Bittium Oyj - Company Announcement

Bittium Corporation is planning to repurchase its own shares and stock options for a total purchase price of approximately EUR 595 million in a voluntary public tender offer directed to all shareho...

Stock Exchange Release

Free for publication on August 24, 2015 at 8.00 a.m.

Not  for release, publication or distribution (in  whole or in part) in, into or
from  the United States or  any judisdiction where to  do so would counstitute a
violation of the relevant laws of such jurisdiction.

Bittium Corporation is planning to repurchase its own shares and stock options
for a total purchase price of approximately EUR 595 million in a voluntary
public tender offer directed to all shareholders and holders of stock options
2008C of the Company

The  Board  of  Directors  of  Bittium  Corporation  has  decided  to convene an
Extraordinary General Meeting on September 14, 2015 to decide on a repurchase of
its  own shares ("Shares")  and stock options  2008C ("Stock Options") through a
voluntary  public tender offer directed to all shareholders and holders of Stock
Options of the Company (the "Offer").

Summary:

  * The Offer would be made at market price and the consideration offered would
    be determined as the volume weighted average price of the Share based on
    transactions in NASDAQ OMX Helsinki Ltd over the five days preceding the
    acceptance of the offer document rounded to the nearest full EUR cent (the"Offer Price");
  * The Offer would be made for a maximum of 124,747,351 Shares, corresponding  approximately to 94.1 per cent of all the Shares in the Company on the date
    of this release. The Offer would also be made for a maximum of 252,648 Stock
    Options. The Offer would be executed only for the part of the consideration
    payable for the Shares amounting up to EUR 593,797,392.67 in the aggregate
    and for the Stock Options amounting up to EUR 1,202,607.33 in the aggregate;
  * The maximum number of Shares and Stock Options that the Offer concerns have
    been determined on the basis of the numbers of all Shares and Stock Options
    in the Company so that the Offer concerns the same proportional share of all
    the Shares and Stock Options taking into account the 277,005 new shares to
    be registered on or about September 1, 2015 subscribed for pursuant to the
    Stock Options, the subscriptions of which the Company has accepted on August
    20, 2015 and the corresponding decrease in the number of Stock Options;
  * A shareholder or a holder of Stock Options may accept the Offer for all the
    Shares and/or Stock Options owned by him/her or for a number of Shares
    and/or Stock Options of his/her choosing per each book-entry account.
    Possible multiple acceptances by the same person of Shares and Stock
    Options, respectively, will be combined for each book-entry account;
  * The Shares and Stock Options to be repurchased by the Company based on the
    accepted offers will become null and void as a part of the settlement of the
    Offer's execution so that they will not become in the Company's possession.
    Thus, the restriction in the Finnish Limited Liability Companies Act
    concerning the purchase of own shares, according to which the purchase of
    own shares may not be executed in a way that the number of own shares held
    by a company would exceed one tenth (1/10) of all the shares in such a
    company, does not restrict the execution of the Offer;
  * The completion of the Offer is conditional upon that no such fact or
    circumstance has occurred after the date of this release that would
    constitute a material adverse change in Bittium or in its subsidiaries,
    considered as a whole;
  * The price offered for the Stock Options is the Offer Price subtracted with
    the share subscription price of the Stock Option, which was EUR 0.55 per
    share on August 20, 2015;
  * The Company intends to publish an offer document, which includes more
    detailed information on the Offer, on or about September 23, 2015;
  * The seven largest shareholders and a certain major shaholderof Bittium,
    representing in the aggregate approximately 47.4 per cent of all the Shares
    and votes in Bittium, have undertaken to vote for accepting the Offer in the
    Extraordinary General Meeting;
  * In the Offer, the seven largest shareholders and a certain major shareholder
    of Bittium have, as described in detail in the following, undertaken to
    offer for repurchase at least 70 per cent of the Shares each of them owns,
    in the aggregate 43,949,571 Bittium shares, corresponding approximately to
    33,2 per cent of all the shares and votes in Bittium.


