PKC Group Oyj - Tender offer

Motherson Sumi Systems Limited launches a voluntary recommended public tender offer for all shares and stock options in PKC Group Plc

PKC Group Plc  Company announcement  19 January 2017 9.00 p.m.



THIS RELEASE MAY NOT BE RELEASED, PUBLISHED OR OTHERWISE DISTRIBUTED, IN WHOLE
OR IN PART, IN OR INTO, DIRECTLY OR INDIRECTLY, THE UNITED STATES, CANADA,
JAPAN, AUSTRALIA, SOUTH AFRICA OR HONG KONG OR IN ANY OTHER JURISDICTION IN
WHICH THE TENDER OFFER WOULD BE PROHIBITED BY APPLICABLE LAW. 



Motherson Sumi Systems Limited launches a voluntary recommended public tender
offer for all shares and stock options in PKC Group Plc 



Motherson Sumi Systems Limited (“MSSL”) and PKC Group Plc (“PKC” or “Company”)
have on January 19, 2017 entered into a combination agreement under which they
agree to combine the wiring harness businesses of MSSL and PKC (the
“Combination Agreement”). In order to effect the combination MSSL will, through
a directly or indirectly wholly owned subsidiary (the “Offeror”), make a
voluntary recommended public tender offer to purchase all the issued and
outstanding shares and stock options in PKC that are not owned by PKC or any of
its subsidiaries (the “Tender Offer”). In the Tender Offer, PKC’s shareholders
are being offered a cash consideration of EUR 23.55 for each share in PKC and
holders of stock options are being offered a cash consideration of EUR 23.55
minus the applicable subscription price for each outstanding stock option in
PKC representing an aggregate equity purchase price of approximately EUR 571
million. Combining the two companies will create a leading supplier of wiring
systems and components for the worldwide transportation industry. 



Summary of the Tender Offer



  -- The offer price is EUR 23.55 in cash for each share in PKC (the “Share
     Offer Price”);
  -- The Share Offer Price represents a premium of:
     -- 51.1 percent to the closing price of PKC share on Nasdaq Helsinki Ltd
        (“Nasdaq Helsinki”) on January 19, 2017, i.e. the last day of trading
        before the announcement of the Tender Offer; and
     -- 53.1 percent to the three month volume-weighted average price on Nasdaq
        Helsinki up to and including January 19, 2017.
  -- The offer price is EUR 6.90 in cash for each outstanding 2012B stock option
     and EUR 0.27 in cash for each outstanding 2012C stock option.
  -- The Board of Directors of PKC has unanimously decided to recommend the
     shareholders and the holders of the stock options to accept the Tender
     Offer.
  -- The Tender Offer is subject to approvals by the relevant regulatory
     authorities, such as competition authorities, and the Offeror gaining
     control of more than 90 percent of PKC’s shares and outstanding stock
     options, in the aggregate.
  -- The Offeror has announced that it will, on or about February 6, 2017,
     publish a tender offer document with detailed information on the Tender
     Offer.
  -- The
Offeror has announced that the offer period under the Tender Offer is
     expected to commence on or about February 6, 2017 and to run until March
     21, 2017. The Offeror reserves the right to extend the offer period from
     time to time in accordance with the terms and conditions of the Tender
     Offer.
  -- Pursuant to the Combination Agreement, the Offeror is to acquire all issued
     and outstanding shares amounting to 24,125,387 shares, and all issued and
     outstanding stock options amounting to 457,300 stock options in PKC. Should
     such number of shares be tendered in the Tender Offer that Offeror obtains
     more than 90 percent of all shares and voting rights in PKC, the Offeror
     intends to initiate mandatory redemption procedure for the remaining of the
     shares and stock options and thereafter apply for delisting of the shares
     of PKC from Nasdaq Helsinki.
  -- On the date of the announcement of the Tender Offer, MSSL does not hold any
     shares or voting rights in PKC.
  -- The Offeror reserves the right to buy shares of PKC before, during and/or
     after the offer period in public trading on Nasdaq Helsinki or otherwise.
  -- The Tender Offer and the combination will preserve the identity, the
     management structure, the business operations and the assets of PKC.
  -- According to the Combination Agreement, the Offeror has sufficient
     financing for the Tender Offer‎ through cash and draw down facilities not
     being subject to any availability or draw down conditions. Such financing
     will remain available for the offer period, including any extension. The
     Offeror may, however, at its‎ discretion also use new facilities for
     financing the actual settlement of the Tender Offer. The‎ completion of the
     Tender Offer is not conditional upon obtaining financing for the Tender
     Offer.



