CGI LAUNCHES A VOLUNTARY RECOMMENDED PUBLIC TENDER OFFER FOR ALL SHARES IN AFFECTO PLC
AFFECTO PLC -- STOCK EXCHANGE RELEASE -- 22 AUGUST 2017 at 8:30 EET
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.
CGI LAUNCHES A VOLUNTARY RECOMMENDED PUBLIC TENDER OFFER FOR ALL SHARES IN AFFECTO PLC
CGI Nordic Investments Limited (the "Offeror"), a wholly owned indirect subsidiary of CGI Group, Inc. ("CGI"), and Affecto Plc ("Affecto") have on 21 August 2017 entered into a Combination Agreement (the "Combination Agreement") under which the Offeror undertakes to make a voluntary public cash tender offer to purchase all of the issued and outstanding shares in Affecto that are not owned by Affecto or any of its subsidiaries (the "Tender Offer"). The price offered for each share validly tendered in the Tender Offer will be EUR 4.55 in cash representing an aggregate purchase price of approximately EUR 98 million for Affecto shares that are not owned by Affecto or any of its subsidiaries as of the announcement of the Tender Offer.
SUMMARY OF THE TENDER OFFER
The offer price is EUR 4.55 in cash for each Affecto share (the "Offer Price");
The Offer Price represents a premium of
approximately 48.5 percent compared to the volume-weighted average trading price of the Affecto shares on Nasdaq Helsinki Ltd. ("Nasdaq Helsinki") during the 12-month period preceding the day of announcement of the Tender Offer;
approximately 27.6 percent compared to the volume-weighted average trading price of the Affecto shares on Nasdaq Helsinki during the 3-month period preceding the announcement of the Tender Offer; and
approximately 29.3 percent compared to the closing price of the Affecto shares on Nasdaq Helsinki on 21 August 2017, the last trading day before the announcement of the Tender Offer;
Cantell Oy, representing approximately 10.17 percent of the shares and votes in Affecto, has, subject to certain customary conditions, irrevocably undertaken to accept the Tender Offer and not to accept any competing offer with a consideration of less than EUR 4.70 per Affecto share;
The Tender Offer is subject to, among others, approvals, permits and consents by the relevant regulatory authorities, such as competition authorities, and the Offeror gaining control of more than 90 percent of the outstanding Affecto shares and voting rights on a fully diluted basis;
The unconflicted members of the Board of Directors of Affecto have unanimously resolved to recommend to shareholders of Affecto to accept the Tender Offer (as described in more detail below);
If the Offeror obtains more than 90 percent of the shares and voting rights in Affecto, the Offeror intends to commence a mandatory redemption proceeding according to the provisions of the Finnish Companies Act in order to acquire title to all the shares in Affecto. The Offeror intends to apply for the delisting of the Affecto shares from Nasdaq Helsinki.
The Offeror will, on or about 29 August 2017, publish a tender offer document with detailed information on the Tender Offer; and
The offer period for the Tender Offer is expected to commence on or about 30 August 2017 and to expire on or about 27 September 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.
If Affecto pays or distributes or resolves to pay or to distribute dividends or distribute assets or funds to its shareholders before the completion of the Tender Offer and should the record date of any such payment or distribution fall before any or all of the settlements of completion trades under the Tender Offer, the Offer Price shall be decreased accordingly.
Affecto's Board of Directors have formed a composition to evaluate and process the Tender Offer consisting of Magdalena Persson, Mikko Kuitunen, Tuija Soanjärvi, Timo Vaajoensuu and Olof Sand who are non-conflicted members of Affecto's Board of Directors and independent of the Offeror and CGI. As Aaro Cantell has, on behalf of Cantell Oy, given his support for the Tender Offer, which may impact his ability to evaluate the bid unconstrained by undue influences, he has not in any way participated in the decision making related to the matter by Affecto's Board of Directors. The Board of Directors of Affecto in its aforementioned composition has unanimously decided to recommend that the shareholders accept the Tender Offer. The Board of Directors will issue its complete statement on the Tender Offer in accordance with the Finnish Securities Market Act before the commencement of the Tender Offer. To support its assessment of the Tender Offer, the Board of Directors of Affecto has procured a fairness opinion from Affecto's financial advisor Access Partners Oy to the effect that the consideration to be offered to the shareholders is, from a financial point of view, fair to such holders.
