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Exhibit 20.2
UNTERBERG HARRIS
000 XXXXXXX XXXXXX, 00XX XXXXX
XXX XXXXXXXXX, XX 00000
(000) 000-0000 FAX (000) 000-0000
October 11, 1996
Board of Directors
Software Publishing Corporation
000 X. Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Ladies and Gentlemen:
We understand that Software Publishing Corporation ("Software Publishing"
or the "Company") and Allegro New Media ("Allegro") have entered into an
Agreement and Plan of Merger, dated October 1, 1996 (the "Merger Agreement"),
pursuant to which Software Publishing will become a wholly owned subsidiary of
Allegro (the "Merger"). In connection with the Merger, Allegro will issue
0.26805 shares of its Common Stock for each share of Software Publishing's
Common Stock (the "Exchange Ratio") and the vested and non-vested options will
be assumed by Allegro based on the terms of the Merger.
You have requested our opinion with respect to the fairness of the Exchange
Ratio, from a financial point of view, to the shareholders of Software
Publishing.
In connection with our review, we have, among other things:
(i) reviewed the Merger Agreement dated October 1, 1996;
(ii) reviewed publicly available financial information with respect to
the business operations of the Company including, but not limited to,
audited financial statements for the fiscal years ended September 1993,
1994 and 1995 and unaudited financial statements for the period ended June
30, 1996;
(iii) reviewed publicly available financial information with respect
to the business operations of Allegro including, but not limited to,
audited financial statements for the fiscal year ended December 31, 1995
and unaudited financial statements for the period ended June 30, 1996;
(iv) reviewed certain internal financial and operating information
relating to Software Publishing and Allegro (including financial
projections) prepared by the respective managements of each company;
(v) held discussions with certain members of both Software Publishing
and Allegro senior management concerning their past and current operations,
financial condition and business prospects and the potential financial
effect of the Merger of Software Publishing and Allegro if the Merger were
consummated;
(vi) reviewed a comparison of operating results and other financial
information of Software Publishing and Allegro with other companies which
we deemed appropriate;
(vii) reviewed the historical market prices and reported trading
activity of Software Publishing and Allegro Common Stock;
(viii) compared the financial terms of the Merger and the premium paid
over the Company's current, historical and average stock price with the
terms and premiums paid of certain other merger, acquisition and business
combination transactions which we deemed appropriate; and
(ix) considered such other information, financial studies and analyses
as we deemed relevant and performed such analyses, studies and
investigations as we deemed necessary.
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We have assumed and relied upon, without independent verification, the
accuracy and completeness of the information reviewed by us. With respect to any
financial projections, we assumed that they had been reasonably prepared on
bases reflecting the best currently available estimates and judgments of the
respective future financial performances of Software Publishing and Allegro and
the future financial performance of the combined company. We also have assumed,
without independent verification, that Allegro owns and has adequate legal
protection for all material intellectual property it purports to own, that
Allegro owns or has adequate rights to use all intellectual property material to
its business as conducted or contemplated to be conducted and that the
representations and warranties of Software Publishing and Allegro in the
Agreement and Plan of Reorganization are true and correct. We have also assumed
that the Merger will be accounted for as a purchase.
We have not conducted a physical inspection of the properties or facilities
of Software Publishing or Allegro or made any independent valuation or appraisal
of the assets, liabilities, patents or intellectual property of Software
Publishing and Allegro, nor have we been furnished with any such valuations or
appraisals. Our opinion is necessarily based upon economic, market and other
conditions as in effect on, and the information made available to us, as of the
date of this letter.
We understand that in considering the Merger, the Board of Directors of the
Company has considered a wide range of financial and non-financial factors, many
of which are beyond the scope of this letter. This letter is not intended to
substitute for the Board's exercise of its own business judgment in reviewing
the Merger. This opinion is solely for purposes of the Board of Directors of the
Company in connection with its exercise of its business judgment, and delivery
of this opinion is not intended to confer rights on any third party, including
shareholders, employees or creditors of the Company or Allegro.
We are expressing no opinion herein as to the prices at which the shares of
the Company or Allegro will actually trade at any time. Our opinion does not
constitute a recommendation to any shareholder as to how such shareholder should
vote on the Merger. It should be understood that, although subsequent
developments may occur which might affect this opinion, Unterberg Harris does
not have any obligation to update, revise or reaffirm this opinion.
Based upon and subject to the foregoing considerations, it is our opinion
as financial advisors that, as of the date of the Merger Agreement, the Exchange
Ratio is fair, from a financial point of view, to the shareholders of Software
Publishing.
Very truly yours,
/s/ Unterberg Xxxxxx
XXXXXXXXX XXXXXX
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