Conditions for the completion of the Tender Offer



The completion of the Tender Offer is conditional on, among other things, the
following conditions being met or the Offeror waiving the fulfilment thereof on
or by the date on which the Offeror announces the final outcome of the Tender
Offer: 



  1. the valid tender of outstanding shares representing, together with any
     shares otherwise held or acquired by the Offeror, over ninety percent (90
     percent) of PKC’s shares and outstanding stock options, in the aggregate;
  2. PKC not having paid out any dividend or distributed any funds, and PKC not
     having made any resolutions (other than as permitted by the Combination
     Agreement), by the shareholders or the board of directors (by virtue of an
     authorization), to distribute any dividend or funds of PKC;
  3. the Offeror having obtained all permits, consents and approvals from all
     applicable competition and other regulatory authorities as may be required
     in connection with the transactions contemplated by the Combination
     Agreement;
  4. no law, regulation or regulatory decision having been issued or pending
     preventing, postponing or materially challenging the consummation of the
     Tender Offer by any court or public authority of competent jurisdiction;
  5. the board of directors of PKC having issued a recommendation to the
     shareholders of PKC and the holders of options to accept the Tender Offer
     and such recommendation remaining in force and not having been materially
     modified or amended,
provided that the Offeror may not refer to this condition if the board of
     directors of PKC has modified or amended the recommendation due to a
     material breach of the Combination Agreement by the Offeror;
  6. no fact or circumstance having occurred after the date of the Combination
     Agreement that has resulted in or constituted, or that can reasonably be
     expected to result in or constitute, a Material Adverse Change (as defined
     below):



Material Adverse Change means, with respect to the Company , any fact or
circumstance that has or is reasonably likely to have a material adverse change
on the business, assets, financial condition or results of operations of the
Company or the Subsidiaries (as defined in the Combination Agreement), taken as
a whole; provided that none of the following shall be deemed either alone or in
the aggregate to constitute, or be taken into account in determining whether
there has been a material adverse change; any change, development, event,
occurrence, effect or fact arising out of or resulting from 



(a) any change in capital market conditions generally or general economic
conditions, including with respect to interest rates or currency exchange
rates, 



(b) any change in geopolitical conditions or any outbreak or escalation of
hostilities, acts of war or terrorism occurring after the date of the
Combination Agreement, 



(c) any hurricane, tornado, flood, earthquake or other natural or man-made
disaster occurring after the date of the Combination Agreement, 



(d) any change in applicable statutes, generally approved accounting principles
or IFRS, which comes into force or becomes applicable after the date of the
Combination Agreement, 



(e) any change in general conditions in the industries in which the Company and
the Subsidiaries and joint ventures operate, or 



(f) the failure as such of the Company to meet any internal or published
projections, forecasts, estimates or predictions in respect of revenues,
earnings or other financial or operating metrics before, on or after the date
of the Combination Agreement, such failure not being a result of a change,
development, event, occurrence, effect or fact otherwise constituting a
material adverse change, 



provided, in case of items (a) through (f) above, so long as such change,
development, event, occurrence, effect or fact does not have a materially
disproportionate effect on the Group (as defined in the Combination Agreement)
relative to the other industry participants; 



(g) changes in the market price or trading volume of the Company’s securities
after the date of the Combination Agreement, and 



(h) the announcement of the Offer and the Offeror (both as defined in the
Combination Agreement) becoming a new controlling shareholder of the Company
(including without limitation the effect of any change of control or similar
clauses in contracts entered into by the Company and the Subsidiaries). 



