPACT OF BUY-IN . . . . . . . . . . . . . . . . . . . . . D
TIMING AND PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . E
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Project CAN / E - I
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ILLUSTRATIVE MINORITY BUY-IN PROCESS
TIN'S BOARD ACTION
o TIN BOARD VOTES TO BUY-OUT MINORITY SHAREHOLDERS
- After consulting with outside advisors
o TIN SENDS A LETTER TO BOARD OF CAN STATING:
- TIN intention
- Price offered
- Form of consideration (cash; stock; combination; other)
- Requesting CAN Board establish special committee
o PUBLIC ANNOUNCEMENT OF OFFER BY CAN AND TIN
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Project CAN / E - 2
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ILLUSTRATIVE MINORITY BUY-IN PROCESS
CAN BOARD ACTION
o FULL BOARD ESTABLISHES SPECIAL COMMITTEE OF DISINTERESTED DIRECTORS
- Should not be employees of TIN or CAN
- Should not be directors of TIN
- Should not have long-standing commercial relationship with XXX
(consultant; lawyer; advisor; supplier)
o PUBLIC ANNOUNCEMENT OF ESTABLISHMENT OF SPECIAL COMMITTEE (SIMULTANEOUS
WITH ANNOUNCEMENT OF OFFER)
o CAN BOARD WILL LIKELY ACT IN ACCORDANCE WITH SPECIAL COMMITTEE
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Project CAN / E - 3
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ILLUSTRATIVE MINORITY BUY-IN PROCESS
SPECIAL COMMITTEE'S ACTION
o HAS FIDUCIARY OBLIGATION TO PROTECT THE INTERESTS OF MINORITY
SHAREHOLDERS
- Must review and analyze TIN's offer as to adequacy and fairness
- Must exercise due consideration and care
- Must recommend to full CAN Board accepting or rejecting TIN's offer
o HAS PRACTICAL OBLIGATION TO ATTEMPT TO NEGOTIATE BEST PRICE
- Enters into negotiations with TIN and its advisors
- CAN should have no obligation to sell
o HIRES ADVISORS TO HELP MEET BOTH OBLIGATIONS
- Legal
- Financial
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Project CAN / E - 4
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ILLUSTRATIVE MINORITY BUY-IN PROCESS
NEGOTIATE PRICE
o SPECIAL COMMITTEE AND ITS ADVISORS WILL ANALYZE PRICE WITH REGARD TO:
- CAN DCF valuation
- Public market for similar businesses/assets
- Comparable company analysis
- And anything else that can justify a higher price
o MINORITY SHAREHOLDERS ARE NOT ENTITLED TO A VOTING CONTROL PREMIUM
o TIN AND ITS ADVISORS WILL DO SIMILAR ANALYSIS
o THE TWO SIDES WILL NEGOTIATE OVER PRICE AND TERMS
o BEGIN DRAFTING OF PROXY AND SCHEDULE 13E-3
- Include 13e-3 "going private" disclosure
- Will file after negotiated price is accepted
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Project CAN / E - 5
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ILLUSTRATIVE MINORITY BUY-IN PROCESS
NEGOTIATIONS COMPLETE
o OPINIONS RENDERED
- From Special Committee's advisors to Special Committee
- From TIN'S advisors to TIN'S Board
o SPECIAL COMMITTEE MAKES RECOMMENDATIONS TO CAN BOARD
o CAN BOARD MAKES DECISION IN RESPECT TO OFFER
o JOINT ANNOUNCEMENT
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Project CAN / E - 6
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ILLUSTRATIVE MINORITY BUY-IN PROCESS
EFFECT REPURCHASE
o PROCESS
- CAN files proxy statement; respond to SEC comments
- CAN mails proxy materials to shareholders
- CAN holds shareholder meeting
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Project CAN / E - 7
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ILLUSTRATIVE SUMMARY TIMETABLE OF PROCESS
---------- ---------- ---------- ----------- --------------
May 1997 June 1997 July 1997 August 1997 September 1997
[Calendar] [Calendar] [Calendar] [Calendar] [Calendar]
---------- ---------- ---------- ----------- --------------
TIN TIN
CAN CAN
XXXXXX READ DR
Outside Advisors OA
Company Counsel CC
Accountants ACCT
Date Task Responsibility
------------------------------ -------------------------------------------------------- --------------
