TAMFELT CORP. STOCK EXCHANGE RELEASE November 2009, 2009 at 9.15 a.m.
TAMFELT AND METSO ENTER INTO A COMBINATION AGREEMENT; SHARE EXCHANGE OFFER FOR
ALL OF TAMFELT'S SHARES
Tamfelt Corp. (“Tamfelt”) and Metso Corporation (“Metso”) have on November 5,
2009 agreed to combine their operations under the combination agreement entered
into (the “Combination Agreement”). As a result, Metso will make a public
tender offer to purchase all of the issued and outstanding shares in Tamfelt.
The combination will strengthen Metso's services business especially in the
pulp and paper industry. For Tamfelt, the combination creates new growth
opportunities especially outside Europe, where Metso has an extensive installed
base and wide sales and services network.
The public tender offer will be carried out in the form of a share exchange (the
“Share Exchange Offer”). Metso offers Tamfelt's shareholders 3 new shares issued
by Metso for each 10 Tamfelt's shares (“Shares”). Metso offers EUR 0.35 for each
stock option issued by Tamfelt (“Stock Options”).
The Board of Directors of Tamfelt unanimously recommends that Tamfelt's
shareholders and holders of Stock Options accept Metso's offer. Major
shareholders, Ilmarinen Mutual Pension Insurance Company, Varma Mutual Pension
Insurance Company, Tapiola Mutual Pension Insurance Company, Mandatum Life
Insurance Company Limited, Kaleva Mutual Insurance Company as well as certain
foundations and private shareholders, whose aggregated ownership in Tamfelt is
35.58 per cent of Shares including 2.82 per cent ownership of Tamfelt held by
Metso, have irrevocably and unconditionally undertaken to accept the Share
Exchange Offer.
The offer period under the Share Exchange Offer is expected to commence on or
about November 23, 2009 and to expire on or about December 18, 2009.
Metso estimates that the combination will be closed in the first quarter of 2010
at the latest. The combination is subject to competition authority approvals in
Finland and some other countries.
”The focus of the markets is shifting increasingly outside Europe. We believe
that Metso's global network and strong position also in the emerging markets
will further strengthen Tamfelt's competitiveness also in these areas. The
combination is a continuation to our long-term and successful co-operation. As
both companies are technology leaders in their respective areas, we believe it
will accelerate technological development in the future”, states Tamfelt's
Chairman of the Board Mikael von Frenckell.
“We highly value the competencies and long history of Tamfelt and welcome
Tamfelt shareholders to continue the tradition as Metso shareholders”, states
Jorma Eloranta, President and CEO of Metso.
Benefits of the combination
- Metso's extensive installed base and global sales and services network
provide Tamfelt's products and services new growth potential especially outside
Europe.
- Tamfelt's PMC products (Paper machine clothing), i.e., forming fabrics, felts
and belts complement Metso's product and services offering, thus enabling the
offering of more competitive and comprehensive solutions for the companies'
shared customer base. Metso does not currently have paper and board machine
clothing products in its own product offering.
- Tamfelt's filter fabrics complement Metso's wear product offering not only in
the pulp and paper industry but also, for example, in the mining and energy
industries.
- After the combination, development of technical textiles can be integrated
into Metso's fiber and paper technology research and development. Tighter
co-operation is expected to, for example, speed up new paper and board machine
start-ups, thus supporting also Metso's new project sales.
- The combination is estimated to increase Metso's services business by
approximately EUR 140 million annually. At the same time, the services share of
Metso's Paper and Fiber Technology segment increases from 41 per cent to
approximately 50 per cent of net sales.
Reima Kerttula, President of Tamfelt believes that the combination will improve
the competitiveness of both companies: ”Together we will have a stronger global
service network and more comprehensive product offering. In addition, the
combination yields opportunities to more efficient product development. I
believe that after the combination, Tamfelt will be even more competitive.”
