fw analysis orion power acquisition maintaining belowconse nsus estimates reducing target price original message stein neil mailto neil stein csfb com sent friday september 28 2001 7 02 undisclosed recipients subject rri analysis orion power acquisition maintaining belowconse nsus estimates reducing target price good morning attached please find fc note reliant resources summary 1 september 27 2001 rri announced would acquire orion power 26 80 cash transaction 2 view deal positive implications sector purchase price essentially line estimate private market value orn asset portfolio 26 83 overall deal gives us addition confidence valuation framework reinforces view valuations sector extremely attractive 3 rri leaving unchanged 2002 eps guidance 2 05 2 15 rri noted earnings contribution deal 0 30 offset negative impact sluggish conditions western power markets 4 2001 2002 eps estimates remain unchanged 1 62 1 95 2002 estimate continues company guidance giving us comfort forecast 5 importantly 2002 rri western generation assets currently less 50 hedged well company peers including cpn strong buy 19 75 mir buy 19 60 company relatively exposed commodity price volatility region country 6 reducing target price 30 40 derive valuation discounted cash flow dcf analysis employs 11 4 discount rate revised target price reflects 1 2 9 billion acquisition expenditure 2 1 8 billion assumed net debt 3 incremental earnings synergies associated deal 4 earnings shortfall rri western operations slower overall growth prospects business regards neil stein 212 325 4217 message named person use may contain confidential proprietary legally privileged information confidentiality privilege waived lost mistransmission receive message error please immediately delete copies system destroy hard copies notify sender must directly indirectly use disclose distribute print copy part message intended recipient credit suisse group subsidiaries reserve right monitor e mail communications networks views expressed message individual sender except message states otherwise sender authorised state views entity unless otherwise stated pricing information given message indicative subject change constitute offer deal price quoted reference terms executed transactions treated preliminary subject formal written confirmation