(I) ACQUISITION of the SALE SHARES in MEDION AG
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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. This announcement appears for information purpose only and does not constitute an offer or an invitation to induce an offer by any person to acquire, subscribe for or purchase any securities. (Stock Code: 0992) DISCLOSEABLE TRANSACTION IN RELATION TO: (i) ACQUISITION OF THE SALE SHARES IN MEDION AG (ii) AN OPTION AGREEMENT IN RELATION TO THE OPTION SHARES IN MEDION AG (iii) A SHAREHOLDERS’ AGREEMENT (iv) A GENERAL OFFER FOR THE ENTIRE ISSUED SHARES OF MEDION AG AND (v) A BUSINESS COMBINATION AGREEMENT Sole Financial Advisor The Board is pleased to announce that on 1 June 2011, the Company, the Bidco and the Seller entered into the Share Purchase Agreement, pursuant to which the Bidco agreed to conditionally acquire from the Seller the Sale Shares, which represents approximately 36.66% of the total issued shares (equivalent to approximately 39.72% excluding Treasury Shares) in Medion, a publicly traded German stock corporation listed on the Frankfurt am Main stock exchange. In addition, the Company, through the Bidco, announced its intention in Germany to make the Conditional Takeover Offer to all shareholders of Medion. Completion of the Share Purchase Agreement and the Conditional Takeover Offer is conditional upon the Bidco being able to acquire an aggregate number of shares representing at least 51.00% of the total issued shares (equivalent to approximately 55.27% excluding Treasury Shares) in Medion. The Purchase Price and the Offer Price are the same and equal to EUR 13.00 per share, representing a premium of approximately 25% over the VWAP of the shares of Medion on the Frankfurt am Main stock exchange for the three months prior to the date of this announcement. The Seller has also provided an irrevocable and unconditional undertaking to the Bidco not to accept the Conditional Takeover Offer for all of the Seller’s shares held in Medion. Further, the Company, the Bidco and the Seller have entered into a Shareholders’ Agreement to coordinate their respective exercise of voting rights in the general meeting of Medion. On the same date, the Bidco and the Company entered into the Option Agreement with the Seller pursuant to which the Seller agreed to grant to the Bidco an option right to purchase the Option Shares, and the Bidco agreed to grant to the Seller an option right to sell the Option Shares. 1 Furthermore, the Company, the Bidco and Medion have entered into a Business Combination Agreement outlining, inter alia, the support of the Transaction by the management board of Medion as well as the proceedings regarding the composition of the supervisory board of Medion post-closing of the Transaction. Barclays Capital is acting as the sole financial advisor to the Company with respect to the Transaction. Shareholders and potential investors should note that the Transaction, which is subject to a number of conditions precedent, may or may not be completed. Shareholders and potential investors are reminded to exercise caution when dealing in the securities of the Company. As certain of the percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules in respect of the Transaction exceed 5% but are less than 25%, the Transaction constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. 1. INTRODUCTION The Board is pleased to announce that on 1 June 2011, the Company, the Bidco and the Seller entered into the Share Purchase Agreement. On the same date, the Company, the Bidco and the Seller entered into the Shareholders’ Agreement and the Option Agreement. In addition, the Company announced its intention in Germany to make the Conditional Takeover Offer to all shareholders of Medion. Furthermore, the Company, the Bidco and Medion have entered into a Business Combination Agreement outlining, inter alia, the support of the Transaction by the management board of Medion as well as the proceedings regarding the composition of the supervisory board of Medion post-closing of the Transaction. 2. MATERIAL TERMS OF THE SHARE PURCHASE AGREEMENT Date 1 June 2011 Parties 1. The Company; 2. The Bidco; and 3. The Seller. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiry, the Seller and its ultimate beneficial owner are independent third parties of the Company and its connected persons. Shares Purchased, Put and Call Options The Seller holds a total of 26,622,049 shares in Medion which represents about 54.98% of the total issued shares (equivalent to approximately 59.58% excluding Treasury Shares) in Medion. 