Silmäasema Oyj: Statement of Board of Directors of Silmäasema Oyj Concerning Coronaria Oy’s Mandatory Public Tender Offer

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Silmäasema OyjStock Exchange Release11 September 2019 at 9:20 a.m. EET 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES, CANADA, JAPAN, AUSTRALIA, SOUTH AFRICA OR HONG KONG OR OTHER JURISDICTION OR IN OTHER CIRCUMSTANCES IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION, OR A TENDER OFFER, WOULD BE UNLAWFUL. ADDITIONAL INFORMATION IN BELOW IN SECTION “DISCLAIMER” OF THIS RELEASE.

With reference to the stock exchange release issued by Silmäasema Plc (hereinafter referred to as “Silmäasema” or the “Company”) on 16 August 2019 concerning Coronaria Oy’s (“Coronaria” or the “Offeror”) obligation to launch a mandatory public tender offer for all shares in the Company and all securities entitling their holders to shares in the Company, and with reference to the stock exchange release issued by the Company on 27 August 2019 concerning Coronaria’s decision to launch a mandatory public  tender offer (“Tender Offer”), Silmäasema’s Board of Directors is issuing its statement on the Tender Offer in accordance with Chapter 11, Section 13 of the Securities Markets Act (746/2012, as amended, the “SMA”).

This statement has been prepared in Finnish and translated into English. In the event of any discrepancies between the Finnish and the English version, the Finnish version shall prevail.

In relation to the Tender Offer, Silmäasema is committed to comply with the recommendation provided in Chapter 11, Section 28 of the SMA (“ Helsinki Takeover Code”).

According to Chapter 11, Section 13 of the SMA, the Board of Directors of the target company shall make public its statement of the public tender offer regarding the company. In its statement, the Board of Directors of the target company must present its well-founded assessment of the tender offer from the perspective of the target company and the holders of the securities for which the tender offer is made, and of the strategic plans of the offeror presented in the tender offer document and their likely effects on operations and employment in the target company.

On 16 August 2019, Coronaria announced that it had acquired 1,420,031 shares in Silmäasema through transactions completed on 15 and 16 August 2019. The highest price paid for the shares was EUR 6.00 per share. Consequently, Coronaria’s shareholding in Silmäasema increased to a total of 4,615,443 shares, corresponding 32.4% of all shares and votes in Silmäasema, and Coronaria became subject to an obligation to launch a mandatory public Tender Offer for all other shares in Silmäasema and securities entitling their holders to shares in Silmäasema in accordance with Chapter 11, Section 19 of the SMA.

On the date of this statement, Silmäasema has 14,248,805 shares. The Company does not hold any treasury shares. On the date of this statement, Silmäasema does not have any other securities entitling their holders to shares.

Coronaria has reserved the right to acquire shares in the Company before the beginning of the offer period, during the offer period and/or after the offer period through public trading at Nasdaq Helsinki Ltd (“Nasdaq Helsinki”) or otherwise. According to the information provided by Coronaria in its stock exchange releases and the tender offer document issued and published on 5 September 2019 and supplemented on 9 September 2019 (collectively the “Offer Document”) concerning the  Tender Offer, Coronaria holds, as set out in the Offer Document a total of 4,765,987 shares in Silmäasema at the end of the trading day of 3 September 2019, corresponding to 33.4% of all shares and votes in Silmäasema. On 9 September 2019, Coronaria supplemented and further specified the Offer Document as follows: (i) the Offer Consideration of the  Tender Offer corresponds to a premium of around 10.4% compared with the volume-weighted average price of the Company shares on the Nasdaq Helsinki during the six-month period preceding the establishment of an obligation to launch a tender offer on 15 August 2019 (instead of the premium of 17.8% presented in the original Offer Document published on 5 September 2019); (ii) the stock exchange release issued by Silmäasema on 16 August 2019 (“Silmäasema’s new strategy and updated financial targets – renewing the eyesight market and growing profitably”) was included in full as an appendix to section 4.1 of the Offer Document, concerning the Company’s strategy and financial targets for 2020–2022 confirmed by Board of Directors of Company on that date.

The following summary of the terms and conditions of the Tender Offer is based on the information provided in the Offeror’s stock exchange releases and in the Offer Document, which contains detailed terms and conditions and instructions for approving the Tender Offer.

The Tender Offer will be launched in accordance with the terms and conditions of the Offeror’s Offer Document. The consideration offered is EUR 6.00 in cash for each share in Silmäasema for which the Tender Offer has been appropriately approved (“Offer Consideration”). In accordance with the terms and conditions of the Offer Document, the Offer Consideration is equal to the highest price paid by Coronaria for shares in Silmäasema during the six-month period preceding the establishment of the obligation to launch a tender offer.

