TIDMPOWR
RNS Number : 9119J
Powerflute Oyj
15 September 2016
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN OR INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
FOR IMMEDIATE RELEASE
15 September 2016
RECOMMED CASH OFFER
for
POWERFLUTE OYJ
by
NORDIC PACKAGING AND CONTAINER (FINLAND) HOLDINGS OY
an affiliate of
MADISON DEARBORN PARTNERS, LLC
The boards of directors of Nordic Packaging and Container
(Finland) Holdings Oy ("Bidco") and Powerflute Oyj ("Powerflute" or
the "Company") are pleased to announce the terms of a recommended
cash offer to be made by Bidco for the entire issued and to be
issued share capital of Powerflute (including all outstanding
Powerflute Options) not already owned, or agreed to be acquired, by
Bidco. Bidco is a company recently incorporated in Finland by
investment funds advised by Madison Dearborn Partners, LLC ("MDP")
for the purpose of making and implementing the Offer. Further
details in relation to MDP and Bidco are set out in paragraph 9 of
this Announcement.
Summary
-- Under the terms of the Offer, Powerflute Shareholders and
Powerflute Optionholders (other than the Smurfit Parties) will be
entitled to receive:
For each Powerflute Share: 90 pence in cash; and
For each Powerflute Option: 90 pence in cash less the applicable
subscription price for such Powerflute
Option.
-- The Offer values the entire issued and to be issued share
capital of Powerflute (including all outstanding Powerflute
Options) at approximately GBP268 million and represents:
-- a premium of approximately 22.0 per cent. to the Closing
Price per Powerflute Share of 73.75 pence on 14 September 2016,
being the last Business Day prior to the date of this Announcement;
and
-- a premium of approximately 23.6 per cent. to the average
Closing Price of 72.82 pence per Powerflute Share for the 90 day
period up to and including 14 September 2016, being the last
Business Day prior to the date of this Announcement.
-- Bidco has either agreed to acquire pursuant to the Smurfit
Undertakings or received irrevocable undertakings to accept, or
procure the acceptance of, the Offer in respect of, in aggregate,
152,034,507 Powerflute Shares (inclusive of Powerflute Shares
underlying Powerflute Options), representing approximately 51.0 per
cent. of the entire issued share capital of Powerflute (assuming
exercise of all outstanding Powerflute Options and excluding
treasury shares).
-- Bidco has already agreed, in private transactions pursuant to
the Smurfit Undertakings, to acquire the Smurfit Parties' entire
beneficial holdings in Powerflute amounting to, in aggregate,
81,973,221 Powerflute Shares (inclusive of Powerflute Shares
underlying Powerflute Options), representing approximately 27.5 per
cent. of the entire issued share capital of Powerflute (assuming
exercise of all outstanding Powerflute Options and excluding
treasury shares), for 80 pence in cash for each Powerflute Share
and 80 pence in cash less the applicable subscription price for
each Powerflute Option and otherwise on the terms and conditions
set out in the Smurfit Undertakings. The Smurfit Parties will have
no continuing equity interest in Powerflute following the
completion of the Offer.
-- Bidco has obtained an irrevocable undertaking from Henderson
Global Investors Limited and Alphagen Capital Limited (in their
capacities as discretionary investment managers) to accept, or
direct acceptances of, the Offer in respect of a total of
49,634,357 Powerflute Shares, representing, in the aggregate,
approximately 16.7 per cent. of the entire issued share capital of
Powerflute (assuming exercise of all outstanding Powerflute Options
and excluding treasury shares). Further details of these
irrevocable undertakings are set out in Appendix 3 to this
Announcement.
-- The Independent Directors, who have been so advised by
Rothschild as to the financial terms of the Offer, considers the
terms of the Offer to be fair and reasonable. In providing advice
to the Independent Directors, Rothschild has taken into account the
commercial assessments of the Independent Directors. Rothschild is
providing independent financial advice to the Independent
Directors. In view of their ongoing involvement, neither Marco
Casiraghi nor David Walton has participated in the preparations and
deliberations regarding the Independent Directors'
recommendation.
-- The Independent Directors have consulted with the Company's
Nominated Adviser, Numis Securities Limited, regarding the matters
described in this Announcement where required by and in accordance
with the AIM Rules.
-- The Independent Directors intend to recommend unanimously
that Powerflute Shareholders and Powerflute Optionholders accept
the Offer, as the Powerflute Directors (other than Dr. Dermot F.
Smurfit) who hold Powerflute Shares and Powerflute Options have
irrevocably undertaken to do in respect of their entire beneficial
holdings in Powerflute amounting to, in aggregate, 20,426,929
Powerflute Shares (inclusive of Powerflute Shares underlying
Powerflute Options), representing approximately 6.9 per cent. of
the entire issued share capital of Powerflute (assuming exercise of
all outstanding Powerflute Options and excluding treasury shares).
Shareholders should refer to paragraph 6 of this Announcement for
further detail on the background to and reasons for the Independent
Directors' recommendation.
-- The Offer is conditional upon, amongst other things, Bidco
receiving valid acceptances (which have not been withdrawn) in
respect of Powerflute Shares and Powerflute Options which, when
taken together with the Powerflute Shares and Powerflute Options
that Bidco has actually acquired (or has an unconditional right to
acquire) pursuant to the Smurfit Undertakings and any other
Powerflute Shares or Powerflute Options acquired by Bidco before or
during the Disclosure Period (whether pursuant to the Offer or
otherwise), will result in Bidco holding more than 90 per cent. of
the Powerflute Shares and voting rights then normally exercisable
at a general meeting of Powerflute (assuming exercise of all
outstanding Powerflute Options and excluding treasury shares).
-- If the Offer becomes, or is declared, unconditional in all
respects and sufficient acceptances of the Offer are received,
Bidco intends to procure that Powerflute will make an application
to the London Stock Exchange for the cancellation of the admission
to trading on AIM of all the Powerflute Shares. Cancellation of
admission to trading is likely to reduce significantly the
liquidity and marketability of any Powerflute Shares in respect of
which the Offer has not been accepted at such time. It is also
intended that, following implementation of the Offer, Bidco will
seek to re-register Powerflute as a private limited company.
-- If the Offer becomes, or is declared, unconditional in all
respects and sufficient acceptances of the Offer are received,
Bidco also intends to initiate compulsory redemption proceedings
pursuant to Chapter 18 Section 1 of the Finnish Companies Act to
acquire compulsorily, on the same terms as the Offer, the remaining
Powerflute Shares in respect of which the Offer has not at such
time been accepted, whether or not the Offer remains open.
-- Powerflute has its registered office in Finland and is not
subject to the UK City Code on Takeovers and Mergers (the "Code").
Accordingly the Code does not apply to the Offer by Bidco for
Powerflute and this transaction is not subject to the jurisdiction
of, or being regulated by, the UK Panel on Takeovers and Mergers
(the "Takeover Panel"). However, Powerflute and Bidco have agreed,
to the extent set out in the Implementation Agreement, that they
will conduct themselves and the Offer as if the Offer were subject
to the Code.
The offer price for each outstanding Powerflute Share validly
tendered (and not validly withdrawn) in accordance with the terms
and conditions of the Offer will be payable in Sterling. However,
beneficial owners of Powerflute Shares that are registered directly
in their own name in the Finnish book-entry system will have the
option to receive (in full satisfaction of Bidco's obligations in
respect of the offer price) payment in respect of their Powerflute
Shares that are validly tendered (and not validly withdrawn) in
accordance with the terms and conditions of the Offer in the
equivalent amount of Euros determined as near to the payment date
as reasonably practicable based on the Euro spot rate against the
Sterling exchange rate on the nearest practicable day to such
payment date (as determined and implemented by the receiving agent
for the Offer).
This summary should be read in conjunction with the following
full announcement and the Appendices. The Offer will be subject to
the Conditions and principal further terms set out in this
Announcement and to the full terms and conditions that will be set
out in the Offer Document and, in respect of Powerflute Shares held
in certificated form and Powerflute Options, the applicable Form of
Acceptance.
It is intended that the Offer Document and the Forms of
Acceptance containing further details of the Offer will be
despatched to Powerflute Shareholders and Powerflute Optionholders
(other than to persons in a Restricted Jurisdiction) as soon as
practicable and, in any event, not later than 28 days after the
date of this Announcement (unless agreed otherwise with the
Independent Directors).
Appendix 1 contains the conditions and certain further terms of
the Offer. Appendix 2 contains bases and sources of certain
information contained in this summary and the following
announcement. Appendix 3 contains details of irrevocable
undertakings received by Bidco. Appendix 4 contains the definitions
of certain terms used in this summary and this Announcement.
Powerflute confirms that, as of close of business on 14
September 2016, it had in issue 290,650,374 ordinary shares of no
nominal value (excluding shares held in treasury). The
International Securities Identification Number for Powerflute
Shares is FI0009015291.
The above figure may be used by shareholders to determine the
percentage of issued share capital they hold in Powerflute for the
purposes of making Disclosure as described in the Announcement.
Enquiries:
Barclays (Financial Adviser to MDP and Bidco) Tel: +44 (0) 20
7623 2323
Asim Mullick/Kurt Kohlmeyer/Bertie Whitehead (Corporate
Broking)
Rothschild (Financial Adviser to Powerflute) Tel: +44 (0) 20
7280 5000
John Deans/Neil Thwaites
Numis Securities Limited (NOMAD and Corporate Broker to
Powerflute) Tel: +44 (0) 20 7260 1000
Mark Lander (Corporate Broking)
Andrew Holloway/Jamie Lillywhite (Nominated Advisor)
Barclays, which is authorised by the Prudential Regulation
Authority and regulated in the United Kingdom by the Financial
Conduct Authority and the Prudential Regulation Authority, is
acting as financial adviser exclusively for MDP and Bidco and
no-one else in connection with the Offer, this Announcement and the
other matters referred to in this Announcement, and will not regard
any other person as its client in relation to the matters referred
to in this Announcement and will not be responsible to anyone other
than MDP and Bidco for providing the protections afforded to its
clients, nor for providing advice in relation to the Offer or this
Announcement or any matter referred to herein.
Rothschild, which is authorised by the Prudential Regulation
Authority and regulated by the Financial Conduct Authority and the
Prudential Regulation Authority in the United Kingdom, is acting
exclusively for Powerflute as to the financial terms of the Offer
and for no-one else in connection with the Offer and this
Announcement and will not regard any other person as its client in
relation to the matters referred to in this Announcement and will
not be responsible to anyone other than Powerflute for providing
the protections afforded to its clients, nor for providing advice
in relation to the Offer or this Announcement or any matter
referred to herein.
Numis, which is authorised and regulated by the FCA in the
United Kingdom, is acting solely for Powerflute as its nominated
adviser and broker in relation to the Offer and this Announcement
and nobody else (whether or not a recipient of this Announcement)
as a client in relation to the Offer and this Announcement and will
not be responsible to anyone other than Powerflute for providing
the protections afforded to the clients of Numis nor for providing
advice in relation to the Offer and this Announcement or any other
matter referred to in this Announcement.
IMPORTANT NOTES
Further Information
This Announcement is for information purposes only. It is not
intended to and does not constitute, or form part of, an offer or
invitation or the solicitation of any offer to sell or purchase any
securities or the solicitation of any offer to otherwise acquire,
subscribe for, sell or otherwise dispose of any security pursuant
to the Offer or otherwise, nor shall there by any sale, issuance,
or transfer of securities in any jurisdiction in contravention of
applicable law.
The Offer will be made solely by means of the Offer Document
and, in respect of Powerflute Shares held in certificated form and
Powerflute Options, the applicable Form of Acceptance, which will
contain the full terms and conditions of the Offer, including
details of how the Offer may be accepted. Any decision in respect
of, or other response to, the Offer should be made only on the
basis of the information contained in those documents.
This Announcement has been prepared for the purpose of complying
with English and Finnish law and the AIM Rules and the information
disclosed may not be the same as that which would have been
disclosed if this Announcement had been prepared in accordance with
the laws of jurisdictions outside of the United Kingdom and
Finland.
Bidco will prepare the Offer Document and the Forms of
Acceptance to be distributed to the Powerflute Shareholders and
Powerflute Optionholders. Powerflute and Bidco urge the Powerflute
Shareholders and Powerflute Optionholders to read the Offer
Document and the applicable Form of Acceptance when they become
available because they will contain important information relating
to the Offer.
The receipt of cash pursuant to the Offer by Powerflute
Shareholders and Powerflute Optionholders may be a taxable
transaction under applicable national, state and local, as well as
foreign and other, tax laws. Each Powerflute Shareholder and
Powerflute Optionholder is urged to consult their independent
professional adviser regarding the tax consequences of accepting
the Offer.
Overseas Shareholders
The release, publication or distribution of this Announcement in
certain jurisdictions may be restricted by law, and the
availability of the Offer to persons who are residents, citizens or
nationals of jurisdictions other than the United Kingdom or Finland
may be restricted by laws and/or regulations of those
jurisdictions. Therefore any persons who are subject to the laws
and regulations of any jurisdiction other than the United Kingdom
or Finland should inform themselves about and observe any
applicable requirements in their jurisdiction. Any failure to
comply with the applicable requirements may constitute a violation
of the laws and/or regulations of any such jurisdiction. To the
fullest extent permitted by applicable law, the companies and
persons involved in the Offer disclaim any responsibility or
liability for the violation of such requirements by any person.
Unless otherwise determined by Bidco and permitted by applicable
law and regulation, the Offer will not be made available, directly
or indirectly, in, into or from a Restricted Jurisdiction where to
do so would violate the laws in that jurisdiction and no person may
accept the Offer by any such use, means, instrumentality or form
within a Restricted Jurisdiction or any other jurisdiction if to do
so would constitute a violation of the laws of that jurisdiction.
Accordingly, copies of this Announcement and all documentation
relating to the Offer are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in,
into or from any Restricted Jurisdiction, and persons receiving
this Announcement and all documentation relating to the Offer
(including custodians, nominees and trustees) must not mail or
otherwise distribute or send them in, into or from any Restricted
Jurisdiction.
Unless otherwise permitted by applicable law and regulation, the
Offer may not be made, directly or indirectly, in or into, or by
the use of mails or any means or instrumentality (including, but
not limited to, facsimile, e-mail or other electronic transmission,
telex or telephone) of interstate or foreign commerce of, or of any
facility of a national, state or other securities exchange of, any
Restricted Jurisdiction and the Offer may not be capable of
acceptance by any such use, means, instrumentality or
facilities.
Notice to Finnish Investors
This Announcement has not been prepared in accordance with the
Finnish Securities Market Act (746/2012, as amended). Neither the
Offer nor this Announcement shall be deemed to constitute any
offering of securities or any bid for securities as defined in the
Finnish Securities Market Act.
