Tom, I was in first the same time as you, only I chose not to sell that day. Too bad for me. Anyway, CAWS is mentioned in this big, long filing by PacTel. It may be related to the information Rodney posted previously. If Scott or any of you other big brains would like to go to work on it to find some meaning re CAWS, please do so:
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PacTel Files 3.25M Shares For Wireless Cable Deals
Form S-4 333-14963 SEC RECEIVED: 10/28/96
ISSUER: PACIFIC TELESIS GROUP INC. SYMBOL: PAC UNDERWRITER: N/A OFFERING: 3.25 million shares of common stock.
NARRATIVE DESCRIPTION
Pacific Telesis Group Inc. has filed formal documents with the SEC in connection with the company's proposed acquisition of Wireless Holdings Inc. (WHI) and Videotron Bay Area Inc. (VBAI). Both companies being acquired were joint ventures of Montreal-based Groupe Videotron and Salt Lake City based Transworld Telecommunications Inc. (TTI).
As reported, PacTel entered into an agreement in November 1995 to acquire the two companies in exchange for approximately $120 million in stock and also the assumption of about $55 million in debt.
PacTel said in the filing that, due to the complicated exchange formula and the number of variables comprising the formula, it is difficult to quantify the maximum or minimum number of shares which will be issued in the acquisition.
In May 1996, TTI hired Wasserstein Perella & Co. Inc. (WP&Co.) to provide a fairness opinion in connection with the acquisitions.
In connection with their opinion on 6/25/96, representatives of WP&Co. considered various financial and other valuation considerations that they deemed relevant, which included: (i) wireless cable service and demographic trends as a whole in WHI's and VBAI's markets; (ii) TTI's, WHI's and VBAI's respective historical financial and operating performance and future prospects in the context of their respective business strategies, market positions, and current and prospective competition; (iii) the development stage nature of the wireless cable industry; (iv) TTI's, WHI's and VBAI's respective technological, marketing and product strategies; (v) respective size and asset mix of TTI, WHI and VBAI; (vi) TTI's minority ownership of VBAI, and shared control of WHI; (vii) budgets for WHI and VBAI provided by TTI management; (viii) the breadth and depth of the potential acquisition universe for TTI; (ix) PacTels' financial resources; (x) recent basic trading area (BTA) auctions for wireless cable service; (xi) the success of PacTel in winning licenses in the BTA auction in WHI's and VBAI's service areas; and (xii) PacTels' announced merger agreement with SBC.
WP&Co. arrived at a range of implied combined enterprise values for WHI and VBAI based on total proceeds to TTI as part of the transaction, including all direct payments made by PacTel to TTI and amounts to be received by TTI in the allocation of the consideration to be paid by PacTel to TTI and Videoway Technologies Ltd., the exact amount of which is subject to certain FCC and other closing adjustments, without taking into account any transaction costs incurred by either TTI, WHI, VBAI or Videotron USA.
In arriving at a range of implied enterprise values of WHI and VBAI, WP&Co. ascribed a relative value of either 100% or 50% to unbuilt line-of-sight (LOS) homes compared to built LOS homes (i.e., the number of "effective LOS homes" served by a company is calculated as the number of built LOS homes plus the product of the relative value and the number of unbuilt LOS homes).
If the relative value between unbuilt LOS homes and built LOS homes is 100% (i.e. there is no difference in value between unbuilt LOS homes and built LOS homes), then based on the total proceeds to be received by TTI, the enterprise value per effective LOS homes multiple range is $34.64 to $37.47, the enterprise value per subscriber multiple range is $10,027 to $10,847, the adjusted enterprise value per net effective LOS homes multiple range is $30.15 to $33.05 (where "adjusted enterprise value" is the implied enterprise value of WHI and VBAI less the product of the number of subscribers served by WHI and VBAI and an applied value per subscriber of $1,500, and "net effective LOS homes" is the number of effective LOS homes less the number of subscribers served by WHI and VBAI divided by a 15% total target penetration rate) and the enterprise value adjusted for near-term penetration per effective LOS homes multiple range of $45.41 to $48.25 (where the "enterprise value adjusted for near-term penetration" is the implied enterprise value of WHI and VBAI plus the product of the number of additional subscribers needed to achieve a penetration rate of 2.5% and an applied cost per subscriber of $500).