As presented in the Offer Document, the Offer Consideration is around 10.4% higher than the volume-weighted average price for the six-month period preceding the establishment of the obligation to launch a tender offer, around 9.4% higher than the volume-weighted average price for the three-month period preceding the establishment of the obligation to launch a tender offer, and around 7.5% higher than the closing rate of the Company share on the Nasdaq Helsinki on 15 August 2019.

According to Chapter 11, Section 15 of the SMA, a mandatory Tender Offer may be conditional only on the decisions that need to be obtained from the authorities. The Offeror’s obligation to approve the shares in Company for which the Tender Offer has been approved for payment, as well as its obligation to completion the Tender Offer, is conditional on all the necessary approvals from the authorities, permits and issues of consent, including but not limited to any approvals by the competition authorities, before the date on which the Offeror discloses the final result of the Tender Offer or on that date, in accordance with chapter 11, section 18 of the SMA (the date of issue of the final result). According to Coronaria’s estimate, the completion of the Tender Offer does not require approval from the competition authorities.

The offer period in accordance with the Tender Offer began on 5 September 2019 at 9.30 am (Finnish time) and will end on 26 September 2019 at 4 pm (Finnish time), unless the offer period is extended in accordance with the terms and conditions of the Offer Document. The Offeror FCAn announce any extension to the offer period by means of a stock exchange release no later than 26 September 2019.

Before the Board of Directors of the Company assessed the Tender Offer, each of its members independently assessed and announced to the Board of Directors of the Company whether they should be disqualified from the consideration of the matter in accordance with the Finnish Limited Liability Companies Act (624/2006, as amended, the “FCA”) or whether he/she has commitments or connections related to the Offeror and/or the completion of the Tender Offer that may be material or otherwise significant in terms of his/hers assessment of his/her possibilities to participate in consideration of the Tender Offer free from all external circumstances and connections, including aspects related to the fulfilment of the obligation of duty of loyalty in accordance with the FCA and the preconditions provided in the Helsinki Takeover Code for processing the matter free from all external circumstances and connections.

The member of the Board of Directors of the Company, Tuomas Lang, is the Chairman of the Board of Directors of Intera Partners Oy and one of its owners of. Intera Partners Oy manages the Intera Fund II Ky fund, which, on the date of this statement, owns 2,375,950 shares in Silmäasema, corresponding to 16.68% of all shares and votes in Silmäasema. Even though Tuomas Lang does not participate in decision-making concerning matters related to the shareholding in Silmäasema at Intera Fund II Ky, he has announced prior to discussion and evaluation of the Tender Offer by the Board of Directors of the Company – taking into account the aspects explained above and Intera Fund II Ky’s shareholding in proportion to all shares in Silmäasema – that he cannot participate in consideration of the Tender Offer or in decision-making concerning related matters on the Company’s Board of Directors completely free from all external circumstances and connections. The other members of the Company’s Board of Directors have unanimously assessed the situation to the same effect.

The shareholdings of the members of Silmäasema’s Board of Directors and their related parties in Silmäasema are presented on the Company’s website.

Because all  the members of the Board of Directors of the Company other than Tuomas Lang have been able to participate in processing the Tender Offer and related matters, including decision-making concerning this statement on the Company’s Board of Directors, and the Board of Directors has therefore had a quorum, the Board of Directors of the Company has not established a separate committee or other preparatory body to process the Tender Offer or related matters. Each member of Silmäasema’s Board of Directors who has participated in decision-making has independently assessed the Tender Offer and its effect in accordance with the applicable laws and the Helsinki Takeover Code.

On the date of this statement, Silmäasema has not received a separate statement from its employees or their representatives on the  effects of the Tender Offer on the employment at the Company.

In order to issue this statement, the Board of Directors of Silmäasema has reviewed the Offer Document carefully. Silmäasema’s Board of Directors has appointed legal and financial advisers to help it with this work. With regard to the Tender Offer, Nordea Bank Abp (“Nordea”) serves as Silmäasema’s financial adviser and HPP Attorneys Ltd serves as its legal adviser.

When preparing its statement, the Board of Directors of Silmäasema has used information provided by Offeror in the Offer Document, and Board of Directors of Silmäasema has not independently ensured the completeness or the accuracy of such information. For this reason, the estimate of the Board of Directors of the Company of the effects of the Tender Offer on the Company’s business operations and employees must be taken with caution.