Notice to US Investors
The Offer is being made for securities in a Finnish company
traded on the AIM and US Powerflute Shareholders should be aware
that this Announcement and documentation relating to the Offer have
been, or will be, prepared in accordance with disclosure
requirements, format and style that differ from those in the United
States. All financial information that is included in this
Announcement or that may be included or referred to in any other
documents relating to the Offer, have been, or will be, prepared,
save where Bidco and Powerflute have expressly agreed otherwise, in
accordance with International Financial Reporting Standards adopted
by the European Union and therefore may not be comparable to
financial statements of US companies or companies whose financial
statements are prepared in accordance with US GAAP.
The Offer, if required to be made, will be made in the United
States pursuant to applicable exemptions under the US tender offer
rules and securities laws and otherwise in accordance with the
applicable provisions of English law. Accordingly, the Offer will
be subject to disclosure and other procedural requirements,
including with respect to withdrawal rights, offer timetable,
settlement procedures and timing of payments that are different
from those applicable under US domestic tender offer procedures and
law. In the United States, the Offer will be made solely by Bidco
and not by its financial adviser.
Both Powerflute and Bidco are companies incorporated under the
laws of Finland. It may not be possible for Powerflute Shareholders
or Powerflute Optionholders in the United States to effect service
of process within the United States upon Powerflute or Bidco or
their respective officers or directors or to enforce against any of
them judgments of the United States predicated upon the civil
liability provisions of the federal securities laws of the United
States. It may not be possible to sue Powerflute or Bidco or their
respective officers or directors in a non-US court for violations
of the US securities laws. There is also substantial doubt as to
enforceability in the United Kingdom in original actions, or in
actions for the enforcement of judgments of US courts, based on the
civil liability provisions of US federal securities laws.
Forward-Looking Statements
This Announcement including the information incorporated into
this Announcement contains certain forward-looking statements.
These statements are based on the current expectations of Bidco or
Powerflute (as the case may be) and are naturally subject to
uncertainty and changes in circumstances. These forward-looking
statements may include statements about the expected effects on
Bidco or Powerflute of the Offer, the expected timing and scope of
the Offer, strategic options and all other statements in this
Announcement other than historical or current facts.
Forward-looking statements often use words such as "anticipate",
"target", "expect", "estimate", "intend", "plan", "budget",
"schedule", "forecast", "project", "goal", "believe", "hope",
"aims", "continue", "will", "may", "should", "would", "could",
"subject to", or other words of similar meaning. By their nature,
forward-looking statements involve known and unknown risks and
uncertainties, because they relate to events and depend on
circumstances that will occur in the future and the factors
described in the context of such forward-looking statements in this
Announcement could cause actual results, outcomes and developments
to differ materially from those expressed in, or implied by, such
forward-looking statements and such statements are therefore
qualified in their entirety by the risks and uncertainties
surrounding these future expectations. Many of these risks and
uncertainties relate to factors that are beyond the entities'
ability to control or estimate precisely, such as, but not limited
to, general business and market conditions both globally and
locally, political, economic and regulatory forces, industry trends
and competition, future exchange and interest rates, changes in
government and regulation including in relation to health and
safety, the environment, labour relations and tax rates and future
business combinations or dispositions. Although it is believed that
the expectations reflected in such forward-looking statements are
reasonable, neither Bidco nor Powerflute can give any assurance,
representation or guarantee that such expectations will prove to
have been correct and such forward-looking statements should be
construed in light of such factors and you are therefore cautioned
not to place reliance on these forward-looking statements which
speak only as at the date of this Announcement. Neither Bidco nor
Powerflute assumes any obligation to update or correct the
information contained in this Announcement (whether as a result of
new information, future events or otherwise), except as required by
applicable law or regulations.
No Profit Forecasts or Estimates
Nothing in this Announcement is intended or shall be deemed to
be a forecast, projection or estimate of the future financial
performance of Bidco or Powerflute and no statement in this
Announcement should be interpreted to mean that earnings or
earnings per share of those entities (where relevant) for the
current or future financial periods would necessarily match or
exceed the historical published earnings or earnings per share of
those entities (where relevant).
Disclosure Requirements
Powerflute is a Finnish company whose shares are traded on AIM
and is therefore not subject to the Code. Accordingly, Powerflute
Shareholders and others dealing in Powerflute Shares are not
obliged to disclose any of their dealings under the provisions of
the Code. However, market participants are requested to make
disclosure of "dealings" as if the Code applied. Disclosures made
in relation to relevant securities of Powerflute should be released
via a Regulatory Information Service using the headline "Document
re: Powerflute". The headline "Form 8/8.3"should not be used. Any
question regarding completion of these forms should be raised with
Numis (tel: +44 (0) 20 7260 1000). Powerflute Shareholders and
persons considering the acquisition or disposal of any interest in
Powerflute Shares are reminded that they are subject to the
Disclosure and Transparency Rules made by the UKLA and other
applicable regulatory rules regarding transactions in Powerflute
Shares.
Powerflute's website contains the form of disclosure requested.
If you are in any doubt as to whether or not you should disclose
"dealings", you should contact an independent financial adviser
authorised by the Financial Conduct Authority under FSMA (or, if
you are resident in a jurisdiction other than the United Kingdom, a
financial adviser authorised under the laws of such
jurisdiction).
In the light of the foregoing, any person who is "interested" in
one per cent. or more of any class of "relevant securities" of
Powerflute or of any "securities exchange offeror" (being any
"offeror" other than an "offeror" in respect of which it has been
announced that its "offer" is, or is likely to be, solely in
"cash") is requested to make an "Opening Position Disclosure"
following the commencement of the Disclosure Period which begins
upon the release of this Announcement.
An "Opening Position Disclosure" should contain details of the
person's "interests" and short positions in, and rights to
subscribe for, any "relevant securities" of each of (i) Powerflute
and (ii) any "securities exchange offeror(s)". Persons requested to
make an "Opening Position Disclosure" are requested to make such
"Opening Position Disclosure" by no later than 3:30 p.m. on the
tenth "business day" following the release of this Announcement.
Relevant persons who undertake "dealings" in the relevant
securities of Powerflute or a "securities exchange offeror" prior
to the deadline for making an "Opening Position Disclosure" are
requested instead to make a "Dealing Disclosure".
If any person is, or becomes "interested" (directly or
indirectly) in one per cent. or more of any class of "relevant
securities" of an offeree or of any "securities exchange offeror",
all "dealings" in any "relevant securities" of that offeree or of
any "securities exchange offeror" (including by means of an option
in respect of, or a derivative referenced to, any such "relevant
securities") should be publicly disclosed in a "Dealing Disclosure"
by no later than 3:30 p.m. on the "business day" following the date
of the relevant transaction. This requested disclosures should
continue until the date on which any "offer" becomes, or is
declared, unconditional as to acceptances, lapses or is otherwise
withdrawn or on which the Disclosure Period otherwise ends. A
"Dealing Disclosure" should contain details of the "dealing"
concerned and of the person's interests and short positions in, and
rights to subscribe for, any "relevant securities" of (i)
Powerflute and (ii) any "securities exchange offeror", save to the
extent that these details have previously been disclosed.
Accordingly, in the case of both an "Opening Position
Disclosure" and any "Dealing Disclosure", disclosures of interests
in the shares of Powerflute are requested to be made.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire an "interest"
in "relevant securities" of Powerflute or a "securities exchange
offeror", they should be regarded to be a single person for these
purposes.
"Opening Position Disclosures" will be made by Powerflute and by
any "offeror", and all "dealings" in "relevant securities" of
Powerflute by Powerflute, by any "offeror" or by any persons
"acting in concert" with any of them, will be disclosed in a
"dealing disclosure" by no later than 12:00 p.m. on the "business
day" following the date of the relevant transaction.
"Interests in securities" arise, in summary, when a person has
long economic exposure, whether conditional or absolute, to changes
in the price of "securities". In particular, a person will be
treated as having an "interest" by virtue of the ownership or
control of "securities", or by virtue of any option in respect of,
or derivative referenced to, "securities".
Terms in quotation marks are defined in the Code, which can be
found on the website of the Takeover Panel. If you are in any doubt
as to whether the request to disclose a "dealing" by reference to
the above applies to you, you should contact an independent
financial adviser authorised by the Financial Conduct Authority
under FSMA.
Purchases Outside the Offer
Bidco or its nominees or brokers (acting as agents) may purchase
Powerflute Shares or Powerflute Options otherwise than under the
Offer, such as in the open market or through privately negotiated
purchases, including pursuant to the Smurfit Undertakings. Such
purchases shall comply with the terms of the Implementation
Agreement and the AIM Rules.
Publication on Websites and Availability of Hard Copies
A copy of this Announcement will, subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions, be available free of charge for inspection on
Powerflute's website at www.powerflute.com by no later than 12 noon
on the business day following this Announcement. For the avoidance
of doubt, the contents of the websites referred to in this
Announcement are not incorporated into, and do not form part of,
this Announcement.
Powerflute Shareholders holding depositary interests issued by
Capita Registrars may request a hard copy of this Announcement by
contacting Capita Registrars on 0371 664 0321 if calling from
within the United Kingdom or +44 (0) 371 664 0321 if calling from
outside the United Kingdom, or by submitting a request in writing
to Capita Asset Services, Corporate Actions, The Registry, 34
Beckenham Road, Beckenham, Kent BR3 4TU. Powerflute Shareholders
holding their shares in a Finnish book-entry account may request a
hard copy of this Announcement by contacting Nordea Bank Finland
Plc on +358 200 3000, or by submitting a request in writing to
Nordea Bank Finland Plc, Investor Solutions & Services, Aleksis
Kiven katu 3-5, VC215, 00020 NORDEA. Lines are open 9.00 a.m. to
5.30 p.m. Monday to Friday. You may also request that all future
documents, announcements and information to be sent to you in
relation to the Offer should be in hard copy form.
Information Relating to Powerflute Shareholders
Please be aware that addresses, electronic addresses and certain
other information provided by Powerflute Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Powerflute may be provided to Bidco during the
Disclosure Period as requested from time to time.
Rounding
Certain figures included in this Announcement have been subject
to rounding adjustments. Accordingly, figures shown for the same
category presented in different tables may vary slightly and
figures shown as totals in certain tables may not be an
arithmetical aggregation of the figures that proceed them.
Time
All times shown in this Announcement are London times, unless
otherwise stated.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN OR INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
FOR IMMEDIATE RELEASE
15 September 2016
RECOMMED CASH OFFER
for
POWERFLUTE OYJ
by
NORDIC PACKAGING AND CONTAINER (FINLAND) HOLDINGS OY
an affiliate of
MADISON DEARBORN PARTNERS, LLC
1. Introduction
The boards of directors of Nordic Packaging and Container
(Finland) Holdings Oy ("Bidco") and Powerflute Oyj ("Powerflute" or
the "Company") are pleased to announce the terms of a recommended
cash offer to be made by Bidco for the entire issued and to be
issued share capital of Powerflute (including all outstanding
Powerflute Options) not already owned, or agreed to be acquired, by
Bidco.
Bidco is a company recently incorporated in Finland by
investment funds advised by Madison Dearborn Partners, LLC ("MDP")
for the purpose of making and implementing the Offer. Further
details in relation to MDP and Bidco are set out in paragraph 9 of
this Announcement.
2. The Offer
Under the terms of the Offer, which is subject to the Conditions
and further terms set out in Appendix 1 to this Announcement and to
the full terms and conditions to be set out in the Offer Document
and, in respect of Powerflute Shares held in certificated form and
Powerflute Options, the applicable Form of Acceptance, Powerflute
Shareholders and Powerflute Optionholders (other than the Smurfit
Parties) will be entitled to receive:
For each Powerflute Share: 90 pence in cash; and
For each Powerflute Option: 90 pence in cash less the applicable
subscription price for such Powerflute
Option.
The Offer values the entire issued and to be issued share
capital of Powerflute (including all outstanding Powerflute
Options) at approximately GBP268 million on the basis of the fully
diluted share capital of Powerflute of approximately 297,987,474
Powerflute Shares, as at the date of this Announcement, and
represents:
-- a premium of approximately 22.0 per cent. to the Closing
Price per Powerflute Share of 73.75 pence on 14 September 2016,
being the last Business Day prior to the date of this Announcement;
and
-- a premium of approximately 23.6 per cent. to the average
Closing Price of 72.82 pence per Powerflute Share for the 90 day
period up to and including 14 September 2016, being the last
Business Day prior to the date of the date of this
Announcement.
The Powerflute Shares and Powerflute Options will be acquired
pursuant to the Offer fully paid and free from all liens, charges,
equitable interests, encumbrances, rights of pre-emption and any
other rights and interests of any nature whatsoever and together
with all rights now and hereafter attaching thereto, including
voting rights and the right to receive and retain in full all
dividends and other distributions (if any) declared, made or paid
on or after the date of this Announcement. Bidco reserves the right
to reduce the Offer consideration by the amount of any dividend (or
other distribution) which is paid or becomes payable by Powerflute
to Powerflute Shareholders and/or Powerflute Optionholders after
the date of this Announcement.
The offer price for each outstanding Powerflute Share validly
tendered (and not validly withdrawn) in accordance with the terms
and conditions of the Offer will be payable in Sterling. However,
beneficial owners of Powerflute Shares that are registered directly
in their own name in the Finnish book-entry system will have the
option to receive (in full satisfaction of Bidco's obligations in
respect of the offer price) payment in respect of their Powerflute
Shares that are validly tendered (and not validly withdrawn) in
accordance with the terms and conditions of the Offer in the
equivalent amount of Euros determined as near to the payment date
as reasonably practicable based on the Euro spot rate against the
Sterling exchange rate on the nearest practicable day to such
payment date (as determined and implemented by the receiving agent
for the Offer).
The Offer Document, containing further information about the
Offer, together with the relevant Forms of Acceptance, will be sent
to the Powerflute Shareholders in due course and will be made
available by Powerflute on its website at www.powerflute.com.
3. Irrevocable Undertakings
Bidco has received irrevocable undertakings from:
-- all of the Powerflute Directors (other than Dr. Dermot F.
