EXHIBIT (b)(1)
October 17, 1999
Board of Directors
Comair Holdings, Inc.
P.O. Box 75021
Cincinnati, OH 45275
Members of the Board:
We understand that Comair Holdings, Inc. ("Comair" or the "Company"), Delta Air
Lines, Inc. ("Delta") and Kentucky Sub, Inc., an indirect wholly owned
subsidiary of Delta ("Acquisition Sub"), propose to enter into an Agreement and
Plan of Merger, dated October 17, 1999 (the "Merger Agreement"), which
provides, among other things, for (i) the commencement by Acquisition Sub of a
tender offer (the "Tender Offer") for all outstanding shares of common stock,
no par value, of Comair (the "Common Stock") for $23.50 per share net to the
seller in cash, and (ii) the subsequent merger (the "Merger") of Acquisition
Sub with and into Comair. Pursuant to the Merger, Comair will become an
indirect wholly owned subsidiary of Delta and each outstanding share of Common
Stock of Comair, other than shares held in treasury or held by Delta or any
subsidiary of Delta or as to which dissenters' rights have been perfected, will
be converted into the right to receive $23.50 per share in cash. The terms and
conditions of the Tender Offer and the Merger are more fully set forth in the
Merger Agreement.
You have asked for our opinion as to whether the consideration to be received
by the holders of shares of Common Stock pursuant to the Merger Agreement is
fair from a financial point of view to such holders (other than Delta and its
affiliates).
For purposes of the opinion set forth herein, we have:
(i) reviewed certain publicly available financial statements and other
information of the Company;
(ii) reviewed certain internal financial statements and other financial
and operating data concerning the Company prepared by the management
of the Company;
(iii) reviewed certain financial projections prepared by the management of
the Company;
(iv) discussed the past and current operations and financial condition
and the prospects of the Company, including the Company's expected
future relationship with Delta, with senior executives of the
Company;
(v) reviewed the reported prices and trading activity for the Common
Stock;
(vi) compared the financial performance of the Company and the prices and
trading activity of the Common Stock with that of certain other
comparable publicly-traded companies and their securities;
(vii) reviewed the financial terms, to the extent publicly available, of
certain comparable acquisition transactions;
(viii) participated in discussions and negotiations among representatives
of the Company and Delta and their financial and legal advisors;
(ix) reviewed the Merger Agreement and certain related documents; and
(x) performed such other analyses and considered such other factors as
we have deemed appropriate.
We have assumed and relied upon without independent verification the accuracy
and completeness of the information reviewed by us for the purposes of this
opinion. With respect to the financial projections, we have assumed that they
have been reasonably prepared on bases reflecting the best currently available
estimates and judgments of the future financial performance of the Company. We
have assumed that the Tender Offer and the Merger will be consummated on the
terms set forth in the Merger Agreement. We have not made any independent
valuation or appraisal of the assets or liabilities of the Company, nor have we
been furnished with any such appraisals. Our opinion is necessarily based on
economic, market and other conditions as in effect on, and the information made
available to us as of, the date hereof.
In arriving at our opinion, we were not authorized to solicit, and did not
solicit, interest from any party, nor did we have discussions with any party
other than Delta with respect to the acquisition of the Company or any of its
assets.
We have acted as financial advisor to the Board of Directors of the Company in
connection with this transaction and will receive a fee for our services. In
addition, Xxxxxx Xxxxxxx provides no advice or recommendation as to whether or
not holders of shares of Common Stock should participate in the Tender Offer.
In the past, Xxxxxx Xxxxxxx has provided financial advisory and financing
services for Delta and has received fees for the rendering of these services.
Based on the foregoing we are of the opinion on the date hereof that the
consideration to be received by the holders of shares of Common Stock pursuant
to the Merger Agreement is fair from a financial point of view to such holders
(other than Delta and its affiliates).
Very truly yours,
XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
Principal
