Tectia Oyj - Company Announcement

STATEMENT BY THE BOARD OF DIRECTORS OF TECTIA CORPORATION ON THE PUBLIC TENDER OFFER MADE BY CLAUSAL COMPUTING OY

Helsinki, Finland, 2012-03-23 08:02 CET (GLOBE NEWSWIRE) -- TECTIA CORPORATION 
 COMPANY ANNOUNCEMENT   MARCH 23, 2012 AT 09:02 A.M. 

Not for release, publication or distribution in Australia, Canada, Japan, South
Africa or the United States. 

STATEMENT BY THE BOARD OF DIRECTORS OF TECTIA CORPORATION ON THE PUBLIC TENDER
OFFER MADE BY CLAUSAL COMPUTING OY 

The Board of Directors of Tectia Corporation (the “Board”) issues this
statement regarding Clausal Computing Oy's tender offer in accordance with
Chapter 6, Section 6 of the Finnish Securities Market Act: 

Background of the Statement

Clausal Computing Oy (the ”Offeror”) has made a cash tender offer (the “Tender
Offer”) to purchase all the shares (the “Shares”) and stock options entitling
to Shares (the “Stock Options”) in Tectia Corporation (“Tectia” or the
”Company”) not already owned by Tectia or its subsidiaries or by the Offeror or
its affiliates. Clausal Computing Oy is a company wholly-owned by Mr. Tatu
Ylönen, who acts as the Managing Director and Board member of Tectia. 

The cash price offered in the Tender Offer is EUR 0.50 per Share, EUR 0.47 for
each I/1999 Stock Option, EUR 0.01 for each I/2000 Stock Option, EUR 0.01 for
each II/2000 Stock Option, EUR 0.01 for each II/2002 Stock Option, and EUR 0.01
for each III/2002 Stock Option. 

The offer period of the Tender Offer (the “Offer Period”) will commence on
March 19, 2012 and expire on April 11, 2012, unless continued in accordance
with the terms of the Tender Offer. 

The detailed terms of the Tender Offer are included in the Finnish language
tender offer document relating to the Tender Offer (the “Tender Offer
Document”) approved by the Finnish Financial Supervisory Authority and
published on March 16, 2012. The Board has not participated in the drafting of
the Tender Offer Document. 

Tectia's Board has evaluated the Tender Offer and prepared this statement
acting solely through its non-conflicted and independent members Mr. Juho
Lipsanen, Ms. Tiia Tuovinen, Mr. Pyry Lautsuo and Mr. Jussi Harvela. Mr.
Ylönen, who is the Managing Director and Board member of Tectia has not
participated in the in the preparation,  evaluation or decision-making of the
Board regarding the Tender Offer including this statement since the Offeror is
a company controlled by Mr. Ylönen. The statement of the Board is unanimous. 

Due to the Offeror's and Mr. Ylönen's significant ownership in the Company, the
Board has not actively sought alternative or competing tender offers. The Board
has not received alternative or competing tender offers from third parties, and
is not aware of the preparation of any such tender offers. 

For  the  purpose  of  evaluating  the  Tender  Offer  the Board has engaged
the investment bank HLP  Corporate Finance Ltd to provide an independent
fairness opinion (“Fairness Opinion”). HLP Corporate Finance Ltd has in its
Fairness Opinion issued on March 22, 2012 stated that, with the assumptions
presented in the opinion, the Tender Offer is, from a financial point of view,
not fair to Tectia's shareholders. The Fairness Opinion is annexed to this
Statement. 

On the date of this statement the Board has not received a separate statement
from the personnel of the Company. 

Board's Statement on the Tender Offer; the Board does not Recommend the Tender
Offer 

The Board has evaluated the Tender Offer and its terms on the basis of the
Tender Offer Document, the Fairness Opinion of HLP Corporate Finance Ltd and
other available information. 

The Board does not recommend the Tender Offer. According to the opinion of the
Board the offered consideration is not fair and it is possible that continuing
in accordance with the Company's strategy may provide a higher value for the
Company's shareholders. However, the Board cannot guarantee that the rejection
of the Tender Offer or any other alternative would produce a better result than
accepting the Tender Offer. 

Tectia's shareholders must independently decide on the acceptance of the Tender
Offer taking into consideration all information contained in the Tender Offer
Document as well as other circumstances affecting the value of Tectia's shares.
However, the Board wishes to draw attention on the following circumstances
which may be relevant when assessing the Tender Offer: 

  -- At the time of the Tender Offer Tectia's share price is, from a historical
     perspective, low. Although the offered consideration includes a premium
     when compared to the recent share price of the Company, on a longer term
     perspective the offered consideration does not include a premium. For
     example the offered consideration is lower than the volume-weighted average
     price of 2011, which was 0.51 EUR / share.



  -- In its financial statements release of February 15, 2012 the Company did
     not give any full year 2012 profit estimates for the reasons detailed in
     that release, which were related to, inter alia, risk factors related to
     the company's new products, macroeconomic environment, potential currency
     fluctuations and the value of certain patents and patent applications. When
     assessing the Tender Offer the shareholders should take into account that
     these risk factors are still valid. Those risk factors which the Board
     considers most significant are addressed below.



  -- The Company aims to release new products, which are still under
     development. There are significant risk factors related to the required
     development expenditure, start of the deliveries and sales and the demand
     for the new products. However, if successful, the new products may have a
     positive impact on the development of the Company's revenue and profits.