Smurfit) who beneficially own Powerflute Shares or Powerflute
Options to accept, or procure acceptances of, the Offer in respect
of (i) their own beneficial holdings in Powerflute amounting to, in
aggregate, 20,426,929 Powerflute Shares (inclusive of Powerflute
Shares underlying Powerflute Options), representing approximately
6.9 per cent. of the entire issued share capital of Powerflute
(assuming exercise of all outstanding Powerflute Options and
excluding treasury shares) and (ii) where relevant, any Powerflute
Shares they may acquire pursuant to the exercise of Powerflute
Options; and
-- Henderson Global Investors Limited and Alphagen Capital
Limited (in their capacities as discretionary investment managers)
to accept, or direct acceptances of, the Offer in respect of a
total of 49,634,357 Powerflute Shares, representing, in the
aggregate, approximately 16.7 per cent. of the entire issued share
capital of Powerflute (assuming exercise of all outstanding
Powerflute Options and excluding treasury shares).
All of these irrevocable undertakings will cease to be binding
if the Offer terminates or lapses in accordance with its terms or
otherwise becomes incapable of ever becoming effective. In
addition, the irrevocable undertaking from Henderson Global
Investors Limited and Alphagen Capital Limited also will cease to
be binding in the additional circumstances set out in Appendix 3 to
this Announcement.
In addition, Bidco has already agreed, in private transactions
pursuant to the Smurfit Undertakings, to acquire the Smurfit Party
shareholders' entire beneficial holdings in Powerflute amounting
to, in aggregate, 81,973,221 Powerflute Shares (inclusive of
Powerflute Shares underlying Powerflute Options), representing
approximately 27.5 per cent. of the entire issued share capital of
Powerflute (assuming exercise of all outstanding Powerflute Options
and excluding treasury shares), for 80 pence in cash for each
Powerflute Share and 80 pence in cash less the applicable
subscription price for each Powerflute Option and otherwise on the
terms and conditions set out in the Smurfit Undertakings.
See Appendix 3 for further information in relation to these
irrevocable undertakings.
Accordingly, Bidco has either agreed to acquire pursuant to the
Smurfit Undertakings or received irrevocable undertakings to
accept, or procure the acceptance of, the Offer in respect of, in
aggregate, 152,034,507 Powerflute Shares (inclusive of Powerflute
Shares underlying Powerflute Options), representing approximately
51.0 per cent. of the entire issued share capital of Powerflute
(assuming exercise of all outstanding Powerflute Options and
excluding treasury shares).
Powerflute has its registered office in Finland and is not
subject to the UK City Code on Takeovers and Mergers (the "Code").
Accordingly the Code does not apply to the Offer by Bidco for
Powerflute and this transaction is not subject to the jurisdiction
of, or being regulated by, the UK Panel on Takeovers and Mergers
(the "Takeover Panel"). However, Powerflute and Bidco have agreed,
to the extent set out in the Implementation Agreement, that they
will conduct themselves and the Offer as if the Offer were subject
to the Code.
4. Background to the Offer
MDP has significant experience in investing in companies in the
packaging industry, including Multi Packaging Solutions
International Limited, BWAY Holdings Corporation, Boise Cascade
Corporation, Smurfit Kappa Group plc and Packaging Corporation of
America. As a result, MDP is continuously evaluating acquisition
opportunities within the global packaging industry. In early
October 2015, MDP commenced preliminary discussions with the Board
about a possible transaction. On 13 October 2015, MDP submitted a
preliminary indication of interest offering to acquire all of the
shares of Powerflute for consideration per share at or around the
then-current trading price, at which point the parties entered into
the Confidentiality Agreement. Following a brief due diligence
review, including a meeting with management, MDP submitted a
revised proposal on 9 November 2015, offering to acquire all of the
shares of Powerflute at a price of 85 pence per share plus a
contingent value right of 6 pence per share based upon a
performance threshold. On 18 November 2015, MDP submitted a second
revised offer to acquire all of Powerflute's ordinary shares at a
price per share of (i) 90 pence to shareholders other than Smurfit
Parties (being Dr. Dermot F. Smurfit and Bacchantes Ltd. (the
investment vehicle of Sir Michael Smurfit)), and (ii) 79 pence to
the Smurfit Parties, plus a contingent value right of 6 pence for
each share held by the Smurfit Parties. On 21 December 2015,
following evaluation of MDP's proposal by the independent members
of the Board and consultations with certain major shareholders of
Powerflute, the Board announced that it had terminated discussions
with MDP.
In April 2016, MDP and the Independent Directors resumed
discussions regarding a potential transaction. On 10 May 2016, MDP
submitted an indication of interest outlining its willingness to
make an offer to acquire all of Powerflute's ordinary shares at 90
pence per share from each shareholder other than the Smurfit
Parties, and 80 pence per share to the Smurfit Parties. On 19 May
2016, MDP submitted a revised indication of interest to the Board
detailing the due diligence process and timing and reaffirming its
offer based upon the terms and conditions set forth in the revised
indication of interest. Following the execution of the 19 May 2016
submission of the indication of interest, MDP, with the consent of
the Independent Directors, entered into exclusive discussions with
Powerflute's management and engaged in a detailed due diligence
exercise. On 13 June 2016, MDP submitted a letter to the Board
reaffirming its indication of interest dated 19 May 2016. MDP
recently completed its due diligence review and confirmed its
willingness to make the Offer on the terms and conditions set forth
in a revised Indication of Interest on 1 September 2016.
MDP believes there is a strong rationale for the making of the
Offer. After evaluating Powerflute's operations and financial
performance, and based upon MDP's experience investing in a range
of related packaging businesses, MDP believes that Powerflute has
an attractive market position and a strong management team.
However, MDP also believes that certain of Powerflute's near-term
operating activities and strategic opportunities could be addressed
most effectively as a private company.
5. Current Trading
There has been no significant change in Powerflute's financial
or trading position since 30 June 2016.
6. Background to and Reasons for the Recommendation
Founded around 10 years ago by Dr. Dermot F. Smurfit, its
Chairman, Powerflute has established a track record for buying
packaging businesses with strong fundamentals, the performance of
which can be improved through a combination of management focus and
targeted investment.
In recent years, Powerflute has delivered significant value to
its shareholders. Powerflute's operating and financial performance
over this time has resulted in substantial capital growth for
shareholders, and allowed the Board to adopt a consistent and
progressive dividend policy.
Important to the success of Powerflute has been the contribution
of its senior management team, in particular the industry expertise
and knowledge of Powerflute's Chairman, its CEO, Marco Casiraghi,
supported by its CFO, David Walton.
In the 2016 interim announcement released on 16 August 2016, the
Board stated that the Powerflute Group had performed well during
the first half of the year despite encountering tougher market
conditions in a number of areas. The Board also stated that markets
are expected to remain competitive throughout the second half of
the year, but despite this, the Board expected the Powerflute Group
to continue to perform well for the remainder of the year.
The Independent Directors (comprising the Board, other than
Marco Casiraghi and David Walton, each of whom MDP has proposed
should have an ongoing involvement with the executive management of
Powerflute) remain of the view that the Powerflute Group will
continue to perform well in 2016 and, notwithstanding the inherent
cyclicality of the paper industry, the Powerflute Group has solid
long-term prospects. The outlook for Powerflute's markets beyond
this year and in the medium term is inevitably less certain given
the increased geo-political risks and the tougher market conditions
that the Powerflute Group is now facing. It is also relevant to
highlight that Powerflute's future success will depend on its
continued ability to find and acquire underperforming businesses
and to achieve improvement within a timescale appropriate to a
listed company.
Against this backdrop, the Independent Directors believe the
Offer is timely for Powerflute's shareholders.
The Independent Directors have assessed the Offer in the light
of Powerflute's current strategy and its alternative strategic
options, including related risks and opportunities, its shareholder
structure and its succession plans. In particular the Independent
Directors have taken into account that the Chairman and his brother
Sir Michael Smurfit, both of whom have had long and successful
careers in the packaging industry and who together own 27.5 per
cent. of the Company's share capital, have indicated their wish to
dispose of their shareholdings in Powerflute and are prepared to
accept an offer from Bidco at a discount to the Offer to other
shareholders. Post completion of the transaction, neither the
Chairman nor Sir Michael Smurfit will have any further involvement
with the Company.
Agreement on the Offer was reached after a period of negotiation
between the Independent Directors and MDP (on behalf of Bidco). The
negotiations included assessment of the effects of recent movements
in exchange rates on the value of the Company as it is listed in
the United Kingdom while its operations are denominated in foreign
currencies. The Independent Directors have also benchmarked the
Offer against other transactions in Powerflute's sector.
The Offer to the non-Smurfit Party shareholders represents a
premium of 22.0 per cent. to the current share price and 23.6 per
cent. to the 90 day average share price. The Independent Directors
believe that, taking into account all factors referred to above,
the Offer is fair and reasonable. The Independent Directors, who
have been so advised by Rothschild as to the financial terms of the
Offer, therefore intend to recommend the Offer to the Company's
shareholders. In providing advice to the Independent Directors,
Rothschild has taken into account the commercial assessments of the
Independent Directors.
Marco Casiraghi, Christopher Knight, David Walton and Teresa
Presas, together the only members of the Board (other than Dr.
Dermot F. Smurfit) who own Powerflute Shares and/or Powerflute
Options have, subject to certain customary conditions, irrevocably
undertaken to accept the Offer. It has been agreed that nothing in
such undertakings will restrict the relevant person, in his
capacity as a director of the Company from acting in such capacity
or voting in his sole discretion in such capacity on any matter to
the extent required in order to fulfil his fiduciary duties.
As referred to above MDP has proposed that Marco Casiraghi (CEO)
and David Walton (CFO) each has an ongoing involvement with the
executive management of Powerflute. Therefore, neither Marco
Casiraghi nor David Walton has participated in the preparations and
deliberations regarding the Independent Directors' recommendation.
All four of the other members of the Board have participated in the
consideration of the Offer and the recommendation.
7. Recommendation
As stated above, the Offer to the non-Smurfit Party shareholders
represents a premium of 22.0 per cent. to the current share price
and 23.6 per cent. to the 90 day average share price. The
Independent Directors, who have been so advised by Rothschild as to
the financial terms of the Offer, consider that, taking into
account all factors referred to above, the Offer is fair and
reasonable. Accordingly, the Independent Directors intend to
recommend the Offer to the Company's shareholders. In providing
advice to the Independent Directors, Rothschild has taken into
account the commercial assessments of the Independent Directors. As
set out above, neither Marco Casiraghi nor David Walton has
participated in the preparations and deliberations regarding the
Independent Directors' recommendation. All four of the other
members of the Board have participated in the consideration of the
Offer and the recommendation.
8. Information relating to Powerflute
Powerflute is a paper and packaging group quoted on the AIM
market of the London Stock Exchange (Ticker: POWR) which seeks to
acquire businesses with strong fundamentals whose performance can
be improved through a combination of management focus and targeted
investment. Powerflute currently has two main activities: Coreboard
and Cores, which trades under the name Corenso, and Packaging
Papers, which trades under the name Powerflute.
Coreboard and Cores
Through its Corenso brand, Powerflute is one of the world's
leading integrated producers of high-quality coreboard and high
performance cores, operating three coreboard mills with total
capacity in excess of 300,000 tonnes per annum, 12 wholly owned
core plants with total capacity of 230,000 tonnes per annum and
four affiliated core plants with total capacity of about 35,000
tonnes per annum.
Powerflute has coreboard production facilities in Finland,
France and North America and a network of core plants in strategic
locations in China, North America and Europe, including facilities
throughout continental Europe, in the Nordic regions and in the
United Kingdom.
Cores and coreboard are manufactured from recycled paper and are
used for applications in paper, packaging, textiles, steel,
aluminium and many other industries. Corenso coreboard and cores
demonstrate superior strength and rigidity and are suitable for use
in the most demanding applications.
Packaging Papers
Powerflute operates a paper mill in the town of Kuopio in
Central Finland with the capability to produce up to 280,000 tonnes
per annum of a premium grade of semi-chemical fluting made
exclusively from locally sourced birch. The Kuopio mill is one of
only three suppliers of Nordic semichemical fluting in Europe.
Corrugated boxes manufactured using Powerflute(TM) demonstrate
strength and humidity resistance making them suitable for use in
demanding packaging applications and for exposure to challenging
environmental conditions.
Powerflute(TM) is used extensively for long-distance
transportation of fruit and vegetables in refrigerated containers
and for the packaging of high-value industrial goods such as
electrical appliances, automotive components and bulk dry
chemicals.
For more information about Powerflute, visit
www.powerflute.com.
9. Information relating to MDP and Bidco
MDP
MDP is a leading private equity investment firm based in
Chicago, Illinois. Since MDP's formation in 1992, the firm has
raised six funds with aggregate capital of over US$18 billion and
has completed investments in approximately 130 companies. MDP
operates from a single office in Chicago and employs 43 investment
professionals. MDP's 15 Managing Directors have an average tenure
at the firm of 20 years and many have worked together since the
1980s.
MDP's founders adopted an industry focused investment approach
over 30 years ago, and the firm has six dedicated teams that have
long and successful track records of investing in their respective
sectors. The six industry verticals are: (i) Basic Industries, (ii)
Business & Government Services, (iii) Consumer, (iv) Financial
& Transaction Services, (v) Health Care and (vi) Telecom, Media
& Technology Services. Within its Basic Industries vertical,
MDP is an active investor in the paper and packaging sector, having
previously made investments in Multi Packaging Solutions
International Limited, BWAY Holdings Corporation, Boise Cascade
Corporation, Smurfit Kappa Group plc and Packaging Corporation of
America.
For more information about MDP, visit www.mdcp.com.
Bidco
Bidco is a private limited liability company incorporated in
Finland on 2 September 2016 under the Finnish Companies Act with
registered number 2778943-5. It has its registered office at c/o
Borenius Attorneys Ltd, Eteläesplanadi 2, FI-00130 Helsinki,
Finland. The directors of Bidco are Thomas S. Souleles, Mark B.
Tresnowski and John Eric Knutsen.
Bidco is owned and controlled by investment funds advised by MDP
(the "MDP Funds") and has been formed for the purpose of making and
implementing the Offer. Save for activities in connection with the
Offer, Bidco has not carried on any business prior to the date of
this Announcement, nor has it entered into any obligations. Bidco
has no material assets or liabilities other than those described in
this Announcement, and Bidco has not paid any dividends or prepared
any historical financial accounts.
Bidco's proposed principal investment is the proposed
acquisition of Powerflute Shares pursuant to the Offer or
otherwise. In the event that the Offer is declared unconditional in
all respects and there is full acceptance of the Offer by
Powerflute Shareholders and Powerflute Optionholders, the earnings,
assets and liabilities of Bidco will comprise the consolidated
earnings, assets and liabilities of the Powerflute Group at that
time, and the principal activity of Bidco will be to act as a
holding company for Powerflute.
