TENDER OFFER
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO
On
On
To increase deal certainty and ensure completion of the Tender Offer, PPG has changed the condition for completion of the Tender Offer concerning the minimum acceptance level by lowering the relevant threshold from more than 90 per cent to more than 66.7 per cent, and has provided additional undertakings for the obtaining of the regulatory approvals.
The Board of Directors of the Company (the "Board of Directors"), pursuant to what is provided herein, unanimously recommends that the shareholders of the Company accept the Tender Offer, and has decided to issue the statement below regarding the Tender Offer as required by Chapter 11, Section 13 of the Finnish Securities Markets Act (756/2012, as amended). In its assessment and recommendation the Board of Directors has also taken into consideration the proposals for competing offers, including the value indicated by such proposals, received by the Company prior to the increase in the Offer Price, as announced on
Tender Offer in brief
PPG is a public company incorporated under the laws of
The Tender Offer is made in accordance with the terms and conditions of the tender offer document approved by the
The Offer Price is
- approximately 126.1 per cent compared to the closing price of the Shares on
Nasdaq Helsinki Ltd ("Nasdaq Helsinki") onDecember 17, 2020 , the last trading day prior to the announcement of the Initial Tender Offer; - approximately 131.7 per cent compared to the volume-weighted average trading price of the Shares on Nasdaq Helsinki during the three-month period prior to and up to the date of the announcement of the Initial Tender Offer; and
- approximately 141.7 per cent compared to the volume-weighted average trading price of the Shares on Nasdaq Helsinki during the 12-month period prior to and up to the date of the announcement of the Initial Tender Offer.
The Company has been informed that, in connection with the significantly increased
The completion of the Tender Offer is subject to the satisfaction or waiver by the Offeror of certain conditions on or prior to the Offeror's announcement of the final results of the Tender Offer including, among others, that approvals by the relevant regulatory authorities (including competition authorities) have been received and the Offeror having gained control of more than 66.7 per cent of the Shares and voting rights in the Company.
If the Offeror is able to obtain more than 66.7 per cent but less than 90 per cent of the Shares and votes in the Company, the Offeror will complete the Tender Offer in accordance with its terms and conditions. In order to provide the remaining shareholders of
If the Offeror is able to obtain more than 90 per cent of the Shares and votes in the Company, the Offeror intends to initiate compulsory redemption proceedings in accordance with the Finnish Companies Act (624/2006, as amended) to acquire the remaining Shares in the Company, and thereafter cause the Company's Shares to be delisted from Nasdaq Helsinki as soon as permitted and practicable under applicable laws and regulations.
The detailed terms and conditions of the Tender Offer as well as further information on the Tender Offer is included in the Tender Offer Document.
The Offeror has obtained commitments for debt financing, which together with other sources of immediately available funds are sufficient for the completion of the Tender Offer and subsequent compulsory redemption proceedings, if any, in accordance with the Finnish Companies Act.
The offer period under the Tender Offer commenced on
Background for the statement
Pursuant to the Finnish Securities Markets Act, the Board of Directors must prepare a public statement regarding the Tender Offer and prepare any updates thereto pursuant to a competing offer. The statement must include a well-founded assessment of the Tender Offer from the perspective of the Company and its shareholders as well as of the strategic plans presented by the Offeror in the Tender Offer Document and their likely effects on the operations of, and employment at, the Company.
In preparing its statement, the Board of Directors has relied on information provided in the Tender Offer Document by the Offeror and certain other information provided by the Offeror and has not independently verified this information. Accordingly, the Board of Directors' assessments of the consequences of the Tender Offer on the Company's business and employees should be treated with caution.
Assessment regarding strategic plans presented by the Offeror in the Tender Offer Document and their likely effects on the operations of, and employment at the Company
Information given by the Offeror
The Board of Directors has assessed the Offeror's strategic plans based on the statements made in the Offeror's announcements regarding the Tender Offer published on
According to the information provided in the Tender Offer Document and the Offeror's announcement on the Tender Offer, the Offeror sees significant value and potential in the Company and accordingly expects to make substantial investments in the Company's infrastructure and people, as well as to provide the Company with access to the Offeror's global diversified paints, coatings and speciality coatings offering on which the Company will be able to build and further deepen its customer relationships, develop lateral products and access additional markets. Upon the completion of the Tender Offer, the Offeror expects to position the Company and its various brands as the Offeror's platform to the Nordic and
The Offeror intends to maintain the Company's identity, culture and Finnish values, including its commitment to creating sustainable value for all stakeholders and its various investments in local communities and people. The Offeror expects to maintain the Company's corporate offices in
The Offeror sees the Company's strong distribution capability as a platform to significantly grow many of the Offeror's legacy products in its Protective and Marine, Refinish, and Light Industrial Coatings businesses and expand the Company's and the Offeror's combined presence in the countries where the Company is active.
