AFFECTO PLC STOCK EXCHANGE RELEASE 15.6.2007 at 11:00
INVITATION TO AN EXTRAORDINARY SHAREHOLDERS' MEETING OF AFFECTO PLC AND THE
PROPOSALS OF THE BOARD OF DIRECTORS
The shareholders of Affecto Plc ("Affecto") are hereby summoned to an
Extraordinary Shareholders' Meeting to be held on Tuesday, 10 July 2007 at
3:00 p.m. at Finlandia Hall, Mannerheimintie 13, 00100 Helsinki. Please use
the entrances K1 and M1 at the Finlandia Hall.
Affecto has on 11 June 2007 announced its intention to acquire all issued and
outstanding shares in Component Software Group ASA ("Component"), a listed
company in Norway, through a public tender offer. The consideration offered
is NOK 63.68 per share paid as a combination of cash and shares in Affecto.
The Combination Agreement between Affecto and Component entered into on 11
June 2007 sets forth the principle terms under which Affecto will make the
tender offer. Such terms include, inter alia, the passing at the
Extraordinary Shareholders' Meeting of Affecto of a resolution to authorize
the Board of Directors to issue a sufficient number of Affecto shares to be
offered to Component shareholders as the share consideration part of the
offer price and to elect a new member to the Board of Directors of Affecto
nominated by Component with effective date from the closing date of the
tender offer.
In order to complete the tender offer the Board of Directors proposes the
following matters will be on the agenda at the Extraordinary Shareholders'
Meeting.
1. Proposal by the Board of Directors to authorise the Board of Directors to
issue shares
The Board of Directors proposes that the Extraordinary Shareholders' Meeting
authorise the Board of Directors to decide to issue new shares and to convey
the company's own shares held by the company in one or more tranches. The
share issue may be carried out as a share issue against payment or without
consideration on terms to be determined by the Board of Directors and in
relation to a share issue against payment at a price to be determined by the
Board of Directors.
A maximum of 4.800.000 new shares may be issued. A maximum of 1.700.000 own
shares held by the company may be conveyed.
The Board of Directors proposes that the authorisation comprise the right to
deviate from the shareholders' pre-emptive subscription right provided that
the company has weighty financial reason for the deviation in a share issue
against payment and provided that the company, taking into account the
interest of all its shareholders, has a particularly weighty financial reason
for the deviation in a share issue without consideration. It is proposed that
shares may also be subscribed for or own shares conveyed against contribution
in kind or by means of set-off.
In addition, the authorisation includes the right to decide on a share issue
without consideration to the company itself so that the amount of own shares
held by the company after the share issue is a maximum of one-tenth (1/10) of
all shares in the company. Pursuant to Chapter 15 Section 11 Subsection 1 of
the Companies Act, all own shares held by the company and its subsidiaries
are included in this amount.
The authorisation may only be used as payment in the acquisition of the
shares of Component.
2. New member of the Board of Directors
Pursuant to the Combination Agreement between Affecto and Component entered
into on 11 June 2007, the Board of Directors proposes to the Meeting that Mr.
Haakon Skaarer be elected as a new board member with effective date from the
closing date. The election is conditional upon the completion of the tender
offer.
Board of Directors' Proposals
The copies of the Board of Directors' proposals concerning items 1-2 above
including appendices and other documents to be dealt with at the Meeting will
be available on the company website www.affecto.com as of 2 July 2007. In
addition, the proposals of the Board of Directors are available for
examination by the shareholders as of 2 July 2007 at the address given below,
and they also will be available at the Meeting. Copies of the documents will
be sent to shareholders upon request.
Right to attend and vote at the Meeting
In order to attend and have the right to vote at the Meeting, the shareholder
(a) shall be entered in the Shareholder Register of the company maintained by
Finnish Central Securities Depository Ltd on Friday 29 June 2007, and
(b) shall give notice to attend the Meeting by Thursday 5 July 2007 at 4.00
p.m. Finnish time.
Registration in the Shareholder Register
The shareholder in whose name the shares are registered is automatically
registered in the Shareholder Register of the company. Shareholders holding
nominee-registered shares who wish to attend the Meeting may temporarily be
registered in the Shareholder Register. Such registration shall be made on
Friday 29 June 2007 at the latest. For temporary registration, shareholders
shall contact their account operator.