When preparing its statement, the Board of Directors of Silmäasema has carefully assessed the Tender Offer and other options potentially available to Silmäasema.

The Board of Directors of Silmäasema has assessed Coronaria’s strategic plans based on the Offer Document. As presented in the Offer Document, the Offeror seeks to acquire all shares in the Company that are not held by the Offeror or by Silmäasema or its subsidiaries.

Pursuant to the Offer Document, the Tender Offer is not expected to have a significant immediate effect on Silmäasema’s operations, locations or assets or on the number of employees. In cooperation with Silmäasema’s other shareholders, Coronaria seeks to contribute to any restructuring in the future, if this is necessary for business operations.

As presented in the Offer Document, Coronaria’s intention is for Silmäasema to continue to operate as a separate unit, however, in cooperation with other eye healthcare business operations of the Coronaria Groupas far as possible.

As presented in the Offer Document, the Tender Offer will not have, according to Coronaria, any immediate effects on Silmäasema’s management. However, Coronaria intends to influence the composition of Silmäasema’s Board of Directors in line with its shareholding after the completion of the Tender Offer.

The Board of Directors of Silmäasema deems that the strategic plans presented in the Offer Document, as well as their probable effects on Silmäasema’s operations and employment with Silmäasema, have been presented on a general level, without more specific reasoning. The Offer Document states that the Offeror intends to continue Silmäasema’s operations as a separate unit. On the other hand, Coronaria sees potential in developing cooperation between Coronaria and Silmäasema by means of traditional and digital healthcare, and possibly intends to expand the business concept beyond the domestic market.

Based on the Offer Document, the Board of Directors cannot provide a comprehensive assessment of the effects of the possible completion of the Tender Offer on Silmäasema’s operations and employment.

There is no certainty that Coronaria will not make significant changes to Silmäasema’s strategy or operations or concerning its employees, (including restructuring that may concern the divestment of Silmäasema’s business operations or parts thereof, for example). Furthermore, the financial effects of such possible arrangements on the Company or its shareholders are not described in the Offer Document. It should also be noted that, with Coronaria and Silmäasema being competitors concerning certain business operations, there is no certainty whether Coronaria’s shareholding will affect Silmäasema’s business operations in this respect.

According to the Offer Document, the Offer Consideration is EUR 6.00 per share for each share in Silmäasema for which the Tender Offer has been appropriately approved.

The Offer Consideration is higher than the market price of the Company share before the establishment of the obligation to launch a tender offer, as described above under Section “Tender Offer in brief”. If Silmäasema decides to distribute dividends, additional dividends or other assets in any form and this distribution of assets is paid to Silmäasema’s shareholders before the settlement date as defined in the Offer Document, or if the record date for any of the above comes before the settlement date defined in the Offer Document, the Offeror reserves the right to reduce the Offer Consideration in line with the euro-for-euro principle. If the number or class of Silmäasema’s outstanding shares changes between the date of the announcement of the Tender Offer and the settlement date defined in the Offer Document because of a capitalisation, reclassification, share split, reverse share split, combination or exchange of shares, or as a result of a new issuance of shares or a similar measure with a dilution effect, the Offeror reserves the right to adjust the Offer Consideration accordingly to reflect the measure in question.

The Board of Directors of Silmäasema has requested a fairness opinion statement (“Fairness Opinion”) on the Tender Offer from its financial adviser, Nordea, to support its assessment of the Tender Offer. The Fairness Opinion is included in full as an to this statement. The Board of Directors notes that, based on the Fairness Opinion provided by Nordea, conditional on the assumptions and provisions presented therein, the consideration offered to Silmäasema’s shareholders is not financially fair from a financial point of view on the date of the Fairness Opinion.

When assessing the Tender Offer (including the Offer Consideration), analysing Silmäasema’s alternative options and deciding on this statement, the Board of Directors of Silmäasema has considered several factors, such as the following:

i)    Silmäasema’s recent and announced positive financial performance, most recently its half-year report for 1 January to 30 June 2019, which was published on the day when the Offeror announced its acquisition of Silmäasema shares to such an extent that an obligation to launch a tender offer was established (16 August 2019);

ii)   the Company’s new strategy and updated financial targets announced on the day when its half-year report for 1 January to 30 June 2019 was published; and

i)      the historical development of Silmäasema’s share price and trading volume.

Based on the aspects and factors that the Board of Directors of Company considers to be essential for the assessment of the Tender Offer, the Board of Directors deems the consideration offered by Coronaria for the Company shares to be low from the perspective of Silmäasema’s shareholders.

