[Letterhead]
December 8, 1997
Board of Directors
Tescorp, Inc.
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Members of the Board:
We understand that Tescorp Acquisition Corporation ("Acquisition"), a
wholly owned subsidiary of Supercanal Holding S.A. and Tescorp, Inc.
("Tescorp" or the "Company") have entered into an Stock Purchase and Merger
Agreement dated as of sEptember 16, 1997 (the "Agreement") and subsequently
amended as of December 5, 1997 (the "Amended Agreement") regarding the
proposed purchase of the Company in cash, by Acquisition (the "Proposed
Acquisition"). The Amended Agreement provides that, following the purchase of
6,006,006 shares of Tescorp Common Stock for a total consideration of
$20,000,000, Acquisition will offer to purchase all the outstanding Tescorp
Common Stock for a per share amount equal to $144.00 in cash, plus an amount
equal to accrued and unpaid dividends. The terms and conditions of the
Proposed Acquisition are set forth in more detail in the Amended Agreement.
We have acted as financial advisor to the company in connection with its
review of the strategic alternatives for the Company and with the negotiation
of the Proposed Acquisition, and have been requested by the Company to render
our opinion with respect to the fairness, from a financial point of view to
the Company's stockholders, of the consideration to be offered to such
stockholders in the Proposed Acquisition. We have not been requested to opine
as to, and our opinion does not in any manner address, the Company's
underlying business decision to proceed with or effect the Proposed
Acquisition.
In arriving at its opinion, we reviewed and analyzed, among other things,
the following: (i) the Agreement and the Amended Agreement; (ii) publicly
available information concerning Tescorp which we believed to be relevant to
its inquiry; (iii) financial and operating information with respect to the
business, operations and prospects of Tescorp furnished to us by Tescorp;
MEMBER OF THE NEW YORK STOCK EXCHANGE AND OTHER PRINCIPAL EXCHANGES
Tescorp, Inc.
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(iv) trading history of Tescorp's Common Stock up to September 15, 1997 (the
last trading day prior to the September 16, 1997 Agreement); (v) a comparison
of the historical financial results and present financial condition of
Tescorp with those of other publicly traded companies which we deemed
relevant; and (vi) a comparison of the financial terms of the Proposed
Acquisition with the terms of certain other recent transactions which we
deemed relevant. In addition, we had discussions with the management of
Tescorp concerning the Company's business, operations, assets, financial
condition and prospects, and undertook such other studies, analyses and
investigations as we deemed appropriate for the purposes of the opinion
expressed herein.
In connection with our review, we assumed and relied upon the accuracy
and completeness of the financial and other information used by it in
arriving at our opinion without independent verification and further relied
upon the assurances of management of Tescorp that they were not aware of any
facts that would make such information inaccurate. With respect to the
financial and operating information relating to the business, operations and
prospects of prepared on a basis reflecting the then best currently available
estimates and judgments of the management of Tescorp. In arriving at our
opinion, we did not make nor obtain any evaluations or appraisals of the
assets or liabilities of Tescorp. Our opinion is necessarily based upon
market, economic and other conditions as they existed on, and could be
evaluated as of, the date of this letter.
We have acted as financial advisor to the Company in connection with the
Proposed Acquisition and will receive a fee for our services, a portion of
which is contingent upon the consummation of the Proposed Acquisition. In
addition, the Company has agreed to indemnify us for certain liabilities
arising out of the rendering of this opinion. We have performed various
investment banking services for Tescorp in the past and have received fees
for such services. In the ordinary course of our business, we actively trade
in the equity securities of the Company for our own account and for the
accounts of our customers and, accordingly, may at any time hold a long or
short position in such securities. In addition, certain of our affiliated
funds under management hold long positions in the securities of the Company.
Tescorp, Inc.
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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 consideration to be
offered to the Company's stockholders in the Proposed Acquisition is fair to
such stockholders.
This opinion is solely for the use and benefit of the Board of Directors
of the Company and shall not be disclosed publicly or made available to, or
relied upon by, any third party without our prior approval. This opinion is
not intended to be and does not constitute a recommendation to any
stockholder as to how such stockholder should vote with respect to the
Proposed Acquisition.
Very truly yours,
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