Exhibit 99.(c)(3)
[AEGIS MUSE'S LETTERHEAD]
April 7, 2000
Board of Directors
Xxxxxxxx, Inc.
Xxx X. Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, XX 00000
Dear Members of the Board of Directors:
Xxxxxxxx, Inc. ("Rosemore") and Crown Central Petroleum Corporation ("Crown")
will enter into an Agreement and Plan of Merger dated as of April 7, 2000 (the
"Merger Agreement") pursuant to which Xxxxxxxx will acquire for a price of $9.50
per share all of the issued and outstanding Class A and Class B common stock of
Crown held by stockholders other than Xxxxxxxx (the "Merger"). The Merger will
be effected by having Xxxxxxxx Acquisition Corporation ("RAC"), a newly formed
subsidiary of Xxxxxxxx, merge with and into Crown. Crown will be the surviving
corporation in the Merger and will become a wholly owned subsidiary of Xxxxxxxx.
You have asked us whether, in our opinion, the proposed consideration to be
paid by Xxxxxxxx in the Merger is fair to Xxxxxxxx from a financial point of
view. This letter confirms our oral opinion previously delivered to you:
In arriving at the opinion set forth below, we have, among other things:
1. Reviewed Crown's Annual Reports, Forms 10-K and related financial
information for the three fiscal years ended December 31, 2000;
2. Reviewed certain information, including financial forecasts, relating to
the business, earnings, cash flow, assets and prospects of Crown,
furnished to us by Crown;
3. Conducted discussions with members of senior management of Crown
and Xxxxxxxx concerning Crown's business and prospects;
4. Reviewed the historical market prices and trading activity for Crown
Common Stock and compared them with those of certain publicly traded
companies which we deemed to be similar to Crown;
5. Compared the results of operations of Crown with those of certain
companies which we deemed to be reasonably similar to Crown;
6. Compared the proposed financial terms of the Merger with the financial
terms of certain other mergers and acquisitions which we deemed to be
relevant;
7. Reviewed the Merger Agreement; and
8. Reviewed such other financial studies and analyses and performed such
other investigations and took into account such other matters as we
deemed necessary.
In addition, Aegis Muse relied upon its own experience and judgment in
projecting revenues and gross margins. Operating expenses were typically based
on Crown's historical performance, and estimates of future capital expenditures
were based both on Aegis Muse's own estimates of amounts needed to be spent to
comply with existing and anticipated environmental regulations as well as
Crown's own projections for sustaining capital.
In preparing our opinion, we have relied on the accuracy and completeness of
all information supplied or otherwise made available to us by Crown, and we
have not independently verified such information or undertaken an independent
appraisal, evaluation or actuarial evaluation of the assets or liabilities of
the Crown. With respect to the financial forecasts and estimates of future
overhead reductions furnished to us by Crown, we have assumed that they have
been reasonably prepared and reflect the best currently available estimates
and
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judgement of Xxxxx's management as to the expected future financial
performance of Crown. Our opinion is based upon general economic, market,
monetary and other conditions as they exist and can be evaluated, and the
information made available to us, as of the date hereof.
This opinion is addressed to the Board of Directors of Xxxxxxxx and does not
constitute a recommendation to any shareholders as to how such shareholders
should vote on the proposed Merger.
Aegis Muse Associates, LLC, as part of its strategic advisory business, is
continually engaged in the valuation of refining and marketing businesses and
their securities in connection with mergers and acquisitions. We have acted as
financial advisor to Xxxxxxxx in connection with the Merger and will receive a
fee for our services, a significant portion of which is contingent upon
consummation of the Merger. We have, in the past through our affiliate, Xxxx
Xxxxxxx & Company, provided consulting services to Crown and have received
fees for rendering such services. We may continue to provide advisory and
consulting services to Xxxxxxxx or Crown, and receive fees for rendering such
services. Such continuing financing services may include, without limitation,
financing in connection with the Merger.
On the basis of, and subject to the foregoing, we are of the opinion that
the proposed consideration to be paid by Xxxxxxxx to the holders of Crown Stock
in the Merger is fair to Xxxxxxxx (other than to Xxxxxxxx'x shareholders or
affiliates) from a financial point of view.
Very truly yours,
AEGIS MUSE ASSOCIATES, LLC
By: /s/ Xxxxxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxxxx, III