Board assessment
The Board of Directors considers that the information on the strategic plans of the Offeror concerning the Company is given on a general level. Based on the Offeror's statements, the Board of Directors believes that the strategic plans of the Offeror pursuant to the Tender Offer would not have any immediate material effects on the Company's operations, assets, the position of the Company's employees or its business locations.
The Board of Directors views that the Company can benefit from the Offeror's complementary products, capabilities, technologies and expertise to deliver enhanced value to customers.
The Board of Directors believes that the Offeror's potential to contribute further capital and resources to the business of the Company will benefit the activities of the Company in the future. The Board of Directors shares the Offeror's view that the combined company would have the capabilities to deliver a more extensive offering to its clients, offer new possibilities for its employees and provide a platform for future growth through additional geographical reach and market position.
The Board of Directors believes that the combined group could offer new possibilities for the Company's employees, given the Offeror's intentions to grow the business and invest in the Company's people. The Board of Directors also believes that the combined entity could be better positioned to attract new employees.
The Board of Directors considers that, in addition to the Offer Price, the credibility of the Offeror as an owner, together with its track record of making acquisitions, as well as the already completed sales of Shares representing 9.32 per cent of the Shares in the Company by certain major shareholders and the unconditional irrevocable undertaking by
The Board of Directors notes, however, that the Tender Offer may have an effect on employment in the Company particularly with regard to overlapping functions. The Board of Directors believes that the final and long-term impact of the integration can be assessed only after the completion of the Tender Offer.
On the date of this statement, the Board of Directors has not received formal statements from the Company's employees as to the effects of the Tender Offer on the employment at the Company.
Assessment of the Tender Offer from the perspective of the Company and its shareholders
When evaluating the Tender Offer, analysing alternative opportunities available to the Company and concluding on its statement, the Company has considered several factors, including, but not limited to, the Company's recent financial performance, current position and future prospects, the historical performance of the trading price of the Company's share and the conditions for the Company and the Offeror to complete the Tender Offer.
Following receipt of
The Board of Directors has also considered the need for stable operating conditions for the Company's business and personnel ahead of the important sales season in order to minimize any adverse impacts associated with a lengthy transaction process. PPG's assurances to keep the Company's business intact also provide more security to the Company's operations. In addition, the lower condition for acceptance threshold of 66.7 per cent also provides more deal certainty in comparison to
In order to support its assessment of the Tender Offer, the Board of Directors has received a fairness opinion, dated
The Board of Directors believes that the consideration offered by the Offeror to the shareholders is fair to the shareholders based on its assessment of the matters and factors, which the Board of Directors has concluded to be material in evaluating the Tender Offer. These matters and factors include, but are not limited to:
- the
Offer Price and the premium offered for the Shares; - the information and assumptions on the business operations and financial condition of the Company as at the date of this statement and their expected future development;
- the historical trading price of the Shares;
- the cash consideration of the Tender Offer, which provides the shareholders with immediate liquidity;
- valuation multiples of the Shares compared to the industry multiples before the announcement of the Initial Tender Offer;
- valuations and analysis made and commissioned by the Board of Directors as well as discussions with external financial advisors;
- investigations and evaluations conducted by the Company after having received other indications of interest;
-
any alternative proposals and opportunities, including proposals regarding potential competing offers received by the Company. These include a proposal by Hempel received prior to the first increase in the Offer Price, announced on
January 5, 2021 , and the Potential Competing Offer fromAkzoNobel , announced onJanuary 28, 2021 , before whichAkzoNobel was provided with the opportunity to conduct due diligence on the Company; - the ability to respond to possible third-party proposals if necessary to comply with the Board of Directors' fiduciary duties;
- other terms of the Tender Offer;
- the undertakings by certain shareholders of the Company to accept the Tender Offer as referred to above; and
- the Fairness Opinion issued by SEB concerning the fairness of the Offer Price, from the financial point of view, to the Company's shareholders.