The aspects and factors deemed to be essential by the Board of Silmäasema include, but are not limited to, the following:

As described above, the Board of Directors of Silmäasema has assessed, in accordance with the applicable regulations, the Offer Consideration, as well as the strategic plans presented by Coronaria in the Offer Document and their probable effects on Silmäasema’s operations and employment. However, the shareholders must independently decide whether they approve the Tender Offer, and they must consider all available essential information, including the aspects presented in the Offer Document and this statement, as well as all other aspects affecting the value of Silmäasema shares.

Nothing presented in this statement by the Board of Directors of Silmäasema constitutes investment or tax advice. In particular, the Board of Directors of Silmäasema is not assessing the general performance of the share in Silmäasema or risks related herein.

However, the Board of Directors of Silmäasema requests that Silmäasema’s shareholders pay special attention to the following aspects that may be significant in terms of assessing the Tender Offer when each shareholder is assessing whether they will approve the Tender Offer or not:

As described above in this statement, the Board of Directors of Silmäasema has carefully assessed the Tender Offer and its terms and conditions as a whole, based on the Offer Document, the Fairness Opinion, the information disclosed by Silmäasema by means of stock exchange releases, Silmäasema’s estimated future performance and other available information, for example.

Based on what is presented above, the Board of Directors of Silmäasema deems the offered consideration to be low from a financial perspective, considering the premium offered in the Tender Offer, the Company's value creation potential based on its strategy and targets announced on 16 August 2019, and the Fairness Opinion provided by Nordea, among other factors, as well as the aspects explained in more detail under Section “Board of Directors’ Assessment of the Offer Consideration from the Perspective of the Company and its Shareholders” above.

Based on the aspects mentioned above, the members of the Board of Directors of Silmäasema who participated in the decision-making process have unanimously decided to not recommend that Silmäasema’s shareholders approve the Tender Offer.

However, the Board of Directors of Silmäasema requests that shareholders pay attention to the fact that the Company’s future development depends on its ability to achieve its set targets. In addition, each shareholder should assess the Tender Offer carefully and independently from their perspective, considering their personal circumstances, as well as the possible decrease in the liquidity of the Silmäasema share as a result of the Tender Offer and its possible effect on the share price formation, in addition to the concentration of ownership and the other aspects mentioned above under “The Effects of the Approval or Non-Approval of the Tender Offer”.

In Helsinki, on11 September 2019

Silmäasema Plc Board of Directors

Appendix: Fairness Opinion

For further information, please contact:

Jukka Hienonen, Chairman of the Board of Directors, tel. +358 50 388 9670

Distribution:

Nasdaq HelsinkiKey media outlets

THIS STOCK EXCHANGE RELEASE MUST NOT BE PUBLISHED, RELEASED OR DISTRIBUTED, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN THE INTO, UNITED STATES, CANADA, JAPAN, AUSTRALIA, SOUTH AFRICA OR HONG KONG OR ANY OTHER JURISDICTION WHERE PUBLICATION, RELEASE OR DISTRIBUTION OR THE TENDER OFFERWOULD BE UNLAWFUL.

THIS STOCK EXCHANGE RELEASE IS NOT AN OFFER DOCUMENT AND DOES NOT IN ITSELF CONSTITUTE AN OFFER OR AN INVITATION TO MAKE A SALES OFFER. IN PARTICULAR, THIS STOCK EXCHANGE RELEASE IS NOT AN OFFER TO SELL OR A REQUEST FOR OFFERS TO BUY ANY OF THE SECURITIES DESCRIBED IN THIS STOCK EXCHANGE RELEASE, NOR IS IT AN EXTENSION OF THE PURCHASE OFFER TO THE UNITED STATES, CANADA, JAPAN, AUSTRALIA, SOUTH AFRICA OR HONG KONG. INVESTORS MUST APPROVE THE PURCHASE OFFER CONCERNING THE SHARES BASED SOLELY ON THE INFORMATION INCLUDED IN THE OFFER DOCUMENT. THE PURCHASE OFFER WILL NOT BE MADE, DIRECTLY OR INDIRECTLY, IN AREAS WHERE MAKING AN OFFER OR PARTICIPATING IN AN OFFER WOULD BE UNLAWFUL, OR WHERE THE PUBLICATION OF THE OFFER DOCUMENT OR REGISTRATIONS ARE REQUIRED, OR WHERE MAKING AN OFFER IS SUBJECT TO FURTHER REQUIREMENTS IN ADDITION TO THOSE RELATED TO THE PURCHASE OFFER IN FINLAND.

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Globe Newswire: 07:20 GMT Wednesday 11th September 2019

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