Statement of the Board of Directors of Ramirent Plc regarding the voluntary public cash tender offer by Loxam S.A.S.
Ramirent Plc Stock Exchange Release June 14, 2019 at 9.05 a.m. EEST
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO CANADA, JAPAN, AUSTRALIA, SOUTH AFRICA OR HONG KONG, OR IN ANY OTHER JURISDICTION IN WHICH THE TENDER OFFER WOULD BE PROHIBITED BY APPLICABLE LAW. FOR FURTHER INFORMATION, SEE SECTION "IMPORTANT INFORMATION" BELOW.
Loxam S.A.S. ("Loxam" or the "Offeror") and Ramirent Plc ("Ramirent" or the "Company") have on June 10, 2019 announced that the Offeror, will make a voluntary recommended public cash tender offer to purchase all of the issued and outstanding shares in Ramirent that are not held by Ramirent or any of its subsidiaries (the "Shares") (the "Tender Offer").
The Board of Directors of Ramirent (the "Board") hereby issues the following statement concerning the Tender Offer in accordance with Chapter 11, Section 13 of the Finnish Securities Markets Act (746/2012, as amended).
Tender Offer in brief
Ramirent and Loxam have on June 10, 2019 entered into a Combination Agreement (the "Combination Agreement"), setting out, among other matters, the terms and conditions pursuant to which the Tender Offer shall be made by the Offeror.
The Tender Offer will be made in accordance with the terms and conditions of a tender offer document (the "Tender Offer Document") expected to be published by the Offeror on or about June 19, 2019.
The price offered for each Share validly tendered in the Tender Offer is EUR 9.00 in cash, subject to adjustments as set out in the terms and conditions of the Tender Offer. The offer price represents a premium of approximately:
- 65.4 percent compared to the closing price of Ramirent shares on Nasdaq Helsinki Ltd ("Nasdaq Helsinki") on June 7, 2019, the last trading day before the announcement of the Tender Offer; and
- 56.0 percent compared to the volume-weighted average trading price of Ramirent shares on Nasdaq Helsinki during the 3-month period preceding the date of the announcement of the Tender Offer.
The offer price is subject to the terms and conditions of the Tender Offer. According to the terms and conditions of the Tender Offer, among other things, should the Company decide to pay any dividend, in any form, and such distribution is paid to the Company shareholders before the completion date of the Tender Offer (including the second instalment of the 2018 annual dividend of EUR 0.23 resolved upon at the 2019 Annual General Meeting of Ramirent) or if a record date with respect to the foregoing occurs prior to the completion date of the Tender Offer, the offer price shall be reduced accordingly on a euro-for-euro basis.
The Tender Offer was announced by the Offeror pursuant to Chapter 11 of the Finnish Securities Markets Act on June 10, 2019.
Certain major shareholders of Ramirent Nordstjernan AB and Oy Julius Tallberg Ab as well as the President and CEO of Ramirent Mr. Tapio Kolunsarka and the CFO of Ramirent Mr. Jukka Havia, have irrevocably undertaken to accept the Tender Offer subject to certain customary conditions. The irrevocable undertakings represent jointly approximately 31.9 percent of the Shares in Ramirent.
In addition, the major shareholder of Stavdal AB, Hammarviken Företagsutveckling AB, representing approximately 62.9 percent of the Stavdal Shares (as defined below) and approximately 3.2 percent of the Shares in Ramirent (after taking into account the expected issuance of 5,848,341 Ramirent shares to the shareholders of Stavdal AB (the "Stavdal Shares") in connection with the completion of the acquisition of Stavdal AB by Ramirent, which was announced by Ramirent on April 8, 2019), has irrevocably undertaken to accept the Tender Offer subject to certain customary conditions or to sell its Stavdal Shares to the Offeror outside the Tender Offer at the offer price subject to the completion of the Tender Offer.
The offer period for the Tender Offer is expected to commence on or about June 19, 2019 and is expected to expire on or about July 18, 2019. 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.