The completion of the Tender Offer will be subject to the satisfaction or waiver by the Offeror of the following conditions:
the Affecto shares having been validly tendered and not validly withdrawn, together with any shares in the Company owned by the Offeror or its affiliates, as calculated in accordance with Chapter 18, Section 1 of the Companies Act, representing more than 90 percent of the issued and outstanding shares and voting rights in the Company, on a fully diluted basis;
the receipt of all necessary regulatory approvals, permits, consents and clearances, whether in Finland or any other jurisdiction, including without limitation (i) the approval by the Ministry of Economic Affairs and Employment of Finland required under the Act on Monitoring of Foreign Corporate Acquisitions in Finland, and (ii) clearance with the competition authorities in Finland , and that any conditions set in such approvals, permits, consents or clearances are acceptable to the Offeror in that they are not materially adverse to the Offeror in view of the Tender Offer or the benefits of the transaction contemplated thereby;
the board of Directors of Affecto having issued its recommendation that the holders of the Affecto shares accept the Tender Offer and tender their shares to the Offeror in the Tender Offer, and such recommendation remaining in force in accordance with its terms and not having been withdrawn or amended in a manner detrimental to the Offeror;
the undertaking by Cantell Oy to accept the Tender Offer remaining in force in accordance with its terms and not having been modified, changed or amended;
the Combination Agreement not having been terminated and remaining in force;
no Material Adverse Change (as defined in the Combination Agreement and the Tender Offer) having occurred after the signing date of the Combination Agreement; and
no order having been issued or action taken by any competent court or regulatory authority which prevents, or materially challenges the completion of the Tender Offer.
The Offeror has secured financing for the Tender Offer through access to cash and draw-down facilities of CGI. The financing is not conditional upon the completion of the Tender Offer.
CGI has guaranteed as for its own debt the performance of the Offeror’s obligations in relation to the Tender Offer, including the payment of any offer consideration.
The detailed terms and conditions of the Tender Offer and information on how to accept the Tender Offer will be included in the tender offer document expected to be published by the Offeror on 29 August 2017.
The Offeror and Affecto have undertaken to follow the Helsinki Takeover Code issued by the Finnish Securities Market Association referred to in Chapter 11, Section 28 of the Finnish Securities Markets Act.
As of the date hereof, Affecto's share capital amounts to EUR 5,104,956.30 and the number of shares issued to 22,450,745. The Offeror does not own, whether directly or through any affiliate, any shares in Affecto at the time of this stock exchange release. The Offeror may purchase Affecto shares during the Offer Period in the public trading on Nasdaq Helsinki or otherwise.
BACKGROUND AND REASONS OF THE TENDER OFFER
CGI is unique compared to most organizations. It not only has a vision, but also a dream: “To create an environment in which we enjoy working together and, as owners, contribute to building a company we can be proud of.” This dream has motivated and drives CGI’s vision: “To be a global, world-class IT and business process services leader helping our clients succeed.”
In pursuing its dream and vision, CGI has been highly disciplined throughout its history in executing a “Build and Buy” profitable growth strategy, combining profitable organic growth through the pursuit of contracts – both large and small – with new and existing clients in CGI’s targeted industries (“Build”) and accretive acquisitions of targets which will strengthen CGI’s local proximity in metro markets, industry expertise and enhance CGI's services and solutions (“Buy”). In line with its growth strategy, CGI plans to double the company in five to seven years through a combination of acquisitions and organic growth.