10. Financing Arrangements of Bidco
Equity Commitment Letter
On 14 September 2016, Bidco entered into an equity commitment
letter with the MDP Funds (the "Equity Commitment Letter") pursuant
to which the MDP Funds have committed to provide equity financing
to Bidco on the terms and subject to the conditions set out in the
Equity Commitment Letter. The purpose of the Equity Commitment
Letter is to provide Bidco with a source of funds to finance (in
part) the consideration payable under the Offer and to pay certain
fees, costs and other expenses in connection with the Offer.
The MDP Funds will satisfy their obligations under the Equity
Commitment Letter from existing capital commitments.
Interim Facilities Agreement
On 14 September 2016, Bidco entered into an interim credit
facility with Barclays Bank PLC (the "Interim Facility") that
provides for borrowings of up to EUR315 million on the terms and
subject to the conditions set out in the Interim Facility. The
purpose of the Interim Facility is to provide Bidco with a source
of funds to finance (in part) the consideration payable under the
Offer and to pay certain fees, costs and other expenses in
connection with the Offer.
Under the Interim Facility, Bidco has agreed to a number of
restrictions including in relation to the conduct of the Offer by
Bidco, including that Bidco shall:
-- provide such additional information regarding the status of
the Offer (including whether any competing offer has been made in
respect of the Powerflute Shares) and the acquisition of any
Powerflute Shares pursuant to Chapter 18 Section 1 of the Finnish
Companies Act (624/2006, as amended) as the interim facility agent
may reasonably request;
-- use its reasonable endeavours to acquire any Powerflute
Shares not acquired on or prior to the First Closing Date,
including pursuant to Chapter 18 Section 1 of the Finnish Companies
Act (624/2006, as amended), prior to 31 December 2016;
-- not, without the prior written consent of all interim
lenders, increase the amount of cash payable by it in respect of
any Powerflute Shares and any Powerflute Options pursuant to the
Offer or otherwise increase the consideration payable pursuant to
the Offer, unless any additional or alternative consideration
payable is funded by means of additional equity or subordinated
loans;
-- not, except as consented to by the interim facility agent in
writing, amend, vary, waive or otherwise modify the terms and
conditions of the Offer set out in this Announcement or the Offer
Document, or treat as satisfied any condition, the satisfaction of
which involves an assessment regarding the acceptability or
otherwise to Bidco of conditions imposed by any regulatory body, if
such amendment, variation, waiver, modification or treating as
satisfied is material and is reasonably likely to be prejudicial to
the interests of the interim lenders, in each case except to the
extent required by court or any other applicable law, regulation or
regulatory body;
-- not declare the Offer unconditional as to acceptances until
the Offer has been accepted by the holders of Powerflute Shares and
Powerflute Options such that Bidco is entitled to proceed with
compulsory redemption proceedings pursuant to Chapter 18 Section 1
of the Finnish Companies Act;
-- procure that the Offer Document is issued and dispatched in
accordance with the timetable set out in this Announcement;
-- deliver to the interim facility agent copies of this
Announcement, the Offer Document, any receiving agent letter, all
other material announcements and documents published or delivered
pursuant to the Offer and all material legally binding agreements
entered into by Bidco in connection with the Offer, in each case
except to the extent it is prohibited by law or regulation from
doing so; and
-- procure that such action as is necessary is taken to
re-register Powerflute and any other relevant members of the
Powerflute Group as a private limited company on or prior to 31
December 2016.
11. Management, Employees and Locations
Bidco attaches great importance to the skills, expertise and
knowledge of the existing management and employees of Powerflute
and expects them to play a leading role in growing its business. If
the Offer is declared unconditional in all respects, Bidco intends
to build on the successful investment in the business made by the
existing management team.
Bidco has significant understanding of Powerflute's operations.
Although Bidco has not had detailed discussions about the
operational management of its operations on an ongoing basis, it is
the current belief of Bidco that, if the Offer is declared
unconditional in all respects, Bidco does not anticipate carrying
out any material restructuring of Powerflute's business or
relocation of its personnel or other significant cost saving
exercise, nor any changes to the principal locations of the
Powerflute Group's business or any redeployment of its fixed
assets.
Bidco confirms that if the Offer is declared unconditional in
all respects, it intends to safeguard fully the existing employment
and pension rights of all Powerflute's management and employees in
accordance with applicable law and to comply with the Powerflute
Group's pension obligations for existing employees and members of
Powerflute's pension schemes. Bidco's current plans for Powerflute
do not involve any material change in the conditions of employment
of its employees.
It is intended that the Independent Directors will cease to be
directors of Powerflute on the Offer becoming, or being declared,
unconditional in all respects, or shortly thereafter.
12. Powerflute Shares to which the Offer Relates and the Powerflute Share Plan
Bidco has already agreed, in private transactions pursuant to
the Smurfit Undertakings, to acquire the Smurfit Shareholders'
entire beneficial holdings in Powerflute amounting to, in
aggregate, 81,973,221 Powerflute Shares (inclusive of Powerflute
Shares underlying Powerflute Options), representing approximately
27.5 per cent. of the entire issued share capital of Powerflute
(assuming exercise of all outstanding Powerflute Options and
excluding treasury shares). The Offer extends to the remaining
Powerflute Shares and Powerflute Options not already owned, or
agreed to be acquired by, Bidco (including pursuant to the Smurfit
Undertakings).
The Offer extends to all outstanding Powerflute Options (other
than Powerflute Options held by the Smurfit Parties, which are
subject to purchase by Bidco on the terms and subject to the
conditions contained in the Smurfit Undertakings). On 13 September
2016, the Board determined to accelerate conditionally all
outstanding Powerflute Options (including those held by the Smurfit
Parties) such that the holders thereof shall have the right to
exercise such Powerflute Options and subscribe for the underlying
Powerflute Shares from and after such time as the Offer has become
or been declared wholly unconditional.
Under the terms of the Offer, each Powerflute Optionholder
(other than, for the avoidance of doubt, any Smurfit Parties) will
be permitted either to accept the Offer in respect of his or her
Powerflute Options or to exercise his or her Powerflute Options and
then accept the Offer in respect of the Powerflute Shares
underlying such Powerflute Options, in each case in accordance with
procedures to be more fully described in the Offer Document.
The receipt of cash pursuant to the Offer by Powerflute
Optionholders may be a taxable transaction under applicable
national, state and local, as well as foreign and other tax laws,
and the tax consequences may be different depending on the
jurisdiction in which the Powerflute Optionholders reside and/or
whether Powerflute Optionholders accept the Offer in respect of
Powerflute Options or Powerflute Shares underlying such Powerflute
Options. Each Powerflute Shareholder and Powerflute Optionholder is
urged to consult their independent professional adviser regarding
the tax consequences of the Offer.
13. Financing of the Offer
The consideration payable under the Offer will be provided by
Bidco from the proceeds of the Equity Commitment Letter and the
Interim Facility (or a replacement term loan facility), in each
case, as referred to in paragraph 10 of this Announcement.
Barclays, financial adviser to Bidco, is satisfied that
sufficient cash resources are available to Bidco to satisfy in full
the consideration payable to Powerflute Shareholders and Powerflute
Optionholders pursuant to the Offer and to the Smurfit Parties
under the Smurfit Undertakings.
The statement made by Barclays in the paragraph above is given
solely with regard to market practices followed when providing a
cash confirmation for transactions governed by the Code and without
regard to the applicable laws, rules and regulations of any other
jurisdiction.
Further information in relation to the financing of the Offer
will be set out in the Offer Document.
14. Opening Position Disclosure
Except for the irrevocable undertakings referred to in paragraph
3 of this Announcement, as at close of business on 14 September
2016 (being the last Business Day prior to the date of this
Announcement), neither Bidco, nor any of the directors of Bidco or
any member of the Bidco Group, nor, so far as the directors of
Bidco are aware, any person acting in concert with Bidco for the
purposes of the Offer, had any interest in, right to subscribe for,
or had borrowed or lent any Powerflute Shares or securities
convertible or exchangeable into Powerflute Shares, nor did any
such person have any short position (whether conditional or
absolute and whether in the money or otherwise), including any
short position under a derivative, any agreement to sell or any
delivery obligation or right to require another person to take
delivery, or any dealing arrangement, in relation to Powerflute
Shares or in relation to any securities convertible or exchangeable
into Powerflute Shares.
However, in the interests of maintaining secrecy prior to the
publication of this Announcement, Bidco has not yet completed
enquiries in respect of the matters referred to in this paragraph
of certain parties who may be deemed to be acting in concert with
it for the purposes of the Offer. Enquiries of such parties will be
completed as soon as practicable following the making of this
Announcement and further disclosures, if any, required in respect
of such parties will be made as soon as possible.
Powerflute confirms that it will, within 10 business days, make
an "Opening Position Disclosure". Bidco will make an "Opening
Position Disclosure" later today.
15. Further Terms and Conditions of the Offer
The Offer will be subject to the Conditions and further terms
set out in this Announcement and to the full terms and conditions
to be set out in the Offer Document and, in respect of Powerflute
Shares held in certificated form and Powerflute Options, the
applicable Form of Acceptance.
Appendix 1 contains the conditions and certain further terms of
the Offer. Appendix 2 contains bases and sources of certain
information contained in this Announcement. Appendix 3 contains
details of irrevocable undertakings received by Bidco. Appendix 4
contains the definitions of certain terms used in this
Announcement.
The Offer will be governed by English law. Powerflute and Bidco
have agreed, to the extent set out in the Implementation Agreement,
that they will conduct themselves and the Offer as if the Offer
were subject to the Code. The Offer will also be subject to the
applicable requirements of the AIM Rules.
16. Cancellation of Admission to Trading of the Powerflute
Shares on Aim and Compulsory Redemption
If the Offer becomes, or is declared, unconditional in all
respects and Bidco receives valid acceptances (which have not been
withdrawn) in respect of Powerflute Shares and Powerflute Options
which, when taken together with the Powerflute Shares and
Powerflute Options that Bidco has actually acquired (or has an
unconditional right to acquire) pursuant to the Smurfit
Undertakings and any other Powerflute Shares or Powerflute Options
acquired by Bidco before or during the Disclosure Period (whether
pursuant to the Offer or otherwise), will result in Bidco holding
more than 90 per cent. of the Powerflute Shares and of the voting
rights then normally exercisable at a general meeting of Powerflute
(assuming exercise of all outstanding Powerflute Options and
excluding treasury shares), Bidco intends to procure that
Powerflute will make an application for the cancellation of the
admission to trading on AIM of the Powerflute Shares.
If such an application is made, it is expected that such
cancellation of admission to trading on AIM will take effect no
earlier than 20 Business Days after the date on which Bidco
(together with those acting in concert with it) have, by virtue of
their shareholdings and acceptances of the Offer, acquired, or
agreed to acquire, 75 per cent. of the voting rights attaching to
the Powerflute Shares. Bidco will procure that Powerflute makes an
announcement through a Regulatory Information Service when the
necessary 75 per cent. threshold has been reached confirming that
the notice period has commenced and the anticipated date of
cancellation.
Cancellation of admission to trading on AIM is likely to reduce
significantly the liquidity and marketability of any Powerflute
Shares in respect of which the Offer has not at such time been
accepted.
In addition, if the Offer becomes, or is declared, unconditional
in all respects and Bidco receives valid acceptances (which have
not been withdrawn) in respect of Powerflute Shares and Powerflute
Options which, when taken together with the Powerflute Shares and
Powerflute Options that Bidco has actually acquired (or has an
unconditional right to acquire) pursuant to the Smurfit
Undertakings and any other Powerflute Shares or Powerflute Options
acquired by Bidco before or during the Disclosure Period (whether
pursuant to the Offer or otherwise), will result in Bidco holding
more than 90 per cent. of the Powerflute Shares and of the voting
rights then normally exercisable at a general meeting of Powerflute
(assuming exercise of all outstanding Powerflute Options and
excluding treasury shares), Bidco also intends to initiate
compulsory redemption proceedings pursuant to Chapter 18 Section 1
of the Finnish Companies Act to acquire compulsorily, on the same
terms as the Offer, the remaining Powerflute Shares in respect of
which the Offer has not at such time been accepted, whether or not
the Offer remains open and to seek to re-register Powerflute as a
private limited company. In connection with these proceedings,
Bidco will hold an extraordinary general meeting as soon as
practical after the closing of the Offer to elect new directors to
Powerflute's board of directors.
17. Overseas Shareholders
The availability of the Offer to Powerflute Shareholders and
Powerflute Optionholders who are not resident in the United Kingdom
or Finland may be affected by the laws and/or regulations of their
relevant jurisdiction. Therefore, any persons who are subject to
the laws and/or regulations of any jurisdiction other than the
United Kingdom or Finland should inform themselves about and
observe any applicable legal or regulatory requirements in their
jurisdiction. If you are in any doubt, you should consult your
professional adviser in the relevant jurisdiction without
delay.
18. Offer-Related Arrangements
Implementation Agreement
On 14 September 2016, Bidco, Powerflute and, for the limited
purpose specified therein, the MDP Funds entered into an
implementation agreement (the "Implementation Agreement"). Under
this agreement the parties have agreed, on the terms and subject to
the conditions contained therein to conduct themselves and the
Offer as if the Offer were subject to certain requirements of the
Code, notwithstanding that as a matter of law the Code does not
apply to the Offer. The Implementation Agreement does not prevent
the parties from agreeing to amend the Implementation Agreement
with respect to the Offer. The Implementation Agreement also
contains certain undertakings, assurances and confirmations among
the parties, including with respect to the co-operation of the
parties relating to the implementation of the Offer. Pursuant to
the Implementation Agreement, the parties have agreed to appoint a
committee comprised of representatives appointed by each of Bidco
and Powerflute, which will be responsible for determining how the
Code would be interpreted and applied in relation to the Offer or
the parties (a "Code Committee Matter"). The Implementation
Agreement also provides for referral of any matter relating to the
interpretation and application of any Code Committee Matter to a
Code Expert (as defined in the Implementation Agreement), whose
rulings (absent fraud or manifest error) are final and binding on
the parties. Pursuant to the Implementation Agreement Bidco and
Powerflute agree to co-operate and assist each other in obtaining
the clearances required to satisfy the Conditions and the
Implementation Agreement also sets out their agreement as to the
treatment, in relation to the Offer, of participants in the
Powerflute Share Plan. The Implementation Agreement terminates
automatically (save in respect of certain surviving provisions) in
certain circumstances including (a) upon agreement in writing
between the parties thereto; (b) if the Offer lapses (or is
withdrawn) in accordance with its terms (unless where such lapse or
withdrawal is otherwise to be followed soon after by an
announcement of a firm intention to make an offer made by Bidco or
a person acting in concert with Bidco to implement the Offer by a
different offer on substantially the same or improved terms); (c)
if the Independent Directors withdraw or adversely modify or
qualify their recommendation and thereafter Bidco gives written
notice to Powerflute to terminate the Implementation Agreement or
Powerflute gives written notice to Bidco to terminate the
Implementation Agreement; or (d) if an independent competing
transaction approved by the Board becomes or is declared
unconditional in all respects or is completed.
