Sydsvenska Kemi announces an offer for Perstorp and a partial offer for shares in Pergo
Not for release in or into the United States, Canada, Australia or Japan. No offer is being made hereby to persons whose participation in the offer requires that further prospectus, registration or other measures are taken in addition to those required under Swedish law.
- Forms a world-leading Nordic chemicals group
- The larger shareholders committed to the offer
- Perstorp to spin-off Pergo to its shareholders
- For each share in Perstorp a combination of cash and debentures is received
- Sydsvenska Kemi makes a partial offer to purchase up to around 14 percent of the shares in Pergo
Public offer to the shareholders in and holders of convertible debentures issued by Perstorp AB
The Board of Directors of Sydsvenska Kemi AB (“Sydsvenska Kemi”) has decided to make a public offer (“The Offer”) to the shareholders and holders of convertible debentures issued by Perstorp AB (“Perstorp”). Sydsvenska Kemi is owned by Industri Kapital´s private equity fund Industri Kapital 2000 (“Industri Kapital 2000”). Neither Sydsvenska Kemi nor Industri Kapital 2000 owns any shares in Perstorp today.
The Offer is conditional on a Perstorp annual general meeting resolution to execute a spin-off of the laminate flooring business within Pergo AB (“Pergo”) to the shareholders in Perstorp. The Board of Directors of Perstorp today proposes (see separate press release issued by Perstorp) that the annual general meeting 2001 should resolve upon the spin-off of Pergo to the shareholders in Perstorp in accordance with the so-called Lex Asea provision and that Pergo thereafter be publicly listed (see further “Stock exchange listing of Pergo” below).
The proposed structure means in short that Perstorp´s shareholders, for each share in Perstorp, receive:
*both the consideration in The Offer from Sydsvenska Kemi, consisting of
– SEK 71 per B-share and SEK 82 per A-share in cash
– and debentures issued by Sydsvenska Kemi with a nominal value of SEK 16.50
*and further, the dividend from Perstorp consisting of shares in Pergo with a pro forma equity value in the Pergo group as at December 31, 2000, of SEK 23.60 per share in Perstorp
These amounts represent a total of SEK 111.10 per B-share and SEK 122.10 per A-share in Perstorp.
AB Custos, Nordea mutual funds, SEB Fondförvaltning AB, Fourth AP-fund, SIF, Second AP-fund, First AP-fund, Third AP-fund, Sixth AP-fund, Alecta, Vera Böning through company, Bo Ursing, Wilhelm Wendt, Karl-Lennart Wendt och Carl-Henrik Wendt who hold shares together representing around 65% of the shares capital and around 75% of the voting rights in Perstorp have expressed their support and intend to accept The Offer.
Background to The Offer
The owner of Sydsvenska Kemi, Industri Kapital 2000, has through Dynea (formerly Nordkemi, comprising Neste Chemicals and Dyno Chemicals) achieved strong positions within certain segments of the European specialty chemicals industry. The turnover of Dynea amounts to around SEK 10 billion. Perstorp is one of the largest chemicals companies in the Nordic region with a strong brand and world-leading positions within several attractive segments within specialty chemicals.
The intention is that Perstorp shall develop as an independent group and that the business within Neste Oxo with a turnover of around SEK 2 billion shall be integrated with Perstorp´s specialty chemicals business. Neste Oxo has, during the last year, been separated from Dynea and is now fully owned by Industri Kapital 2000. Through an integration of Neste Oxo, the position of Perstorp´s Specialty Chemicals would be strengthened and its turnover within the field would increase by around 50 percent. Further ahead synergies can also be achieved through combinations of parts of Perstorp Chemitec and Dynea.
In the long run the intention is to bring together Perstorp/Neste Oxo and Dynea. A world-leading specialty chemicals group would then be created, with the Nordic region as a base and with globally leading positions in several market segments within formaldehyde based specialty chemicals such as wood and industrial resins as well as polyols. The combined turnover would then amount to around SEK 18 billion.
*For each share in Perstorp consideration is offered as follows:
1. Cash payment of SEK 71 for each B-share and SEK 82 for each A-share in Perstorp, with deduction for any cash dividend that Perstorp decides for the fiscal year 2000 and that is paid to others than Sydsvenska Kemi.
2. Subordinated debentures issued by Sydsvenska Kemi with a nominal value of SEK 16.50. The debentures carry an accumulated interest of 12% annually with a 10-year maturity. Interest is capitalized yearly and paid at maturity. Premature redemption will be executed if, amongst other things, Sydsvenska Kemi or Industri Kapital divests the chemicals business in Perstorp to a third party.
