Novator Finland Oy has on 21 November 2007 demanded pursuant to the Finnish companies act (chapter 5, section 4), that Elisa ("Elisa" or the "Company") call an extraordinary shareholders' meeting to decide upon proposals made by Novator Finland Oy. Upon this request, the Board has resolved to convene an extraordinary meeting of shareholders on 21 January 2008. Novator has through a press release on 22 November 2007 outlined the reasons for its proposals to amend Elisa's corporate structure and strategy. Novator's proposals to the extraordinary meeting of shareholders include (i) releasing the current members of the Board of Directors from their office, (ii) election of a new Board of Directors and (iii) amendment of the Articles of Association including the structure and strategy of the group (the complete proposal is enclosed). The Board of Elisa (the "Board") considers it to be its duty to provide the rationale of its views regarding Novator's proposals in order to ensure that all of Elisa's shareholders have sufficient information to make an informed decision at the extraordinary shareholders' meeting. The Board is concerned about the implications for shareholders of the proposed amendment of the corporate structure and articles of association of Elisa. Such proposed amendment would shift significant decision making power away from Elisa's shareholders to the Board. As Elisa principally operates in one field of business, the Board believes that fundamental changes to Elisa's businesses and operations should in accordance with good corporate governance be a matter to be decided by the Company's shareholders. This measure of control is in the interest of all shareholders who seek exposure to Elisa based on its current business and prospects, and not a substantially different business composition. In addition, Elisa has a broadly distributed shareholder base, which makes it possible to control the election of the Board of Directors at a general meeting of shareholders even with a relatively limited holding. Given that Novator has proposed that the structure and operations of the Company are renewed, the Board wants to summarise the strategy of the Company. During the past four years, Elisa has executed the two first steps of its Group strategy, the first step being the integration of One Elisa, the second step being strengthening of its market position. The successful execution of the current strategy has resulted in total shareholder returns that have substantially exceeded that of European telecommunications indices. In the past four years, during the execution of the current strategy, Elisa's total shareholder returns (share price appreciation plus dividends) have been 149% as compared to the total return of the MSCI Europe Telecommunications Services Index of 74%. The third phase of Elisa's strategy is to grow in new services and new markets. Elisa believes that the growth opportunities in new services are substantial and give Elisa an opportunity to grow outside its traditional telecommunications services businesses. The Board believes that Elisa's customer base of advanced Internet and 3G users provides an excellent population of sophisticated users in which to test and develop new services. An example of such new services is the Wippies-service (www.wippies.com). Other new services will be launched in the near future. The Board is also active in seeking new acquisition opportunities in this area to further utilise Elisa's skills and strengths. During the past four years, Elisa has actively consolidated the Finnish telecommunications market and acquired new service businesses. Elisa has in the past two years also evaluated a number of international and new services acquisition opportunities, but has decided not to pursue these opportunities as prices have been perceived to be too high. The Board believes that even in hindsight this has been the right choice. Elisa has recently strengthened its new business development and acquisition capabilities. Elisa will continue to actively evaluate acquisition opportunities to support its strategy. In addition, while seeking profitable growth opportunities, Elisa plans to continue its pro-active capital structure and distribution policy. The Board believes that Elisa's current corporate structure and Articles of Association fully support the execution of its strategy. Given the reasons stated above, the Board does not believe that shareholders' best interests are served by the proposal of Novator. The Board will continue to proactively review the strategy and structure of Elisa in order to continue its aim to grow shareholder value for Elisa's shareholders. ELISA CORPORATION Board of Directors Pekka Ketonen, Chairman of the Board will provide further information. To schedule discussions, please contact Vesa Sahivirta, Director IR and Financial Communication (+358 50 520 5555) Juha Kervinen, Group Treasurer (+358 50 555 3625) Additional materials can be found on www.elisa.com/investors Distribution: Helsinki Stock Exchange Principal Media ENCLOSURE Novator Finland Oy's proposals to the General Meeting: 1. Release of the current members of the Board of Directors from their office. Novator Finland Oy proposes that all of the current members of the Board of Directors of the Company be released with immediate effect from their office by a resolution of the Extraordinary General Meeting. 2. Election of a new Board of Directors. Novator Finland Oy proposes to elect a new Board of Directors of the Company at the Extraordinary General Meeting. The new Board of Directors may include current members of the Board of Directors of the Company. 3. Amend the Articles of Association. Novator Finland Oy proposes that the Extraordinary General Meeting resolves to amend Paragraph 2 (Field of Activity) of the Articles of Association of the Company to read as follows:"The Company may. directly by itself and/or through its subsidiaries and/or associated companies, (i) carry on general telecommunications business in Finland and abroad, provide telecommunications services and related equipment as well as carry on consultation, research and inspection activities in respect of telecommunications, and/or (ii) own real property and securities as well as trade in securities and carry on investments and financing activities. The Company shall in its operations pay attention to the requirements of bilingualism." The proposed amendment would allow the newly elected Board of Directors to initiate the necessary actions for the restructuring of the Company and its operations, which could include the establishment of a subsidiary into which all of the operative business of the Company would be transferred. Novator Finland Oy believes that such structure would increase the flexibility of the Company's management and operations, financial structure, risk profile and future direction and would therefore be beneficial for the Company and all of its shareholders.
ELISA'S BOARD ANNOUNCES THE RATIONALE OF ITS VIEWS REGARDING NOVATOR FINLAND OY'S PROPOSAL TO THE EGM ON 21 JANUARY 2008
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