The completion of the Tender Offer is subject to certain conditions to be fulfilled or waived by the Offeror on or prior to the date of the Offeror's announcement of the final result of the Tender Offer, including, among other things, the valid tender of Shares (including the 5,848,341 Stavdal Shares to the extent that they are outstanding and validly tendered into the Tender Offer) representing in the aggregate, together with any other Shares otherwise held by the Offeror prior to the announcement of the final result of the Tender Offer and the Stavdal Shares to the extent that they are not validly tendered into the Tender Offer and the Offeror has the unconditional right to acquire them from the Stavdal AB shareholders, more than ninety percent (90%) of the aggregate number of the shares and voting rights of the Company calculated on a fully diluted basis.
The Offeror's intention is to cause the Shares in the Company not held by the Offeror to be transferred to it through subsequent compulsory redemption proceedings in accordance with the Finnish Companies Act (624/2006, as amended) and to cause the shares in the Company to be delisted from Nasdaq Helsinki as soon as permitted and reasonably practicable under applicable laws and regulations following the completion of the Tender Offer.
At the time of the announcement of the Tender Offer on June 10, 2019, neither the Offeror nor any of its group entities held any Shares or voting rights in Ramirent.
The detailed terms and conditions of the Tender Offer as well as further information on the Tender Offer will be included in the Tender Offer Document.
Financing of the Tender Offer
The Offeror plans to finance the Tender Offer through debt facilities and cash on balance sheet. The debt facilities are made available under bridge facilities agreements of up to EUR 1.5 billion in aggregate. The availability of the debt facilities is subject to customary "certain funds" conditions or conditions the satisfaction of which is within the control of the Offeror. The Offeror's obligation to complete the Tender Offer is not conditional upon availability of financing, and no third party consents are required by the Offeror for the financing of the Tender Offer.
Background of the statement
Pursuant to Chapter 11, Section 13 of the Finnish Securities Market Act, the Board has an obligation to prepare a public statement regarding the Tender Offer. The statement must include a well-founded assessment of the Tender Offer from the perspective of Ramirent and its shareholders as well as on the strategic plans presented by the Offeror in the Tender Offer Document and their likely effects on the operations of, and employment at, Ramirent.
For the purposes of issuing this statement, the Offeror has submitted to the Board a draft version of the Tender Offer Document in the form in which the Offeror has filed it with the Finnish Financial Supervisory Authority for approval on June 11, 2019.
In preparing this statement, the Board has relied on the information provided in the draft Tender Offer Document and has not independently verified the information included therein. Accordingly, the Board's assessments of the consequences of the Tender Offer on Ramirent's operations and employees should be treated with caution.
Assessment of the strategic plans presented by the Offeror in the Tender Offer Document and their likely effects on the operations of, and employment at, Ramirent
Information given by the Offeror in the Tender Offer Document
The Board has assessed the Offeror's strategic plans based on the statements made in the Company's and the Offeror's announcement regarding the Tender Offer published on June 10, 2019 and the draft Tender Offer Document.
According to the draft Tender Offer Document, Loxam is now the largest equipment rental company in Europe with revenue of EUR 1,483 million and EBITDA of EUR 501 million in 2018. Loxam has approximately 8,000 employees and operates a network of 766 branches in over 13 countries in Europe in addition to the Middle East, Brazil, Colombia and Morocco. As a result of its strong financial position and sustainable business, Loxam has completed over 20 acquisitions during the last 10 years, which demonstrates its integration skills and its inclusive corporate culture.
According to Loxam's statements, combining Ramirent's important market position in the Nordics and Eastern Europe with Loxam's strong market positions in Western and Southern European markets will create a uniquely positioned company, with better scale and resilience on the back of a larger, more diverse and greater international exposure, making their respective businesses balanced for the benefit of their customers, employees and financial stakeholders. With combined revenue of EUR 2.2 billion the combined entity would also emerge as a leading equipment rental player globally.
Loxam expects that backed by its bespoke experienced integration capabilities, the proposed acquisition of Ramirent represents a significant step forward in the Group's strategy, creating a pan-European equipment rental leader, a diversified business and customer mix as well as provides a platform for future growth.