2 The Bidco has agreed conditionally to acquire the Sale Shares which represents approximately 36.66% of the total issued shares (equivalent to approximately 39.72% excluding Treasury Shares) in Medion. Following the SPA Closing, the Seller will continue to own 8,874,016 shares, representing approximately 18.33% of the total issued shares (equivalent to approximately 19.86% excluding Treasury Shares) in Medion. Subject to the terms and conditions set forth in the Option Agreement, the Seller has agreed to grant to the Bidco an option right to purchase the Option Shares, and the Bidco has agreed to grant to the Seller an option right to sell the Option Shares to the Bidco. Purchase Price and Payment In consideration for the sale by the Seller of the Sale Shares to the Bidco, the Bidco will pay to the Seller the Total Purchase Price, which amounts to approximately EUR 231 million. The Total Purchase Price, prior to any consideration adjustment, shall be settled in the following manner: • 80% of the Total Purchase Price is to be paid in cash and in Euros at the SPA Closing; • 20% of the Total Purchase Price is to be paid in shares to be issued by the Company to the Seller at the SPA Closing, 50% of which to be issued to the Seller at the SPA Closing and 50% to serve as security for any potential damages and issued to the Seller as deferred purchase price within an 18-month period after the SPA Closing. The Purchase Price was negotiated and determined on an arm’s length basis and on normal commercial terms. The Company has taken into account various factors, including Medion’s historical financial performance, its growth prospects in the future and earnings potential, as well as the key terms of other agreements relating to the Transaction. The issue price for the shares of the Company to be issued to the Seller is equal to HK$4.48, being the VWAP of the shares of the Company on the Stock Exchange for the last 5 trading days prior to the date of this announcement. The number of consideration shares to be issued to the Seller would amount to 115,120,635 shares. Accordingly, as at the date immediately prior to the date of this announcement and assuming no shares are issued by the Company other than pursuant to the Transaction, the consideration shares represent: (a) approximately 1.15% of the total issued share capital of the Company before issue of the consideration shares; and (b) approximately 1.14% of the total issued share capital of the Company after consideration shares are issued. On the SPA Closing Date, the cash portion of the Total Purchase Price will be adjusted to reflect the difference, if any, between the issue price of HK$4.48 and the closing price of the shares of the Company on the SPA Closing Date, which will be settled in cash either by the Company or by the Seller. 3 Upon the SPA Closing, the Company expects to issue such consideration shares under the then general mandate granted to the Directors at the annual general meeting of the Company immediately preceding such share issue. An application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in the consideration shares to be issued to the Seller. The consideration shares of the Company to be issued to the Seller will be subject to a maximum lock-up period of sixty months as of the SPA Closing whereby during the lock-up period, the Seller will be subject to restrictions of transfer and use (such as sell, pledge, lend or otherwise dispose of) and, subsequently after each anniversary of the SPA Closing, one-fifth of total consideration shares will be released from such lock-up restriction. Pursuant to the Share Purchase Agreement, the Company shall procure that the Bidco complies with all payment obligations under the Share Purchase Agreement. Conditions Precedent The SPA Closing is conditional upon the satisfaction of the following conditions: 1. the SPA Closing shall be permissible pursuant to European Union merger control regulations; 2. the approval of the FIRB has been obtained, without any conditions or limitations other than conditions or limitations that impose mere formalities; 3. no material adverse change in the assets, properties, financial positions, liabilities, claims, operational results, or capability to generate earnings, of any member of Medion and its subsidiaries or their respective business operations has occurred since the date of the Share Purchase Agreement; 4. the acceptance of the Conditional Takeover Offer by shareholders holding a number of shares representing, together with the Sale Shares acquired under the Share Purchase Agreement, or any shares in Medion acquired by the Bidco in any other manner, at least 51.00% of the total issued shares (equivalent to approximately 55.27% excluding Treasury Shares) in Medion, representing at least 24,693,384 shares in Medion; 5.