Larox Oyj - Company Announcement

Statement by the Board of Directors of Larox concerning Outotec's tender offer

LAROX OYJ 	COMPANY ANNOUNCEMENT 28.12.2009 2:00 pm                              

Statement by the Board of Directors of Larox concerning Outotec's tender offer  

With reference to the company announcement published by Outotec Oyj on December 
22, 2009 regarding the Outotec Oyj's mandatory public tender offer, the Board of
Directors of Larox Oyj issues the following statement in accordance to the      
chapter 6, section 6 of the Finnish Securities Markets Act regarding the public 
tender offer of Outotec Oyj.                                                    

THE STATEMENT BY THE BOARD OF DIRECTORS OF LAROX OYJ IN ACCORDANCE TO THE       
CHAPTER 6, SECTION 6 OF THE FINNISH SECURITIES MARKETS ACT REGARDING THE        
MANDATORY PUBLIC OFFER OF OUTOTEC OYJ                                           

1. Background                                                                   

Outotec Oyj (“Outotec” or the “Offeror”), has offered to acquire through a      
mandatory public tender offer in accordance with Chapter 6 of the Finnish       
Securities Market Act (495/1989, as amended) all of the series A and B shares   
issued by Larox Corporation (“Larox”), which are not yet in the ownership of    
Outotec or which Larox does not own as well as the unused subscription rights   
relating to the bonus issue implemented by Larox in 1994 (the “Subscription     
Rights”) (the “Tender Offer”).                                                  

Outotec announced on December 18, 2009 that it will carry out with certain main 
shareholders of Larox share transactions, in which the aforementioned will sell 
all Larox series A and B shares held by them to Outotec (the “Share             
Transactions”). The shares purchased correspond altogether to 94.40% of all the 
votes in Larox and 99.99% of all Larox series A shares, to 61.89% of all Larox  
series B shares and 70.48% of all the shares in Larox. The Share Transactions   
were completed on December 21, 2009, as a consequence of which Outotec has      
become obliged to make a mandatory public tender offer for all the remaining    
series A and B shares of Larox as well as for the Subscription Rights.          

According to the Outotec's announcement the consideration offered for each      
series A and series B share in the Tender Offer equals to the consideration     
offered in                                                                      
the Share Transactions, i.e. 0.45 new Outotec shares for each series A share and
0.40 new Outotec shares for each series B share (the “Share Consideration”). A  
cash consideration of EUR 10.76 for each series A share and of EUR 9.56 for     
each series B share is offered as an alternative in the Tender Offer (the “Cash 
Consideration”). (The Cash Consideration and the Share Consideration jointly    
referred to as the “Offer Consideration”). The Offer Consideration for each     
Larox                                                                           
series B share represents a premium of approximately 36.6% compared to the      
closing price of the Larox series B share on the Helsinki Stock Exchange on     
October 14, 2009, which was the last trading day before the announcement of the 
Share Transactions and the Tender Offer, and a premium of approximately 41.8%   
compared to the volume-weighted average trading price of the Larox series B     
share during the last six (6) months before the announcement of the Share       
Transactions and the Tender Offer. The Larox series A shares are not subject to 
public trading. The consideration offered for each Subscription Right is EUR    
11.47 in cash (the “Subscription Right Offer Price”).                           

Under Chapter 18 (624/2006, with amendments) of the Finnish Companies Act, a    
shareholder holding more than 90% of the total number of the shares and votes in
a company has the right and also obligation if other shareholders so demand to  
redeem the remaining shares issued by the company. According to the Tender      
Offer, if Outotec acquires ownership to more than 90% of the Larox shares,      
Outotec intends to initiate compulsory acquisition proceedings under the above  
provisions of the Finnish Companies Act in order to acquire title to all the    
Larox shares. In any other event, Outotec may consider alternative means of     
combining the businesses of the companies, such as by means of a merger or other
business arrangements.                                                          

It is Outotec's intention that, as promptly as possible according to the        
applicable rules, Larox shall apply for the delisting of its shares from the    
official list of the Helsinki Stock Exchange.                                   

The acceptance period for the Tender Offer (the “Offer Period”) has commenced on
December 28, 2009 at 9:30 am (Finnish time) and expires on January 22, 2009 at  
4:00 pm (Finnish time) unless the Offer Period is extended.                     

The above-mentioned Tender Offer and its conditions are described in details in 
the Tender Offer Document.                                                      


2. Statement of the Board of Directors                                          

The Board of Directors of Larox (“Board”) has today, in accordance to the       
chapter 6, section 6 of the Finnish Securities Markets Act, issued this         
statement regarding the Tender Offer (“Statement”). The Statement evaluates the 
Tender Offer from the point of view of the holders of the Larox Shares and      
Subscription Rights targeted by the Tender Offer, the strategic plans presented 
by Outotec in the Tender Offer Document and their probable impact on Larox's    
business and employment at Larox.                                               

More detailed background of the Tender Offer is available in the Tender Offer   
Document.                                                                       

The Board has issued this statement in a composition which includes the         
following independent members of the Board: Thomas Franck, Teppo Taberman and   
Matti Ruotsala. The members of the Board Timo Vartiainen and Katariina Aaltonen 
who have already sold the shares owned by themselves and by Capillary Oy to     
Outotec have not, due to possible conflict of interest, participated and will   
not participate in the decisions of the Board or in the formulation of the      
Statement on this issue.                                                        

The Board has evaluated the Tender Offer and its terms on the basis of the      
Tender Offer Document, the fairness opinion acquired from Evli Bank Plc,        
Corporate Finance, and other information that has been available.               