Background and reasons for the repurchase

The  Company announced the sale of its Automotive business to German Continental
AG  for a purchase price of EUR  600 million on May 19, 2015. The closing of the
transaction  was  announced  on  July  1, 2015. Further,  on August 8, 2015, the
Company  announced that it plans to distribute the net proceeds from the sale of
its   Automotive   business  to  its  shareholders  in  the  first  instance  by
repurchasing  own  shares  in  a  voluntary  public  tender  offer  made  to all
shareholders of the Company.

The  funds received from the  sale of the Automotive  business are not needed in
the  current  business  of  the  Company  and  distributing  such  funds  to the
shareholders  is thus appropriate. As the amount  of the funds to be distributed
is  exceptionally  large  in  comparison  with  the  size  of  the  Company, the
repurchase  of own shares in  a voluntary public tender  offer is an appropriate
way  to execute the  distribution. In the  voluntary public tender  offer of the
Company  to repurchase its own Shares, a  large number of shareholders will have
an  opportunity to sell  their Shares, which  would not be  possible in ordinary
trading  in the stock exchange due to  a limited trading volume. The decrease in
the  number of Shares, due to the Offer and the Shares becoming null and void as
part of the Offer, will further contribute to maintaining the share price of the
Company on an appropriate level compared to a situation, where the profits to be
used  for the Offer would be distributed for the shareholders as dividends while
the number of shares in the Company would remain unchanged.

The  Company has  received an  advance ruling  by the  Finnish Central Tax Board
regarding  the tax treatment of a shareholder participating in the Offer, should
Bittium  repurchase its own  Shares with the  funds received in  the sale of the
Automotive business in a public tender offer under certain terms and conditions.
Pursuant  to the  advance ruling  by the  Central Tax  Board, the  provisions in
Section  29 of the Finnish  Act on Taxation  Procedure regarding veiled dividend
are  not applied to  the repurchase of  own shares and,  thus, the taxation of a
shareholder participating in the Offer would be conducted in accordance with the
ordinary provisions on taxation of capital gains under Finnish tax law.

A  shareholder  or  a  holder  of  Stock  Options residing outside of Finland is
advised  to  contact  a  financial  or  legal  advisor  in  their own country to
determine  the  taxation  and  any  possible  securities market consequences for
accepting the Offer.

The Offer Price

The  Offer will  be made  at market  price. The  Offer Price  will be the volume
weighted average price of the Share based on transactions in NASDAQ OMX Helsinki
Ltd.  over the five days  preceding the acceptance of  the offer document, on or
about  September 22, 2015, rounded to the nearest full EUR cent. The Offer Price
will  be announced separately,  in connection with  the publication of the offer
document.

The  consideration offered  for the  holders of  Stock Options  is determined by
subtracting  the share subscription price of a Stock Option, which was EUR 0.55
per Share on August 20, 2015 from the Offer Price.

The Offer

The  Board of  Directors of  the Company  proposes to  the Extraordinary General
Meeting  that the  maximum total  number of  Shares to  be repurchased  could be
124,747,351 Shares,  corresponding  approximately  to  94.1 per  cent of all the
Shares  in  the  Company  on  the  date  of this release. The Company's Board of
Directors proposes further that the proposed amount of profits to be distributed
to  the shareholders in  the Offer would  be a maximum  of EUR 593,797,392.67 in
total.

The  Board of  Directors of  the Company  proposes to  the Extraordinary General
Meeting  that the maximum total number of Stock Options to be repurchased in the
Offer  would be 252,648 Stock  Options. The Board  of Directors proposes further
that  the maximum total amount of profits  distributable to the holders of Stock
Options in the Offer would be EUR 1,202,607.33.

The  maximum numbers of Shares and Stock Options pursuant to the Offer have been
determined  on the basis of  the numbers of all  Shares and Stock Options in the
Company so that the Offer concerns the same proportional share of all Shares and
Stock  Options taking into account the 277,005 new shares to be registered on or
about  September  1, 2015 subscribed  for  pursuant  to  the  Stock Options, the
subscriptions  of  which  the  Company  has  accepted on August 20, 2015 and the
corresponding decrease in the number of Stock Options.