One of CGI’s seven strategic business units is located in the Nordic countries. CGI believes that the proposed combination represents an attractive opportunity to execute on its “Buy” growth strategy and strengthen its leading capabilities in the Nordic countries. The combined resources would deepen CGI’s digital expertise in analytics and data science and would provide an ideal platform in which employees could be actively engaged to serve clients, to win larger scale outsourcing opportunities, and to offer the combined client base a diverse portfolio of services and IP-led solutions in the Nordic countries. Affecto’s robust strategic consulting, cloud, data analytics and digital transformation capabilities will further complement CGI’s global expertise across several in-demand digital transformation areas. Additionally, the integration of Affecto into CGI’s Nordic operations would expand CGI’s footprint to jurisdictions where it currently does not have a presence, namely Lithuania and Latvia. It is also anticipated that further revenue opportunities will be available to the combined business through the enhanced offering of both geographic and product services to both CGI and Affecto clients. CGI believes that Affecto joining a larger and financially strong international group and combining with its Nordic business unit will provide a better platform for organic growth and will be beneficial to both Affecto and CGI’s employees and clients and people in the Nordic countries.
QUOTES OF REPRESENTATIVES OF AFFECTO AND THE OFFEROR
“We have carefully reviewed the offer by CGI and believe that it recognises the strategic value of Affecto. The match between the two companies is compelling with both having strong focus on customer intimacy. Through the combination we could bring complementary skills and a vast number of CGI owned solutions to our customers who operate in an increasingly global market. Affecto would add 1,000 new highly skilled and driven specialists helping customers become data driven, increasingly focusing on artificial intelligence and machine learning to the CGI organisation. We also believe that becoming part of a larger and highly professional global organisation opens up new opportunities for Affecto’s employees. We are excited about this offer for our customers and our employees, and are recommending that our shareholders accept the offer.” comments Magdalena Persson, Chairperson of the Board of Affecto Plc.
”I am excited to note that Affecto’s full-stack data capabilities are well recognized and appreciated. This is essentially thanks to our customers and people. Our customers are relying on us more and more in their mission critical business processes. Our strong network of data-driven experts is growing both in scale and capability. These two aspects combined with our strategic direction in cognitive data offer strong potential of complementary value across the two companies.” comments Juko Hakala, CEO of Affecto Plc.
“The offer to merge with Affecto aligns with CGI’s plan to profitably double the company in five to seven years through a combination of acquisitions and organic growth,” said George D. Schindler, CGI President and Chief Executive Officer. “In turn, CGI brings Affecto depth and end-to-end capabilities serving blue chip clients around the world, including access to a network of global and onshore delivery centers, robust intellectual property portfolio, managed services and high-end IT consulting. We will continue to implement an established build-and-buy strategy that adds to our strength in the Nordics and around the globe.”
“We look forward to welcoming Affecto professionals into the CGI family as member-owners, sharing and collaborating as highly skilled innovators that are focused on delivering value to clients,” said Heikki Nikku, CGI President of Nordics operations. “By merging Affecto with the global reach and resources of CGI, the powerful combination creates unique career opportunities for CGI professionals in the Nordic as we pursue profitable future growth together.”
A summary of the Combination Agreement is attached hereto as Appendix 1.
Access Partners Oy acts as the financial advisor and Dittmar & Indrenius Attorneys Ltd. as the legal advisor to Affecto in connection with the Tender Offer.
HPP Attorneys Ltd acts as the legal advisor to CGI and the Offeror in connection with the Tender Offer. OP Corporate Bank plc acts as the financial adviser to the Offeror and arranger of the Tender Offer.
Board of Directors
For additional information, please contact:
Chairperson of the Board, Magdalena Persson
tel. +46 733 920 508
CEO, Juko Hakala
tel. +358 20 577 7450
The Company will arrange a briefing for analysts and media on 22 August 2017 at 13:00 (EET) at the Company’s Espoo premises at Keilaranta 17 C, FI-02150 Espoo.
CGI IN THE NORDICS IN BRIEF
With nearly 8,000 professionals in 55 offices across Denmark, Estonia, Finland, Norway and Sweden, CGI has a strong local presence across the Nordic IT services market. With a deep commitment to being the best in its industry across the Nordics and around the world, CGI serves as a market leader in end-to-end IT and business consulting services, solutions and outsourcing services. CGI's Nordic operation serves thousands of clients in public and private organisations to help them achieve operational efficiencies while harnessing innovation to better serve the digital needs of their customers and citizens.