  1. no information made public by PKC or disclosed by PKC to the Offeror being
     materially inaccurate, incomplete, or misleading, and PKC not having failed
     to make public any information that should have been made public by it
     under applicable laws and regulations; and
  2. the Combination Agreement still being in force.  



MSSL has announced that it will make all necessary filings to obtain regulatory
approvals, including from the relevant competition authorities, as soon as
possible after the announcement of the Tender Offer. 



According to information currently available, it is not certain that all
necessary authority approvals can be obtained by the end of the initial offer
period. In case all necessary approvals have not been obtained by the end of
the initial offer period, the Offeror has announced that it will extend the
offer period in order to receive the necessary approvals to be able to complete
the Tender Offer. The Offeror estimates that the competition clearances can be
obtained prior to the expiry of the initial offer period. 



The Board of Directors of PKC has unanimously decided to recommend the
shareholders and the holders of the stock options to accept the Tender Offer
and considers that the terms and conditions of the Tender Offer are fair to the
shareholders and the holders of the stock options. The Board of Directors of
PKC has received a fairness opinion from its financial adviser BofA Merrill
Lynch  that, subject to the assumptions and limitations set out therein, the
consideration to be offered to the shareholders in the Tender Offer is fair
from a financial point of view, to such holders. The Board of Directors will
issue its formal written statement on the Tender Offer in accordance with the
Finnish Securities Market Act after having received a copy of the tender offer
document approved by the Finnish Financial Supervisory Authority and in any
event no later than the second (2nd) banking day after the commencement of the
offer period. 



“MSSL's offer is an attractive premium to the share price of PKC and reflects
the strategic value of the business. The combination with MSSL will also
strengthen further the competitive position of PKC through greater scale and
breadth of capability to service its customers while providing management and
employees with enhanced opportunities across the larger combined group. As
such, the Board of PKC is unanimously recommending PKC shareholders vote in
favor of the transaction”, says Mr. Ruotsala, Chairman of the Board at PKC. 



PKC has appointed BofA Merrill Lynch as financial adviser and Borenius
Attorneys Ltd as legal adviser. Merrill Lynch International (“BofA Merrill
Lynch”), a subsidiary of Bank of America Corporation, is acting exclusively for
PKC in connection with the Tender Offer and for no one else and will not be
responsible to anyone other than PKC for providing the protections afforded to
its clients or for providing advice in relation to the Tender Offer. 



MSSL’s press release relating to the Tender Offer is enclosed to this stock
exchange release. The release contains, among others, MSSL’s strategic
rationale and background for the Tender Offer, the comments of the MSSL’s
representatives, summary of the Combination Agreement, additional information
on the Tender Offer and information of the news conference held, on January 20,
2017, at 10.00 a.m. EET. 



The Offeror and PKC have undertaken to comply with the recommendation regarding
the procedures to be complied with in Finnish tender offers (the “Helsinki
Takeover Code”) issued by the Finnish Securities Market Association. 



PKC Group Plc

Board of Directors



Matti Hyytiäinen

President & CEO



Further information:

Matti Ruotsala, Chairman of the Board of Directors, PKC Group Plc, contact
Sinikka Ravander, Tel. +358 40 1209 277, sinikka.ravander@pkcgroup.com 

Matti Hyytiäinen, President & CEO, PKC Group Plc, Tel. + 358 400 710968



News conference: January 20, 2017, at 10.00 a.m. EET at Hotel Kämp,
Pohjoisesplanadi 29, 00100 Helsinki, Finland. 

The news conference will also be webcast live at the above mentioned times on
the Company’s website at www.pkcgroup.com. 

The recorded webcast will be available at the same address after the event.
News conference material can be uploaded from the same address after the
conference. 



Distribution

Nasdaq Helsinki

Main media

www.pkcgroup.com



PKC Group is a global partner, designing, manufacturing and integrating
electrical distribution systems, electronics and related architecture
components for the commercial vehicle industry, rolling stock manufacturers and
other selected segments. The Group has production facilities in Brazil, China,
Finland, Germany, Lithuania, Mexico, Poland, Russia, Serbia and the USA. The
Group's revenue from continuing operations in 2015 totalled EUR 847 million.
PKC Group Plc is listed on Nasdaq Helsinki. 



