Evox Rifa Group Oyj (“Evox”) and KEMET Corporation have on 19 February 2007 entered into a Combination Agreement, pursuant to which KEMET Corporation's wholly owned subsidiary KEMET Electronics Corporation (“KEMET”) makes an offer for all shares and convertible loan notes of Evox. The Board of Directors of Evox gives this statement pursuant to Chapter 6 Section 6 of the Securities Markets Act having received from KEMET its Tender Offer Document on 9 March 2007. KEMET offers to the Evox shareholders an offer consideration of EUR 0.12 per share in cash and, to the holders of each convertible loan note, the aggregate of the nominal amount of EUR 100 plus accrued interest up to and including the closing date of the tender offer payable in cash. The per share offer consideration is approximately 38 per cent higher than the one month volume-weighted average trading price, approximately 44 per cent higher than the three months' volume- weighted average trading price and approximately 46 per cent higher than the twelve months' volume-weighted average trading price for the time period prior to the announcement of the tender offer (calculated based upon the daily trading information of the Helsinki Stock Exchange). The per share offer consideration of EUR 0.12 is lower than the EUR 0.1333 conversion rate of the convertible capital loan notes. Evox has a strong market position in selected target markets, a high level of engineering capability and long-standing customer relationships. Evox operates in a global and highly competitive market in which demand and production has, in recent years, transferred to Asia, especially China. Evox is significantly smaller than its global competitors, and while the demand for its products is growing, the electronics business is cyclical in nature. Maintaining competitiveness demands continued investment in production process improvement and the development of new products and technologies. In the opinion of the Board of Directors of Evox, the market position of the company can be further strengthened and the aforementioned changes in the business environment better managed together with a business partner, and a combination with KEMET is a better solution for the shareholders than to continue as an independent company. The Board of Directors considers KEMET to be a strategic buyer interested in entering into new market segments and customer applications. The products, manufacturing structure and customers of Evox are not significantly overlapping those of KEMET. By utilizing its strong financial position, KEMET has the opportunity to further develop Evox's business and accelerate its growth through capital investments and research and development. KEMET plans to integrate Evox's business into KEMET's global organization based upon an integration plan still to be developed. As far as the Board of Directors is aware, KEMET intends to continue the business of Evox without significant changes for the time being. The Board of Directors of Evox is not aware of KEMET having planned major changes to manufacturing sites of Evox, although KEMET will continue to require that each manufacturing site will have to generate positive cash flow and be competitive in the marketplace. The Board of Directors is not aware of any changes in terms of employment or number of jobs in Evox as a result of the Tender Offer. The Board of Directors have investigated the possibilities of strengthening Evox's business prospects through mergers or partnerships. These investigations have not lead to serious offers or proposals to buy Evox's shares. Evox has granted KEMET sixty (60) days of exclusivity to negotiate the Combination Agreement and conduct a due diligence review. The exclusivity period started on 15 January 2007 and since that date Evox's Board of Directors has not been in contact with other potential buyers. The Board of Directors is not aware of any party contemplating a comparable offer. In order to evaluate the offer made by KEMET, the Board has requested Advium Corporate Finance, eQ Pankki Oy (“Advium”) to provide a fairness opinion. According to the opinion given by Advium, on 18 February 2007 and based on assumptions given in the opinion, the consideration offered by KEMET to the shareholders and to the holders of convertible capital loan notes is fair. Considering the aforementioned information, the Board is of the opinion that the offer consideration offered in KEMET's tender offer is fair from the perspective of the shareholders and holders of convertible capital loan notes, as a result of which the Board recommends the shareholders and holders of convertible capital loan notes to accept the tender offer. Evox shareholders Fennogens Investments S.A., Veikko Laine Oy, Mr. Wee Cheng Hoon, Mr. Henrik Ehrnrooth and Mr. Pertti Laine representing approximately 51.7 per cent of the share capital of Evox, have undertaken irrevocably and unconditionally to accept the tender offer. Two members of the Evox Board, Mr. Henrik Ehrnrooth and Mr. Pertti Laine, have not participated in and will not participate in the Board of Directors' decisions on this transaction due to the potential conflict of interest relating to the said commitments towards KEMET. KEMET'S tender offer is subject to the valid tender of shares and convertible capital loan notes representing more than two thirds (2/3) of all shares and votes of Evox. Should KEMET obtain more than nine tenths (9/10) of the shares and votes of Evox, KEMET intends to initiate compulsory acquisition proceedings under the Finnish Companies Act. Furthermore, if KEMET obtains less than nine tenths (9/10) but more than two thirds (2/3) of the shares and votes of Evox, KEMET may consider combining the operations of Evox through a merger under Chapter 16 of the Companies Act and for this purpose KEMET reserves the right to transfer the offer to a wholly owned Finnish subsidiary of KEMET Corporation (the parent company of KEMET). If KEMET receives more than nine tenths (9/10) of the shares and votes of Evox, the holders of convertible capital loan notes shall be offered an opportunity to convert their loan notes to shares in Evox during a specific time period decided by the Board of Directors, after which the right to convert the convertible capital loan notes to Evox shares will cease. Despite the positive recommendation of the Board of Directors each shareholder and holder of convertible capital loan notes must independently decide whether to accept the offer of KEMET taking into consideration all information presented in KEMET's Tender Offer Document and other possible matters affecting the tender offer. Espoo, 9 March 2007 The Board of Directors of Evox Rifa Group Oyj Further information from: Vice Chairman Jerker Molander, tel: +358 50 380 3845 Distribution: Helsinki Stock Exchange, principal media
Statement of the Board of Directors of Evox Rifa Group Oyj concerning the tender offer of KEMET Electronics Corporation
| Source: Evox Rifa Group