Smurfit Undertakings
On 14 September 2016, Bidco and the Smurfit Parties entered into
deeds of irrevocable undertaking (the "Smurfit Undertakings")
pursuant to which Bidco has agreed in private transactions to
acquire the Smurfit Parties' entire beneficial holdings in
Powerflute amounting to, in aggregate, 81,973,221 Powerflute Shares
(inclusive of Powerflute Shares underlying Powerflute Options),
representing approximately 27.5 per cent. of the entire issued
share capital of Powerflute (assuming exercise of all outstanding
Powerflute Options and excluding treasury shares), for 80 pence in
cash for each Powerflute Share and 80 pence in cash less the
applicable subscription price for each Powerflute Option and
otherwise on the terms and conditions set out in each of the
Smurfit Undertakings.
Subject only to the condition that, upon consummation of the
purchase of the Smurfit Parties' entire beneficial holdings in
Powerflute by Bidco pursuant to the Smurfit Undertakings, all of
the Conditions (except for the Acceptance Condition) shall have
been satisfied (or waived by Bidco), completion of the Smurfit
Parties Undertaking and the transfer and conveyance of the Smurfit
Parties' entire beneficial holdings in Powerflute to Bidco, free
and clear of all liens and other encumbrance, will take place
automatically (without any further action required on the part of
any Smurfit Party or Bidco or any other person or entity) upon (a)
the Smurfit Parties' receipt of written notice from Bidco that all
of the Conditions (except for the Acceptance Condition) have been
satisfied (or waived by Bidco) and that the Acceptance Condition
will become satisfied (or will be waived by Bidco) upon
consummation of the purchase of the Smurfit Parties' entire
beneficial holdings in Powerflute by Bidco pursuant to the Smurfit
Undertakings, and (b) Bidco's delivery of payment to the Smurfit
Parties in the amount of 80 pence in cash for each Powerflute Share
and 80 pence in cash less the applicable subscription price for
each Powerflute Option.
Confidentiality Agreement
On 28 October 2015, MDP entered into a confidentiality agreement
with Powerflute in a customary form in relation to MDP's previous
approach, which was announced on the market 21 December 2015,
pursuant to which, among other things, MDP undertook, subject to
certain exceptions:
-- to keep confidential information relating to Powerflute and
not disclose it to third parties (other than those specifically
permitted within the agreement) for a period of two years from the
date of the agreement; and
-- not to acquire any interest in the securities of Powerflute
for a period of 18 months from the date of the agreement.
19. Documents Available for Inspection
Copies of the following documents will, by no later than 12 noon
on the Business Day following date of this Announcement, be
published on Powerflute's website at www.powerflute.com until the
end of the Disclosure Period:
(a) the Equity Commitment Letter, the Interim Facility, the
Implementation Agreement and the Confidentiality Agreement;
(b) the irrevocable undertakings referred to in paragraph 3 of
this Announcement (including the Smurfit Undertakings); and
(c) this Announcement.
20. Expected Timetable
It is intended that the Offer Document and the Forms of
Acceptance containing further details of the Offer will be
despatched to Powerflute Shareholders (other than to persons in
Restricted Jurisdictions) as soon as practicable and, in any event,
not later than 28 days after the date of this Announcement.
21. General
Your attention is drawn to the further information contained in
the Appendices, which form part of, and should be read in
conjunction with, this Announcement.
Please be aware that addresses, electronic addresses and certain
other information provided by Powerflute Shareholders, Powerflute
Optionholders, persons with information rights and other relevant
persons for the receipt of communications from Powerflute may be
provided to Bidco during the Disclosure Period.
22. Consent
Rothschild has given and not withdrawn its consent to the
publication of this Announcement with the inclusion in it of the
references to its name and (where applicable) advice in the form
and context in which they appear.
Enquiries:
Barclays (Financial Adviser to MDP and Bidco) Tel: +44 (0) 20
7623 2323
Asim Mullick/Kurt Kohlmeyer/Bertie Whitehead (Corporate
Broking)
Rothschild (Financial Adviser to Powerflute) Tel: +44 (0) 20
7280 5000
John Deans/Neil Thwaites
Numis Securities Limited (NOMAD and Corporate Broker to
Powerflute) Tel: +44 (0) 20 7260 1000
Mark Lander (Corporate Broking)
Andrew Holloway/Jamie Lillywhite (Nominated Advisor)
Barclays, which is authorised by the Prudential Regulation
Authority and regulated in the United Kingdom by the Financial
Conduct Authority and the Prudential Regulation Authority, is
acting as financial adviser exclusively for MDP and Bidco and no
one else in connection with the Offer, this Announcement and the
other matters referred to in this Announcement, and will not regard
any other person as its client in relation to the matters referred
to in this Announcement and will not be responsible to anyone other
than MDP and Bidco for providing the protections afforded to its
clients, nor for providing advice in relation to the Offer or this
Announcement or any matter referred to herein.
Rothschild, which is authorised by the Prudential Regulation
Authority and regulated by the Financial Conduct Authority and the
Prudential Regulation Authority in the United Kingdom, is acting
exclusively for Powerflute as to the financial terms of the Offer
and for no-one else in connection with the Offer and this
Announcement and will not regard any other person as its client in
relation to the matters referred to in this Announcement and will
not be responsible to anyone other than Powerflute for providing
the protections afforded to its clients, nor for providing advice
in relation to the Offer or this Announcement or any matter
referred to herein.
Numis, which is authorised and regulated by the FCA in the
United Kingdom, is acting solely for Powerflute as its nominated
adviser and broker in relation to the Offer and this Announcement
and nobody else (whether or not a recipient of this Announcement)
as a client in relation to the Offer and this Announcement and will
not be responsible to anyone other than Powerflute for providing
the protections afforded to the clients of Numis nor for providing
advice in relation to the Offer and this Announcement or any other
matter referred to in this Announcement.
IMPORTANT NOTES
Further Information
This Announcement is for information purposes only. It is not
intended to and does not constitute, or form part of, an offer or
invitation or the solicitation of any offer to sell or purchase any
securities or the solicitation of any offer to otherwise acquire,
subscribe for, sell or otherwise dispose of any security pursuant
to the Offer or otherwise, nor shall there by any sale, issuance,
or transfer of securities in any jurisdiction in contravention of
applicable law.
The Offer will be made solely by means of the Offer Document
and, in respect of Powerflute Shares held in certificated form and
Powerflute Options, the applicable Form of Acceptance, which will
contain the full terms and conditions of the Offer, including
details of how the Offer may be accepted. Any decision in respect
of, or other response to, the Offer should be made only on the
basis of the information contained in those documents.
This Announcement has been prepared for the purpose of complying
with English and Finnish law and the AIM Rules and the information
disclosed may not be the same as that which would have been
disclosed if this Announcement had been prepared in accordance with
the laws of jurisdictions outside of the United Kingdom and
Finland.
Bidco will prepare the Offer Document and the Forms of
Acceptance to be distributed to the Powerflute Shareholders and
Powerflute Optionholders. Powerflute and Bidco urge the Powerflute
Shareholders and Powerflute Optionholders to read the Offer
Document and the applicable Form of Acceptance when they become
available because they will contain important information relating
to the Offer.
The receipt of cash pursuant to the Offer by Powerflute
Shareholders and Powerflute Optionholders may be a taxable
transaction under applicable national, state and local, as well as
foreign and other, tax laws. Each Powerflute Shareholder and
Powerflute Optionholder is urged to consult their independent
professional adviser regarding the tax consequences of accepting
the Offer.
Overseas Shareholders
The release, publication or distribution of this Announcement in
certain jurisdictions may be restricted by law, and the
availability of the Offer to persons who are residents, citizens or
nationals of jurisdictions other than the United Kingdom or Finland
may be restricted by laws and/or regulations of those
jurisdictions. Therefore any persons who are subject to the laws
and regulations of any jurisdiction other than the United Kingdom
or Finland should inform themselves about and observe any
applicable requirements in their jurisdiction. Any failure to
comply with the applicable requirements may constitute a violation
of the laws and/or regulations of any such jurisdiction. To the
fullest extent permitted by applicable law, the companies and
persons involved in the Offer disclaim any responsibility or
liability for the violation of such requirements by any person.
Unless otherwise determined by Bidco and permitted by applicable
law and regulation, the Offer will not be made available, directly
or indirectly, in, into or from a Restricted Jurisdiction where to
do so would violate the laws in that jurisdiction and no person may
accept the Offer by any such use, means, instrumentality or form
within a Restricted Jurisdiction or any other jurisdiction if to do
so would constitute a violation of the laws of that jurisdiction.
Accordingly, copies of this Announcement and all documentation
relating to the Offer are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in,
into or from any Restricted Jurisdiction, and persons receiving
this Announcement and all documentation relating to the Offer
(including custodians, nominees and trustees) must not mail or
otherwise distribute or send them in, into or from any Restricted
Jurisdiction.
Unless otherwise permitted by applicable law and regulation, the
Offer may not be made, directly or indirectly, in or into, or by
the use of mails or any means or instrumentality (including, but
not limited to, facsimile, e-mail or other electronic transmission,
telex or telephone) of interstate or foreign commerce of, or of any
facility of a national, state or other securities exchange of, any
Restricted Jurisdiction and the Offer may not be capable of
acceptance by any such use, means, instrumentality or
facilities.
Notice to Finnish Investors
This Announcement has not been prepared in accordance with the
Finnish Securities Market Act (746/2012, as amended). Neither the
Offer nor this Announcement shall be deemed to constitute any
offering of securities or any bid for securities as defined in the
Finnish Securities Market Act.
Notice to US Investors
The Offer is being made for securities in a Finnish company
traded on the AIM and US Powerflute Shareholders should be aware
that this Announcement and documentation relating to the Offer have
been, or will be, prepared in accordance with disclosure
requirements, format and style that differ from those in the United
States. All financial information that is included in this
Announcement or that may be included or referred to in any other
documents relating to the Offer, have been, or will be, prepared,
save where Bidco and Powerflute have expressly agreed otherwise, in
accordance with International Financial Reporting Standards adopted
by the European Union and therefore may not be comparable to
financial statements of US companies or companies whose financial
statements are prepared in accordance with US GAAP.
The Offer, if required to be made, will be made in the United
States pursuant to applicable exemptions under the US tender offer
rules and securities laws and otherwise in accordance with the
applicable provisions of English and Finnish law. Accordingly, the
Offer will be subject to disclosure and other procedural
requirements, including with respect to withdrawal rights, offer
timetable, settlement procedures and timing of payments that are
different from those applicable under US domestic tender offer
procedures and law. In the United States, the Offer will be made
solely by Bidco and not by its financial adviser.
Both Powerflute and Bidco are companies incorporated under the
laws of Finland. It may not be possible for Powerflute Shareholders
or Powerflute Optionholders in the United States to effect service
of process within the United States upon Powerflute or Bidco or
their respective officers or directors or to enforce against any of
them judgments of the United States predicated upon the civil
liability provisions of the federal securities laws of the United
States. It may not be possible to sue Powerflute or Bidco or their
respective officers or directors in a non-US court for violations
of the US securities laws. There is also substantial doubt as to
enforceability in the United Kingdom in original actions, or in
actions for the enforcement of judgments of US courts, based on the
civil liability provisions of US federal securities laws.
Forward-Looking Statements
This Announcement, including the information incorporated into
this Announcement, contains certain forward-looking statements.
These statements are based on the current expectations of Bidco or
Powerflute (as the case may be) and are naturally subject to
uncertainty and changes in circumstances. These forward-looking
statements may include statements about the expected effects on
Bidco or Powerflute of the Offer, the expected timing and scope of
the Offer, strategic options and all other statements in this
Announcement other than historical or current facts.
Forward-looking statements often use words such as "anticipate",
"target", "expect", "estimate", "intend", "plan", "budget",
"schedule", "forecast", "project", "goal", "believe", "hope",
"aims", "continue", "will", "may", "should", "would", "could",
"subject to", or other words of similar meaning. By their nature,
forward-looking statements involve known and unknown risks and
uncertainties, because they relate to events and depend on
circumstances that will occur in the future and the factors
described in the context of such forward-looking statements in this
Announcement could cause actual results, outcomes and developments
to differ materially from those expressed in, or implied by, such
forward-looking statements and such statements are therefore
qualified in their entirety by the risks and uncertainties
surrounding these future expectations. Many of these risks and
uncertainties relate to factors that are beyond the entities'
ability to control or estimate precisely, such as, but not limited
to, general business and market conditions both globally and
locally, political, economic and regulatory forces, industry trends
and competition, future exchange and interest rates, changes in
government and regulation including in relation to health and
safety, the environment, labour relations and tax rates and future
business combinations or dispositions. Although it is believed that
the expectations reflected in such forward-looking statements are
reasonable, neither Bidco nor Powerflute can give any assurance,
representation or guarantee that such expectations will prove to
have been correct and such forward-looking statements should be
construed in light of such factors and you are therefore cautioned
not to place reliance on these forward-looking statements which
speak only as at the date of this Announcement. Neither Bidco nor
Powerflute assumes any obligation to update or correct the
information contained in
this Announcement (whether as a result of new information,
future events or otherwise), except as required by applicable law
or regulations.
No Profit Forecasts or Estimates
Nothing in this Announcement is intended or shall be deemed to
be a forecast, projection or estimate of the future financial
performance of Bidco or Powerflute and no statement in this
Announcement should be interpreted to mean that earnings or
earnings per share of those entities (where relevant) for the
current or future financial periods would necessarily match or
exceed the historical published earnings or earnings per share of
those entities (where relevant).
Disclosure Requirements
Powerflute is a Finnish company whose shares are traded on AIM
and is therefore not subject to the Code. Accordingly, Powerflute
Shareholders and others dealing in Powerflute Shares are not
obliged to disclose any of their dealings under the provisions of
the Code. However, market participants are requested to make
disclosure of "dealings" as if the Code applied. Disclosures made
in relation to relevant securities of Powerflute should be released
via a Regulatory Information Service using the headline "Document
re: Powerflute". The headline "Form 8/8.3"should not be used. Any
question regarding completion of these forms should be raised with
Numis (tel: +44 (0) 20 7260 1000). Powerflute Shareholders and
persons considering the acquisition or disposal of any interest in
Powerflute Shares are reminded that they are subject to the
Disclosure and Transparency Rules made by the UKLA and other
applicable regulatory rules regarding transactions in Powerflute
Shares.