APPENDIX: MSSL’S press release



DISCLAIMER

THIS RELEASE MAY NOT BE RELEASED, PUBLISHED OR OTHERWISE DISTRIBUTED, IN WHOLE
OR IN PART, IN OR INTO, DIRECTLY OR INDIRECTLY, THE UNITED STATES, CANADA,
JAPAN, AUSTRALIA, SOUTH AFRICA OR HONG KONG OR IN ANY OTHER JURISDICTION IN
WHICH THE TENDER OFFER WOULD BE PROHIBITED BY APPLICABLE LAW. 

THIS RELEASE IS NOT A TENDER OFFER DOCUMENT AND AS SUCH DOES NOT CONSTITUTE AN
OFFER OR INVITATION TO MAKE A SALES OFFER. IN PARTICULAR, THIS RELEASE IS NOT
AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
DESCRIBED HEREIN, AND IS NOT AN EXTENSION OF THE TENDER OFFER, IN THE UNITED
STATES, CANADA, JAPAN, AUSTRALIA, SOUTH AFRICA OR HONG KONG. INVESTORS SHALL
ACCEPT THE TENDER OFFER FOR THE SHARES AND THE STOCK OPTIONS ONLY ON THE BASIS
OF THE INFORMATION PROVIDED IN A TENDER OFFER DOCUMENT. OFFERS WILL NOT BE MADE
DIRECTLY OR INDIRECTLY IN ANY JURISDICTION WHERE EITHER AN OFFER OR
PARTICIPATION THEREIN IS PROHIBITED BY APPLICABLE LAW OR WHERE ANY TENDER OFFER
DOCUMENT OR REGISTRATION OR OTHER REQUIREMENTS WOULD APPLY IN ADDITION TO THOSE
UNDERTAKEN IN FINLAND. 

THE TENDER OFFER IS NOT BEING MADE DIRECTLY OR INDIRECTLY IN ANY JURISDICTION
WHERE PROHIBITED BY APPLICABLE LAW AND, WHEN PUBLISHED, THE TENDER OFFER
DOCUMENT AND RELATED ACCEPTANCE FORMS WILL NOT AND MAY NOT BE DISTRIBUTED,
FORWARDED OR TRANSMITTED INTO OR FROM ANY JURISDICTION WHERE PROHIBITED BY
APPLICABLE LAW. IN PARTICULAR, THE TENDER OFFER IS NOT BEING MADE, DIRECTLY OR
INDIRECTLY, IN OR INTO, OR BY USE OF THE POSTAL SERVICE OF, OR BY ANY MEANS OR
INSTRUMENTALITY (INCLUDING, WITHOUT LIMITATION, FACSIMILE TRANSMISSION, TELEX,
TELEPHONE OR ELECTRONIC TRANSMISSION BY WAY OF OR THE INTERNET OR OTHERWISE) OF
INTERSTATE OR FOREIGN COMMERCE OF, OR ANY FACILITIES OF A NATIONAL SECURITIES
EXCHANGE OF, THE UNITED STATES, CANADA, JAPAN, AUSTRALIA, SOUTH AFRICA OR HONG
KONG. THE TENDER OFFER CANNOT BE ACCEPTED, DIRECTLY OR INDIRECTLY, BY ANY SUCH
USE, MEANS OR INSTRUMENTALITY OR FROM WITHIN THE UNITED STATES, CANADA, JAPAN,
AUSTRALIA, SOUTH AFRICA OR HONG KONG. 

PKC’S SHARES HAVE NOT BEEN AND WILL NOT REGISTERED UNDER THE US SECURITIES ACT
OF 1933, AS AMENDED (THE ”SECURITIES ACT”), OR UNDER ANY OF THE RELEVANT
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES OF
AMERICA. PKC’S SHARES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, EXCEPT
PURSUANT TO AN EXEMPTION FROM THE SECURITIES ACT OR IN A TRANSACTION NOT
SUBJECT TO THE REGISTSRATION REQUIREMENTS OF THE SECURITIES ACT.

Attachments:

MSSL - Announcement release OMX_ENG .pdf