Notice to attend
A shareholder wishing to attend the Meeting shall give notice to attend the
Meeting to the company either
(a) by e-mail: arja.hyrske@affecto.com,
(b) by telephone +358 205 777 757 (Arja Hyrske) Monday through Friday between
9.00 a.m. and 4.00 p.m. Finnish time,
(c) by letter to Affecto Plc, Atomitie 2, 00370 Helsinki, Finland.
The notice shall be at the company's disposal no later than at 4.00 p.m.
Finnish time on Thursday 5 July 2007.
Delivery of proxies
Proxies for using a shareholder's voting rights at the Meeting shall be
submitted to the company no later than at 4.00 p.m. Finnish time on Thursday
5 July 2007.
We wish our shareholders welcome to the Meeting.
Helsinki 15 June 2007
Affecto Plc
The Board of Directors
APPENDICES
Appendix 1: Proposal of the Board of Directors to authorise the Board of
Directors to issue shares
Appendix 2: Proposal of the Board of Directors to elect a new member of the
Board of Directors
Appendix 3: Stock Exchange Release published by Affecto Plc on 11 June 2007
regarding public tender offer for Component Software Group ASA
Additional information provided by:
CEO Pekka Eloholma, tel. +358 205 777 737
CFO Satu Kankare, tel. +358 205 777 202
Director of M&A and IR Hannu Nyman, tel. +358 205 777 761
Appendix 1:
PROPOSAL OF THE BOARD OF DIRECTORS TO AUTHORISE THE BOARD OF DIRECTORS TO
ISSUE SHARES
The Board of Directors proposes that the Meeting authorise the Board of
Directors to decide to issue new shares and to convey the company's own
shares held by the company in one or more tranches. The share issue may be
carried out as a share issue against payment or without consideration on
terms to be determined by the Board of Directors and in relation to a share
issue against payment at a price to be determined by the Board of Directors.
A maximum of 4.800.000 new shares may be issued. A maximum of 1.700.000 own
shares held by the company may be conveyed.
The Board of Directors proposes that the authorisation comprise the right to
deviate from the shareholders' pre-emptive subscription right provided that
the company has weighty financial reason for the deviation in a share issue
against payment and provided that the company, taking into account the
interest of all its shareholders, has a particularly weighty financial reason
for the deviation in a share issue without consideration. It is proposed that
shares may also be subscribed for or own shares conveyed against contribution
in kind or by means of set-off.
In addition the Board of Directors proposes that the authorisation include
the right to decide on a share issue without consideration to the company
itself so that the amount of own shares held by the company after the share
issue is a maximum of one tenth (1/10) of all shares in the company. Pursuant
to Chapter 15 Section 11 Subsection 1 of the Companies Act, all own shares
held by the company and its subsidiaries are included in this amount.
The authorisation may only be used as payment in the acquisition of the
shares of Component.
The authorisation shall be in force until 30 January 2008. The prior
authorisation given by the Annual General Meeting to the Board of Directors
on 28 March 2007 shall remain in force unchanged.
The decision by the Meeting shall be supported by shareholders with at least
two-thirds of the votes cast and the shares represented at the meeting.
Shareholders representing 37 percent of the shares and votes in Affecto have
declared to support the proposal of the Board of Directors.
Appendix 2:
PROPOSAL BY THE BOARD OF DIRECTORS TO ELECT A NEW BOARD MEMBER
Pursuant to the Combination Agreement between Affecto and Component entered
into 11 June 2007, the Board of Directors proposes to the Meeting that one
new board member be elected with the effective date from the closing date.
The election is conditional upon the completion of the tender offer. The new
member is a Norwegian citizen, M.Sc.(Econ.) Mr. Haakon Skaarer (born 1952).
Mr. Skaarer is the deputy chairman of the Board of Directors of Component and
works as an investment manager for Norsk Vekst ASA. Previously Mr. Skaarer
worked in IBM's international management for 16 years. After the election Mr.
Skaarer the number of board members is seven, which is the maximum number
allowed under the Articles of Association.
Shareholders representing 37 percent of the shares and votes in Affecto have
declared to support the proposal of the committee. Mr. Skaarer has consented
to the election.
