At a meeting on 22 August this year the Board of Directors of Pan Fish ASA (Pan Fish or the Company) decided to invite the Company's shareholders to sell back to the Company, in return for settlement in cash, a total of up to 7,850,000 shares in Pan Fish, corresponding to 6 per cent of all outstanding shares.
At 23 August Pan Fish owns 3,237,244 own shares. Pursuant to a resolution passed by the general meeting, the Board of Directors of Pan Fish is authorised to purchase up to 10 per cent of the Company's outstanding own shares. Pan Fish's strategy has long been to buy back its own shares in the market for subsequent use as a means of settlement in connection with the acquisition of assets and business.
Since the Company is to implement a further substantial planned acquisition programme, it needs to acquire more of its own shares.
In view of this, the Board of Directors of Pan Fish decided on 22 August this year to invite the Company's shareholders to sell a total of up to 7,850,000 shares in Pan Fish back to the Company in return for settlement in cash.
The offer price per share will be the volume weighted average price of the Pan Fish shares traded on the Oslo Stock Exchange between Thursday 23 August and Tuesday 28 August 2001 inclusive. The offer with acceptance form showing the calculated offer price will be dispatched on Wednesday 29 August. The acceptance period will be from Thursday 30 August to Monday 3 September inclusive.
Purchase of shares in Pan Pelagic
This year, Pan Fish has carried out a transaction whereby a majority holding in the previously wholly owned subsidiary Pan Pelagic ASA (Pan Pelagic) was transferred to the Company's shareholders through a dividend payment. In addition, a share capital increase was implemented in Pan Pelagic and that company's shares have been listed on the Oslo Stock Exchange.
At 22 August Pan Fish owns 35,848,487 shares in Pan Pelagic, corresponding to a holding of 48.2 per cent.
The reason for acquiring more shares in Pan Pelagic is that a development foreseen by the management of Pan Fish in 2000, on which the original investments in the pelagic sector were based - i.e. an expected scarcity of marine raw material and an associated rise in the price of fishmeal, fish oil and fish feed - has materialised to an even greater degree than anticipated by the Company. All else being equal, this will mean high feed and production costs in Pan Fish's salmon production. Among other things, this means that the Board of Directors now deems the hedge provided by the present holding in Pan Pelagic to be inadequate.
Moreover, it is much more important today for Pan Fish to secure greater control "upstream" in the value chain of the pelagic sector/ aquaculture industry, thereby optimising access to marine raw material of the required quality for the Pan group's now considerably more extensive plans to invest in own production of fish feed.
With this in view, the Board of Directors of Pan Fish decided on 22 August this year to make an offer to the shareholders in Pan Pelagic to buy up to 17 percent of the shares in Pan Pelagic. This corresponds to approximately 12.82 million shares, or a third of all outstanding shares in Pan Pelagic not already owned by Pan Fish. If Pan Fish obtains acceptances corresponding to this number of shares, the Company's holding in Pan Pelagic will amount to approximately 65.5 per cent. Pan Fish wants to uphold the listing of the Pan Pelagic share.
The offer price per Pan Pelagic share will be fixed using a conversion rate corresponding to a value of NOK 23. This represents a premium of approximately 22 per cent in relation to the volume weighted average price of the Pan Pelagic share yesterday, Wednesday 22 August, and a premium of approximately 33 per cent in relation to the volume weighted average price for the last 30 trading days.
The shareholders in Pan Pelagic will be offered shares in Pan Fish as settlement - mainly from Pan Fish's existing holding of own shares, but where necessary also using newly acquired own shares or cash. In more precise terms, the offered conversion rate (number of Pan Fish shares received as settlement per Pan Pelagic share) will be arrived at via a calculation whereby the offer price of NOK 23 per Pan Pelagic share is divided by the volume weighted average price of the Pan Fish share traded on the Oslo Stock Exchange in the acceptance period for the offer. For example, if the volume weighted average price of the Pan Fish share is NOK 46 in the acceptance period, the seller will receive 0.5 settlement shares in Pan Fish per share in Pan Pelagic.
The offer is scheduled for distribution on Monday 3 September this year. The acceptance period will be Tuesday 4 September to Monday 10 September inclusive.
As Pan Fish owned more than 40 per cent of Pan Pelagic at the time of its stock exchange listing and has retained a holding of over 40 per cent since that time, any further acquisition of shares in Pan Pelagic will not require a mandatory offer to be made to the other shareholders, cf. Securities Trading Act s. 4-6, second paragraph.
Pan Fish own-account trading
In the period from and including 23 August until the expiry of the acceptance period for the offer to buy shares in Pan Pelagic, Pan Fish will not trade on its own account in the Company's shares.
Ålesund, 23 August 2001