Outotec has presented its stratetic plans in the Tender Offer Document. Outotec 
aims at combining the businesses of Outotec and Larox. The Board states that    
Outotec and Larox operate within the same industry, and service mainly a common 
customer base. The Board also states that the risks related to the activity of  
Outotec and Larox are highly similar and future outlook compatible.             

The Board evaluates that Larox's filtration technology and related aftermarket  
business complete Outotec's product and service range. According to the Board's 
view the strategic plans presented by Outotec are in line with Larox's strategy,
the goals being profitable growth, technology leadership as a solution provider 
for mining, metallurgy and chemical process industries and increase of the      
service business.                                                               

The Board evaluates that combining Outotec's and Larox's businesses will have a 
positive impact on the development of the Larox's product and service range     
globally and on the strengthening of the market position under tightening       
competition.                                                                    

The Board states that Outotec has evaluated that combining the global sales and 
service networks and administration of both companies as well as economies of   
scale achieved by the larger size will create synergy benefits of at least EUR 7
million annually. According to the Tender Offer Document Outotec estimates that 
the combination will have a clearly positive effect on Outotec's earning per    
share when the synergies materialize in 2011.                                   

The Board states that Outotec admits in the Tender Offer Document that combining
Outotec's and Larox's businesses will, in addition to synergy benefits, pose    
challenges to both parties, and the combination may, as is common in such       
processes, involve unforeseeable risks.                                         

In connection with the completed Share Transactions, Capillary Oy has made an   
offer to Larox according to which Capillary Oy is willing to purchase the 49%   
share of Larox Flowsys Oy's share capital held by Larox. Based on the statement 
given by an external independent expert the value of the Larox Flowsys Oy shares
subject to the acquisition equaled, on December 10, 2009, the price offered by  
Capillary Oy which is 3.5 million euros. The Board evaluates that the price     
offered by Capillary Oy is appropriate.                                         

According to the Tender Offer Document Outotec aims at achieving cost savings by
combining the business of both companies. The management of Outotec has in      
November 2009 launched the planning of a new structure and business model.      
Outotec's aim is to implement the new structure and business model in spring    
2010. The potential effects of Outotec's contemplated new business model on     
Larox' business, assets or the position of Larox' management and employees will 
be known only once the plans have been finalized and resolutions regarding      
actions to be undertaken have been taken. The Board states that Larox continues 
the formerly agreed and ongoing structural adjustment measures independently of 
the outcome of the Tender Offer.                                                

The shareholders should take into account the risks related to non acceptance of
the Tender Offer. The Larox shares held by a Larox shareholder who has not      
accepted the Tender Offer may, on conditions set out in the Finnish Companies   
Act, be redeemed in the minority shareholders acquisition proceedings under the 
Finnish Companies Act. The value of the potential cash consideration received   
through such acquisition proceedings may, depending on the development of the   
Outotec share price, also be lower than the value of the Share Consideration    
offered in the Tender Offer. The acceptance of the Tender Offer reduces the     
number of Larox shareholders and the number of such Larox shares, which would   
otherwise be publicly traded. Depending on the number of the Larox shares       
tendered in the Tender Offer, this could have an adverse effect on the liquidity
and value of the Larox share.                                                   

3. The Recommendation of the Board                                              

On the basis of the information included in the Tender Offer Document and the   
fairness opinion acquired from Evli Bank Plc, Corporate Finance and other       
available information the Board estimates that Outotec's Offer is according to  
the interest of Larox and of the holders of the Larox's Shares and Subscription 
Rights.                                                                         

The Board states that the value of the Share Consideration for each series B    
share equaled the value of the Cash Consideration, based on the Outotec share   
value according to the closing price on December 23, 2009, which was 23.90      
euros. The Share Consideration may vary during and after the period of the      
tender offer and its value may be above or below the Cash Consideration.        

The Board recommends unanimously that the shareholders of Larox accept the      
Tender Offer.                                                                   

The Board states that it has not participated in the negotiations on the Share  
Transactions nor drawn any combination contract with Outotec or made any due    
diligence investigation at Outotec.                                             

The Board has not actively been looking for alternative or competing tender     
offers.                                                                         
The Board has not either received alternative or competing offers or been       
informed of any such offer being under preparation.                             

The Board reminds that this statement of the Board is not investment or taxation
advisory in nature. Each shareholder has to acknowledge with the Tender Offer   
Document including the terms of the Tender Offer and the information concerning 
the Offerer, and decide independently whether to accept or not to accept the    
Tender Offer, and if accepting the Tender Offer, choose between the Share       
Consideration and the Cash Consideration.                                       


Larox Oyj                                                                       
The Board of Directors                                                          

Further information:                          
Teppo Taberman, Member of the Board                                             

Telephone +358 40 504 7400                                                      

Distribution NASDAQ OMX Helsinki Ltd., Central Media                            

Larox develops, designs and manufactures industrial filters and is a leading    
technology company in its field. Larox is a full service solution provider in   
filtration for separating solids from liquids. It supplies comprehensive        
aftermarket services throughout the lifespan of the Larox solution. Companies   
world-wide in mining and metallurgy, chemical processing and related industries 
benefit from the Larox technologies. Larox operates in over 40 countries and    
has about 600 employees. Larox has production facilities in Finland and in      
China, and the Group is headquartered in Lappeenranta, Finland. Net sales in    
2008 totaled 208.0 million euros, of which more than 93 % were generated by     
exports and the company's foreign operations.