Enedo Oyj's Board of Directors' Statement on Inission AB's
Mandatory Public Tender Offer for Enedo Oyj's Shares
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Enedo Oyj's Board of
Directors' Statement on Inission
AB's Mandatory Public Tender Offer for Enedo
Oyj's Shares
Inission AB ("Inission" or the "Offeror") and Enedo Oyj ("Enedo"
or the "Company") have announced in stock exchange releases dated
on August 1, 2022 that Inission will make a mandatory purchase
offer for all of Enedo's issued and outstanding shares ("Tender
Offer").
The board of directors of Enedo has on
September 5,
2022 decided to issue the following statement on
the Tender Offer as required by the Securities Market Act
(746/2012, as amended).
PURCHASE OFFER IN BRIEF
Inission AB ("Inission"), a North European contract manufacturer
listed on Nasdaq First North Growth Market Stockholm, has on 1
July 2022 disclosed its duty to make a mandatory public tender
offer in accordance with Chapter 11, Section 19 of the Finnish
Securities Market Act (“Offer”) for all the shares and securities
entitling to the shares in Enedo Plc ("Enedo" or the
"Company"), an international designer and producer of high quality
electronic power supplies and systems listed on Nasdaq Helsinki, as
a result of an acquisition of 21,113,257 shares
in Enedo from Joensuun Kauppa ja Kone
Oy, Rausanne Oy, Soinitilat Oy and 10 other major
shareholders (“Selling Shareholders”) of the Company for a purchase
price of EUR 0.26 per share on 1 July 2022. Inission
owns currently altogether 55,113,257 Enedo shares
corresponding approximately to 80.43 per cent of all the shares and
related voting rights in the Company.
The cash consideration to be offered in the mandatory public
tender offer for each Enedo share validly tendered in
accordance with the terms and conditions of the Offer will
be EUR 0.26 (“Offer Price”). Alternatively, Inission will
also offer a share consideration whereby 0.086 new Inission Class B
shares listed on Nasdaq First North Growth Market Stockholm are
offered for each Enedo share validly tendered in
accordance with the terms and conditions of the Offer.
The Offer Price corresponds to the price agreed with
the Selling Shareholders when Inission acquired approximately 31
per cent of all the shares in Enedo from the Selling
Shareholders on 1 July 2022 in exchange for new Inission
Class B shares. The Offer Price is also the highest price paid by
Inission for any Enedo share during the six-month period
preceding the date when Inission became obligated to make the
Offer. The closing price of Enedo on Nasdaq Helsinki
was EUR 0.27 on 30 June 2022, i.e. on the last
trading day preceding the date when Inission became obligated to
make the Offer.
The share exchange ratio to be used in the share consideration
alternative of the Offer is the same share exchange ratio used with
the Selling Shareholders when Inission acquired
their Enedo shares on 1 July 2022 in exchange
for new Inission Class B shares.
The closing price of Inission on Nasdaq First North Growth
Market Stockholm was SEK 32.50 (EUR 3.03) on 30 June
2022, i.e. on the last trading day preceding the date when Inission
became obligated to make the Offer.
Enedo has no other securities entitling to the shares
in Enedo which should be subject to the mandatory public
tender offer.
If Inission obtains more than 90 per cent of all the shares and
related voting rights in Enedo as a result of the Offer,
Inission will initiate mandatory redemption proceedings for the
remaining shares in accordance with the Finnish Companies Act and,
thereafter, Enedo will apply for delisting of its shares
from Nasdaq Helsinki.
Inission estimates there to be significant untapped revenue,
cost and financial synergies, which could be materialized in the
future, if it manages to take full ownership of Enedo as
a result of the Offer. The effect of the Offer on Inission’s profit
and financial position is limited by the fact
that Enedo already is Inission’s approximately 80.43 per
cent owned subsidiary and also depends on the rate of acceptance of
the Offer by Enedo shareholders and their preference for
cash or share consideration. If all
remaining Enedo shareholders accept the cash
consideration in the Offer, the payment of the aggregate cash
purchase price amounts to approximately EUR 3.5
million (SEK 36.0 million) and has a corresponding effect on
Inission’s net debt position. The above amount corresponds to
approximately EUR 0.17 (SEK 1.81) per each current
Inission share. If all remaining Enedo shareholders
accept the share consideration in the Offer, the respective new
Class B shares in Inission represent approximately 5.45 per cent of
all the shares and approximately 2.69 per cent of all the voting
rights in Inission.
Inission does not expect the execution of the Offer to have any
significant imminent effect on the business or assets or the
position of the management or other employees of Inission
or Enedo.