According to Bertel Langenskiöld, President of Metso's Paper and Fiber
Technology segment, ”Tamfelt is a profitable company with long heritage, top of
the line product portfolio and production facilities. We have had close,
long-term cooperation with Tamfelt especially in product development, and we
know each other very well. We expect that through the global combination of
Metso's and Tamfelt's operations and knowledge, the growth of our services
business will exceed the average paper machine market growth rate. In recent
years, the change in the pulp and paper industry especially in Europe and North
America has directed our customers' demand towards service, maintenance and
optimization of their production processes. In emerging markets, such as China
and South America, our installed base has rapidly increased, which provides
exciting opportunities for our services and optimization business.”
After the combination, Tamfelt will continue its operations as a business line
in Metso's Paper and Fiber Technology segment. Apart from some administrative
operations, the combination is not expected to have any immediate effect on the
position of Tamfelt's management or employees. Tamfelt will realize the already
agreed and undergoing cost reduction measures and strategic rearrangements.
Share Exchange Offer and Offer for Stock Options
The offer period under the Share Exchange Offer is expected to commence on or
about November 23, 2009 and to expire on or about December 18, 2009. Metso
reserves the right to extend the offer period in accordance with the terms and
conditions of the Share Exchange Offer. The share exchange offer document will
be available on or about November 19, 2009.
In the Share Exchange Offer, shareholders in Tamfelt are offered 3 new shares in
Metso in exchange for every 10 Tamfelt Shares held by such shareholder,
representing a premium of 20.3 percent compared to the closing price of Tamfelt
Shares on the Helsinki Stock Exchange on November 4, 2009, the last trading day
preceding this announcement, and a premium of 19.5 percent compared to the
volume-weighted average price of Tamfelt Shares on the Helsinki Stock Exchange
during the last 3 months. Premiums have been calculated based on the closing
price, EUR 19.65, of Metso shares in Helsinki Stock Exchange on November 4,
2009, the last trading day proceedings this announcement.
Metso also offers to acquire all of the Stock Options issued by Tamfelt for EUR
0.35 in cash. Currently, each Stock Option entitles its holder to subscribe for
one Share in Tamfelt. The current share subscription price under the Stock
Options is EUR 7.46. The Stock Options are not subject to public trading.
The Board of Directors of Metso has been authorized by the Annual General
Meeting held on March 31, 2009 to decide on a share issue of a maximum of
15,000,000 new Metso shares and a maximum of 10,000,000 treasury shares of
Metso, in deviation of Metso's shareholders' pre-emptive right to subscribe for
shares. On November 5, 2009, the Board of Directors of Metso decided on a share
issue directed at Tamfelt's shareholders, as required for implementing the Share
Exchange Offer. The directed share issue is conditional upon Metso deciding to
complete the Share Exchange Offer.
Major shareholders of Tamfelt, including Metso, whose aggregated ownership in
Tamfelt is 35.58 per cent of Shares, have irrevocably and unconditionally
undertaken to accept the Share Exchange Offer.
The Board of Directors of Tamfelt unanimously recommends that the shareholders
of Tamfelt accept the Share Exchange Offer and that the holders of Stock
Options accept the cash offer. The Board of Directors of Tamfelt has received a
fairness opinion from Access Partners Oy, according to which the consideration
offered in the Share Exchange Offer is fair, from a financial point of view, to
the shareholders and holders of Stock Options in Tamfelt. The Board of Directors
of Tamfelt will issue its complete statement on the Share Exchange Offer on or
about November 9, 2009.
On the date of the announcement of the Share Exchange Offer, Tamfelt's share
capital amounts to EUR 27,563,964 and the number of Shares issued to 30,093,763.
Metso holds 847,350 Tamfelt Shares, representing 2.82 percent of all the issued
and outstanding Shares.
Conditions to Complete the Share Exchange Offer and the Offer for Option Rights
The completion of the Share Exchange Offer and offer for the Stock Options will
be subject to the following conditions (or waiver by Metso):
i)The Share Exchange Offer has been bindingly accepted with respect to shares
representing at least 67 percent of all shares and voting rights in Tamfelt on a
fully diluted basis (including Shares already owned by Metso or its affiliates)
and that the acceptances have not been withdrawn.
ii)The receipt of all necessary approvals from the relevant competition
authorities
and possible conditions set forth in such approvals can be accepted by Metso.