The monthly remuneration received by Mr. Skaarer is EUR 1,300, as decided by
the Annual General Meeting.
Appendix 3:
STOCK EXCHANGE RELEASE PUBLISHED BY AFFECTO PLC ON 11 JUNE 2007 REGARDING
PUBLIC TENDER OFFER FOR COMPONENT SOFTWARE GROUP ASA
AFFECTO PLC STOCK EXCHANGE RELEASE 11 JUNE 2007 at 15:15 (Finnish time)
NOT FOR DISTRIBUTION IN THE UNITED STATES
AFFECTO PLC TO COMMENCE PUBLIC TENDER OFFER FOR COMPONENT SOFTWARE GROUP ASA
Affecto Plc ("Affecto" or the "Offeror") is today announcing its intention to
acquire all issued and outstanding shares in Component Software Group ASA
("Component" or the "Company"), a listed company in Norway, through a public
tender offer (the "Tender Offer"). The consideration offered is NOK 63.68 per
share paid as a combination of cash and shares in Affecto, or cash only. Prior
to the settlement date of the Tender Offer, and subject to completion of the
Tender Offer, Component will distribute a dividend of NOK 1.82 per share,
raising total consideration to NOK 65.50 per share.
The implied market capitalization of the issued and outstanding Component
shares is EUR 46 million. The Tender Offer is structured to result in a 40
percent share consideration and a 60 percent cash consideration, implying that
approximately 4.7 million new Affecto shares will be offered. For the purposes
of the Tender Offer, the value of the Affecto share is deemed to be EUR 3.87
per share and the EUR/NOK exchange rate is 8.1195, the exchange rate published
by the European Central Bank on May 31, 2007.
Shareholders representing approximately 66 percent of the share capital of
Component have irrevocably undertaken to accept the Tender Offer. The Board of
Directors of Component has on the date hereof decided to recommend that
shareholders of Component tender their Component shares to Affecto pursuant to
the terms of the Tender Offer.
Shareholders representing approximately 37 percent of the share capital of
Affecto have irrevocably undertaken to support the Tender Offer by way of
voting in favour of the issuance of new shares and to vote in favour of
electing a new board member of Affecto nominated by Component at an
extraordinary general meeting of shareholders in Affecto to be held on July
10, 2007 or as soon as practicable thereafter.
Affecto has entered into a combination agreement with Component on the date
hereof regarding the principle terms of the Tender Offer, certain undertakings
by Component regarding the conduct of business of Component, as well as
certain other terms related to the Tender Offer (the "Combination Agreement").
The principle terms of the Combination Agreement have been described below.
Component is a leading Scandinavian player within Business Intelligence
solutions, including software and services. The business idea of Component is
to assist its customers in turning large amounts of data into valuable and
usable information and knowledge that can be used in the daily management of
the company. Component Software divides its operations into two product areas;
Business Intelligence and Document Management. The Company both delivers and
implements leading information solution software with the objective of
improving customers' competitiveness, facilitating access to business
information and reducing costs. The company is also, through its own Contempus
software portfolio, a leading European player within electronic processing of
supplier invoices and eCommerce. In 2006, the Component Group achieved a
turnover of NOK 303.8 million. Component is headquartered in Oslo, has
subsidiaries in Denmark and Sweden, and employs a staff of 210. Component is
listed at the Oslo Stock Exchange under trading symbol CSG.
Affecto believes that a combination of the businesses of Affecto and Component
would result in a strong player in the Nordic market, which would strengthen
both organisations and enhance and broaden service and product offering to
their customers.
Affecto CEO Pekka Eloholma comments the transaction: "This acquisition is a
significant and logical step toward our strategic goal to be the leading
Business Intelligence solution provider in the Nordic, Baltic and CEE regions.
By doing this, we create the clearly largest and strongest Business
Intelligence solution provider within these regions with a very strong
position in Finland, Sweden and Norway and a good position in Denmark and the
Baltic countries. The size of our company grows significantly, we target to
reach EUR 115 million net sales on a pro-forma basis in 2007 and the number of
employees will be approximately 1,000. We have known Component for years and
know it to be a well-managed company with excellent competence. As the
corporate culture is similar to us and as there is very little business
overlap, we expect the integration to go smoothly."
