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Technology Stocks : Seagate Technology - Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Tom Simpson who wrote (1902)	7/21/2000 8:07:42 AM
From: MikeM54321	Read Replies (1) \| Respond to of 1989

"if you or I WERE prospective stockholders of New Seagate (which looks to be a real value stock play) we would vote YES too." Tom- You didn't mean to use the term, "value stock play," did you? You're talking about a public arbitrage play, which is risky due to whether the vultures can pull this off. That's what you meant, right? OR Were you stating the obvious and were referring to it being a no-brainer to the vultures(SEG management and the Texas group) that taking SEG private is a value(understatement in this case) play. -MikeM(From Florida)

To: Tom Simpson who wrote (1902)	8/27/2000 10:37:54 PM
From: Lynn	Read Replies (1) \| Respond to of 1989

It's not +/- $5.00 and .467 share of VRTS. The estimated cash stated is $6.03 but could only be $2.88 should VRTS decide to increase the share amount. SEG shareholders would have no way of knowing the amount of cash to be received when they vote because the $ and shares will be determined 2 days before the buy-out. SEG shareholders might get some additional payments at some future date(s) due to tax credits into 2003, but SEG credits received by VRTS [which would be doing the distributing to ex-SEG shareholders] after March 31, 2003 will be kept by VRTS rather than distributed. From the SEC filing: Based upon the market price of VERITAS common stock and Seagate's investment securities as of June 30, 2000, Seagate's estimated cash balance as of June 30, 2000 and the total number of fully-diluted outstanding shares of Seagate 3 <PAGE> 17 common stock as of June 30, 2000, Seagate's stockholders would receive $6.03 per share in cash and $52.87 per share in VERITAS common stock in connection with the merger (or $2.88 per share in cash and $56.03 per share in VERITAS common stock if VERITAS elects to reduce the cash payable in connection with the merger by $750 million and issue additional shares of VERITAS common stock in place of that cash). These cash and per share amounts are only estimates. The actual amounts will not be determined until two days before the completion of the merger and will likely differ from these estimates. The value of the total consideration that Seagate's stockholders will receive in connection with the merger will not be fixed because: - the most significant component of the consideration payable in the merger consists of a fixed number of shares of VERITAS common stock (109,330,300 shares), the market price of which will continue to fluctuate through the completion of the merger; - the market price of any shares of VERITAS common stock issued to Seagate's stockholders in place of up to $750 million of the cash to be paid to Seagate's stockholders in connection with the merger will also continue to fluctuate through the completion of the merger; and - the market price of Seagate's investment securities will continue to fluctuate through the completion of the merger and, therefore, the amount of VERITAS common stock issuable in exchange for those investment securities in connection with the merger will continue to fluctuate through the completion of the merger. As a result of the merger, Seagate's stockholders will also acquire the right to payments based on any tax refunds received and tax credits utilized by VERITAS following the completion of the merger and prior to March 31, 2003 that are attributable to Seagate's taxable periods (or that portion of a taxable period) ending on or prior to the completion of the merger. Although Seagate and VERITAS will estimate the value of the right to receive these tax refunds and credits shortly before the completion of the merger for tax purposes, Seagate's stockholders will not be entitled to receive anything with respect to this right unless and until VERITAS actually receives these tax refunds or utilizes these tax credits in future periods. In addition, the right of Seagate's stockholders to receive any payments in respect of these tax refunds and credits will expire on March 31, 2003. [snip -- followed by sections of the Q and A part] Q: HOW WILL I KNOW EXACTLY HOW MANY SHARES OF VERITAS COMMON STOCK AND HOW MUCH CASH I WILL RECEIVE IN THE MERGER, AND THE VALUE OF MY PROPORTIONATE SHARE OF SEAGATE'S TAX REFUNDS AND CREDITS? A: The exact amount of cash payable, and the exact fraction of a share of VERITAS common stock