CGI IN BRIEF
Founded in 1976, CGI Group Inc. is the fifth largest independent information technology and business process services firm in the world. Approximately 70,000 professionals serve thousands of global clients from offices and delivery centers across the Americas, Europe and Asia Pacific, leveraging a comprehensive portfolio of services including high-end business and IT consulting, systems integration, application development and maintenance, infrastructure management as well as 150 IP-based services and solutions. With annual revenue in excess of C$10 billion and an order backlog exceeding C$20 billion, CGI shares are listed on the TSX (GIB.A) and the NYSE (GIB). Website: www.cgi.com
AFFECTO IN BRIEF
Affecto is a Northern European full-stack data house with expertise in data intensive technologies. Their expertise ranges from enterprise information management to artificial intelligence. Affecto creates business value for its customers by helping them become data driven, thus transforming their businesses. Affecto has long term, committed customer relationships with a large number of essential Northern European companies as well as public institutions. Affecto has a local presence with 18 offices forming a powerful grid, and is a unique home for its 1000+ employees.
Appendix 1: Summary of the Combination Agreement
THIS RELEASE IS FOR GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER TO PURCHASE, OR ANY SOLICITATION OF AN OFFER TO SELL OR ANY INVITATION TO PARTICIPATE. INVESTORS MAY ACCEPT THE TENDER OFFER FOR THE SHARES ONLY ON THE BASIS OF THE INFORMATION PROVIDED IN A TENDER OFFER DOCUMENT WHEN AVAILABLE.
THE TENDER OFFER FOR THE SHARES IS NOT BEING AND WILL NOT BE MADE DIRECTLY OR INDIRECTLY IN ANY JURISDICTION WHERE EITHER THE MAKING OF SUCH AN OFFER OR PARTICIPATION THEREIN IS PROHIBITED BY APPLICABLE LAW OR WHICH WOULD REQUIRE FURTHER OFFER DOCUMENTS, REGISTRATION OR OTHER MEASURES IN ADDITION TO THOSE REQUIRED UNDER FINNISH LAW.
ACCORDINGLY, 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 OR WHICH WOULD REQUIRE FURTHER OFFER DOCUMENTS, REGISTRATION OR OTHER MEASURES IN ADDITION TO THOSE REQUIRED UNDER FINNISH LAW. IN PARTICULAR, THE TENDER OFFER FOR THE SHARES IS NOT BEING AND WILL NOT BE 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, E-MAIL OR OTHER FORMS OF ELECTRONIC COMMUNICATION) 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, AND MAY NOT BE ACCEPTED BY ANY SUCH USE, MEANS, INSTRUMENTALITY OR FACILITY FROM OR WITHIN THE UNITED STATES, CANADA, JAPAN, AUSTRALIA, SOUTH AFRICA OR HONG KONG OR BY PERSONS LOCATED OR RESIDENT THEREIN, OR PERSONS (INCLUDING AGENTS, FIDUCIARIES OR OTHER INTERMEDIARIES) ACTING FOR THE ACCOUNT OR BENEFIT OF PERSONS LOCATED OR RESIDENT THEREIN. ANY PURPORTED ACCEPTANCE OF THE TENDER OFFER FOR THE SHARES RESULTING DIRECTLY OR INDIRECTLY FROM A VIOLATION OF THESE RESTRICTIONS WILL BE INVALID.
APPENDIX 1: SUMMARY OF THE COMBINATION AGREEMENT
This summary aims to describe the terms and conditions of the Combination Agreement to the extent that such terms and conditions may materially affect the assessment of a shareholder of the Company of the terms and conditions of the Tender Offer. This summary is not an exhaustive presentation of all the terms and conditions of the Combination Agreement.
CGI Nordic Investments Limited (the "Offeror") and Affecto Plc (the "Company") have on 21 August 2017 entered into the Combination Agreement, the purpose of which is to agree on the procedures relating to as well as the terms and conditions of the contemplated acquisition by the Offeror of all issued and outstanding shares in the Company that are not owned by the Company or any of its subsidiaries (the “Target Shares”).
The intention of the Offeror and the Company is that the Offeror, in order to combine the businesses of the Offeror and the Company, will acquire the Target Shares through a voluntary public cash tender offer, and, if necessary, through a subsequent squeeze-out proceeding under the Companies Act. The Offeror intends to apply for the delisting of the shares of the Company as soon as practicably possible.