iii)No such fact or circumstance has arisen of which Metso did not have
knowledge at the time of the announcement of the Share Exchange Offer, that
either has or is reasonably likely to have a material adverse effect on the
business, assets,
financial condition, results of operations or future prospects of Tamfelt and
its subsidiaries.
iv)The Combination Agreement between Metso and Tamfelt has not been terminated
in accordance with its terms and it continues to be in full force.
v)A general meeting of shareholders of Tamfelt has resolved to (i) remove
Article 12 of Tamfelt's Articles of Association (Obligation to Redeem Shares)
and (ii) to elect Jorma Eloranta, Mikael von Frenckell, Pasi Laine, Bertel
Langenskiöld and Jouko Oksanen as members of the Board of Directors of Tamfelt,
with the effectiveness of such resolutions being subject only to the public
announcement
of Metso promptly after the last date of the offer period (including any
extended or discontinued extended offer period) to the effect that the offer
conditions of the Share Exchange Offer have been satisfied (or waived) by Metso.
Summary of the Combination Agreement
This summary is not an exhaustive presentation of all the terms and conditions
of the Combination Agreement. The summary aims at describing the terms and
conditions of the Combination Agreement to the extent that such terms and
conditions may materially affect the assessment of a shareholder or Stock Option
holder of Tamfelt of the terms and conditions of the Share Exchange Offer or the
offer for Stock Options. Nothing in the Combination Agreement (or this summary
thereof) confers any rights or obligations on any person other than Metso or
Tamfelt.
Objectives of the Combination Agreement
Metso and Tamfelt (both separately, a “Party” and together, the “Parties”)
executed the Combination Agreement on November 5, 2009. Pursuant to the
Combination Agreement, Metso will acquire, through the Share Exchange Offer and
through a cash offer for the Stock Options, and, if necessary, through
subsequent compulsory redemption proceedings in accordance with the Finnish
Companies Act, all Shares and Stock Options in Tamfelt. The intention of Metso
is to cause the Shares to be delisted from the Helsinki Stock Exchange.
Share Exchange
Under the Combination Agreement, the Offer Period for the Share Exchange Offer
shall initially extend until four weeks after the date on which it commences and
it may be extended by Metso from time to time in accordance with the terms and
conditions of the Share Exchange Offer.
Pursuant to the Combination Agreement, Metso offers to acquire all of Tamfelt's
issued and outstanding Shares and Stock Options and to pay the purchase price
for the Shares in Metso's new shares by issuing 3 new Metso shares for each 10
Shares of Tamfelt, and for the Stock Options EUR 0.35 in cash.
Under the Combination Agreement, the completion of the Share Exchange is subject
to the fulfillment (or waiver by Metso) of certain conditions. These conditions
are set forth in section “Conditions to complete the Share Exchange Offer and
offer for the Stock Options” above.
If, as a result of the completion of the Share Exchange, Metso's ownership
exceeds 90 percent of all shares and voting rights in Tamfelt, Metso shall
commence at the earliest practical time the compulsory redemption proceedings in
accordance with the Finnish Companies Act.
Upon the redemption of the remainder of the Shares not tendered in the Share
Exchange Offer, Metso intends to apply for the delisting of Tamfelt's Shares on
the Helsinki Stock Exchange.
Extraordinary General Meeting of Shareholders of Tamfelt
Under the Combination Agreement, the Board of Directors of Tamfelt has
undertaken to convene an Extraordinary General Meeting of shareholders of
Tamfelt be held on no later than one week prior to the expiry of the offer
period and to propose to such meeting to resolve on the removal of Article 12
from Tamfelt's Articles of Association and to elect a new Board of Directors for
Tamfelt, as described in “—Certain Consequences of the Share
Exchange—Extraordinary General Meeting of Shareholders of Tamfelt” below.
Recommendation of the Board of Directors of Tamfelt
Under the Combination Agreement, the Board of Directors of Tamfelt has
undertaken to unanimously and unconditionally recommend to the shareholders and
Stock Option holders in Tamfelt to accept the Share Exchange Offer and to vote
in favor of the removal of Article 12 of Tamfelt's Articles of Association, and
the election of a new Board of Directors for Tamfelt as described in “—Certain
Consequences of the Share Exchange—Extraordinary General Meeting of Shareholders
of Tamfelt” below.