*Shareholders in Perstorp who, at March 21, 2001, hold 99 or less shares can receive a pure cash payment of SEK 87.50 per B-share and SEK 98.50 per A-share for all shares held, with deduction of any cash dividend that Perstorp decides on for the fiscal year 2000 and that is paid to others than Sydsvenska Kemi.
*For each convertible debenture with a nominal amount of SEK 88.90 under Perstorp´s 1996/2001 convertible debenture loan, SEK 23.10 in cash is offered by Sydsvenska Kemi, in exchange for a waiver of conversion rights. The holders of convertible debentures waiving their conversion rights will, regardless if they accept The Offer or not, receive a face value of SEK 88.90 (including accrued interest) from Perstorp on May 15, 2001. The consideration from Sydsvenska Kemi together with the face value thereby amounts to SEK 112.00 in cash. Holders of convertible debentures should note that the last day for conversion is April 30, 2001 and that the loan is due for payment on May 15, 2001.
All shareholders in Perstorp are, regardless if they accept The Offer or not, entitled to receive a possible dividend in kind in the form of shares in Pergo as well as any cash dividend that is decided upon at the annual general meeting in Perstorp.
Perstorp’s press release shows that the pro forma equity value in the Pergo group is at December 31, 2000, SEK 1,689 million. The proposition is further that for every four shares in Perstorp, one share in Pergo is received (1-to-4), and accordingly it follows that group equity value in Pergo amounts to SEK 94.40 per share in Pergo, corresponding to SEK 23.60 per share in Perstorp.
Conditions of The Offer
The Offer is subject to the following conditions:
*That The Offer is accepted to such a degree that Sydsvenska Kemi becomes owner of more than 90 percent of the total number of shares and more than 90 percent of the voting rights of all shares in Perstorp, calculated after full conversion of all outstanding convertible debentures. However, Sydsvenska Kemi reserves the right to complete The Offer at a lower level of acceptance.
*That Perstorp´s annual general meeting 2001 resolves in accordance with the Board of Directors’ proposal that to Perstorp´s shareholders spin-off Pergo with an equity value in the group of SEK 1,689 million , and that it thereafter is confirmed that the shares in Pergo are released from Perstorp AB´s VPC account, at latest June 18, 2001 or at a later date agreed by Sydsvenska Kemi.
*That Sydsvenska Kemi receives required regulatory approval for the completion of The Offer on terms acceptable to Sydsvenska Kemi, on June 25, 2001 at the latest. However, Sydsvenska Kemi reserves the right to waive this condition in whole or in part.
The Offer regarding all shares and convertible debentures issued by Perstorp will be financed by equity of SEK 2.9 billion in Sydsvenska Kemi, the debentures issued by Sydsvenska Kemi which form part of The Offer and by bank financing. Sydsvenska Kemi has received binding credit commitments from Svenska Handelsbanken to be able to pursue The Offer, subject to the completion of The Offer at the latest by June 27, 2001.
Value of The Offer
The total consideration in The Offer, based on the nominal value of the debenture loan, amounts to SEK 87.50 per B-share and SEK 98.50 per A-share in Perstorp, which corresponds to around SEK 6,417 million (including the consideration for convertible debentures but exclusive of the face value).
The total calculated consideration in The Offer together with the group equity value in Pergo amounts to SEK 111.10 per B-share and SEK 122.10 per A-share in Perstorp.
On March 5, 2001, Perstorp shares were suspended from trading in connection with the public announcement by Industri Kapital that negotiations were being held with larger shareholders in Perstorp. These negotiations led up to this Offer. Together the above calculated figures of SEK 111.10 per B-share and SEK 122.10 per A-share represent, compared to the price paid before the suspension of trading on March 5, 2001 of SEK 78.50 for B-shares and SEK 72.00 for A-shares, a premium of 41.5% for the B-shares and 69.6% for the A-shares. Compared to the average share price paid during the last 30 days of trading before the suspension of trading at SEK 71.57 for B-shares and SEK 72.39 for A-shares the premium amounts to 55.2% for the B-shares and 68.7% for the A-shares.
However, it should be noted that the price of the debenture as well as the price of the Pergo share will be set by the market. The price could therefore be above or below that of the debenture’s nominal value in Pergo, as well as the pro forma equity value per share in the Pergo group at December 31, 2000.
Both the A-shares and the B-shares in Perstorp are listed on the Stockholm stock exchange A-list. The B-shares in Perstorp are also listed on SEAQ International in London. The convertible debenture loans are neither listed nor subject to trading on an exchange or a marketplace.