Furthermore, according to Loxam's statements, it values Ramirent's organization and highly experienced management team and employees, and expects the contemplated transaction to be positive for Ramirent and its employees.
According to the draft Tender Offer Document, other than as described therein and the payment of the offer price, Loxam expects the completion of the Tender Offer not to have any material consequence on Ramirent's daily operations, the position of Ramirent's management, employees, or its business locations.
The Board considers that the information on the strategic plans of the Offeror concerning Ramirent included in the draft Tender Offer Document is of a general nature. However, based on the Offeror's statements, the Board believes that the strategic plans of the Offeror pursuant to the Tender Offer would not generally have a significant effect on the operations or business locations of Ramirent.
The Board shares Loxam's view that the combined company has the capabilities to deliver a more extensive offering to its clients, can offer new possibilities for its employees and provides a platform for future growth in creating a pan-European player. Furthermore, the Board of Directors considers that the Offer Price and the credibility of Loxam as an investor, together with its track record of making acquisitions, supports the Offerors ability to gain control of more than 90 percent of the shares and thereby successfully complete the Tender Offer and subsequently integrate the companies.
The Board notes, however, that the Tender Offer may have an effect on employment in the Company with regard to duplicative functions. The Board believes that the final and longer-term impact of the integration can be assessed only after the completion of the Tender Offer.
On the date of this statement, the Board has not received any formal statements as to the effects of the Tender Offer to the employment at Ramirent from Ramirent's employees.
Assessment of the Board from the perspective of Ramirent and its shareholders
In evaluating the Combination Agreement and the Tender Offer, analysing alternative opportunities available to Ramirent and concluding this statement, the Board has considered several factors, such as Ramirent's recent financial performance, current position and future prospects, and the historical performance of the trading price of the Ramirent share.
The Board's assessment of continuing the business operations of Ramirent as an independent company has been based on reasonable future-oriented estimates, which include various uncertainties, whereas the offer price offered by the Offeror in the Tender Offer and the premium included therein is not subject to any uncertainty other than the fulfilment of the conditions to completion of the Tender Offer.
In order to support its assessment of the Tender Offer, the Board has received a fairness opinion, dated June 10, 2019, concerning the Tender Offer (the "Fairness Opinion") from Ramirent's financial advisor Lazard AB. The Fairness Opinion is attached as Appendix 1 to this statement.
The Board believes that the consideration offered by the Offeror in the Tender Offer is fair from the perspective of Ramirent's shareholders on its assessment of the matters and factors, which the Board has concluded to be material in evaluating the Tender Offer. These matters and factors include, but are not limited to:
- the offer price and premium offered for the Shares (taking into account also possible adjustments to the offer price pursuant to the terms and conditions of the Tender Offer);
- the fact that the offer price will be paid fully in cash;
- historical trading price of the Ramirent shares;
- information and assumptions on the business operations and financial conditions of Ramirent as at the date of this statement and their expected future development;
- valuations and analysis made and commissioned by the Board as well as discussions with external financial advisors;
- transaction certainty, and the conditions of the Tender Offer are reasonable and customary;
- the ability to respond to possible third party proposals if necessary to comply with the Board's fiduciary duties;
- other terms of the Tender Offer;
- the undertakings by the Company's certain shareholders to accept the Tender Offer as referred to above; and
- the Fairness Opinion.
The Board has investigated and considered the trends in the markets and the industry and certain strategic alternatives available to Ramirent. Such alternatives include, but are not limited to, remaining an independent company, and partnering with others. The Board has also considered the risks and uncertainties associated with such alternatives.
Based on its overall assessment, taking into consideration the factors described above, among other matters, the Board has concluded that the Tender Offer is a more favourable alternative to Ramirent's shareholders compared to continuing the business operations as an independent company or other potential strategic alternatives available to Ramirent.
Recommendation of the Board
The Board has carefully assessed the Tender Offer and its terms and conditions based on the draft Tender Offer Document, the Fairness Opinion, and other available information.