The Board of Directors of Tamfelt may, at any time prior to the completion of
the Share Exchange Offer, withdraw, modify or amend its recommendation or take
actions contradictory to its earlier recommendation, if (a) the Board of
Directors of Tamfelt considers that, due to materially changed circumstances,
the acceptance of the Share Exchange Offer would no longer be in the best
interest of Tamfelt and/or the shareholders and Stock Option holders in Tamfelt;
and (b) the Board of Directors of Tamfelt has received an opinion from an
independent reputable advisor, according to which such withdrawal, modification
or amendment of the recommendation, or acting contradictory to the
recommendation, is in the best interest of Tamfelt and/or the shareholders and
Stock Option holders in Tamfelt; and (c) the Board of Directors of Tamfelt has
provided Metso with a reasonable opportunity to negotiate with the Board of
Directors of Tamfelt on such actions; and (d) if an action allowed is connected
to a Superior Offer (as defined below), the Board of Directors of Tamfelt has
given Metso a reasonable opportunity during not less than five (5) days to agree
with the Board of Directors of Tamfelt on improving the terms and conditions of
the Share Exchange Offer.
Tamfelt shall not, directly or indirectly, solicit any inquiries or facilitate
or solicit any proposal or offer (including, without limitation, any proposal or
offer to shareholders and Stock Option holders in Tamfelt) that constitutes, or
may reasonably be expected to lead to, any competing transaction or that could
otherwise harm or hinder the completion of the combination or have any
discussions or negotiations with anyone in furtherance of any such actions.
If Tamfelt receives from any person an unsolicited bona fide written offer for a
competing transaction (a “Competing Offer”) that the Board of Directors of
Tamfelt determines in good faith to constitute a Superior Offer (as defined
below), Tamfelt may take any action(s) reasonably required in respect of such
Competing Offer, if: (a) the Board of Directors of Tamfelt determines in good
faith that it is obligated to take such action(s) in order to comply with its
fiduciary duties; and (b) Tamfelt has complied with the terms of the Combination
Agreement.
A “Superior Offer” shall mean a bona fide binding written offer not solicited by
or on behalf of Tamfelt made by a third party to acquire all of the Shares and
Stock Options in Tamfelt pursuant to a tender offer or a merger, or to acquire
all the operations of Tamfelt pursuant to a sale of all or substantially all of
the assets of Tamfelt, on terms which the Board of Directors of Tamfelt
reasonably determines in good faith to be substantially more beneficial for the
shareholders and Stock Option holders in Tamfelt than the Share Exchange Offer,
as the same may be modified by Metso. In determining whether an offer is
substantially more beneficial for the shareholders and Stock Option holders in
Tamfelt, the Board of Directors of Tamfelt must also take into account whether
the potential Superior Offer is reasonably capable of being consummated (taking
into account, among other things, all legal, financial, regulatory and other
aspects of such proposal and the identity of the person making such proposal)
and the availability of financing.
Representations and Warranties
In the Combination Agreement, the Parties give each other certain
representations and warranties customary in transactions of a similar nature
relating to, among other things:
- certain corporate matters including the organization, qualification to do
business and authority to execute the Combination Agreement and perform the
obligations thereunder; and
- the information disclosed by the respective party, including the financial
statements, interim reports and public announcements.
The warranties shall automatically terminate on the completion date for the
Share Exchange Offer thereby having no further effect after such date.
Undertakings
Under the Combination Agreement, the Parties have given certain undertakings to
each other with respect to the procedures to be followed in connection with the
Share Exchange Offer, including, among other things, the following:
- each Party has undertaken to use its best efforts to do, or cause to be done,
and to assist and cooperate with the other Party in doing, all things necessary
or advisable to consummate in the most expeditious manner practicable, the Share
Exchange Offer and the combination;
- Metso has agreed to make all submissions, notifications and filings it deems
necessary to obtain all consents, approvals or actions by any competition
authorities under any applicable competition laws in any jurisdiction;
- Tamfelt has agreed to provide to Metso and its advisors access upon prior
notice
and at reasonable times to such information concerning the business, properties,
contracts, assets, liabilities, personnel and other aspects of Tamfelt and its
subsidiaries as Metso may reasonably request;
- Tamfelt has undertaken to continue its business operations in the ordinary
course of business and consistent with past practice, and to refrain from making
or carrying out any material changes;
- each Party has undertaken not to take any actions to distribute or declare
dividends prior to the closing date; and
- each Party has undertaken to notify the other Party of certain events and to
consult with each other before issuing any public announcements.