Pursuant to the Finnish Securities Markets Act Section 22 of
Chapter 11, the offer period in the mandatory tender offer shall
begin within a month from the publishing of the tender offer.
However, the Finnish Financial Supervisory Authority has
granted Inission an exemption to start the offer period by 15
September 2022. The offer period is expected to commence on or
about 8 September 2022 at 9:30 am (Finnish
time) and expire on or about 29 September
2022 at 4:00 pm (Finnish time) unless the offer
period is extended in accordance with the terms and conditions of
the Offer. The tender offer document is expected to be published on
or about 8 September 2022 including detailed instructions
and terms and conditions of the Offer.
Based on Inission’s understanding, the completion of the Offer
does not require approval from the competition authorities.
Inission has sufficient financial arrangements in place to carry
out the Offer as far as the offer consideration is paid in cash and
the Board of Directors of Inission has been authorised by the
Annual General Meeting of Inission to issue a sufficient number of
new Class B shares in Inission to enable Inission to carry out the
Offer also as far as the offer consideration is paid in new Class B
shares in Inission.
Inission reserves the right to acquire shares in the Company
before the commencement of the offer period, during the offer
period and/or after the offer period of the Offer through public
trading on Nasdaq Helsinki or otherwise.
In the Offer Inission will comply with the recommendation in
accordance with Chapter 11, Section 28 of the Finnish Securities
Market Act on the procedures to be complied with in public tender
offers (Helsinki Takeover Code).
STATEMENT OF THE BOARD OF DIRECTORS
1. Background of the statement
In accordance with the Securities Market Act, Enedo's board of
directors must publish a statement on the Tender Offer.
The statement must present a reasoned assessment of the Tender
Offer from the point of view of Enedo and its shareholders, as well
as the strategic plans presented by Inission in the Tender Offer
and their likely effects on Enedo's operations and employment at
Enedo.
For the purpose of issuing this statement, Inission has
submitted the draft of the Tender Offer to board of directors of
Enedo on 2 September 2022
While preparing the statement, Enedo's board of directors has
used information that Inission has presented in the announcement
regarding the Tender Offer published on August 1, 2022 and in the
draft of the Tender Offer. Enedo's board of directors has not
independently evaluated the information on the Tender Offer. For
this reason, Enedo's board of directors' assessment of the effect
of the Tender Offer on Enedo's business operations or personnel
must be considered carefully.
2. The board's assessment from the perspective of Enedo
and its shareholders
Introduction
When evaluating the Tender Offer, analyzing Enedo's potential
alternative opportunities and deciding on its opinion, the board
has taken several factors into consideration, such as Enedo's
current financial situation, current position and future prospects,
as well as the historical trading prices of Enedo's shares.
To support its evaluation of the Tender Offer, Enedo's Board of
Directors has received an expert opinion on the fairness of the
Tender Offer ("Fairness Opinion") from Aktia Alexander Corporate
Finance Oy. In the Fairness Opinion dated September 2, 2022, in
accordance with the assumptions and conditions presented therein,
it is stated that the cash consideration offered for the shares is
fair in the financial sense at the time of issuing the Fairness
Opinion. The Fairness Opinion statement is attached to this
statement in Appendix 1.
Board's assessment
Enedo's board of directors assesses, based on the elements
considered essential for the evaluation of the Tender Offer, that
the consideration offered by the Inission to Enedo's shareholders
is fair. The assessment is based among other things on the
following:
• Enedo's
current critical financial situation and liquidity and the fact
that there is currently no full certainty of the adequacy of
long-term, short-term or working capital financing;
- Under certain circumstances, certain
loans of Enedo might become convertible into shares at an agreed
conversion price. Should this happen, it would have a significant
dilutive effect
• Offered -3.7
percent premium to Enedo's closing share price on Nasdaq Helsinki
on June 30, 2022;
• Illiquidity of the Enedo share and
the concentration of the share ownership
• The price of the purchase offer is the same
at which Enedo's previous significant shareholders exchanged their
shares for shares of Inission AB;
• Aktia Alexander Corporate Finance
Oy's Fairness Opinion statement.
The Board of Directors has determined that the Tender Offer is a
positive option for the shareholders taking into account the risks
and uncertainties and the terms of the draft of the Tender
Offer.
3. Assessment of the strategic plans presented by
the Offeror and their likely
effects on Enedo's operations and
employment at Enedo
Information provided by the
Offeror in the Offer
Document
Enedo's board of directors has evaluated the Offeror's strategic
plans based on the information presented in the announcement
regarding the Offeror's Tender Offer published on August 1, 2022,
and in the draft of the Tender Offer document.