Component CEO Åge Lønning comments: "In this business combination we are
creating the strongest Business Intelligence competence center in the Nordic
and Baltic region. We in Component Software are looking forward to join forces
with Affecto. We are operating in an exiting and growing market. Bringing
together the competencies and experience of both companies will help us
develop better solutions and create more value for our customers."
After the acquisition has been completed, Component's CEO Åge Lønning will be
responsible for the business in Norway and Denmark, while the Swedish business
will be managed by Martin Hultqvist, Affecto's country manager in Sweden.
Affecto will announce the complete terms and conditions of the Tender Offer
and information on how the Tender Offer can be accepted by a stock exchange
release separately. The principle terms and conditions of the Tender Offer are
summarized below.
Access Partners and SEB Enskilda Corporate Finance have acted as financial
advisors and attorneys at law Dittmar & Indrenius and Bugge, Arentz-Hansen &
Rasmussen as legal advisors to Affecto.
The Tender Offer
Subject to the terms and conditions of the complete Tender Offer, Affecto
offers to acquire all issued and outstanding shares in Component (the
"Shares"), which are not owned by Affecto or a company belonging to the
Affecto group of companies.
The Offer Price
The offer price for each issued and outstanding Share validly tendered and not
properly withdrawn in accordance with the terms and condition of the Tender
Offer is NOK 63.68 (the "Offer Price"). The shareholders of Component may
choose between:
(a) a combined offer of cash and Affecto shares containing NOK 38.21 cash and
0.81 Affecto shares per each Share (where any fractional Affecto share will be
paid in cash); or
(b) a cash offer for NOK 63.68 per Share.
The Offer Price, compared to Component's historical volume weighted average
share price on the Oslo Stock Exchange for the time period since the
announcement of Component's first quarter financials on May 10, 2007
represents a premium of approximately 20 percent. Compared to the closing
share price on the Oslo Stock Exchange on June 8, 2007 of NOK 52.50 per share,
the last trading day before this announcement, the Offer Price represents a
premium of approximately 21 percent.
If the Extraordinary General Meeting of Shareholders of Component resolves on
a dividend distribution in excess of NOK 1.82 after the date hereof and the
record date established for such dividend distribution precedes the settlement
date of the Tender Offer, the Offer Price shall be reduced by the amount of
the dividend in excess of NOK 1.82 per Share in any such dividend
distribution. For the purposes of a possible adjustment, the value of the
Affecto share is deemed to be EUR 3.87 per share and the EUR/NOK exchange rate
is 8.1195.
Conditions to Completion of the Tender Offer
The obligation of Affecto to consummate the Tender Offer is conditional upon
the satisfaction or if permitted by applicable law, prior waiver by Affecto in
writing of the following conditions (the "Offer Conditions"):
(a) the Tender Offer having been accepted to such an extent that Affecto
upon completion of the purchases pursuant to the Tender Offer becomes the
owner of more than 90 percent of all shares and votes in Component;
(b) the passing at an extraordinary shareholders' meeting of Affecto of a
resolution to issue or authorize the Board of Directors to issue a
sufficient
number of Affecto Shares to complete the purchases pursuant to the Tender
Offer and to elect Haakon Skaarer as a new member of the Board of Directors
of Affecto with effective date from the Closing Date;
(c) all consents, approvals authorisations and registrations required to be
obtained from the applicable Governmental Entities to consummate the
transactions contemplated by the Combination Agreement having been obtained
on conditions which do not materially detract the value of the transaction
contemplated by the Combination Agreement; and any waiting period (and any
extension thereof) applicable to the consummation of the transactions under
any competition, merger control or similar law have expired or been
terminated;
(d) no third party having taken or proposed to take any action which would
prevent, hinder or materially delay Affecto from implementing the Tender
Offer or owning and operating the assets of the Component Group;
(e) there having been no or no third party have taken any actions which
would, relative to the situation known to Affecto at the date of the signing
of the Combination Agreement, cause any material adverse change in the
business, assets or financial position of the Component Group, taken as a
whole; or
(f) the Combination Agreement not having been terminated by either party.
Acquisition of shares from certain shareholders of Component
Affecto has obtained irrevocable undertakings (each an "Irrevocable
Undertaking") from shareholders representing, at the time of this
announcement, altogether approximately 66 percent of the shares and votes in
Component (the "Component Majority Shareholders").