issuable, in exchange for each outstanding share of Seagate common stock in connection with the merger, will be determined two trading days before the completion of the merger. To enable Seagate's stockholders to determine a reasonable estimate of the amount of cash and VERITAS common stock that Seagate's stockholders will receive in connection with the merger, Seagate and VERITAS have established a toll free telephone number that Seagate's stockholders may call beginning 10 days prior to the special meeting of Seagate's stockholders at which the leveraged buyout and the merger will be considered and voted upon. This number is 1-800- . Seagate's stockholders may call this telephone number to find out the amount of cash and VERITAS common stock that Seagate's stockholders would be entitled to receive in connection with the merger as if the merger were completed on the day immediately following the date on which the telephone number is called. The recorded message on this telephone number will be updated each day until the day of the special meeting. Seagate's stockholders are cautioned, however, that the amounts provided through this telephone number necessarily will be different than the actual amounts to be received in connection with the merger due to daily fluctuations in the value of the consideration payable in connection with the merger. These actual amounts will not be determined until shortly before, or possibly after, the special meeting. The estimated fair market value of the right of Seagate's stockholders to receive the value of Seagate's future tax refunds and credits if and when collected or utilized, respectively, also will be determined shortly before the completion of the merger. The fair market value of this right will be determined solely for tax purposes, and the actual amount ultimately received by Seagate's stockholders, if any, may be more or less than the fair market value of the right itself at the completion of the merger. Q: WHAT ARE THE TAX CONSEQUENCES TO ME OF THE LEVERAGED BUYOUT AND THE MERGER? A: It is intended, but not certain, that the merger between Seagate and a subsidiary of VERITAS will qualify as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code. If it so qualifies, Seagate stockholders will recognize gain, if any, for federal income tax purposes but only to the extent of the cash received and the fair market value as of the closing of the merger of their proportionate share of any amounts paid following the completion of the merger for tax refunds and credits attributable to Seagate. To the extent a Seagate stockholder's adjusted tax basis in his, her or its shares of Seagate common stock exceeds the consideration received in exchange for such shares in connection with the merger, the resulting loss will not be recognized for federal income tax purposes. If the merger fails to qualify as a "reorganization," it would be a fully taxable transaction. The leveraged buyout will have no direct tax consequences to Seagate stockholders. However, the amount of cash Seagate's stockholders receive in connection with the merger will depend in part on the amount of cash Seagate receives in connection with the leveraged buyout. 6 <PAGE> 20 For a more complete description of the tax consequences of the merger, see "Material United States Federal Income Tax Consequences of the Merger" beginning on page 150 of this document. Q: WHAT AM I BEING ASKED TO VOTE UPON? A: Seagate stockholders are being asked to: - authorize and approve the stock purchase agreement, and the sale by Seagate of its operating assets to Suez Acquisition Company in the leveraged buyout pursuant to the stock purchase agreement; and - adopt and approve the merger agreement, and the merger of a wholly owned subsidiary of VERITAS with Seagate pursuant to the merger agreement. Q: WHAT VOTE OF SEAGATE'S STOCKHOLDERS IS REQUIRED TO APPROVE THE LEVERAGED BUYOUT AND THE MERGER? A: The affirmative vote of the holders of a majority of the outstanding shares of Seagate common stock is required to authorize and approve the stock purchase agreement and the leveraged buyout, and to adopt and approve the merger agreement and the merger between Seagate and a wholly owned subsidiary of VERITAS. THEREFORE, IF YOU FAIL TO VOTE OR IF YOU ABSTAIN FROM VOTING ON EITHER THE STOCK PURCHASE AGREEMENT AND THE LEVERAGED BUYOUT, OR THE MERGER AGREEMENT AND THE MERGER, IT WILL HAVE THE SAME EFFECT AS A VOTE AGAINST EITHER THE LEVERAGED BUYOUT OR THE MERGER, AS APPLICABLE. [snip to end] siliconinvestor.com Lynn