Termination
In accordance with the terms and conditions, the Combination Agreement can be
terminated as follows:
a) by a mutual written agreement of the Parties;
b) by either Party, if the closing date shall not have occurred on or before
March 31,2010; provided, however, that this right to terminate shall not be
available to the Party whose failure to fulfill any obligation under the
Combination
Agreement shall have resulted in the failure of the Closing Date to occur on or
before such date;
c)by either Party, if any order preventing the consummation of the completion
or a material part of it shall have been issued by any court or other authority
of competent jurisdiction and shall have become final and non-appealable;
d) by Tamfelt, if the Board of Directors of Tamfelt has, in accordance with the
terms of the Combination Agreement, withdrawn, modified or amended its
recommendation;
e)by Metso, if the Board of Directors of Tamfelt has (i) withdrawn, modified or
amended, or proposed to withdraw, modify or amend its recommendation, (ii)
approved or recommended, or proposed to approve or recommend, any Competing
Offer, (iii) announced a neutral position with respect to any Competing Offer,
and failed to reject or recommend such Competing Offer within three (3) days of
the announcement of such neutral position, or (iv) taken any other action
contradictory to its earlier recommendation and has not rectified such
contradictory action within three (3) days from Metso's written notice thereof;
f)by Metso, upon (i) an occurrence of an event that has resulted in or
constituted, or would reasonably be expected to result in, or constitute, a
material adverse effect on the business, assets, financial condition, results of
operations or future prospects of Tamfelt and its subsidiaries; or (ii) Metso,
after the execution of the Combination Agreement receiving new information
undisclosed to it prior to the execution of the Combination Agreement which has
a material adverse effects on the business, assets, financial condition, results
of operations or future prospects of Tamfelt and its subsidiaries; and
g) by Tamfelt, upon a material breach of any warranty given by Metso in the
Combination Agreement; or by Metso, upon a material breach of any warranty given
by Tamfelt in the Combination Agreement; or by either Tamfelt or Metso, upon a
material breach of certain covenants included in the Combination Agreement, by
the other Party.
If the Combination Agreement is terminated by either Party in accordance with
(d) or (e) above, Tamfelt shall reimburse Metso for all of its out-of-pocket
expenses in connection with the transactions contemplated by the Combination
Agreement.
Governing Law
The Combination Agreement is governed by Finnish law.
Certain Consequences of the Share Exchange
Extraordinary General Meeting of Shareholders of Tamfelt
Pursuant to the terms under the Combination Agreement and of the Share Exchange
Offer, a general meeting of shareholders of Tamfelt shall be convened resolve to
(i) remove Article 12 of Tamfelt's Articles of Association (Obligation to
Redeem Shares) and (ii) elect Jorma Eloranta, Mikael von Frenckell, Pasi Laine,
Bertel Langenskiöld and Jouko Oksanen as members of the Board of Directors of
Tamfelt, with the effectiveness of such resolutions being subject only to the
public announcement of Metso promptly after the last date of the offer period
(including any extended or discontinued extended offer period) to the effect
that the offer conditions of the Share Exchange Offer have been satisfied (or
waived) by Metso.
Meeting of the Board of Directors of Metso
The Board of Directors of Metso has been authorized by the General Meeting of
shareholders held on March 31, 2009 to decide on a share issue of a maximum of
15,000,000 new Metso shares and a maximum of 10,000,000 treasury shares of
Metso, in deviation of Metso's shareholders' pre-emptive right to subscribe for
shares. On November 5, 2009, the Board of Directors of Metso decided on a share
issue directed at Tamfelt's shareholders, as required for implementing the Share
Exchange Offer. The directed share issue is conditional upon Metso deciding to
complete the Share Exchange Offer.