Based on the foregoing, the Board believes that the Tender Offer and the consideration offered by Loxam for the Shares are fair to the shareholders of Ramirent. The Board also notes that the Tender Offer provides immediate value to the shareholders of Ramirent.
Based on the above factors, the Board is pleased to unanimously recommend that the shareholders of Ramirent accept the Tender Offer.
This statement of the Board is based on an assessment of the issues and factors which the Board has concluded to be material in evaluating the Tender Offer, including, but not limited to, the information and assumptions on the business operations and finances of Ramirent as at the date of this statement and their expected future development.
Four out of six members of the Board have participated in the decision-making concerning this statement. The Board members Mr. Tobias Lönnevall and Mr. Kaj-Gustaf Bergh did not participate in the decision. The evaluation of independence of the members of the Board is available on the website of Ramirent.
The Board notes that the transaction may, as is common in such processes, involve unforeseeable risks.
The Board further states that Ramirent's shareholders should also take into account the potential risks related to non-acceptance of the Tender Offer. If acceptance condition of more than 90 percent of the Shares and votes is waived, the completion of the Tender Offer would reduce the number of Ramirent's shareholders and the number of shares, which would otherwise be traded on Nasdaq Helsinki. Depending on the number of Shares validly tendered in the Tender Offer, this could have an adverse effect on the liquidity and value of the shares in Ramirent.
Pursuant to Chapter 18 of the Finnish Companies Act, a shareholder with more than 90 percent of all shares and votes in a company shall have the right to acquire, and subject to a demand by the other shareholders, also have an obligation to redeem, the shares owned by the other shareholders. Provided Loxam acquires such amount of Shares, the Shares held by Ramirent's shareholders who have not accepted the Tender Offer may be redeemed through compulsory redemption proceedings under the Finnish Companies Act under the conditions set out therein.
Ramirent has undertaken to comply with the Helsinki Takeover Code issued by the Securities Market Association referred to in Chapter 11, Section 28 of the Finnish Securities Markets Act.
This statement does not constitute an investment or tax advice, and the Board does not specifically evaluate herein the general price development or the risks relating to the Shares in general. The shareholders of Ramirent must independently decide whether to accept the Tender Offer, and they should take into account all relevant information available to them, including information presented in the Tender Offer Document and this statement as well as any other factors affecting the value of the Shares.
Ramirent is advised by Lazard AB as the financial advisor, and Hannes Snellman Attorneys Ltd as the legal advisor.
Helsinki, June 14, 2019
The Board of Directors of Ramirent Plc
Appendix 1: Fairness Opinion
Ulf Lundahl, Chairman of the Board of Directors, Ramirent Plc
Tel. +46 70 820 4648
Jukka Havia, EVP and CFO, Ramirent Plc
Tel. +358 50 355 3757
Distribution: Nasdaq Helsinki, the main media, www.ramirent.com
Ramirent is a leading service company offering equipment rental for construction and other industries. Our mission is to help our customers gear up on safety and efficiency by delivering great equipment and smooth service with a smile. We have 2,900 co-workers at 294 customer centers across nine countries in Northern and Eastern Europe. In 2018, Ramirent Group sales reached a total of EUR 712 million. Ramirent is listed on Nasdaq Helsinki (RAMI).
THIS RELEASE MAY NOT BE RELEASED OR OTHERWISE DISTRIBUTED, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO, 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, CANADA, JAPAN, AUSTRALIA, SOUTH AFRICA OR HONG KONG. INVESTORS SHALL ACCEPT THE TENDER OFFER FOR THE SHARES 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 THE INTERNET) OF INTERSTATE OR FOREIGN COMMERCE OF, OR ANY FACILITIES OF A NATIONAL SECURITIES EXCHANGE OF, 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, CANADA, JAPAN, AUSTRALIA, SOUTH AFRICA OR HONG KONG.