The  estimate on  the amount  of distributable  funds is  based on  the separate
financial statements prepared for the period January 1, - July 1, 2015.

A  shareholder or  a holder  of Stock  Options may  accept the Offer for all the
Shares  and/or Stock Options owned  by him/her or for  a number of shares and/or
Stock Options of his/her choosing per each book-entry account.

According  to the proposal of  the Board of Directors,  the Company would have a
right  to  reduce  the  number  of  Shares  to  be  repurchased  in the Offer in
proportion  to  the  number  of  Shares  offered  for  repurchase  in  the Offer
separately  for each book-entry  account, if the  total number of Shares validly
accepted  in  the  Offer  would  exceed  the  maximum number of the Shares to be
repurchased, 124,747,351 Shares or the maximum amount of funds to be distributed
EUR 593,797,392.67 (so called pro rata mechanism).

According  to  the  proposal  of  the  Board  of  Directors,  the  Company would
correspondingly  have  a  right  to  reduce  the  number  of Stock Options to be
repurchase in the Offer in proportion to the number of Stock Options offered for
repurchase  in the  Offer separately  for each  book-entry account, if the total
number  of Stock Options validly accepted in  the Offer would exceed the maximum
number  of the  Stock Options  to be  repurchased, 252,648 Stock  Options or the
maximum  amount of funds to be  distributed EUR 1,202,607.33 (so called pro rata
mechanism).

The  completion  of  the  Offer  is  conditional  upon  that  no  such  fact  or
circumstance has occurred after the date of this release that would constitute a
material adverse change in Bittium or in its subsidiaries considered as a whole.
Such  a material adverse change would especially  be a change which would result
in  the amount of distributable funds required  for the repurchase of the Shares
and  Stock Options pursuant to the Offer no longer being fully available for the
Company.  The Company may cease,  before the final result  of the Offer has been
announced, to demand the fulfilment of the condition described above.

The  offer period for the  Offer is expected to  begin on September 25, 2015 and
expire on October 16, 2015. According to the proposal of the Board of Directors,
the  Company would reserve the right to extend the offer period, if needed, to a
maximum of ten weeks counting from the commencement of the offer period.

The  Shares and  Stock Options  to be  repurchased by  the Company  based on the
accepted  offers will become  null and void  as a part  of the settlement of the
execution of the Offer, preliminarily on the settlement date, that the Shares or
Stock  Options will not become  in the Company's possession.  A shareholder or a
holder  of Stock Options who  has accepted the Offer  accepts in connection with
accepting  the Offer that the repurchased  offered Shares and Stock Options will
become null and void in connection with the execution of the Offer.

The  detailed terms and conditions  of the Offer and  the instructions on how to
accept  the Offer will be included in the offer document, which the Company will
publish on or about September 23, 2015.

On  the announcement date of  the Offer, the Company  or its subsidiaries do not
own the Company's own shares.

Pursuant to the Securities Markets Act, Helsinki Takeover Code of the Securities
Market Association does not apply to a public tender offer for own shares.

Potential effects of the Offer on the ownership structure of the Company

Since  the Offer concerns  a maximum of  94.1 per cent of  all the shares of the
Company,  the final result  of the Offer  may significantly affect the Company's
ownership  structure  after  the  completion  of  the  Offer. For example, it is
possible that the relative ownership of a shareholder not selling all of his/her
Shares  in the Offer, will grow significantly after the completion of the Offer.
Even  if the ownership of  such a shareholder would  exceed 30 or 50 per cent of
the  votes attached to  the Company's shares  otherwise triggering the mandatory
public  tender offer obligation pursuant to Chapter 11 Section 19 of the Finnish
Securities  Markets Act,  no obligation  to launch  a mandatory offer arises for
such  shareholder before the shareholder acquires  or subscribes for more shares
in  the Company or otherwise increases his/her voting power in the Company. This
is due to Chapter 11 Section 21 of the Securities Markets Act, which states that
mere  measures  taken  solely  by  the  Company  itself  does  not  result in an
obligation  to launch a mandatory public tender offer. However, if the ownership
of  a shareholder would  exceed 90 per cent  of all the  Shares and votes in the
Company  after the completion of the  Offer, such shareholder would, pursuant to
Chapter 18 of the Limited Liability Companies Act, have the right and obligation
to  redeem the Shares  held by other  shareholders regardless of  the actions of
such shareholder.