Powerflute's website contains the form of disclosure requested.
If you are in any doubt as to whether or not you should disclose
"dealings", you should contact an independent financial adviser
authorised by the Financial Conduct Authority under FSMA (or, if
you are resident in a jurisdiction other than the United Kingdom, a
financial adviser authorised under the laws of such
jurisdiction).
In the light of the foregoing, any person who is "interested" in
one per cent. or more of any class of "relevant securities" of
Powerflute or of any "securities exchange offeror" (being any
"offeror" other than an "offeror" in respect of which it has been
announced that its "offer" is, or is likely to be, solely in
"cash") is requested to make an "Opening Position Disclosure"
following the commencement of the Disclosure Period which begins
upon the release of this Announcement.
An "Opening Position Disclosure" should contain details of the
person's "interests" and short positions in, and rights to
subscribe for, any "relevant securities" of each of (i) Powerflute
and (ii) any "securities exchange offeror(s)". Persons requested to
make an "Opening Position Disclosure" are requested to make such
"Opening Position Disclosure" by no later than 3:30 p.m. on the
tenth "business day" following the release of this Announcement.
Relevant persons who undertake "dealings" in the relevant
securities of Powerflute or a "securities exchange offeror" prior
to the deadline for making an "Opening Position Disclosure" are
requested instead to make a "Dealing Disclosure".
If any person is, or becomes "interested" (directly or
indirectly) in one per cent. or more of any class of "relevant
securities" of an offeree or of any "securities exchange offeror",
all "dealings" in any "relevant securities" of that offeree or of
any "securities exchange offeror" (including by means of an option
in respect of, or a derivative referenced to, any such "relevant
securities") should be publicly disclosed in a "Dealing Disclosure"
by no later than 3:30 p.m. on the "business day" following the date
of the relevant transaction. This requested disclosure should
continue until the date on which any "offer" becomes, or is
declared, unconditional as to acceptances, lapses or is otherwise
withdrawn or on which the Disclosure Period otherwise ends. A
"Dealing Disclosure" should contain details of the "dealing"
concerned and of the person's interests and short positions in, and
rights to subscribe for, any "relevant securities" of (i)
Powerflute and (ii) any "securities exchange offeror", save to the
extent that these details have previously been disclosed.
Accordingly, in the case of both an "Opening Position
Disclosure" and any "Dealing Disclosure", disclosures of interests
in the shares of Powerflute are requested to be made.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire an "interest"
in "relevant securities" of Powerflute or a "securities exchange
offeror", they should be regarded to be a single person.
"Opening Position Disclosures" will be made by Powerflute and by
any "offeror", and all "dealings" in "relevant securities" of
Powerflute by Powerflute, by any "offeror" or by any persons
"acting in concert" with any of them, will be disclosed in a
"dealing disclosure" by no later than 12:00 p.m. on the "business
day" following the date of the relevant transaction.
"Interests in securities" arise, in summary, when a person has
long economic exposure, whether conditional or absolute, to changes
in the price of "securities". In particular, a person will be
treated as having an "interest" by virtue of the ownership or
control of "securities", or by virtue of any option in respect of,
or derivative referenced to, "securities".
Terms in quotation marks are defined in the Code, which can be
found on the website of the Takeover Panel. If you are in any doubt
as to whether the request to disclose a "dealing" by reference to
the above applies to you, you should contact an independent
financial adviser authorised by the Financial Conduct Authority
under FSMA.
Purchases Outside the Offer
Bidco or its nominees or brokers (acting as agents) may purchase
Powerflute Shares or Powerflute Options otherwise than under the
Offer, such as in the open market or through privately negotiated
purchases, including pursuant to the Smurfit Undertakings. Such
purchases shall comply with the terms of the Implementation
Agreement and the AIM Rules.
Publication on Websites and Availability of Hard Copies
A copy of this Announcement will, subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions, be available free of charge for inspection on
Powerflute's website at www.powerflute.com by no later than 12 noon
on the business day following this Announcement. For the avoidance
of doubt, the contents of the websites referred to in this
Announcement are not incorporated into, and do not form part of,
this Announcement.
Powerflute Shareholders holding depositary interests issued by
Capita Registrars may request a hard copy of this Announcement by
contacting Capita Registrars on 0371 664 0321 if calling from
within the United Kingdom or +44 (0) 371 664 0321 if calling from
outside the United Kingdom, or by submitting a request in writing
to Capita Asset Services, Corporate Actions, The Registry, 34
Beckenham Road, Beckenham, Kent BR3 4TU. Powerflute Shareholders
holding their shares in a Finnish book-entry account may request a
hard copy of this Announcement by contacting Nordea Bank Finland
Plc on +358 200 3000, or by submitting a request in writing to
Nordea Bank Finland Plc, Investor Solutions & Services, Aleksis
Kiven katu 3-5, VC215, 00020 NORDEA. Lines are open 9.00 a.m. to
5.30 p.m. Monday to Friday. You may also request that all future
documents, announcements and information to be sent to you in
relation to the Offer should be in hard copy form.
Information Relating to Powerflute Shareholders
Please be aware that addresses, electronic addresses and certain
other information provided by Powerflute Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Powerflute may be provided to Bidco during the
Disclosure Period as requested from time to time.
Rounding
Certain figures included in this Announcement have been subject
to rounding adjustments. Accordingly, figures shown for the same
category presented in different tables may vary slightly and
figures shown as totals in certain tables may not be an
arithmetical aggregation of the figures that proceed them.
Time
All times shown in this Announcement are London times, unless
otherwise stated.
Appendix 1
Conditions and Certain Further Terms of the Offer
Part A: Conditions of the Offer
1. Acceptance Condition
1.1 The Offer is conditional upon valid acceptances of the Offer
being received (and not withdrawn) by not later than 1.00 p.m. on
the First Closing Date (or such later time(s) and/or date(s) as
Bidco may, subject to the Implementation Agreement or with the
consent of the Independent Directors, decide) in respect of
Powerflute Shares and Powerflute Options which, when taken together
with the Powerflute Shares and Powerflute Options that Bidco has
actually acquired (or has an unconditional right to acquire)
pursuant to the Smurfit Undertakings and any other Powerflute
Shares or Powerflute Options acquired by Bidco before or during the
Disclosure Period (whether pursuant to the Offer or otherwise),
will result in Bidco holding more than 90 per cent. of the
Powerflute Shares and of the voting rights then normally
exercisable at a general meeting of Powerflute (assuming exercise
of all outstanding Powerflute Options and excluding treasury
shares), or such lower percentage as Bidco may, subject to the
Implementation Agreement, decide (but such lower percentage may not
be less than 66 2/3 per cent.).
1.2 The Offer will initially be open for acceptances until 1.00
p.m. (London time) on the date falling 60 calendar days after the
publication of the Offer Document. Bidco undertakes to keep the
Offer open until, at least, the later of:
(a) the date falling 14 calendar days after the date on which
the Acceptance Condition is satisfied; and
(b) the date falling 60 calendar days after the publication of the Offer Document.
2. Further Conditions
In addition, subject as stated in Part B of this Appendix I and
to the requirements of the Implementation Agreement, the Offer is
conditional upon the following conditions (as amended, if
appropriate) being satisfied or, where relevant, waived:
2.1 Notifications, waiting periods and authorisations
2.1.1 All anti-trust and/or merger control notifications,
filings or applications which are necessary in connection with the
Offer having been made and all necessary waiting periods (including
any extensions thereof) under any applicable anti-trust and/or
merger control legislation or regulation of any jurisdiction having
expired, lapsed or been terminated (as appropriate) and all
anti-trust and/or merger control authorisations, orders, consents,
clearances, permissions and approvals necessary in any jurisdiction
for, or in respect of, the Offer and, except pursuant to Chapter 18
Section 1 of the Finnish Companies Act, the acquisition or the
proposed acquisition of any shares or other securities in, or
control or management of, Powerflute having been obtained.
2.1.2 Excluding anti-trust or merger control clearance in
relation to the implementation of this Offer (in respect of which
only paragraph 2.1.1 above shall apply) all material notifications,
filings or applications which are necessary or reasonably
considered appropriate in connection with the Offer having been
made and all necessary waiting periods (including any extensions
thereof) under any applicable legislation or regulation of any
jurisdiction having expired, lapsed or been terminated (as
appropriate) and all statutory and regulatory obligations in any
jurisdiction having been complied with in each case in respect of
the Offer and all material authorisations, orders, recognitions,
grants, consents, clearances, confirmations, certificates,
licences, permissions and approvals ("Authorisations") deemed
necessary or reasonably appropriate by Bidco in any jurisdiction
for, or in respect of, the Offer and, except pursuant to Chapter 18
Section 1 of the Finnish Companies Act, the acquisition or the
proposed acquisition of any shares or other securities in, or
control or management of, Powerflute having been obtained in terms
and in a form reasonably satisfactory to Bidco from any appropriate
central bank, government or governmental, quasi-governmental,
supranational, statutory, regulatory, environmental or
investigative body or authority, court, trade agency, professional
association, institution, employee representative body or any other
body or person whatsoever in any jurisdiction or (without prejudice
to the generality of the foregoing) from any person or bodies with
whom any member of the Powerflute Group has entered into
contractual arrangements and all such Authorisations necessary or
reasonably appropriate to carry on the business of any member of
the Powerflute Group in any jurisdiction having been obtained and
all such Authorisations remaining in full force and effect at the
time at which the Offer becomes otherwise wholly unconditional and
there being no notice or written intimation of an intention to
revoke, suspend, restrict, modify or not to renew such
Authorisations.
2.2 General regulatory
No Third Party having given notice of a decision to take,
institute, implement or threaten any action, proceeding, suit,
investigation, inquiry or reference (and in each case, not having
withdrawn the same), or having required any action to be taken or
otherwise having done anything, or having enacted, made or proposed
any statute, regulation, decision, order or change to published
practice (and in each case, not having withdrawn the same) and
there not continuing to be outstanding any statute, regulation,
decision or order which would or might reasonably be expected to
make the Offer or its implementation, or the acquisition or
proposed acquisition of any shares or other securities in, or
control of, Powerflute by Bidco, void, unenforceable and/or illegal
under the laws of any relevant jurisdiction, or otherwise, directly
or indirectly, materially prevent or prohibit, restrict, restrain
or delay the same or otherwise interfere with the Offer or its
implementation, or impose material additional conditions or
obligations with respect to, or otherwise materially impede,
interfere or require amendment of the Offer or the acquisition, to
an extent which is material in the context of the Offer (provided
always that Bidco shall take or cause to be taken all steps
reasonably necessary in order to any consents from Third Parties as
promptly as possible, including divesting (or ceasing operations)
assets, properties or businesses (including any related tangible or
intangible properties and customer contracts), and all applicable
waiting and other time periods (including any extensions thereof)
during which any such Third Party could decide to take, institute,
implement or threaten any such action, proceeding, suit,
investigation, enquiry or reference or take any other step under
the laws of any jurisdiction in respect of the Offer having
expired, lapsed or been terminated.
2.3 Certain matters arising as a result of any arrangement, agreement, etc.
Except as Disclosed, there being no provision of any
arrangement, agreement, lease, licence, franchise, permit or other
instrument to which any member of the Powerflute Group is a party
or by or to which any such member or any of its assets is, or may
be, bound, entitled or subject, or any event or circumstance which,
as a consequence of the Offer or because of the change in the
control of Powerflute or any other member of the Powerflute Group
represented by the Offer, would, or might reasonably be expected
to, result in (in any case to an extent which is, or would be,
material in the context of the Powerflute Group taken as a
whole):
2.3.1 any monies borrowed by, or any other indebtedness, whether
actual or contingent, of, or any grant available to, any member of
the Powerflute Group being or becoming repayable, or capable of
being declared repayable, immediately or prior to its or their
stated maturity date or repayment date, or the ability of any such
member to borrow monies or incur any indebtedness being withdrawn
or inhibited or being capable of becoming or being withdrawn or
inhibited;
2.3.2 the creation or enforcement of any mortgage, charge or
other security interest over the whole, or any part, of the
business, property or assets of any member of the Powerflute Group
or any such mortgage, charge or other security interest (whenever
created, arising or having arisen) becoming enforceable;
2.3.3 any such arrangement, agreement, lease, licence,
franchise, permit or other instrument being terminated or the
rights, liabilities, obligations or interests of any member of the
Powerflute Group therein being adversely modified or adversely
affected, or any obligation or liability arising or any adverse
action being taken or arising thereunder;
2.3.4 any liability of any member of the Powerflute Group to
make any severance, termination, bonus or other payment to any of
its directors or other officers;
2.3.5 the rights, liabilities, obligations, interests or
business of any member of the Powerflute Group under any such
arrangement, agreement, lease, licence, franchise, permit or other
instrument, or the interests or business of any member of the
Powerflute Group in or with any other person, body, firm or company
(or any agreement or arrangement relating to any such interests or
business) being, or becoming capable of being, terminated or
adversely modified or affected or any onerous obligation or
liability arising or any adverse action being taken thereunder;
2.3.6 any member of the Powerflute Group ceasing to be able to
carry on business under any name under which it presently carries
on business;
2.3.7 the value of, or the financial or trading position or
prospects of, any member of the Powerflute Group being prejudiced
or adversely affected; or
2.3.8 Powerflute Group other than trade creditors or other
liabilities incurred in the ordinary course of business,
and no event having occurred which, under any provision of any
arrangement, agreement, lease, licence, franchise, permit or other
instrument to which any member of the Powerflute Group is a party
or by or to which any such member or any of its assets are bound,
entitled or subject, would be expected to result in any of the
events or circumstances as are referred to in Conditions 2.3.1 to
2.3.8 (in each case, to an extent which is material in the context
of the Powerflute Group taken as a whole).