THIS STOCK EXCHANGE RELEASE OR ANY OTHER DOCUMENT OR MATERIALS RELATING TO THE TENDER OFFER IS NOT BEING MADE AND HAVE NOT BEEN APPROVED BY AN AUTHORISED PERSON FOR THE PURPOSES OF SECTION 21 OF THE UK FINANCIAL SERVICES AND MARKETS ACT 2000 ("FSMA"). ACCORDINGLY, THIS STOCK EXCHANGE RELEASE OR ANY OTHER DOCUMENT OR MATERIALS RELATING TO THE TENDER OFFER ARE NOT BEING DISTRIBUTED TO, AND MUST NOT BE PASSED ON TO, THE GENERAL PUBLIC IN THE UNITED KINGDOM. THE COMMUNICATION OF THIS STOCK EXCHANGE RELEASE OR ANY OTHER DOCUMENT OR MATERIALS RELATING TO THE TENDER OFFER IS EXEMPT FROM THE RESTRICTION ON FINANCIAL PROMOTIONS UNDER SECTION 21 OF THE FSMA ON THE BASIS THAT IT IS A COMMUNICATION BY OR ON BEHALF OF A BODY CORPORATE WHICH RELATES TO A TRANSACTION TO ACQUIRE DAY TO DAY CONTROL OF THE AFFAIRS OF A BODY CORPORATE; OR TO ACQUIRE 50 PER CENT. OR MORE OF THE VOTING SHARES IN A BODY CORPORATE, WITHIN ARTICLE 62 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005.
THIS STOCK EXCHANGE RELEASE HAS BEEN PREPARED IN COMPLIANCE WITH FINNISH LAW, THE RULES OF NASDAQ HELSINKI AND THE HELSINKI TAKEOVER CODE AND THE INFORMATION DISCLOSED MAY NOT BE THE SAME AS THAT WHICH WOULD HAVE BEEN DISCLOSED IF THIS ANNOUNCEMENT HAD BEEN PREPARED IN ACCORDANCE WITH THE LAWS OF JURISDICTIONS OUTSIDE OF FINLAND.
Notice to U.S. Shareholders
U.S. shareholders are advised that the shares of Ramirent are not registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") and that Ramirent is not subject to the periodic reporting requirements of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is not required to, and does not, file any reports with the U.S. Securities and Exchange Commission (the "SEC") thereunder.
The Tender Offer is open to Ramirent's shareholders resident in the United States and is made on the same terms and conditions as those made to all other shareholders of Ramirent to whom an offer is made. Any information documents, including this Release, are being disseminated to U.S. shareholders on a basis comparable to the method that such documents are provided to Ramirent's other shareholders.
The Tender Offer is expected to be made in the United States pursuant to Section 14(e) and Regulation 14E under the Exchange Act as a "Tier II" tender offer, and otherwise in accordance with the requirements of Finnish law. Accordingly, the Tender Offer will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, the offer timetable, settlement procedures and timing of payments that are different from those applicable under U.S. domestic tender offer procedures and law.
To the extent permissible under applicable law or regulations, including Rule 14e-5 under the Exchange Act, Loxam and its affiliates or brokers (acting as agents for Loxam or its affiliates, as applicable) may from time to time, directly or indirectly, purchase or arrange to purchase, outside of the Tender Offer shares of Ramirent or any securities that are convertible into, exchangeable for or exercisable for such shares of Ramirent, provided that no such purchases or arrangements to purchase outside of the Tender Offer will be made in the United States by or on behalf of the Offeror or its affiliates or for a price that is greater than the Offer Price. To the extent information about such purchases or arrangements to purchase is made public in Finland, such information will be disclosed by means of a press release or other means reasonably calculated to inform U.S. shareholders of Ramirent of such information. In addition, the financial advisers to Loxam, or affiliates of the financial advisors, may also engage in ordinary course trading activities in securities of Ramirent, which may include purchases or arrangements to purchase such securities.
Neither the SEC nor any U.S. state securities commission has approved or disapproved the Tender Offer, or passed any comment upon the adequacy or completeness of any tender offer document. Any representation to the contrary is a criminal offence in the United States.