Offer Period and Offer Consideration
Pursuant to the Combination Agreement, the Offer Period under the Tender Offer shall initially continue for four (4) weeks and may be extended or terminated in accordance with the terms and conditions of the Tender Offer. Under the Combination Agreement, the Offeror shall in the Tender Offer offer to acquire the Target Shares for a cash consideration of EUR 4.55 per each Target Share, subject to the terms and conditions of the Tender Offer.
Conditions to Completion
The obligation of the Offeror to complete the Tender Offer and accept the tendered Target Shares shall be subject to the satisfaction or, to the extent permitted by applicable laws and regulations, waiver by the Offeror of each of the closing conditions described in the section “Summary of the Tender Offer” above.
Recommendation of the Board of Directors of the Company
The Board of Directors of the Company represented by the non-conflicted members thereof have unanimously decided to recommend that the holders of the Target Shares accept the Tender Offer and tender their Target Shares in the Tender Offer and to issue a formal statement to this effect, all as required pursuant to the Finnish Securities Markets Act and the rules and regulations promulgated thereunder.
In the event of a competing proposal or offer, the Board of Directors may withdraw or amend its recommendation, if the Board of Directors determines reasonably and in good faith that such withdrawal or amendment is required in order for the Board of Directors to comply with its fiduciary duties under the laws of Finland. The right of the Board of Directors of the Company to withdraw or amend its recommendation for the acceptance of the Tender Offer is subject to the Company and the Board of Directors having complied with certain agreed procedures designed to give the Offeror an opportunity to assess such competing proposal or offer and, at the Offeror’s discretion, to enhance its Tender Offer. In order to facilitate this, the Company has undertaken to give the Offeror certain reasonable information about such competing proposal or offer, including the identity of the competing offeror, consideration and other material terms and conditions of such competing proposal or offer, providing the Offeror with a reasonable opportunity to negotiate with the Board of Directors about the matters arising from the competing proposal or offer. If the Offeror enhances its Tender Offer so as to be, based on the reasonable evaluation of the Board of Directors, at least equally favourable to the shareholders of the Company as the competing offer, the Board of Directors shall promptly, and in any event within two (2) Business Days, confirm and uphold the recommendation for the enhanced Tender Offer.
Warranties and Undertakings
In the Combination Agreement, the Company has given to the Offeror certain warranties, relating to, among other things:
(a) the Company and its subsidiaries being validly organized and having power and authority and material permits and licenses to carry out its business, and the Company having the corporate power and authority to execute the Combination Agreement and to perform its obligations thereunder;
(b) the number of shares or other securities, option rights, instruments or special rights issued by the Company, transfer of shares in the Company, and existing authorization to issue new shares, option rights, instruments or special rights, and further there being no other instrument entitling to the subscription of or conversion into Target Shares (including without limitation to option rights or other special rights);
(c) the latest audited consolidated financial statements and interim report of the Company having been prepared in accordance with relevant laws and accounting standards;
(d) the material provided to the Offeror for its due diligence not being misleading, containing untrue statements of material facts or omitting facts that would have a material negative effect with respect to the valuation of the Company;
(e) neither the Company nor its subsidiaries being in material breach, default or any other material violation of applicable laws or regulations, or permits or licenses held by them, the Company having complied with its disclosure obligations, and neither the Company nor its subsidiaries having offered or made, or accepted or received any illegal or unlawful payments or compensation or gifts or other contributions, and no proceeding alleging any such has been filed, commenced or settled, or to the knowledge of the Company, threatened, in each case to the extent such matter would be material;
(f) certain employee matters, including applicable collective agreements and compliance therewith, employee relations and not being a party to agreements or arrangements requiring certain payments to employees, or having amended certain employment terms and arrangements;
(g) the Company and its subsidiaries being in compliance with any agreements material for their business, and no material agreements having been terminated, and the Combination Agreement or the execution thereof not, to the knowledge of the Company, resulting in any third party exercising any right to terminate any material agreement or arrangement to which the Company or any of its subsidiaries is a party, except to the extent such termination would not be material;
(h) there being no formal proceedings pending, or, to the knowledge of the Company, threatened in relation to the Company or its subsidiaries, except to the extent such proceeding would not be material;
(i) the Company and each subsidiary owning or having the right to use all intellectual property rights material to its business and not infringing the intellectual property rights of any third party and the intellectual property so owned or licensed including all material intellectual property used in the business of the Company and each subsidiary as currently conducted;
(j) the Company and each subsidiary having filed all tax returns required to be filed with the relevant authorities in due time, and such tax returns being true and complete in all material respects, the Company and each subsidiary having, in all material respects, paid, withheld or collected all taxes due and there being no tax audits pending or, to the knowledge of the Company threatened with respect to the Company or any subsidiary;
(k) the practices related to information security and data processing, including personal data, being in compliance with contracts and laws and company’s own policies and statements in all material respects; and
(l) the Company and each subsidiary having since 2 June 2017 conducted its business in the ordinary course of business consistent with past practice.