  -- The Company has certain patents and patent applications, which may be
     valuable. These patents were developed for the company´s IPSec-technology
     related products and are not used in current products. New applications
     have emerged for technologies described and claimed in the patents, e.g.
     VoIP (Voice-over-IP) and 3GPP LTE (Long Term Extension, or 4G) networks and
     smart phones. It is possible that the most important of the patent
     applications will be granted and that they will be essential for some of
     the standards in the area. The valuation of the patents and patent
     applications contain significant uncertainty factors, the range of possible
     values is large and in the opinion of the Board the precise valuation of
     the patents and patent applications in question is currently impossible.
     Furthermore, utilization of the patents and patent applications may require
     significant economical resources. The Board has received two independent
     expert opinions on the likely valuation of the patents and the patent
     applications. Valuation experts from a global audit firm provided during
     fall 2011 the company with a valuation estimate for these patents and
     patent applications, according to which the fair market value would be
     approximately EUR 1 million. In another opinion received in March 2012 the
     likely value of the patents and patent application is, based on the range
     of probable values presented in the report, approximately EUR 1.4 million.
     Both opinions contain significant disclaimers. However, it is possible that
     that the actual future sale price or other income from these patents and
     patent applications would be substantially higher than the estimated value.
     According to the second expert opinion it is possible that if (i) the
     Company is prepared to commit substantial amounts of money to the
     utilization of the patents, (ii) all of the key patents are granted, (iii)
     they are essential for certain of the standards in the area, (iv) the key
     technology markets relevant for the patents develop as currently estimated,
     (v) Tectia would be successful in defending its patents, and (vi) Tectia
     would be successful in licensing the patents in terms that would be
     economically beneficial for Tectia, the hypothetical revenue streams could,
     if all of the conditions presented above would be fulfilled, in theory be
     in the range of tens of millions of euros. However, this scenario contains
     extremely significant uncertainty factors and according to the assessment
     of the Board, based on the expert opinions, the likelihood of this scenario
     is minimal. When assessing the Tender Offer the Board has assumed that the
     value of the patents and patent applications would be approximately EUR one
     million. The patents and patent applications may also prove to be
     worthless.



  -- It is possible that as a result of the possible further concentration of
     the shareholding in Tectia due to the Tender Offer, the trading volumes of
     the Shares will be lower than currently and the price formation of the
     Shares on the stock exchange may be less certain. If the Offeror reaches a
     holding in excess of 50% of the total voting rights carried by the Shares
     as a result of the Tender Offer, the Offeror will be under no obligation to
     make any further mandatory tender offer in the future.



  -- According to the information received by the Board, certain significant
     shareholders will probably reject the Tender Offer. Should this happen, it
     is probable that the Offeror's ownership will not exceed the 9/10 threshold
     set out in the Finnish Companies' Act, in which case the plan to delist the
     Company described in the Tender Offer Document will probably not be
     completed.

  -- Based on the conditions noted above, the Offeror may not have any
     obligation to make  any further mandatory tender offer in the future and it
     is probable that as a result of the Tender Offer the Offeror's ownership
     will not exceed the 9/10 threshold. Therefore, it is possible that the
     shareholders will not have an equivalent possibility to transfer their
     shares at the same price in the future.



  -- The Offeror together with its owner has already before the Tender Offer
     exercised significant control in Tectia. It is possible that as a result of
     the Tender Offer the Offeror's holding of the votes in the Company
     increases so that the Offeror together with its related entities is able to
     make decisions in the Company, for example concerning the election of the
     Board. Tectia's shareholders' alternatives are to remain as shareholders in
     a Company where the Offeror exercises a significant degree of control, or
     to accept the Tender Offer.


The Tender Offer also includes an offer for the option rights entitling to
subscribe Shares in the Company. The number and financial significance of these
option rights is relatively small. According to the Board's opinion the
consideration of EUR 0.47 offered for each option right in series I/1999 is not
fair. For all other option rights than the I/1999-series the Offeror has made a
nominal offer of EUR 0.01 for each option right. These option rights will
terminate without any value unless there is a significant change in the
development of the Company's share price before the end of the subscription
periods. Therefore, for the holders of other option rights than those in the
I/1999 series, it may be advisable to accept the Tender Offer. 

This statement is not investment advisory to the shareholders. Shareholders
must independently decide whether to accept the Tender Offer. 

Evaluation of the strategic plans set out in the Tender Offer Document and
their probable impacts on the operations and employment 

According to the Finnish Securities Market Act Tectia's Board must give a
reasoned assessment on the strategic plans of the Offeror presented in the
Tender Offer Document and on their likely effects on the operations and
employment. 

According to the Tender Offer Document: (unofficial translation) ”The Offeror
and its related entities wish to grow their shareholding in Tectia, which the
Offeror believes would significantly support the Company's growth and
facilitate further financing of the Company. If Mr. Tatu Ylönen's, who
exercises control in the Offeror, direct and indirect shareholding exceeds 9/10
of all shares and votes in the Company, he intends to initiate a squeeze-out
procedure in accordance with the Companies' Act and to exercise his control in
the Company so that the Company will seek delisting of the Shares in the
Helsinki Stock Exchange. The Offeror believes that in a private environment the
Company could better develop its business activities in accordance with its
strategy. Based on the Offeror's current view its strategic plans for Tectia
would not have an impact on Tectia's personnel or the location of its offices.”
Furthermore, the Tender Offer Document states that: ”Tender Offer does not have
a direct impact on the business or assets of Tectia or to the position of its
management or employees.” 

Based on the information set out in the Tender Offer Document Tectia's board
assesses that the Tender Offer will not have a direct impact on the business
activities or employment of Tectia. 


Helsinki, March 22, 2012

TECTIA CORPORATION
Board of Directors

Further information: Juho Lipsanen, Chairman of the Board, tel. +358 20 500 7000

Enclosure: Fairness Opinion of HLP Corporate Finance Ltd

Distribution:
NASDAQ OMX Helsinki Oy
Major media
www.ssh.com

Bifogade filer:

Fairness Opinion ENG.pdf