Exhibit 13
[LETTERHEAD OF LAZARD FRERES & CO. LLC]
As of October 7, 1996
Cheyenne Software, Inc.
The Board of Directors
0 Xxxxxxxxxx Xxxxx
Xxxxxx Xxxxxxx, XX 00000
Dear Members of the Board:
We understand that Cheyenne Software, Inc. (the
"Company"), Computer Associates International, Inc. (the
"Acquiror") and a wholly-owned subsidiary of Acquiror (the
"Merger Subsidiary") have entered into an agreement dated
October 7, 1996 (the "Agreement") pursuant to which Merger
Subsidiary will make a tender offer (the "Offer") for any and
all shares of the Company's common stock, par value $0.01 per
share (the "Shares"), at $30.50 per Share in cash. The
Agreement also provides that, following consummation of the
Offer, Merger Subsidiary will be merged with and into the
Company in a transaction (the "Merger") in which each remaining
Share will be converted into the right to receive $30.50 in
cash.
You have requested our opinion as to the fairness, from a
financial point of view, of the proposed cash consideration to
be received by the holders of the Shares (other than Acquiror
and its affiliates) in the Offer and the Merger. In connection
with this opinion, we have:
(i) reviewed the financial terms and conditions of the
Agreement;
(ii) analyzed certain historical business and financial
information relating to the Company;
(iii) reviewed certain financial forecasts and other
data provided to us by the Company relating to
its business;
(iv) conducted discussions with members of the senior
management of the Company with respect to its
business and prospects;
(v) reviewed public information with respect to certain
other companies in lines of businesses we believe to
be generally comparable to the business of the
Company;
(vi) reviewed the financial terms of certain business
combinations involving companies in lines of business
we believe to be generally comparable to the business
of the Company;
(vii) reviewed the historical stock prices and trading
volumes of the Shares; and
(viii) conducted such other financial studies, analyses
and investigations as we deemed appropriate.
We have relied upon the accuracy and completeness of the
foregoing financial and other information, and have not assumed
any responsibility for any independent verification of such
information or any independent valuation or appraisal of any of
the assets or liabilities of the Company. With respect to the
financial forecasts referred to above, we have assumed that
they have been reasonably prepared on bases reflecting the best
currently available estimates and judgments of management of
the Company as to the future financial performance of the
Company. We assume no responsibility for and express no view
as to such forecasts or the assumptions on which they are
based.
Further, our opinion is necessarily based on economic,
monetary, market and other conditions as in effect on, and the
information made available to us as of, the date hereof.
In rendering our opinion, we have assumed that the Offer
and the Merger will be consummated on the terms described in
the Agreement that we reviewed, without any waiver of any
material terms or conditions by the Company. We were not
requested to, and did not, solicit third party indications of
interest in acquiring the Company.
Lazard Freres & Co. LLC is acting as financial advisor to
the Company in connection with the Offer and the Merger and
will receive a fee for our services, a substantial portion of
which is contingent upon the consummation of the Offer.
Our engagement and the opinion expressed herein are for
the benefit of the Company's Board of Directors and are not on
behalf of, and are not intended to confer rights or remedies
upon, the Acquiror, Merger Subsidiary, any shareholders of the
Company or Acquiror or any other person. It is understood that
this letter may not be disclosed or otherwise referred to
without our prior consent, except as may otherwise be required
by law or by a court of competent jurisdiction.
Based on and subject to the foregoing, we are of the
opinion that the proposed cash consideration to be paid to the
holders of the Shares (other than Acquiror and its affiliates)
pursuant to the Offer and the Merger is fair to such
shareholders from a financial point of view.
Very truly yours,
LAZARD FRERES & CO. LLC
By /s/ Xxxxxx Xxxxxxxxx
Managing Director