The Board of Directors has noted that the relevant business prospects of the Company would also provide opportunities for the Company to develop its business as an independent company for the benefit of the Company and its shareholders.
The Board of Directors' assessment of continuing the business operations of the Company as an independent company has been based on reasonable future-oriented estimates, which include various uncertainties, whereas the Offer Price and the premium included therein is not subject to any uncertainty other than the fulfilment of the conditions to completion of the Tender Offer.
Based on overall assessment and taking into account the factors described above, the Board of Directors has concluded that the Tender Offer is a favourable alternative for the shareholders.
Recommendation of the Board of Directors
The Board of Directors has carefully assessed the Tender Offer and its terms and conditions based on the Tender Offer Document, the Fairness Opinion, and other available information. In line with the Helsinki Takeover Code, the Board of Directors has sought the best possible outcome for the Company's shareholders by undertaking the measures needed to achieve as good a bid as possible by also evaluating other alternatives as part of the assessment of the Tender Offer and the Offer Price and also considering deal certainty aspects, including in relation to the expected timing in obtaining necessary approvals from the regulatory authorities.
Based on the evaluations and facts given above, the Board of Directors considers that the Tender Offer and the amount of the Offer Price are, under the prevailing circumstances, fair from the perspective of the Company's shareholders.
Based on the foregoing, the Board of Directors unanimously recommends that the shareholders of the Company accept the Tender Offer.
Six out of seven members of the Board of Directors have participated in the decision-making concerning this statement. The Chairman of the Board
Certain other matters
The Board of Directors notes that the combination of the Company and the Offeror may, as is common in similar arrangements, involve unforeseeable risks.
The Board of Directors notes that the shareholders of the Company should also take into account the lowered acceptance condition of 66.7 per cent as well as potential risks related to non-acceptance of the Tender Offer. Should the final result of the acceptance level of the Tender Offer be lower than 90 per cent or if the acceptance condition of more than 66.7 per cent of the Shares and votes is waived, there would be no redemption of the minority shareholders' Shares in the Company and that the Company would likely remain listed on Nasdaq Helsinki, but the completion of the Tender Offer would reduce the number of the Company's shareholders and the number of Shares, which would otherwise be traded on Nasdaq Helsinki. Depending on the number of Shares validly tendered in the Tender Offer, this could have an adverse effect on the liquidity and value of the Shares in the Company and make it more difficult to dispose of Shares in a timely manner or at a favorable price after the completion of the Tender Offer. The Offeror has not communicated any changes to its previously communicated plans with respect to the Company for the event the Tender Offer is completed with the acceptance level being above 66.7 per cent but lower than 90 per cent.
If the Tender Offer is completed in accordance with its terms, without waiving the minimum acceptance condition of more than 66.7 per cent of the Shares and votes, the Offeror will hold two-thirds or more of the Shares and exercise two-thirds or more of the voting rights represented in General Meetings and thereby become a controlling shareholder that is able to significantly influence the Company's course of business, including, but not limited to, strategy, business plan and future M&A opportunities. As a result, the Company's abilities to operate as a fully independent listed company will be limited. The Offeror would pursuant to the Finnish Companies Act be able to make major decisions concerning
It should also be noted that should the Offeror, within nine months from the end of the offer period of the Tender Offer, acquire Shares on terms that are more favorable than the Tender Offer, the Offeror would pursuant to the Finnish Securities Markets Act be obliged to compensate the difference to those
Pursuant to Chapter 18 of the Finnish Companies Act, a shareholder that holds more than 90 per cent of all shares and votes in a company shall have the right to acquire and, subject to a demand by other shareholders, also be obligated to redeem the shares owned by the other shareholders. In such case, the Shares held by the Company's shareholders, who have not accepted the Tender Offer, may be redeemed through redemption proceedings under the Finnish Companies Act in accordance with the conditions set out therein.