Pursuant to the Irrevocable Undertakings, the Component Majority Shareholders
have agreed to sell the Component shares held by each Component Majority
Shareholder to Affecto at a price of NOK 63.68 per share payable 60 percent in
cash and 40 percent in Affecto shares by accepting the Tender Offer, provided
that:
(a) The Tender Offer has not lapsed or been declared unconditional by
Affecto by 31 October 2007 or at a later date jointly agreed upon between
Affecto and Component, and
(b) the Combination Agreement has not been terminated under a specific
termination clause; but is in force, valid and binding upon Affecto and
Component.
The Component Majority Shareholders have furthermore in the Irrevocable
Undertakings inter alia agreed not to withdraw their acceptance of the Tender
Offer, except pursuant to the Offer not to dispose of, charge, pledge or
otherwise encumber or grant any option or other right over or otherwise deal
with any of the Shares or any interest therein (whether conditionally or
unconditionally); to exercise all voting rights attaching to the Shares in
such manner as to enable the Offer to be made and become unconditional and to
oppose the taking of any action which might result in any condition of the
Offer not being satisfied; and to support payment of dividend amounting to NOK
1.82 per share, election a new board, application for de-listing of the
Company's shares at Oslo Stock Exchange, and making appropriate changes in the
Articles of Association and conversion of Component to a private limited
company, all to be voted at the next extraordinary shareholders' meeting of
Component and subject to the closing of the Tender Offer.
Following Affecto's purchase of the Shares held by the Majority Shareholders,
its holding in Component would increase to 66 percent and Affecto would be
obligated to make a mandatory tender offer for all Shares in Component in
accordance with the Norwegian Securities Trading Act or to divest the Shares
held by Component within the time prescribed by the Norwegian Securities
Trading Act. Affecto does not currently hold any shares or other securities in
Component.
Affecto has structured the Tender Offer so that the consideration for each
Component shareholder under the Tender Offer shall constitute of 60 percent
cash and 40 percent of such shares in Affecto that are issued and will be
issued in connection with the Offer ("Consideration Shares"). All other
shareholders in Component, except Component Majority Shareholders, when
accepting the Offer, have the option to accept as consideration for their
Component shares 60 percent in cash and 40 percent in Consideration Shares, or
alternatively to have their consideration paid 100 percent in cash.
Shareholders electing the 100 percent cash alternative will in effect by
accepting the Tender Offer enter into agreements to sell their Consideration
Shares at the Offer Price to a consortium of certain Component Majority
Shareholders. The consortium consists of Norsk Vekst ASA, Norsk Vekst I AS,
L.Gill Johannessen AS, Rolv L. Jonassen AS and Rolv L. Jonassen (the
"Consortium Members"), representing 31.5 percent of the Shares. The Consortium
Members have undertaken to purchase such amount of Consideration Shares from
the other shareholders, limited to the cash consideration received from
Affecto for their Shares, and accept such amounts of cash and Consideration
Shares, as specified by the Offeror, in accordance with the procedure set
forth above.
The Combination Agreement
The Combination Agreement between Affecto and Component sets forth the
principle terms under which Affecto will make the Tender Offer. The
Combination Agreement also addresses the recommendation given by the Board of
Directors of Component. The Combination Agreement also contains provisions
regarding the cooperation of the parties for the purposes of preparing
necessary filings and documents required to execute the Tender Offer and the
acquisition of Component by Affecto.
In the Combination Agreement Component and Affecto agree that, between the
date of the Combination Agreement and the closing date of the Tender Offer,
the business of the Component group and Affecto group shall be conducted only
in, and the Component Group and Affecto group shall continue to take all
appropriate actions in, and not take any action except in, the ordinary course
of business consistent with past practice.
Flagging Notice
The terms of the Tender Offer, the Irrevocable Undertaking and the Combination
Agreement are described above.
The Component Majority Shareholders have by June 11, 2007 entered into
Irrevocable Undertakings with Affecto pursuant to which they have undertaken
to accept the Tender Offer when made in respect of all the 3,814,502 shares
owned by them. These shares represent 66 percent of the share capital and
votes in Component. Affecto holds no other shares or rights to shares in
Component.
