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Basis for Calculation of the Allotment Concerning the Share Exchange
3) "Allotment in the Share Exchange" above (the "Share Exchange Ratio"), Panasonic and SANYO, respectively and separately, decided to request a third-party valuation institution independent of both companies to calculate the share exchange ratio.
Analyzing the facts, various conditions and the results of the Tender Offer conducted prior to the Share Exchange, Nomura Securities submitted to Panasonic the written opinion (fairness opinion) dated December 21, 2010, stating that the Share Exchange Ratio is proper for Panasonic from a financial viewpoint.
In the valuation of the shares of SANYO, ABeam M&A Consulting conducted a close investigation for the period from the consummation of the Tender Offer to the execution of the Share Exchange Agreement as to whether any events that may materially affect the share value of SANYO had occurred on or after July 29, 2010, which is the date on which the share price of SANYO was calculated based on the purchase price of the Tender Offer.
of Panasonic and SANYO and, under certain assumptions, calculated the share exchange ratio of the Share Exchange based on that information.
In the respective valuation of both SANYO and Panasonic, Mitsubishi UFJ Morgan Stanley analyzed the Share Exchange Ratio, comprehensively taking into account the result of analyses based on the Historical Share Exchange Ratio Analysis, Comparable Company Analysis, Precedent Transaction Analysis, and Discounted Cash Flow Analysis (the "DCF Analysis").
The following shows the outline of the calculation results of the share exchange ratio in the Share Exchange conducted by Mitsubishi UFJ Morgan Stanley (the following shows the assessment ranges derived from each calculation method when the share value per share of Panasonic is set at 1).
Based on the request from the Board of Directors of SANYO, Mitsubishi UFJ Morgan Stanley rendered its fairness opinion dated December 20, 2010 to SANYO's Board of Directors which opined that the Share Exchange Ratio is, based on and subject to certain assumptions, limitations and qualifications stated therein, fair from a financial point of view to the holders of shares of common stock of SANYO other than Panasonic.
Panasonic and SANYO have referred to and carefully reviewed the calculation results of the share exchange ratio submitted by their respective third-party valuation institutions, and continuously negotiated and consulted with each other on the valuation of shares of SANYO based on the same price as the purchase price of the Tender Offer, taking into account various conditions and results of the Tender Offer conducted prior to the Share Exchange, market share price level of shares of Panasonic and other various factors.
In accordance with the Share Exchange Agreement, the Share Exchange Ratio may be subject to change upon the consultation between Panasonic and SANYO in the case of any material changes to the conditions that are the bases of the calculation.
All of Nomura Securities, which is acting as a third-party valuation institution of Panasonic, and ABeam M&A Consulting and Mitsubishi UFJ Morgan Stanley, which are acting as third-party valuation institutions of SANYO, are valuation institutions independent of Panasonic and SANYO, are not related parties, and do not have any material interest to be noted in connection with the Share Exchange.
Upon the Share Exchange, SANYO will become the wholly-owned subsidiary of Panasonic on the effective date (scheduled to be April 1, 2011), and shares of SANYO will be delisted as of March 29, 2011 (the last trading date will be March 28, 2011).