2.4 Certain events occurring since 31 December 2015
Except as Disclosed, no member of Powerflute having since 31
December 2015:
2.4.1 issued or agreed to issue, or authorised or proposed the
issue of, additional shares of any class or securities or
securities convertible into, or exchangeable for, or rights,
warrants or options to subscribe for or acquire, any such shares,
securities or convertible securities or transferred or sold, or
agreed to transfer or sell, or authorised or proposed the transfer
or sale of Powerflute Shares out of treasury (except, where
relevant, as between Powerflute and wholly owned subsidiaries of
Powerflute or between the wholly owned subsidiaries of
Powerflute);
2.4.2 recommended, declared, paid or made or proposed to
recommend, declare, pay or make any bonus, dividend or other
distribution (whether payable in cash or otherwise) other than
dividends (or other distributions whether payable in cash or
otherwise) paid or made by any subsidiary of Powerflute to
Powerflute or any of its subsidiaries in the ordinary course of
business;
2.4.3 other than pursuant to the Offer (and except for
transactions between Powerflute and its wholly owned subsidiaries
or between the wholly owned subsidiaries of Powerflute and
transactions in the ordinary course of business) implemented,
effected, authorised or proposed or announced its intention to
implement, effect, authorise or propose any merger, demerger,
reconstruction, amalgamation, scheme, commitment, acquisition or
disposal of assets or shares or loan capital (or the equivalent
thereof) in any undertaking or undertakings, in any such case, to
an extent which is material in the context of the Powerflute Group
taken as a whole;
2.4.4 (except for transactions between Powerflute and its wholly
owned subsidiaries or between the wholly owned subsidiaries of
Powerflute) disposed of, or transferred, mortgaged or created any
security interest over, any asset or any right, title or interest
in any asset or authorised, proposed or announced any intention to
do so which, in any case, is material in the context of the
Powerflute Group taken as a whole;
2.4.5 (except for transactions between Powerflute and its wholly
owned subsidiaries or between the wholly owned subsidiaries of
Powerflute) issued, authorised or proposed the issue of, or made
any change in or to the terms of, any debentures or, except in the
ordinary course of business, become subject to any contingent
liability or incurred or increased any indebtedness which, in any
case, is material in the context of the Powerflute Group taken as a
whole;
2.4.6 entered into or varied, or authorised, proposed or
announced its intention to enter into or vary, any material
contract, arrangement, agreement, transaction or commitment
(whether in respect of capital expenditure or otherwise) except in
the ordinary course of business which is of a long term, unusual or
onerous nature or magnitude or which involves an obligation of a
nature or magnitude which is likely to be restrictive on the
business of any member of the Powerflute Group and which, in any
case, is material in the context of the Powerflute Group taken as a
whole;
2.4.7 entered into or varied the terms of, or made any offer
(which remains open for acceptance) to enter into or vary, to a
material extent, the terms of, any contract, service agreement,
commitment or arrangement with any director or senior executive of
any member of the Powerflute Group, save as agreed by Bidco;
2.4.8 proposed, agreed to provide or modified to a material
extent the terms of any share option scheme, incentive scheme or
other benefit relating to the employment, or termination of
employment, of any employee of the Powerflute Group save as agreed
by Bidco or which is required pursuant to the implementation of the
Offer;
2.4.9 purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities
or reduced or, except in respect of the matters mentioned in
Condition 2.4.1, made any other change to any part of its share
capital, save as agreed by Bidco or which is required pursuant to
the implementation of the Offer;
2.4.10 waived, compromised or settled any claim (other than in
the ordinary course of business) which is material in the context
of the Powerflute Group taken as a whole;
2.4.11 terminated, or varied the terms of, any agreement or
arrangement between any member of the Powerflute Group and any
other person in a manner which would have a material adverse effect
on the financial position of the Powerflute Group taken as a
whole;
2.4.12 other than pursuant to the Offer and as envisaged in
accordance with the terms of the Offer, made any alteration to its
articles of association or other incorporation documents, in each
case, which is material in the context of the Offer;
2.4.13 except in relation to changes made or agreed as a result
of, or arising from, changes to legislation, made or agreed or
consented to any material change to the terms of the trust deeds
and rules constituting the pension scheme(s) established for its
directors, employees or their dependants or any material change to
the benefits which accrue, or to the pensions which are payable,
thereunder, or to the basis on which qualification for, or accrual
or entitlement to, such benefits or pensions are calculated or
determined or to the basis upon which the liabilities (including
pensions) of such pension schemes are funded or made, or agreed or
consented to, in each case, which is material in the context of the
Powerflute Group taken as a whole;
2.4.14 been unable, or admitted in writing that it is unable, to
pay its debts or commenced negotiations with one or more of its
creditors with a view to rescheduling or restructuring any of its
indebtedness, or having stopped or suspended (or threatened to stop
or suspend) payment of its debts generally or ceased, or threatened
to cease, carrying on all, or a substantial part of, its business,
in each case, which is material in the context of the Powerflute
Group taken as a whole;
2.4.15 (other than in respect of a member of the Powerflute
Group which is dormant and was solvent at the relevant time) taken
or proposed any steps, corporate action or had any legal
proceedings instituted or threatened against it in relation to the
suspension of payments, in each case, which is material in the
context of the Powerflute Group taken as a whole;
2.4.16 entered into, implemented, suffered, authorised the entry
into or implementation of, passed any resolution for or proposed a
moratorium of any indebtedness, its winding-up (voluntary or
otherwise), dissolution, reorganisation or for the appointment of a
receiver, administrator, manager, administrative receiver, trustee
or similar officer of all, or any material part of, its assets or
revenues or any analogous or equivalent steps or proceedings in any
jurisdiction or appointed any analogous person in any jurisdiction
or had any such person appointed, in each case, which is material
in the context of the Powerflute Group taken as a whole;
2.4.17 (except for transactions between Powerflute and its
wholly owned subsidiaries or between the wholly owned subsidiaries
of Powerflute) made, authorised or proposed any change in its loan
capital, in each case, which is material in the context of the
Powerflute Group taken as a whole;
2.4.18 entered into, implemented or authorised the entry into,
any joint venture, asset or profit sharing arrangement, partnership
or merger of business or corporate entities, in each case, which is
material in the context of the Powerflute Group taken as a
whole;
2.4.19 entered into any licence or other disposal of
intellectual property rights of any member of the Powerflute Group
which is material in the context of the Powerflute Group taken as a
whole, and outside the normal course of business; or
2.4.20 entered into any agreement, arrangement, commitment or
contract or passed any resolution or made any offer (which remains
open for acceptance) with respect to, or announced an intention to,
or to propose to, effect any of the transactions, matters or events
referred to in this Condition 2.4.
2.5 No adverse change, litigation, regulatory enquiry or similar
Except as Disclosed, since 31 December 2015 there having
been:
2.5.1 no adverse change in the business, assets, financial or
trading position or profits or prospects or operational performance
of any member of the Powerflute Group which, in any case, is
material in the context of the Powerflute Group taken as a
whole;
2.5.2 no litigation, arbitration proceedings, prosecution or
other legal proceedings (including, without limitation, with regard
to intellectual property rights owned or used by the Powerflute
Group) having been threatened in writing, announced or instituted
by or against or remaining outstanding against or in respect of,
any member of the Powerflute Group or to which any member of the
Powerflute Group is, or would reasonably be expected to become, a
party (whether as claimant, defendant or otherwise), in each case,
which has a material adverse effect on the Powerflute Group taken
as a whole, or in the context of the Offer;
2.5.3 no enquiry, review or investigation by, or complaint or
reference to, any Third Party against or in respect of any member
of the Powerflute Group having been threatened in writing,
announced or instituted or remaining outstanding by, against or in
respect of any member of the Powerflute Group, in each case which
might reasonably be expected to have a material adverse effect on
the Powerflute Group taken as a whole, or in the context of the
Offer;
2.5.4 no contingent or other liability having arisen or become
apparent to Bidco or increased other than in the ordinary course of
business which would, or might reasonably be expected to, adversely
affect the business, assets, financial or trading position or
profits or prospects of any member of the Powerflute Group to an
extent which is material in the context of the Powerflute Group
taken as a whole, or in the context of the Offer; and
2.5.5 no steps having been taken and no omissions having been
made which are likely to result in the withdrawal, cancellation,
termination or modification of any licence held by any member of
the Powerflute Group which is necessary for the proper carrying on
of its business and the withdrawal, cancellation, termination or
modification of which might reasonably be expected to have a
material adverse effect on the Powerflute Group taken as a whole,
or in the context of the Offer.
2.6 No discovery of certain matters regarding information,
liabilities and environmental issues
Except as Disclosed, Bidco not having discovered:
2.6.1 that any financial, business or other information
concerning the Powerflute Group publicly announced prior to the
date of the Announcement or disclosed at any time to Bidco or to
any of its advisers by or on behalf of any member of the Powerflute
Group prior to the date of the Announcement is misleading, contains
a material misrepresentation of any fact, or omits to state a fact
necessary to make that information not misleading, to an extent
which, in any such case, is material in the context of the
Powerflute Group taken as a whole;
2.6.2 that any member of the Powerflute Group or any
partnership, company or other entity in which any member of the
Powerflute Group has a significant economic interest and which is
not a subsidiary undertaking of Powerflute is, otherwise than in
the ordinary course of business, subject to any liability,
contingent or otherwise, and which is material in the context of
the Powerflute Group taken as a whole, or in the context of the
Offer;
2.6.3 that any past or present member of the Powerflute Group
has not complied in any material respect with all applicable
legislation, regulations or other requirements of any jurisdiction
or any Authorisations relating to the use, treatment, storage,
carriage, disposal, discharge, spillage, release, leak or emission
of any waste or hazardous substance or any substance likely to
impair the environment (including any property) or harm human or
animal health or otherwise relating to environmental matters or the
health and safety of humans, which non-compliance would be likely
to give rise to any material liability including any penalty for
non-compliance (whether actual or contingent) on the part of any
member of the Powerflute Group which, in any case, is material in
the context of the Powerflute Group taken as a whole;
2.6.4 that there has been a material disposal, discharge,
spillage, accumulation, release, leak, emission or the migration,
production, supply, treatment, storage, transport or use of any
waste or hazardous substance or any substance likely to impair the
environment (including any property) or harm human or animal health
which (whether or not giving rise to non- compliance with any law
or regulation), would be reasonably likely to give rise to any
material liability (whether actual or contingent) on the part of
any member of the Powerflute Group which in any case is material in
the context of the Powerflute Group taken as a whole;
2.6.5 that there is, or is reasonably likely to be, any material
obligation or liability (whether actual or contingent) or
requirement to make good, remediate, repair, reinstate or clean up
any property or asset currently or previously owned, occupied,
operated or made use of or controlled by any past or present member
of the Powerflute Group (or on its behalf), or in which any such
member may have, or previously have had or be deemed to have had,
an interest, under any environmental legislation, common law,
regulation, notice, circular, Authorisation or order of any Third
Party in any jurisdiction or to contribute to the cost thereof or
associated therewith or indemnify any person in relation thereto,
which, in any case, is material in the context of the Powerflute
Group taken as a whole;
2.6.6 that circumstances exist (whether as a result of the
making of the Offer or otherwise) which would be reasonably likely
to lead to any Third Party instituting (or whereby any member of
the Powerflute Group would be reasonably likely to be required to
institute) an environmental audit or take any steps which would in
any such case be reasonably likely to result in any actual or
contingent liability to improve or install new plant or equipment
or to make good, repair, reinstate or clean up any property of any
description or any asset now or previously owned, occupied or made
use of by any past or present member of the Powerflute Group (or on
its behalf) or by any person for which a member of the Powerflute
Group is or has been responsible, or in which any such member may
have, or previously have had or be deemed to have had, an interest,
which, in any case, is material in the context of the Powerflute
Group taken as a whole; or
2.6.7 that circumstances exist whereby a person has, or class of
persons have, or is reasonably likely to have, any legitimate claim
or claims against any member of the Powerflute Group in respect of
any product or process, or materials used therein, now or
previously manufactured, sold, supplied or carried out by any past
or present member of the Powerflute Group, which, in each case, is
material in the context of the Powerflute Group taken as a
whole.
2.7 Anti-corruption and criminal property
Except as Disclosed, Bidco not having discovered that:
(a) any member of the Powerflute Group or any person that
performs or has performed services for or on behalf of any such
member is or has engaged in any activity, practice or conduct which
would constitute an offence under the UK Bribery Act 2010, the US
Foreign Corrupt Practices Act or any other applicable
anti-corruption legislation; or
(b) any asset of any member of the Powerflute Group constitutes
criminal property as defined by section 340(3) of the Proceeds of
Crime Act 2002 (but disregarding paragraph (b) of that
definition),
which, in either case, is material in the context of the
Powerflute Group taken as a whole.
Part B: Certain Further Terms of the Offer
Bidco reserves the right to waive, in whole or in part, all or
any of the above Conditions 2.1 to 2.7 (inclusive). Each of the
Conditions shall be regarded as a separate Condition and shall not
be limited by reference to any other Condition.
Bidco shall be under no obligation to waive (if capable of
waiver), to determine to be or remain satisfied or to treat as
fulfilled any of Conditions 2.1 to 2.7 (inclusive) by a date
earlier than the latest date for the fulfillment of that Condition
notwithstanding that the other Conditions of the Offer may at such
earlier date have been waived or fulfilled and that there are at
such earlier date no circumstances indicating that any of such
Conditions may not be capable of fulfillment.
If pursuant to the Implementation Agreement Bidco is required to
make a mandatory offer for Powerflute Shares, Bidco will make such
alterations to any of the above Conditions and terms of the Offer
as are necessary to comply with the relevant provisions of the Code
as if the Offer were subject to the Code (except as otherwise
specifically provided in the Implementation Agreement).
The availability of the Offer to persons not resident in the
United Kingdom may be affected by the laws of the relevant
jurisdiction. Persons who are not resident in the United Kingdom
should inform themselves about and observe any applicable
requirements.
The Offer will not be made, directly or indirectly, in or into,
or by use of the mails of, or by any means or instrumentality
(including, without limitation, facsimile transmission, telex,
telephone, internet or e-mail) of interstate or foreign commerce
of, or of any facility of a national securities exchange of, any
Restricted Jurisdiction and the Offer will not be capable of
acceptance by any such use, means, instrumentality or facility or
from within any Restricted Jurisdiction (unless otherwise
determined by Bidco).
Powerflute Shares (including shares underlying options) which
will be acquired under the Offer will be acquired fully paid and
free from all liens, equities, charges, encumbrances, options,
rights of pre-emption and any other third party rights and
interests of any nature and together with all rights now or
hereafter attaching or accruing to them, including voting rights
and the right to receive and retain in full all dividends and other
distributions (if any) declared, made or paid on or after the date
of this Announcement.
The offer price for each outstanding Powerflute Share validly
tendered (and not validly withdrawn) in accordance with the terms
and conditions of the Offer will be payable in Sterling. However,
beneficial owners of Powerflute Shares that are registered directly
in their own name in the Finnish book-entry system will have the
option to receive (in full satisfaction of Bidco's obligations in
respect of the offer price) payment in respect of their Powerflute
Shares that are validly tendered (and not validly withdrawn) in
accordance with the terms and conditions of the Offer in the
equivalent amount of Euros determined as near to the payment date
as reasonably practicable based on the Euro spot rate against the
Sterling exchange rate on the nearest practicable day to such
payment date (as determined and implemented by the receiving agent
for the Offer).