In  the  Offer,  the  Company's  seven  largest shareholders and a certain major
shareholder  of  the  Company  have  undertaken  to  offer for repurchase in the
aggregate  43,949,571 Bittium  shares,  corresponding  approximately to 33.2 per
cent  of all the shares  and votes in Bittium.  The number of Shares pursuant to
the  undertakings of each  of the mentioned  shareholder corresponds to at least
70 per  cent of all the Shares owned  by these shareholders on August 23, 2015.
The  shareholders  have  further  undertaken  not  to acquire more shares in the
Company  before the commencement  of the Offer  and while the  Offer is ongoing.
These undertakings do not prevent the shareholders from selling their Shares for
the  part  exceeding  the  number  of  Shares  subject  to  the undertaking. All
undertakings  have  been  given  with  certain  terms and conditions that cannot
result  in  the  expiration  of  the  undertaking  if  the Offer is executed and
assuming  that the Extraordinary General Meeting  decides to accept the Offer as
proposed  by the Board of Directors. Each  of the five largest shareholders have
also  undertaken, provided that it is  not  economically unreasonable, to reduce
their  ownership further in a situation  where his ownership would exceed 30 per
cent  of all  shares in  the Company  following the  execution of the Offer. The
purpose  of the  undertakings is  to limit,  among other  things, the  number of
Shares  that a current major shareholder  could hold following the completion of
the Offer, where the Offer is accepted for the most part or in its entirety.

Undertakings by certain shareholders

The seven largest shareholders and a certain major shareholder of Bittium,
representing in the aggregate approximately 47.4 per cent of all the Shares and
votes in Bittium, have undertaken to vote for accepting the Offer in the
Extraordinary General Meeting.


In Oulu, August 24, 2015

Bittium Corporation

Board of Directors



Further Information:

Veli-Pekka Paloranta

CFO

Bittium Corporation

Tel. +358 40 344 5466



Distribution:

NASDAQ Helsinki

Main media



Bittium

Bittium  is  specialized  in  developing  reliable and secure communications and
connectivity solutions using the latest technologies and deep knowledge on radio
technology.  Bittium provides innovative products and customized solutions based
on  its product platforms, and R&D services for customers in various industries.
Bittium  also  offers  high  quality  information  security solutions for mobile
devices and portable computers. In 2014, net sales of continuing operations, was
EUR  52.7 million and operating profit was EUR 0.8 million. Bittium is listed on
Nasdaq Helsinki. www.bittium.com.

Disclaimer

This announcement is neither an offer to purchase nor a solicitation of an offer
to  sell shares in Bittium Corporation (the "Shares") anywhere in the world. The
final  terms and  further provisions  of the  possible public  tender offer (the"Offer")  will be disclosed in  the offer document once  approved by the Finnish
Financial  Supervisory Authority. Holders of the Shares are strongly recommended
to read the offer document and all announcements in connection with the Offer as
they contain or will contain important information.

The Offer is not being made directly or indirectly, in or into the United States
or  any other jurisdiction  where to do  so would constitute  a violation of the
laws  of such jurisdiction. The Offer is not  being made by the use of the mails
or any other means or instruments of interstate or foreign commerce (inter alia,
transmission by fax, telephone or internet) in or into the United States, nor by
the  use of any facility of a national securities exchange in the United States.
Accordingly,  the sending or any other  distribution of this announcement or any
other  accompanying  document  in  or  into  the  United  States  or  any  other
jurisdiction,  where to do so  would constitute a violation  of the laws of such
jurisdiction, is prohibited.


[HUG#1947120]