If the relative value between unbuilt LOS homes and built LOS homes is 50%, then based on the total proceeds to be received by TTI, the enterprise value per effective LOS homes multiple range is $51.29 to $55.49, the adjusted enterprise value per net effective LOS homes multiple range is $45.48 to $49.81, and the enterprise value adjusted for near-term penetration of LOS homes per effective LOS homes multiple range is $61.36 to $65.56.
These reference ranges of multiples were all considered in the context of the analyses described below. Each of these analyses supports WP&Co.'s conclusion in the Fairness Opinion as to the proceeds to be received by TTI and the implied enterprise value per effective LOS homes, enterprise value per subscribers, adjusted enterprise value per net effective LOS homes and enterprise value adjusted to achieve near-term penetration per effective LOS homes ranges of multiples are within the reference ranges calculated using public company trading analysis and precedent merger and acquisition transactions analysis.
Public Company Trading Analysis: WP&Co. reviewed, analyzed and compared certain operating, financial and trading information of eight other publicly traded companies (American Telecasting, CAI Wireless, CellularVision, Heartland Wireless, National Wireless, Peoples Choice TV, Wireless Cable of Atlanta and Wireless One), including market values, enterprise values (defined as market value plus debt, preferred stock and minority interest less cash and cash equivalents), estimated enterprise values of non-wireless cable operations, number of LOS homes, number of unbuilt LOS homes, number of built LOS homes and the number of subscribers.
If the relative value between unbuilt LOS homes and built LOS homes is 100% (i.e., there is no difference in value between unbuilt LOS homes and built LOS homes), then based on the trading analysis of the above mentioned public companies, the enterprise value per effective LOS homes multiple range is $29.70 to $70.30, the enterprise value per subscribers multiple range is $2,381 to $37,119, the adjusted enterprise value per net effective LOS homes multiple range is $19.30 to $65.10, and the enterprise value per adjusted homes multiple range is $40.70 to $80.40.
If the relative value between unbuilt LOS homes and built LOS homes is 50%, then based on the trading analysis of the above mentioned public companies, the enterprise value per effective LOS homes multiple range is $32.50 to $103.30, the adjusted enterprise value per net effective LOS homes multiple range is $20.80 to $97.20, and the enterprise value adjusted to achieve near- term penetration per effective LOS homes multiple range is $40.70 to $112.20.
Precedent Merger and Acquisition Transactions: WP&Co. reviewed and analyzed selected merger and acquisition transactions involving other companies in the wireless cable industry as it deemed relevant. While there have been many transactions in the wireless cable industry, WP&Co. reviewed the following transactions, which it believed are comparable in scope and scale, and are listed by acquiror(s)/ acquiree(s): Wireless One/True Vision, CS Wireless/CAI Wireless- Heartland Wireless (contribution transaction), Heartland Wireless/CableMaxx, Heartland Wireless/American Wireless Systems, Pacific Telesis/Cross Country, Bell Atlantic-NYNEX/CAI Wireless, CAI If the relative value between unbuilt LOS homes and built LOS home is 100% (i.e., there is no difference in value between unbuilt LOS homes and built LOS homes), then based on the selected precedent merger and acquisition transactions mentioned above, the enterprise value per effective LOS homes multiple range is $12.50 to $93.60, the enterprise value per subscribers multiple range is $2,698 to $16,408, the adjusted enterprise value per net effective LOS homes multiple range is $11.40 to $67.60, and the enterprise value adjusted to achieve near-term penetration per effective LOS homes multiple range is $24.60 to $93.70.
If the relative value between unbuilt LOS homes and built LOS home is 50%, then based on selected precedent merger and acquisition transactions mentioned above, the enterprise value per effective LOS homes multiple range is $20.00 to $100.50, the adjusted enterprise value per net effective LOS homes multiple range is $18.30 to $72.40, and the enterprise value adjusted to achieve near- term penetration per effective LOS homes multiple range is $31.90 to $84.60. |