Day of May 22 o TIN hires XXXXXX READ to review process TIN
o TIN Board reviews buy-out of CAN minority shareholders TIN, XX
x XXXXXX READ advises TIN Board on recommendations for
execution of transaction TIN, DR
o TIN Board decides to proceed with offer TIN
o TIN Board makes offer to CAN TIN
o TIN files revised 13-D TIN, CC
o TIN and CAN notify NYSE TIN, CAN
o Public announcement of offer by CAN and TIN TIN, CAN
o CAN forms special committee CAN, CC
Weeks of May 26 and June 2 o CAN hires financial and legal advisors TIN, CAN
Weeks of June 9 through July 7 o CAN enters into negotiations with TIN
through respective advisors TIN, CAN, DR, CC, OA
o Advisors for TIN and CAN perform supporting analysis TIN, CAN, DR, OA
Week of July 14 o CAN accepts negotiated offer CAN, OA, CC
o Advisors render fairness opinions DR, OA
o TIN and CAN sign Merger Agreement;
Joint public announcement All Parties
Week of July 21 o File proxy statement circular with SEC All Parties
o TIN and CAN make fourth quarter and fiscal
year-end announcements TIN, CAN, CC, ACCT
Week of August 18 o Respond to SEC comments and mail proxy statement All Parties
Week of September 16 o Special shareholder meeting and vote CAN
o Close Merger All Parties
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Project CAN
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TIN PURCHASE OF CAN MINORITY PUBLIC STAKE
EXHIBITS
--------
DETAILED STEEL COMPARABLE COMPANY ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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Project CAN / Exhibit 1 - 1
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COMPARABLE STEEL COMPANY ANALYSIS
Tier I Product Location
------------------------ ----------------------------------------------------- -----------------------------------------
Commercial Metals Manufactures reinforcing and structural steel, steel Steel mini-xxxxx located in Seguin,
warehousing, joist manufacturing, fence post Texas; Birmingham, Alabama; Cayce,
manufacturing, and railcar repair and rebuilding. South Carolina; and Magnolia,
Company also processes recycled steel. Arkansas.
Steel of West Virginia Custom designs and manufactures finished steel products Steel mini-mill and steel
(billets). Billets are reheated to form engineered shapes fabrication facility in West
known as specialty steel sections. Virginia as well as steel
fabrication facility in
Tennessee.
Kentucky Electric A manufacturer of SBQ Flats for the leaf-spring Operations are located near
suspension, cold drawn bar conversion and truck Ashland, Kentucky.
trailer support beams.
NS Group Produces a diverse group of specialty steel products which Manufactures seamless OCTG, line
include seamless and welded tubular goods primarily used pipe products and SBQ products
in oil and natural gas drilling and production operations. at facilities located in Xxxxxx and
Also produces special bar quality products, primarily used Ambridge, Pennsylvania and Baytow,
in the manufacture of heavy industrial equipment; and hot Texas.
rolled coils, which are sold to service centers and other
manufacturers for further processing.
Tier II
------------------------
Birmingham Steel Produces steel reinforcing bar and merchant products. Mini-xxxxx are located in Alabama,
Also specializes in manufacturing steel rod and wire from Illinois, Mississippi, and
semi-finished billets. Washington. Operates its steel
distribution facilities in Florida
and Texas.
Oregon Steel Manufactures and markets specialty and commodity steel Operates two steel mini-xxxxx and
products. four finishing facilities in the
western U.S. and Canada.
Northwestern Steel and Produces structural steel products such as wide flange Operations are located in Sterling
Wire Co. beams, light structural shapes and merchants bars. Also and Rock Falls, Illinois; Houston,
produces rod and wire products including nails, concrete Texas; and Hickman, Kentucky.
reinforcing mesh, and residential and agricultural
fencing.