Based on the information provided by the Offeror, the Offeror's
goal is to restore the Company's sustainable profitability and
further develop its business worldwide. The Offeror focuses on
securing long-term financial profitability and is committed to
taking the necessary actions for this goal. The target of the
Offeror is that Enedo will become a wholly owned subsidiary of the
Offeror.
Board's assessment
Enedo's board of directors believes that the Inission has the
necessary resources and expertise to support, stabilize and develop
the Company and to provide the necessary short- and long-term
additional financing. According to the board's view, these
opportunities benefit Enedo's operations.
Enedo's board of directors believes that the Tender Offer offers
a good and sustainable solution to Enedo's financial needs. In
addition, Enedo's board believes that Tender Offer offers the
Company the opportunity to continue operations (going concern),
further develop its business and products, and provide jobs within
the group in the future.
Enedo's board of directors considers that the information about
the Inission's strategic plans for Enedo presented in the
announcement published on August 1, 2022, and in the draft of the
Tender Offer are of a general nature. However, taking into account
the company's critical financial position, Enedo's board of
directors estimates that it cannot be ruled out that the
implementation of the Tender Offer could have an impact on Enedo's
business operations, locations or the number of jobs.
As of the date of this statement, Enedo's board has not received
any formal statement from Enedo's employees regarding the effects
of the Purchase Offer on employment at Enedo.
4. Board recommendation
Enedo's board of directors has carefully evaluated the Tender
Offer and its terms based on the draft of the Tender Offer, the
Fairness Opinion statement and other available information.
Based on the above, Enedo's board of directors considers that
the Tender Offer and the amount of consideration offered for its
shares are fair for Enedo's shareholders. The Board does not give
any guidance on the mutual superiority of cash and share
consideration or give any recommendation related thereto. Each
shareholder must evaluate himself, in connection with a possible
approval, which consideration he wants to receive.
The Board of Directors bases its opinion on the assessment of
matters and facts that the Board of Directors has deemed essential
in the evaluation of the Tender Offer, including, among other
things, information and assumptions about Enedo's current financial
situation and solvency as well as business activities at the time
of this opinion and their assumed development in the future.
Board chairman Olle Hulteberg and board member Fredrik Berghel
have not participated in decision-making. Olle Hulteberg and
Fredrik Berghel have considered themselves dependent on a
significant shareholder and the author of the Tender Offer and have
decided not to participate in the decision-making regarding this
statement.
Antti Sivula as a board member owns shares in the Company. Each
board member has independently assessed his own possibilities, free
of side effects, to participate in the preparation of this
statement and decision-making on recommending the Tender Offer to
the shareholders and promoting the interests of the shareholders.
Each of them has stated that their share ownership in the Company
does not affect their ability to act as a member of the board of
directors in accordance with their duty of care towards the
shareholder collective.
The independence assessment of the board members can be found on
Enedo's website.
5. Other matters
Enedo is committed to complying with the takeover bid code
referred to in Chapter 11, Section 28 of the Securities Markets
Act, issued on the procedures to be followed in public takeover
bids.
This statement by Enedo's board of directors is not investment
or tax advice in nature. The board cannot be required to
specifically assess the general course development or
investment-related risks. Shareholders should decide whether to
accept or reject the Tender Offer independently, and shareholders
should take into consideration all relevant information available
to them, including the information presented in the Offer Document
and this statement and other factors affecting the value of the
shares.
In case Inission AB successfully acquires more than 90% of the
shares in Enedo, the company will start the redemption procedure in
accordance with Companies Act and will apply to remove Enedo's
shares from trading.
5 September 2022
ENEDO, BOARD OF
DIRECTORS
APPENDIX: 1. Aktia
Alexander Corporate Finance Oy’s Fairness
Opinion statement
For further information please contact Mr. Mikael Fryklund,
CEO, tel. +358 40 500 6864.
DISTRIBUTIONNasdaq Helsinki OyPrincipal mediaEnedoEnedo is
a European designer and producer of high-quality electronic power
supplies and systems for critical equipment even in the most
demanding environments. Enedo´s mission is to make electricity
better – more reliable, more secure, more energy efficient – and
just right to fit its purpose. Enedo´s three main product
categories are Led Drivers, Power supplies and Power Systems. In
2021 the group´s revenue was EUR 36,4
million. Enedo has 330 employees, and its main functions
are located
in Finland, Italy, Tunisia and USA. The
group´s head office is in Finland and parent company
Enedo Oyj is listed on Nasdaq Helsinki Oy.
- Fairness Opinion 02.09.2022
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