EX-99.C 5 ex_c.txt EXHIBIT (C) ================================================================================ PROJECT BLUE Discussion Materials October 14, 2003 ================================================================================ R H O N E G R O U P L L C Executive Summary ------------------------------------------------------------------------ o Based on publicly-available information, Rhone Group LLC ("Rhone") has analyzed the trading patterns of Blue's smaller shareholders in order to determine an appropriate price at which the company should undertake an odd-lot tender offer. o Small Blue shareholders seem to have acquired their shares in the first 2-3 years of Blue trading, hence, their basis is most likely in the $4.00 to $6.00 per share range, a meaningful premium to today's stock price of $3.52 per share. - During the past 4 years, over 90% of the float traded in the first two and half years, when Blue shares were at the higher levels - Non-odd lot shareholders have generated the majority of Blue volume recently, indicating that odd-lot shareholders may have done little trading since the stock's decline in the past 16 months and may have just held on their stock positions o However, the stock has been rather illiquid, especially since late 2001, trading on average (median) at volumes of 200 shares a day. While stock price movements have shown little correlation to volume traded, we expect that a small investor may still experience some downward pressure on price if he/she attempted to sell his/her stock in the open market today. o As such, in order to attract small shareholders to tender their shares, Rhone recommends that the Blue offer price be at least $4.00 per share. This would still represent a meaningful premium to today's stock price for an illiquid security and may help to draw out a larger number of odd-lot shareholders. R H O N E G R O U P L L C Page 2 Stock & Volume Performance -- Last 4 Years -------------------------------------------------------------------------------- [GRAPHIC OMITTED] R H O N E G R O U P L L C Page 3 Price & Volume Analysis -------------------------------------------------------------------------------- Cumulative Period Prior to 10/01/03 ------------------------------------------------------------ 4 Years 3 Years 2 Years 1 Year 6 Months ------- ------- ------- ------ -------- Stock Price High $7.17 $7.17 $7.05 $5.40 $3.75 Low 2.20 2.20 2.20 2.20 2.32 Average 4.66 4.78 4.30 3.01 2.78 Daily Volume High 230,303 66,177 30,500 30,500 30,500 Low 0 0 0 0 0 Median 400 133 116 200 200 Average 4,502 1,617 1,304 1,524 1,333 R H O N E G R O U P L L C Page 4 Stock Basis Analysis -- Last 4 Years by Quarter -------------------------------------------------------------------------------- (Volume in '000s) [GRAPHIC CHART OMITTED] Current Price of $3.52 @ 10/13/03
Total Volume Traded 1,373.0 620.4 704.7 737.8 179.5 257.7 119.8 % of Float (1) 51.9% 23.4% 26.6% 27.9% 6.8% 9.7% 4.5% % of Total Shares 25.7% 11.6% 13.2% 13.8% 3.4% 4.8% 2.2% Average Volume / Day 20.5 9.5 10.8 11.4 2.8 4.0 1.8
Cumulative ---------- Total Volume Traded 26.2 66.0 92.2 85.9 33.4 107.4 115.7 121.1 50.3 4,691.2 % of Float (1) 1.0% 2.5% 3.5% 3.2% 1.3% 4.1% 4.4% 4.6% 1.9% 177.3% % of Total Shares 0.5% 1.2% 1.7% 1.6% 0.6% 2.0% 2.2% 2.3% 0.9% 87.8% Average Volume / Day 0.4 1.0 1.4 1.3 0.5 1.6 1.8 1.9 0.8 4.5
---------- (1) Based on estimated float of 2.6 mm shares per the Proxy and Bloomberg information. R H O N E G R O U P L L C Page 5 Regression Analysis -- Daily Price Change vs. Daily Volume Traded Last 2 Years -------------------------------------------------------------------------------- [GRAPHIC CHART OMITTED] R H O N E G R O U P L L C Page 6 Intra-Day Trading Volume Analysis -- Last 2 Months [GRAPHIC CHART OMITTED] % of Total Aug-03 Sep-03 Cumulative Lots of 101+ Shares 83.5% 94.5% 89.3% Lots of 100 Shares 16.5 5.5 10.7 --------- --------- --------- Total Volume 100.0% 100.0% 100.0% R H O N E G R O U P L L C Page 7 Stock Basis Analysis -- Last 2 Months (1) -------------------------------------------------------------------------------- Lots of 100 Shares or Less [GRAPHIC CHART OMITTED] Current Price of $3.52 @ 10/13/03 August-03 September-03 Vol. Weigh. Average Price $2.96 $3.51 Total Small Lot Volume Traded 3,000 1,100 ---------- (1) Source: Bloomberg R H O N E G R O U P L L C Page 8