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Project CAN / Exhibit 1 - 2
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COMPARABLE STEEL COMPANY ANALYSIS
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Operating Data
LTM LTM Gross LTM EBIT LTM EBITDA LTM Net Income Average Return
Revenues Margin Margin Margin Margin on Equity
-------- ---------- -------- ---------- ----------------- --------------
Tier I
Commercial Metals $2,248.8 10.7% 3.8% 5.7% 2.0% 12.9%
Steel of West Virginia 95.3 10.5 5.8 13.0 2.5 4.9
Kentucky Electric 102.3 12.8 6.3 7.4 3.6 10.4
NS Group 425.3 10.6 5.3 9.7 NM NM
---------------------------------------------------------------------------------------------------------------------------------
Average 11.2% 5.3% 9.0% 2.7% 9.4%
---------------------------------------------------------------------------------------------------------------------------------
Tier II
Birmingham Steel $ 871.4 7.9% 4.0% 8.6% 1.6% 3.1%
Oregon Steel 772.8 13.2 7.4 11.1 3.2 6.9
Northwestern Steel
& Wire 639.1 4.9 3.0 7.3 1.5 9.5
---------------------------------------------------------------------------------------------------------------------------------
Average 8.7% 4.8% 9.0% 2.1% 6.5%
---------------------------------------------------------------------------------------------------------------------------------
CAN $ 596.5 15.9% 11.2% 16.9% 6.6% 12.5%
---------------------------------------------------------------------------------------------------------------------------------
Source: Publicly available documents.
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Project CAN / Exhibit 1 - 3
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COMPARABLE STEEL COMPANY ANALYSIS
================================================================================
Trading Statistics
Multiples of Enterprise Value Multiples of Stock Price
------------------------------- -------------------------------------------
LTM LTM LTM LTM CY 1997 CY 1998 % EPS
Sales EBITDA EBIT E.P.S. E.P.S. E.P.S. CY1997/CY1998
------ ------ --------- -------------------------------------------
Tier I
Commercial Metals 0.3x 4.8x 7.1x 9.8X 10.7x 9.1x 17.5%
Steel of West Virginia 0.7 5.3 12.0 21.4 15.4 12.3 25.0
Kentucky Electric 0.5 6.6 7.8 5.7 NM 5.9 15.0%
NS Group 0.5 5.2 9.7 NM NM NA NM
-------------------------------------------------------------------------------------------------------------
Average Tier I(1) 0.4x 5.5x 8.2x 9.8x 10.7x 9.1x 16.3%
-------------------------------------------------------------------------------------------------------------
Tier II
Birmingham Steel 1.0x 12.2x 26.3x 30.3x 13.8x 9.4x 46.3%
Oregon Steel 1.1 9.4 14.2 16.1 15.4 11.3 36.0
Northwestern Steel
& Wire 0.4 5.8 14.1 8.0 NM 18.8 NM
-------------------------------------------------------------------------------------------------------------
Average Tier II(l) 0.8x 7.6x 14.2x 12.1x 14.6x 10.4x 41.1%
CAN 0.7x 4.0x 5.9x 9.0x 9.1x 9.6x (5.3%)
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Note 1: Excludes Steel of West Virginia from all averages, Birmingham from all
TM averages and Northwestern Steel & Wire and Kentucky Electric from
projected CY 1997 and CY 1998 earnings averages.
Source: Publicly available documents; forecasts provided by Xxxxx, Xxxxxx'x and
First Call and stock prices as of May 8, 1997.
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Project CAN
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TIN PURCHASE OF CAN MINORITY PUBLIC STAKE
EXHIBITS
--------
DETAILED COMPARABLE STEEL COMPANY ANALYSIS . . . . . . 1
SHAREHOLDER PROFILE SUMMARY . . . . . . . . . . . . . 2
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Project CAN / Exhibit 2 - 1
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SHAREHOLDER PROFILE
===============================================================================
CAN % of Total TIN
Institution Shares Held Minority Position Shares Held
----------- ----------- ----------------- -----------
Dimensional Fund Advisors 1,026,399 23.8% 666,486
First Manhattan Co. 728,275 16.9 148,000
Wilshire Assoc. Inc. 209,362 4.9
Barclays Bank Pic 169,104 3.9 591,468
Private Capital Management 122,700 2.9 355,600
Mellon Bank Corporation 106,839 2.5 148,108
Xxxxx/Xxxxxx Advisers 82,800 1.9 99,000
Lighthouse Capital 77,900 1.8
ANB Investment 73,100 1.7 76,904
Brandywine Asset Mgmt 31,900 0.7 88,400
--------- ---- ---------
Total 2,628,379 61.0% 2,173,966
========= ==== =========
Note: Shaded area indicates overlapping ownership with TIN shareholders.
Source: CDA/Spectrum as of December 31, 1996.
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