Insofar as a dividend or other distribution and/or a return of
capital is proposed, declared, made, paid or payable by Powerflute
in respect of a Powerflute Share on or after the date of this
Announcement, Bidco reserves the right to reduce the price payable
under the Offer in respect of an Powerflute Share by the amount of
such dividend and/or distribution and/or return of capital, except
in so far as the Powerflute Share is or will be transferred
pursuant to the Offer on a basis which entitles Bidco alone to
receive the dividend and/or distribution and/or return of capital,
but if that reduction to the price has not been effected the person
to whom the Offer consideration is paid in respect of that
Powerflute Share will be obliged to account to Bidco for the amount
of such dividend and/or distribution and/or return of capital. If
Bidco exercises its right to reduce the Offer consideration by all
or part of the amount of such dividend and/or distribution and/or
return of capital that has not been paid, Powerflute Shareholders
will be entitled to receive and retain that dividend and/or
distribution and/or return of capital.
Bidco may not invoke a condition to the Offer so as to cause the
Offer not to proceed, to lapse or to be withdrawn unless the
circumstances which give rise to the right to invoke the condition
are of material significance to Bidco in the context of the Offer.
Notwithstanding anything to the contrary contained in this
Announcement or in the Implementation Agreement, the condition
contained in paragraph 1.1 of Part A is not subject to this
qualification.
The Offer will be governed by English law and will be subject to
the jurisdiction of the English courts and to the conditions and
further terms set out in this Appendix 1 and to be set out in the
Offer Document. Under the terms of the Implementation Agreement,
Bidco and Powerflute have agreed to conduct themselves and the
Offer as if the Offer were subject to the Code and they will
observe and comply with the Code (save as agreed between them). The
Offer will also be subject to applicable requirements of the London
Stock Exchange, the FCA and the AIM Rules.
Appendix 2
Bases and Sources
In this Announcement:
1. Unless otherwise stated, financial information relating to
the Powerflute Group has been extracted or derived (without any
adjustment) from the audited annual report and accounts of
Powerflute for the year ended 31 December 2015 or from the
unaudited interim condensed consolidated financial statements for
the Powerflute Group as of and for the six month period ended 30
June 2016.
2. References to the existing issued share capital of Powerflute
are to the 290,650,374 Powerflute Shares in issue outside of
treasury, (and, for the avoidance of doubt, excludes the 5,700,000
Powerflute Shares held in treasury) as at 14 September 2016. The
International Securities Identification Number for Powerflute
Shares is FI0009015291.
3. The value of the Offer is calculated on the basis of the
fully diluted number of Powerflute Shares, being 297,987,474.
4. The GBP260 million consideration payable for the entire
issued and to be issued share capital of Powerflute includes the
amount attributable to the Powerflute Shares that Bidco has
contracted to acquire from the Smurfit Parties pursuant to the
Smurfit Undertakings for 80 pence per Powerflute Share.
5. Unless otherwise stated, all Closing Prices have been derived from Bloomberg.
6. The subscription price for each outstanding Powerflute Option
is denominated in Euro and the offer price for each outstanding
Powerflute Option validly tendered (and not validly withdrawn) in
accordance with the terms and conditions of the Offer will be
payable in Sterling. For purposes of calculating the amount payable
in respect of Powerflute Options validly tendered (and not validly
withdrawn), the Euro denominated subscription price will be
converted to the equivalent amount of Sterling as near to the
payment date in respect of such Powerflute Options as reasonably
practicable based on the Sterling spot rate against the Euro
exchange rate on the nearest practicable day to such payment
date.
1
Appendix 3
Details of Irrevocable Undertakings
The Smurfit Undertakings include an obligation to sell, transfer
and convey to Bidco all of their respective right, title and
interest in and to all of their Powerflute Shares, free and clear
of all liens and other encumbrances, subject only to the condition
that all of the Conditions (except for the Acceptance Condition)
shall have been satisfied (or waived by Bidco):
Name of Powerflute Number of Powerflute Percentage of Powerflute
Shareholder Shares in respect of share capital (assuming
which undertaking is exercise of all outstanding
given Powerflute Options
and excluding treasury
shares)
----------------------- ---------------------- -----------------------------
Dr. Dermot F. Smurfit 44,252,008* 14.85%
----------------------- ---------------------- -----------------------------
Bacchantes Ltd. 36,050,213 12.10%
----------------------- ---------------------- -----------------------------
*: excluding 1,671,000 outstanding Powerflute Options held by
Dr. Dermot F. Smurfit under the Powerflute Share Plan, which he
has also committed to sell to Bidco.
------------------------------------------------------------------------------
The following irrevocable undertakings given by Powerflute
Directors (the "Insider Undertakings") include undertakings to
accept the Offer:
Name of Powerflute Number of Powerflute Percentage of Powerflute
Shareholder Shares in respect of share capital (assuming
which undertaking is exercise of all outstanding
given Powerflute Options
and excluding treasury
shares)
-------------------- ---------------------- -----------------------------
Marco Casiraghi 12,612,229** 4.23%
-------------------- ---------------------- -----------------------------
David Walton 3,108,600*** 1.04%
-------------------- ---------------------- -----------------------------
Christopher Knight 1,000,000 0.34%
-------------------- ---------------------- -----------------------------
Teresa Presas 40,000 0.01%
-------------------- ---------------------- -----------------------------
**: excluding 2,136,800 outstanding Powerflute Options held by
Marco Casiraghi under the Powerflute Share Plan, which he has
also committed to Bidco.
---------------------------------------------------------------------------
***: excluding 1,529,000 outstanding Powerflute Options held by
David Walton under the Powerflute Share Plan, which he has also
committed to Bidco.
---------------------------------------------------------------------------
The Smurfit Undertakings and the Insider Undertakings will only
cease to be binding if:
(a) the Offer Document is not posted to shareholders of the
Company within 28 days (or such longer period as may be consented
to by the Independent Directors) after the publication of this
Announcement;
(b) the Offer lapses or is withdrawn and, for the avoidance of
doubt, no new, revised or replacement Offer has been announced, in
accordance with the Implementation Agreement, in its place; or
(c) if the Offer has not become or been declared wholly
unconditional on or before 31 December 2016.
The following irrevocable undertaking (the "Institutional
Undertaking") to accept the Offer:
Name of Entities Number of Powerflute Percentage of Powerflute
Shares in respect of share capital
which undertaking is
given
---------------------------- ---------------------- -------------------------
Henderson Global Investors
Limited and Alphagen
Capital Limited in
their capacities as
discretionary investment
managers 49,634,357 16.70%
---------------------------- ---------------------- -------------------------
The Institutional Undertaking will only cease to be binding
if:
(a) the Offer Document is not posted to shareholders of the
Company within 28 days (or such longer period as may be consented
to by the Independent Directors) after the publication of this
Announcement;
(b) the Offer lapses or is withdrawn and, for the avoidance of
doubt, no new, revised or replacement Offer has been announced, in
accordance with the Implementation Agreement, in its place;
(c) if the Offer has not become or been declared wholly
unconditional on or before 31 December 2016; or
(d) (x) on or before the date which is 21 days after the Offer
Document is posted to shareholders of the Company, any person other
than Bidco and any person acting in concert (as defined in the
Code) with Bidco announcing a firm intention to make an offer to
acquire all of the Powerflute Shares (a "Takeover Bid"); and (y)
the value of the consideration pursuant to the terms of the
Takeover Bid (as at the date on which such person announces its
firm intention to make the Takeover Bid) exceeding the value of the
Offer by 10% or more per Powerflute Share.
Appendix 4
Definitions
Acceptance Condition the condition set out at paragraph 1
of Part A of Appendix 1 to this Announcement;
AIM Alternative Investment Market/AIM, a
market operated by the London Stock
Exchange;
AIM Rules the AIM Rules for Companies published
by the London Stock Exchange;
Announcement this announcement of Bidco's firm intention
to make the Offer;
Barclays Barclays Bank PLC, acting through its
Investment Bank;
Bidco Nordic Packaging and Container (Finland)
Holdings Oy, a private limited liability
company formed in Finland with registered
number 2778943-5;
Bidco Group Bidco, its subsidiaries, holding companies
and subsidiaries of such holding companies
as defined in the Finnish Companies
Act;
Board the board of directors of Powerflute
from time to time;
Business Day a day (other than a Saturday, Sunday,
public or bank holiday) on which banks
are generally open for business in Chicago,
Helsinki and London (other than solely
for trading and settlement in Euro);
Capita Registrars Capita IRG Trustees Limited
Code the City Code on Takeovers and Mergers
(which, for the avoidance of doubt,
Powerflute and Bidco have agreed, to
the extent set out in the Implementation
Agreement, that they will conduct themselves
and the Offer as if the Offer were subject
to it);
Closing Price the closing middle market price of a
Powerflute Share as derived from the
AIM Appendix of the London Stock Exchange
Daily Official List;
Conditions the conditions of the Offer set out
in Appendix 1 to this Announcement;
Confidentiality Agreement the confidentiality agreement entered
into between Powerflute and MDP dated
28 October 2015 as described in paragraph
18 of this Announcement;
Disclosed (i) disclosed in the unaudited interim
results of Powerflute for the six months
ended 30 June 2016 (ii) disclosed in
the annual report and accounts of Powerflute
for the period ended 31 December 2015;
(iii) Publicly Disclosed; (iv) disclosed
in this Announcement; or (v) fairly
disclosed to Bidco (or its advisers)
by or on behalf of Powerflute prior
to the date of this Announcement;
Disclosure Period the period commencing on 15 September
2016 and ending on the earlier of the
date on which the Offer becomes, or
is declared, unconditional as to acceptances
and/or the date on which the Offer lapses
or is withdrawn (or such other date
as the Independent Directors may decide);
Euro or EUR the single European currency;
FCA the UK Financial Conduct Authority;
Finnish Companies Act the Finnish Companies Act (624/2006);
First Closing Date the date which falls 60 days after the
posting of the Offer Document;
Forms of Acceptance the form of acceptance and authority
relating to the Offer in respect of
Powerflute Shares or Powerflute Options,
as the case may be, accompanying the
Offer Document;
Implementation Agreement the implementation agreement, dated
14 September 2016 among Bidco, Powerflute
and, for the limited purpose specified
therein, the MDP Funds;
Independent Directors each of Dermot F. Smurfit, Christopher
Knight, Wolf-Dieter Baumann and Teresa
Presas;
Interim Facility Interim Facilities Agreement, dated
14 September 2016 among MDP, Bidco and
Barclays PLC, as mandated lead arranger,
interim facility agent and interim security
agent;
London Stock Exchange London Stock Exchange plc;
MDP Funds Madison Dearborn Capital Partners VII-A,
L.P., Madison Dearborn Capital Partners
VII-C, L.P. and Madison Dearborn Capital
Partners VII Executive-A, L.P., each
a Delaware limited partnership and whose
registered address is at 70 W Madison
Street, Suite 4600, Chicago, IL 60602,
United States
Numis Numis Securities Limited;
Offer the recommended cash offer to be made
by Bidco for the entire issued and to
be issued share capital of Powerflute
(including all outstanding Powerflute
Options) not already owned, or agreed
to be acquired, by Bidco, on the terms
and subject to the conditions set out
in this Announcement and to the full
terms and conditions to be set out in
the Offer Document and, in respect of
Powerflute Shares held in certificated
form and Powerflute Options, the applicable
Form of Acceptance and, where the context
so requires, any subsequent revision,
variation, extension or renewal of such
offer;
Offer Document the document to be sent to Powerflute
Shareholders which will contain, amongst
other things, the terms and conditions
of the Offer;
pound, GBP, pence or the lawful currency of the United Kingdom;
Sterling
Publicly Disclosed fairly disclosed in any public announcement
by Powerflute to any Regulatory Information
Service prior to the date of the Announcement;
Powerflute or the Company Powerflute Oyj, a public stock company
incorporated in Finland with registered
number FI-2048890-4;
Powerflute Directors the directors of Powerflute as at the
date of this Announcement;
Powerflute Group Powerflute, its subsidiaries, holding
companies and subsidiaries of such holding
companies as defined in the Finnish
Companies Act;
Powerflute Options a total of 7,337,100 option rights granted
under the Powerflute Share Plan entitling
the Share Plan Participants to subscribe
an identical number of Powerflute Shares;
Powerflute Optionholders the holders of Powerflute Options;
Powerflute Shareholders the holders of Powerflute Shares;
Powerflute Share Plan the Powerflute Share Option Scheme 2012;
Powerflute Shares the unconditionally allotted or issued
and fully paid up (or credited as fully
paid up) ordinary shares each in the
capital of Powerflute (it being understood
and agreed that, for purposes of the
Offer, a depositary interest issued
by Capita Registrars, as Powerflute's
registrar for depositary interests,
shall be deemed to be the ordinary share
held by Capita Registrars, as nominee,
that is represented by such depositary
interest), and "Powerflute Share" shall
be construed accordingly;
Regulatory Information any information service authorised from
Service time to time by the FCA for the purposes
of disseminating regulatory announcements;
Restricted Jurisdiction any jurisdiction where local laws or
regulations may result in a significant
risk of civil, regulatory or criminal
exposure if information concerning the
Offer is sent or made available to Powerflute
Shareholders or Powerflute Optionholders
in that jurisdiction;
Rothschild N M Rothschild & Sons Limited;
Smurfit Parties Dr. Dermot F. Smurfit and Bacchantes
Ltd., the investment vehicle of Sir
Michael Smurfit;
Smurfit Undertakings the deeds of irrevocable undertaking,
each dated 14 September 2016 among Bidco
and the Smurfit Parties as described
in paragraphs 2, 3 and 18 of this Announcement;
Third Party any central bank, government or governmental,
quasi-governmental, supranational, statutory,
regulatory, administrative, fiscal,
or investigative body, authority (excluding
any national antitrust or merger control
authority), court, trade agency, association,
institution or professional or environmental
body, employee representative body or
any other person or body whatsoever
in any relevant jurisdiction;
Treasury Shares any shares held by Powerflute as treasury
shares as defined in section 15 of the
Finnish Companies Act;
United Kingdom or UK the United Kingdom of Great Britain
and Northern Ireland;
United States or US the United States of America, its territories
and possessions, any state of the United
States of America, the District of Columbia
and all other areas subject to its jurisdiction;
US$ US dollars, being the lawful currency
of the US; and
US GAAP generally accepted accounting principles
in the US.
This information is provided by RNS
The company news service from the London Stock Exchange
END
OFBGUGDCISBBGLU
(END) Dow Jones Newswires
September 15, 2016 02:01 ET (06:01 GMT)
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