The Company has undertaken to comply with the Helsinki Takeover Code referred to in Chapter 11, Section 28 of the Finnish Securities Markets Act. This statement of the Company does not constitute investment or tax advice, and the Company does not specifically evaluate herein the general price development or the risks relating to the Shares in general. Shareholders must independently decide whether to accept the Tender Offer, and they should take into account all the relevant information available to them, including information presented in the Tender Offer Document and this statement as well as any other factors affecting the value of the Shares.
The Company has appointed SEB as financial adviser and
The Board of Directors of
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IMPORTANT INFORMATION
THIS RELEASE MAY NOT BE RELEASED OR OTHERWISE DISTRIBUTED, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO,
THIS RELEASE IS NOT A TENDER OFFER DOCUMENT AND AS SUCH DOES NOT CONSTITUTE AN OFFER OR INVITATION TO MAKE A SALES OFFER. IN PARTICULAR, THIS RELEASE IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES DESCRIBED HEREIN, AND IS NOT AN EXTENSION OF THE TENDER OFFER, IN,
THE TENDER OFFER IS NOT BEING MADE DIRECTLY OR INDIRECTLY IN ANY JURISDICTION WHERE PROHIBITED BY APPLICABLE LAW AND THE TENDER OFFER DOCUMENT AND SUPPLEMENT DOCUMENT AND RELATED ACCEPTANCE FORMS WILL NOT AND MAY NOT BE DISTRIBUTED, FORWARDED OR TRANSMITTED INTO OR FROM ANY JURISDICTION WHERE PROHIBITED BY APPLICABLE LAWS OR REGULATIONS. IN PARTICULAR, THE TENDER OFFER IS NOT BEING MADE, DIRECTLY OR INDIRECTLY, IN OR INTO, BY USE OF THE POSTAL SERVICE OF, OR BY ANY MEANS OR INSTRUMENTALITY (INCLUDING, WITHOUT LIMITATION, E-MAIL, FACSIMILE TRANSMISSION, TELEX, TELEPHONE OR ELECTRONIC TRANSMISSION BY WAY OF THE INTERNET OR OTHERWISE) OF INTERSTATE OR FOREIGN COMMERCE OF, OR THROUGH ANY FACILITIES OF A NATIONAL SECURITIES EXCHANGE OF,
THIS RELEASE HAS BEEN PREPARED IN COMPLIANCE WITH FINNISH LAW, THE RULES OF NASDAQ HELSINKI AND THE
Information for shareholders of
Shareholders of
The Tender Offer is being made for the issued and outstanding shares of
To the extent permissible under applicable law or regulations, the Offeror and its affiliates or its brokers and its brokers' affiliates (acting as agents for the Offeror or its affiliates, as applicable) may from time to time after the date of the stock exchange release regarding the Tender Offer on
Neither the
The receipt of cash pursuant to the Tender Offer by a
It may be difficult for the Company's shareholders to enforce their rights and any claims they may have arising under the
Forward-looking statements
This release contains statements that, to the extent they are not historical facts, constitute "forward-looking statements". Forward-looking statements include statements concerning plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, competitive strengths and weaknesses, plans or goals relating to financial position, future operations and development, business strategy and the trends in the industries and the political and legal environment and other information that is not historical information. In some instances, they can be identified by the use of forward-looking terminology, including the terms believes", "intends", "may", "will" or "should" or, in each case, their negative or variations on comparable terminology. By their very nature, forward-looking statements involve inherent risks, uncertainties and assumptions, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved. Given these risks, uncertainties and assumptions, investors are cautioned not to place undue reliance on such forward-looking statements. Any forward-looking statements contained herein speak only as at the date of this release.
Disclaimers
The Offeror has retained
The Information Agent will receive reasonable and customary compensation for their respective services in connection with the Tender Offer, will be reimbursed for reasonable out-of-pocket expenses and will be indemnified against certain liabilities and expenses in connection therewith, including certain liabilities under local securities laws.
The Offeror will not pay any fees or commissions to any broker or dealer or to any other person (other than to the depositary and the Information Agent) in connection with the solicitation of tenders of Shares pursuant to the Tender Offer. In those jurisdictions where applicable laws require the Tender Offer to be made by a licensed broker or dealer, the Tender Offer shall be deemed to be made on behalf of the Offeror by one or more registered brokers or dealers licensed under the laws of such jurisdiction.
Appendix 1: Fairness Opinion
Sustainable Nordicness
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