Ashland Inc. · NYSE:ASH
Ashland — Merger or Acquisition (March 2004)
13 slides from Ashland's merger presentation, Mar 19, 2004
Slide 1: Filed by Ashland Inc. pursuant to Rules 165 and 425
Filed by Ashland Inc. pursuant to Rules 165 and 425 promulgated under the Securities Act of 1933, as amended, and deemed filed pursuant to Rule 14a-12 promulgated under the Securities Exchange Act of 1934, as amended. Subject Company: Ashland Inc. Commission File No.: 001-02918
Slide 2: Forward-looking statements and additional information
This presentation contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements include those that refer to Ashland’s operating performance and expectations about this transaction, includi
Slide 3: Presentation Agenda
Overview of Transaction J. Marvin Quin Sr. Vice President and Chief Financial Officer Ashland’s Vision and Strategy James J. O’Brien Chairman and Chief Executive Officer Q&A 3 Presentation Agenda
Slide 4: Overview of the Transaction
Transportation Construction (APAC) Chemicals: Distribution Specialty Chemical (less Maleic Anhydride) Valvoline (less 61 VIOC Stores) 38% of MAP 61 VIOC Stores Maleic Anhydride $315MM of MRO Stock Transfer of $2.7B of Cash and Accounts Receivable 4 HoldCo Overview of the Transaction New Ashland Mara
Slide 5: Final Configuration
Transportation Construction (APAC) Chemicals: Distribution Specialty Chemical (less Maleic Anhydride) Valvoline (less 61 VIOC Stores) $2.7 billion less cost of debt and other financing redemptions $315MM of Marathon stock Approximately $4.50 per share 5 Final Configuration New Ashland Stock Marathon
Slide 6: Conditions to Closing
Favorable IRS ruling Opinions of outside tax counsel Approval of shareholders Regulatory approval (HSR) Consents of 90 % of public debt Updated solvency opinions, etc. 6 Conditions to Closing
Slide 7: New Ashland Tax Basis
Estimated New Ashland tax basis of approximately $3.6 billion, or $51 per New Ashland share, based on number of shares currently outstanding. Equates to roughly $55.50 per current Ashland share Section 355(e) tax payable on difference between value of Ashland at closing and $55.50. Based on number o
Slide 8: Impact on Future Earnings
Revenues would be affected only by the reduction in sales from the Maleic business and Valvoline stores, which totaled about $83 million in 2003. Future operating income would not have the earnings from: MAP interest, which equaled $285 million in 2003; Two other businesses, which totaled $16 millio
Slide 9: Commercial Relationships
MAP is current Ashland supplier Lube stocks to Valvoline Asphalt to APAC Solvents to Ashland Distribution MAP is current Ashland customer Packaged products from Valvoline Water treatment chemicals from Specialty Chemical If the transaction closes, MAP also becomes Sole supplier of maleic anhydride L
Slide 10: Stated objectives and status
10 COMMENTS STATUS STATED OBJECTIVE Expand in existing or adjacent markets Capture value from MAP Reduce debt Strategic review of businesses to optimize business mix Improve organizational effectiveness Increase returns from APAC Improve returns from Ashland Distribution or seek strategic alternativ
Slide 11: Business Update
Chemicals Anticipated 2nd quarter operating income in range of $50-55 million, compared to $30 million in 2003. Growth Strategy Expand Core Businesses Operational Excellence Provide more Value-Added Services Expand Geographically Transportation Construction Improved results expected for historically
Slide 12: Use of Transaction Proceeds
Repayment of debt, build liquidity No extraordinary dividends or stock repurchase plans No change in standards for acquisitions or capital expenditures Focus on core expansions and adjacencies Acquisition bias toward small- to medium-sized transactions 12 Use of Transaction Proceeds
Slide 13: Questions?
Questions?