Sapa's Board recommends shareholders to accept Orkla's public offer
[2005-02-25 8:23]
On February 10, 2005, Orkla ASA ("Orkla") made a public offer ("the Offer") to the shareholders of Sapa AB ("Sapa") to sell their shares to Orkla. The Offer did not include the Sapa shares owned by Elkem.
With the assistance of Handelsbanken Capital Markets, Sapa´s Board has evaluated the Offer. Taking into account the conditions described below, the Board considers Orkla´s offer reasonable and consequently recommends that Sapa’s shareholders accept the Offer,
Background
According to available data, following acquisitions during January 2005, Orkla controls 50.03 per cent of the shares in Sapa´s parent company, Elkem, and has, on February 7, 2005, made a public offer to shareholders in Elkem to sell their shares to Orkla.
According to the Industry and Commerce Stock Exchange Committee´s rules on public offers for the acquisition of shares, Orkla’s control of Elkem requires it to submit a public offer to shareholders in Sapa to sell their shares to Orkla.
The Offer has been made in accordance with the regulations regarding compulsory offers in the Industry and Commerce Stock Exchange Committee´s recommendation on public offers for the acquisition of shares.
On Sapa´s Board, Elkem is represented by four directors. These directors have not participated in the Board´s consideration of the Offer and have consequently not been involved with the preparation of this recommendation.
On February 11, Elkem announced in a disclosure release that through the acquisition of additional shares its ownership in Sapa now amounts to slightly more than 81 per cent of all shares in the company, corresponding to approximately 83 per cent of all shares outstanding.
As a consequence of Elkem´s latest acquisition of shares, the Stockholm Stock Exchange has moved Sapa shares from its O-list to its observation list, since the spread of Sapa shares no longer meets the Exchange´s listing requirements.
The offer
Orkla is offering SEK 187 in cash for each share in Sapa not owned by Elkem. In the event that Orkla extends the Offer, with this extension entailing that shareholders accepting the Offer become entitled to dividends approved by the 2005 Annual General Meeting, the payment of SEK 187 per share will be reduced by the dividend paid per share.
Orkla has further informed that the volume-weighted average price paid for Sapa shares during the 20 days preceding 14 January 2005, the date on which Orkla announced its intention to submit the Offer in Norway, amounted to SEK 186.64, and that the volume-weighted average price paid during the 20 days preceding 20 January 2005, the date on which Orkla announced its intention to submit the Offer in Sweden, amounted to SEK 186.93.
Sapa´s ownership situation and trading in the Sapa share
Approximately 83 per cent of the shares outstanding in Sapa are controlled by Elkem, which is, in turn, controlled by Orkla.
As a consequence of Sapa´s ownership situation, trading in Sapa shares on the Stockholm Stock Exchange has declined sharply since 2001.
Fairness of the offer
The Board considers the reimbursement proposed in the Offer to be within the interval indicated by generally accepted valuation methods in assessing Sapa shares and their potential for development over the medium and long term and in comparison with similar listed companies and transactions. Here, the effect of Sapa´s ownership situation on the trading liquidity of Sapa shares on the Stockholm Stock Exchange has also been taken into account. Consequently, the Offer may be considered to be fair.
The Board´s view is supported by a written fairness opinion, from a financial perspective, of the reimbursement proposed, prepared by Handelsbanken Capital Markets.
Recommendation
The Board recommends that Sapa´s shareholders accept the Offer.
Stockholm, 24 February 2005
The Board of Directors in Sapa AB
For further information please contact Kåre Wetterberg, President and CEO, telephone: +46-8-459 59 11, Magnus Wittbom, Vice President Legal Affairs, telephone: +46-8-459 59 64 or Gabriella Ekelund, Communications Manager, telephone: +46-8-459 59 62.
Sapa is an international industrial group, which develops and markets value-added aluminium profiles, profile-based components and systems, and heat exchanger strip in aluminium. Sapa has a turnover of approximately 14 billion SEK, with 7,900 employees all over Europe and in USA and China. Sapa is one of Europe´s leading companies within its field and the customers are found in the transport, building, engineering and telecom industries. Sapa is listed on the O-list, Observation Section, of Stockholmsbörsen.
Further information about Sapa can be found on our web site www.sapagroup.com
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