The New Metso Shares to be Issued
The subscription for the new Metso shares to be issued will take place as a
payment-in-kind so that each 10 Tamfelt Shares will entitle its holder to
subscribe 3 new Metso shares. If the Share Exchange is accepted in full, the new
Metso shares will represent approximately 6 percent of Metso's share capital and
voting rights after the share issue. The Share Exchange will be carried out on
the terms and conditions presented in the Share Exchange Offer Document.
An application will be made to the Helsinki Stock Exchange to list the new
shares issued in order to carry out the Share Exchange in the same class as
Metso's existing shares. The issuance of Metso's new shares will be carried out
in connection with the admission of the shares to public trading.
The new Metso shares to be issued as in the Share Exchange Offer will confer the
right to a dividend and other shareholder rights when Metso's new shares have
been entered in the Finnish Trade Register.
Shareholding of Metso's and Tamfelt's Shareholders in the Combined Company
If the Share Exchange Offer is accepted in full, Metso's current shareholders
will own a total of approximately 94 percent and former Tamfelt's shareholders a
total of approximately 6 percent of Metso's shares.
Certain risk factors related to the Combination
Tamfelt shareholders should familiarize themselves carefully with the matters
presented in section “Risk Factors Related to the Share Exchange Offer and
Metso” of the share exchange offer document as well as with the other
information given in the share exchange offer document.
ADVISORS
SEB Enskilda acts as the financial advisor and White & Case LLP as the legal
advisor of Metso in connection with the Share Exchange Offer. Access Partners
acts as the financial advisor and Merilampi Attorneys Ltd as the legal advisor
of Tamfelt in connection with the Share Exchange Offer.
Tamfelt Corp.
Board of Directors
For further information:
Reima Kerttula, President and CEO, Tamfelt Corp., tel.
+358 10 404 9200
Bertel Langenskiöld, President, Paper and Fiber Technology, Metso, tel. +358 20
484 3200
Press conference (in Finnish) on November 5, 2009 at 1:00 p.m. at Metso's
Corporate Office, Fabianinkatu 9 A, Helsinki.
The press conference will be attended by Metso's President and CEO Jorma
Eloranta, Bertel Langenskiöld, President, Paper and Fiber Technology segment,
and Tamfelt Corp.'s Chairman of the Board, Mikael von Frenckell and President
and CEO Reima Kerttula.
This release may not be released or otherwise distributed, in whole or in part,
in or into Australia, Canada, Japan, New Zealand, South Africa or the United
States. This release is not a tender offer document and as such does not
constitute an offer or invitation to make a sales offer. Investors shall accept
the Share Exchange Offer for the shares and the offer for the Stock Options only
on the basis of the information provided in a share exchange offer document.
Offers will not be made directly or indirectly in any jurisdiction where either
an offer or participation therein is prohibited by applicable law or where any
share exchange offer document or registration or other requirements would apply
in addition to those undertaken in Finland.
The share exchange offer document and related acceptance forms will not and may
not be distributed, forwarded or transmitted into or from any jurisdiction where
prohibited by applicable law. In particular, the Share Exchange Offer or the
offer for the Stock Options is not being made, directly or indirectly, in or
into, or by use of the postal service of, or by any means or instrumentality
(including, without limitation, facsimile transmission, telex, telephone or the
Internet) of interstate or foreign commerce of, or any facilities of a national
securities exchange of, Australia, Canada, Japan, New Zealand, South Africa or
the United States. The Share Exchange Offer or offer for the Stock Options
cannot be accepted by any such use, means or instrumentality or from within
Australia, Canada, Japan, New Zealand, South Africa or the United States.
Distribution
NASDAQ OMX Helsinki Ltd
Main media
www.tamfelt.com
Tamfelt is a world-leading supplier of technical textiles. The company's main
products are clothing products for the paper and pulp as well as mining and
chemical industries. The Group employs about 1,350 people and its net sales in
2008 were 165 million euro. Founded in 1797, the company is one of the pioneers
of Finnish industry.
Tamfelt and Metso enter into a Combination Agreement; Share Exchange Offer for all of Tamfelt's shares
| Quelle: Tamfelt Oyj Abp