Heijmans will not issue an offer for HBG

Heijmans announced in June 2001 that is was considering issuing an offer for all the outstanding shares of HBG. After previously giving serious consideration to a partnership with HBG on a number of occasions, developments relating to HBG led Heijmans to arrange a meeting with HBG's management. From this meeting Heijmans drew the conclusion that HBG maintains its intention to enter into a joint venture with Ballast Nedam. However, the basic premise of Heijmans is to bring about a large construction company with international spread without dredging activities, and in doing so take a major step towards achieving the objective of becoming a leading Europe construction company with a strong position in the home markets. In addition to the geographical spread, HBG's position in large-scale utility projects and its technical expertise and experience would fit in very well with Heijmans' activities in construction and infrastructure in particular and its profit-orientated and risk-controlling attitude. This would create one of the top-5 European companies with turnover of more than EUR 7 billion and nearly 30,000 employees.

 

The first condition Heijmans placed on a possible offer was fulfilled on 31 August 2001: an agreement was reached with Boskalis regarding the acquisition of the HBG dredging activities. In this case Heijmans would transfer the proceeds of the sale of these dredging activities in cash to the selling shareholders of HBG. This equals an amount of EUR 12 per share in HBG. In addition, Heijmans would pay HBG shareholders one share in Heijmans in exchange for three shares in HBG. Added together this would produce a price per HBG share of approximately EUR 19, i.e. a premium of more than 40% (compared to the rates at the end of last week).

 

Another condition placed on making a possible offer was that HBG would cancel the announced joint venture with Ballast Nedam and that the agreement it apparently signed with Ballast Nedam (including the announced put option of Ballast Nedam) would be terminated without this having major disadvantageous effects for HBG. After studying the findings issued on Friday 26 October by the investigation commission appointed by the Enterprise Chamber of the Amsterdam Court of Appeal and in light of the developments in recent months, Heijmans decided this morning not to issue an offer for the outstanding shares in HBG. Heijmans regrets this, as the perspectives for a combined, construction-focussed company are excellent for everyone involved with the company: for customers (all-round construction company with a low cost price), for employees (opportunities for promotion within a successful international company) and for all the shareholders (good profitability prospects with a liquid share).

 

Heijmans wishes to thank everyone who played a constructive role in this process: shareholders (of HBG and Heijmans), employees and consultants. Heijmans would like in particular to thank the trade organizations of both Heijmans and HBG that participated in the discussions and the Central Works Council of Heijmans that issued a positive recommendation last week regarding the partnership with HBG. Heijmans is not losing sight of its objectives and foresees sufficient opportunities for their realization and for developing into a leading European player.

 

Heijmans confirms its previously announced expectations for 2001, i.e. turnover of EUR 2.25 billion with a net profit of at least EUR 68 million and earnings per share of EUR 3.20. Based on the current orderbook and the backlog, the prospects for 2002 and 2003 remain good and are expected to produce an EBIT margin (earnings before interest and taxes) of 6% in 2003.