In the Combination Agreement, the Offeror has given to the Company certain representations and warranties relating to, among other things:
(a) the Offeror being validly organized and having corporate power and all necessary licenses and authorization to carry on its business and having corporate power and authority to execute the Combination Agreement and to perform its obligations thereunder;
(b) the Offeror having sufficient financing available or access to sufficient funds to finance the Tender Offer in accordance with the Terms and Conditions of the Tender Offer and subsequent to completion of the squeeze-out in accordance with the Companies Act redeem any further Target Shares; and
(c) the Offeror not being required to make any filing to or obtain any approval from any authority in connection with the execution of the Combination Agreement or the Tender Offer, or the completion of the transactions contemplated by the Combination Agreement, save as set out in the closing conditions and except to the extent such filing or approval is not material.
Under the Combination Agreement, the parties have given certain undertakings to each other with respect to the procedures to be followed in connection with the Tender Offer, including, among other things, the following:
(a) the parties have undertaken to comply with the Helsinki Takeover Code issued by the Finnish Securities Market Association;
(b) between the signing date of the Combination Agreement and the date of completion of the Tender Offer, the Company has undertaken to conduct its business and to procure that each subsidiary conducts its respective business in the ordinary course of business consistent with past practice and not to make or commit to make or implement certain material changes and certain actions without the prior consent of the Offeror;
(c) each party has undertaken to use all efforts consistent with customary practice to take any action (including without limitation assisting the other party, acting reasonably, in doing the same) reasonably required or advisable in order to complete the Tender Offer without undue delay, such as:
(i) making any merger filings with competent authorities and any other necessary registration and/or filing with any competent authority and Nasdaq Helsinki and taking any reasonable action necessary to obtain any required waiver, consent and/or approvals;
(ii) obtaining any consent, approval or waiver from any third party that are required or advisable in relation to the Tender Offer;
(iii) informing and/or consulting with the employees in accordance with the applicable laws and regulations;
(iv) passing any additional corporate resolutions required to consummate the Tender Offer;
(v) executing and delivering any additional instruments required to consummate the Tender Offer; and/or
(vi) subject to certain exceptions, giving any information regarding itself that the other party may reasonably need for the purpose of making any registrations and filings with any competent authority and for certain other purposes.
(d) the parties have undertaken to co-operate and consult with each other in connection with the preparation of any filings necessary relating to the Tender Offer;
(e) the parties have undertaken that, subject to the Tender Offer remaining in force, the disclosure material provided by the Company shall remain available to the Offeror and that the parties will establish appropriate procedures for reasonable access to certain executives of the Company and to information reasonably required for integration planning purposes, and assessing any need for filings with or approvals by any regulatory authorities in connection with the Tender Offer;
(f) the Company has undertaken (i) to cease all negotiations or other activities related to a competing proposal (if any) conducted prior to the date of the Combination Agreement; and (ii) not to directly or indirectly contact any third party (or any of its directors, officers, employees, agents or external advisors), for the purpose of soliciting any proposal, offer or indication of interest that could reasonably be expected to lead to a competing proposal, without such third party (or any of its directors, officers, employees, agents or external advisors) having first contacted the Company, its subsidiaries or any of their respective directors, officers, employees, agents and external advisors.