AB Custos, Nordea mutual funds, SEB Fondförvaltning AB, Fourth AP-fund, SIF, Second AP-fund, First AP-fund, Third AP-fund, Sixth AP-fund, Alecta, Vera Böning through company, Bo Ursing, Wilhelm Wendt, Karl-Lennart Wendt och Carl-Henrik Wendt who hold shares together representing around 65% of the share capital and around 75% of the voting rights in Perstorp have expressed their support and intend to accept The Offer.
A prospectus regarding The Offer is expected to be distributed to the shareholders and holders of convertible debenture in Perstorp around April 5, 2001. The acceptance period of The Offer is expected to extend from April 6, 2001 until June 6, 2001. The acceptance period of The Offer concerning convertible debentures is expected to extend from April 6, 2001 until April 27, 2001. Subject to the completion of The Offer by Sydsvenska Kemi, on or before June 18, 2001, settlement is expected to be initiated on June 25, 2001 for those shareholders and convertible debenture holders who have accepted The Offer. Sydsvenska Kemi reserves the right to extend the acceptance period as well as postpone the date for settlement.
Listing and trading in debentures
With the purpose of creating a market for the debentures that constitute consideration of the acquisition of Perstorp, Sydsvenska Kemi will promote the listing and trading of the debentures on the Stockholm Exchange as soon as possible after the completion of The Offer. Sydsvenska Kemi has engaged Öhman Fondkommission as arranger of debenture loans and will together with the Stockholm Exchange prepare a listing of the above-mentioned debenture loans.
Partial public offer from Sydsvenska Kemi to acquire shares in Pergo
The Board of Directors in Sydsvenska Kemi has in conjunction with the offer above decided, subject to the completion of The Offer above, to make a partial public offer to acquire shares in Pergo up to an aggregated cash consideration of SEK 250 million (“Partial offer”). For each share in Pergo SEK 98 is offered. The Partial offer hence concerns 2,551,020 shares in Pergo, which correspond to around 14% of the total number of shares in Pergo. Industri Kapital 2000 has decided to guarantee Sydsvenska Kemi´s financing of the Partial offer.
If shareholders tender shares in Pergo under the Partial offer to an extent that the total amount exceeds SEK 250 million, Sydsvenska Kemi will perform a proportional reduction of the shares thus tendered. The acceptance period of the Partial offer is expected to extend from June 26, 2001 to July 17, 2001. A prospectus with complete conditions regarding the Partial offer is estimated to be sent to shareholders in Perstorp around June 22, 2001.
Stock exchange listing of Pergo
The Board of Directors in Perstorp has announced that, in connection with the annual general meeting, a description of Pergo to Perstorp´s shareholders will be provided, as a basis for the decision to spin-off Pergo to Perstorp shareholders. Prior to the Stock Exchange listing of Pergo the Board of Directors of Pergo will provide a prospectus for Stock Exchange listing that will in detail describe Pergo and its business.
Sydsvenska Kemi has appointed Carnegie and Enskilda Securities as financial advisors for the completion of The Offer. Furthermore, Öhman Fondkommission has been engaged as arranger of the debenture loan. In addition Erneholm & Haskel has been appointed as special advisors.
Stockholm March 22, 2001
Sydsvenska Kemi AB
The Board of Directors
Harald Mix, CEO Sydsvenska Kemi AB, +46-8-678 9500
Comments to The Offer
– We maintain our position that the chemical business of Perstorp together with the businesses within Neste Oxo and further ahead Dynea will become a strong global player in the chemicals sector, says Björn Savén, CEO of Industri Kapital
– The companies complement each other both in terms of geography as well as products, says Harald Mix, CEO of Sydsvenska Kemi. The transaction will in our view ensure development for both Perstorp and its employees.
– The transaction is positive for Perstorp and will provide good conditions for the future, is beneficial for the employees, and is beneficial for the shareholders, says Johan Englund, one of the Wendt family’s spokespersons in the informal committee of nomination in Perstorp.
– I agree with the spokesperson of the Wendt family and also think the institutional owners’ strong support for the transaction has been positive, says Christer Gardell, CEO of Custos, who together with the Wendt family is the largest shareholder of Perstorp. The transaction further means that the shareholders will assist in the creation of a large leading Nordic chemicals group.
– It is further beneficial that The Offer for Perstorp is complemented with a partial offer for Pergo. It increases the individual freedom of choice for the shareholders in Perstorp as well as strengthening the ownership structure, Christer Gardell continues, new Chairman of the board of Pergo. Equipped with its strong balance sheet and with its new management and Board of Directors, Pergo can expand in both Europe and the US. Custos, which will not sell any shares in the Partial offer, has long term intentions with regard to its ownership and believes that Pergo will become an exciting share on the Stock exchange.