Financing of the Tender Offer
The Tender Offer will be funded partly through the issue of new shares in
Affecto and partly through already negotiated loan facilities. The loan
financing is not subject to any lender's independent conditions that would be
different from Affecto's Offer Conditions and that would affect the
consummation of the Tender Offer. Affecto's Board of Directors will convene
shortly to decide on calling an Extraordinary Shareholders Meeting in order to
ask for the Shareholders Meeting's authorization to issue the new shares to be
offered as a part of the Offer Price. Shareholders' representing 37 percent of
the shares and votes in Affecto have undertaken to vote in favour of the
resolution on the authorization of the issue of the new shares to be offered
as a part of the consideration. It is expected that the Board of Directors
will convene the Affecto Extraordinary Shareholders Meeting to be held in
Helsinki on July 10, 2007.
The Tender Offer Period
The Tender Offer is expected to be launched on July 23, 2007 or as soon as
practicable thereafter. As shares in Affecto will be offered as consideration,
a prospectus will need to be filed with appropriate financial supervision
authorities, which may affect the time when the Tender Offer can be launched.
The tender offer period is expected to initially be approximately four weeks.
The Offeror will reserve the right to extend or suspend the tender offer
period, as allowed under applicable law.
Press Conference
A briefing for analysts, investors and media will be arranged today Monday,
June 11, 2007 at 16:30 at Access Partners, Eteläesplanadi 18, Helsinki,
Finland.
Affecto Plc
Board of Directors
Further information:
Pekka Eloholma, CEO, tel. +358 205 777 737
Hannu Nyman, SVP, M&A, tel. +358 205 777 761
Affecto builds versatile IT solutions for its customers, such as business
intelligence (BI), enterprise content management (ECM) and geographic
information systems (GIS) solutions as well as other solutions that improve
efficiencies by enabling organisations to collect, organise and analyse
digital information in support of their business processes.
Affecto is headquartered in Helsinki, with other offices in Finland located in
Joensuu, Jyväskylä, Rauma, Tampere and Turku. The company has subsidiaries in
Estonia, Lithuania, Latvia and Sweden. In 2006 its turnover totalled 50.2
million euros, and in 2007 it targets reaching a turnover of 70 million euros.
Affecto employs a staff of 780. Affecto is listed at Helsinki Stock Exchange
with trading symbol AFE1V.
Disclaimer
These materials are not an offer of securities for sale in the United States.
Securities may not be offered or sold in the United States absent registration
or an exemption from registration under the U.S. Securities Act of 1933, as
amended. The issuer of the shares has not registered, and does not intend to
register, any portion of the offering in the United States and does not intend
to conduct a public offering of shares in the United States.
This document is not a prospectus and as such does not constitute an offer to
sell or the solicitation of an offer to purchase shares or rights to subscribe
for shares. Investors should not subscribe for any shares or rights referred
to in this document, or tender any shares, except on the basis of the
information contained in a prospectus or tender offer document.
This document is only being distributed to and is only directed at (i) persons
who are outside the United Kingdom or (ii) to investment professionals falling
within Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (the "Order") or (iii) high net worth entities, and
other persons to whom it may lawfully be communicated, falling within Article
49(2)(a) to (d) of the Order (all such persons together being referred to as
"relevant persons"). The shares are only available to, and any invitation,
offer or agreement to subscribe, purchase or otherwise acquire such securities
will be engaged in only with, relevant persons. Any person who is not a
relevant person should not act or rely on this document or any of its
contents.
This stock exchange release must not be released or distributed in whole or in
part in or into the United States, Canada, Japan or Australia. This stock
exchange release is neither an offer to purchase nor a solicitation for an
offer to sell shares, and the tender offer will not be made directly or
indirectly in the United States, Canada, Japan or Australia or any other
jurisdiction where such an offer would violate laws of that jurisdiction. This
stock exchange release and tender offer will not and may not be distributed,
forwarded or transmitted in any way, such as by post, fax, email or telephone,
or in any other way to or from areas where it would violate the law.
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INVITATION TO AN EXTRAORDINARY SHAREHOLDERS' MEETING OF AFFECTO PLC AND THE PROPOSALS OF THE BOARD OF DIRECTORS
| Source: Affecto Oyj
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