(g) the Offeror has undertaken to cause an extraordinary meeting of shareholders of the Company to be convened after the completion of the Tender Offer for the purpose of electing new members to the Board of Directors and, provided that the auditors of the Company do not recommend against granting discharge of liability, the Offeror has undertaken at the Company’s next annual meeting of shareholders grant discharge from liability to the resigning members of the Board of Directors;
(h) each party has undertaken to notify the other party if it becomes aware of an event, fact, condition or circumstance that could reasonably be expected to delay or impede the consummation of the Tender Offer or that may constitute a breach of any warranty or covenant under the Combination Agreement;
(i) if the Tender Offer results in a breach, or default under a material agreement or arrangement of the Company to inform the Offeror and, as required, cooperate with the Offeror to obtain consents or otherwise provide to the counterparty with a solution to ensure that such material agreement or arrangement is not terminated; and
(j) subject to the Offeror and/or its affiliates acquiring more than ninety percent (90%) of the issued and outstanding shares and voting rights in the Company on a fully diluted basis, as calculated in accordance with Chapter 18, Section 1 of the Finnish Companies Act, the Offeror shall cause the shares of to be delisted from Nasdaq Helsinki as soon as permitted and reasonably practicable under applicable laws and regulations.
Term and Termination
The Combination Agreement has entered into force on the signing date.
The Combination Agreement may be terminated with immediate effect at any time prior to the expiry date:
(a) by the Offeror by giving written notice to the Company if (i) the Board of Directors has not issued its recommendation in accordance with the Combination Agreement or if the recommendation of the Board of Directors is not substantially in the form as provided to the Offeror prior to the signing of the Combination Agreement, (ii) the Board of Directors has withdrawn or amended its recommendation in a manner detrimental to the Offeror; (iii) the Company is in breach of any of the warranties given by it under the Combination Agreement, provided that such breach(es), individually or in the aggregate, would have a material impact on the Offeror in view of the Tender Offer, entitling the Offeror to invoke a closing condition (as described in the section “Summary of the Tender Offer” above); (iv) the Company is in breach of its non-solicitation undertaking under the Combination Agreement; or (v) the Company is in material breach of any of its other undertakings set forth in the Combination Agreement (unless any such breach is capable of being cured during the Offer Period and is cured within seven (7) business days);
(b) by the Company by giving written notice to the Offeror if the Offeror is (i) in breach of any of the warranties given by it under the Combination Agreement; or (ii) in material breach of any of its other undertakings set forth in the Combination Agreement (unless any such breach is capable of being cured during the Offer Period and is cured within seven (7) business days); or
(c) by either party by giving written notice to the other party if the Closing Date has not occurred on or before 30 November 2017 or if the Offeror has requested an extension by a maximum of three (3) months, due to applicable regulatory approvals not having been obtained, by such later date;
provided, however, that the right to terminate the Combination Agreement shall not be available to a party whose failure to fulfil any of its obligations under the Combination Agreement has caused the event which would otherwise allow such party to terminate the Combination Agreement.
In the event the Combination Agreement has expired or is terminated the Offeror shall, subject to applicable laws and regulations, be entitled to withdraw the Tender Offer.
If the Combination Agreement is terminated by the Offeror on the grounds set out in paragraph (a) above, the Company shall notwithstanding the termination of the Combination Agreement treat the Offeror equally with any competing offer in accordance with applicable laws and regulations.
If the Combination Agreement is terminated by the Offeror on the grounds set out in paragraph (a) above, the Company shall pay to the Offeror a break fee of EUR 1,000,000, which the parties agree is a reasonable estimate of the actual internal and external costs of the Offeror in connection with the Tender Offer and other transactions contemplated under the Combination Agreement.
Any expiry or termination of the Combination Agreement shall be without prejudice to any remedies available to the parties under the Combination Agreement or under applicable laws and regulations for any breach of the contractual obligations.
The Combination Agreement is governed by and construed in accordance with the laws of Finland.
Any dispute, controversy or claim arising out of or relating to the Combination Agreement shall be finally settled by arbitration in accordance with the Arbitration Rules of the Finland Chamber of Commerce.