SEMCON: Statement from the Board of Directors of Semcon in response to Ratos' public takeover bid

Background

This statement is made by the Board of Directors of Semcon AB (publ) ("Semcon" or the "Company") pursuant to section II.19 of Nasdaq Stockholm's Takeover Rules (the "Takeover Rules").

On 23 August 2022, Etteplan Oyj ("Etteplan") announced a public cash takeover bid to the shareholders of Semcon to transfer all of their respective shares in Semcon to Etteplan for a cash consideration of SEK 149 per share in Semcon. On the same date, the Board of Directors of Semcon recommended the shareholders of Semcon to accept this offer.

Today, 26 September, Ratos AB ("Ratos") submitted a public cash takeover bid to the shareholders of Semcon to transfer all of their respective shares in Semcon to Ratos (the "Offer"). According to the terms of the Offer, Ratos offers a cash consideration of SEK 157 per share in Semcon (the "Offer Price") corresponding to a total value of approximately SEK 2.8 billion[[1]]. The Offer Price corresponds to a premium of approximately:

• 5.4 per cent in relation to Etteplan's public takeover bid of SEK 149 per share that was announced on 23 August 2022,
• 6.2 per cent in relation to the closing price of SEK 147.8 for Semcon's shares on Nasdaq Stockholm on 23 September 2022, which was the last trading day before the announcement of the Offer,
• 39.1 per cent in relation to the volume-weighted average price paid on Nasdaq Stockholm during the last 30 trading days prior to the announcement of Etteplan's public takeover bid, and
• 34.4 per cent in relation to the volume-weighted average price paid on Nasdaq Stockholm during the last 180 trading days prior to the announcement of Etteplan's public takeover bid.

The acceptance period for the Offer is expected to commence around 27 September 2022 and end around 27 October 2022. Ratos reserves the right to extend the acceptance period for the Offer and to postpone the settlement date.

The completion of the Offer is conditional upon, among other things, the Offer being accepted to such extent that Ratos becomes the owner of shares representing more than 90 per cent of the outstanding shares in Semcon on a fully diluted basis and receipt of all necessary regulatory, governmental or similar clearances, approvals and decisions, including from competition authorities, in each case on terms which, in Ratos' opinion, are acceptable.

Ratos reserves the right to waive, in whole or in part, one, several or all of the completion conditions set out for the Offer.

Further information concerning the Offer is available in Ratos' bid press release from 26 September 2022 and the offer document that Ratos will publish shortly before the beginning of the acceptance period. These documents will be available through a link at Ratos' website.

In Etteplan's bid press release published on 23 August 2022, Etteplan described a commitment given by Semcon's largest shareholder JCE Group AB ("JCE") to accept the offer from Etteplan. This commitment is conditional upon that no competing, more favourable offer has been made public before the end of the acceptance period, provided that the value of such competing offer exceeds Etteplan's offer price per share by at least five per cent. The Offer Price from Ratos of SEK 157 per share exceeds the offer price from Etteplan by 5.4 per cent, which means that JCE no longer is bound by its commitment against Etteplan. Etteplan announced in the same bid press release that the offer price of SEK 149 per share will not be increased. Against this background, at the request of Ratos and conditional on the Offer being made public, JCE has undertaken to accept the Offer with certain reservations. In addition to JCE, Ratos has also received conditional undertakings to accept the Offer from Nordea Investment Management AB, SAMSON ROCK CAPITAL LLP, Otus Capital Management LP and Ennismore Fund Management. Consequently, Ratos has received undertakings to accept the Offer from shareholders representing approximately 52 per cent of the shares and votes in Semcon.

The processes undertaken by the Board of Directors to evaluate the Offer

The Board of Directors has made a corresponding evaluation of the Offer from Ratos as the one considering the previous offer from Etteplan. A new statement regarding the valuation of the Offer (a so-called "Fairness Opinion") has been deemed not to be justified by the Board of Directors as a Fairness Opinion was recently obtained from Öhrlings PricewaterhouseCoopers AB ("PwC") in connection with the previous offer from Etteplan. In this Fairness Opinion, Etteplan's offer price of SEK 149 per share was deemed reasonable from a financial perspective. More information about the evaluation of Etteplan's previous offer, including the Fairness Opinion from PwC, is available in Semcon's press release from 23 August 2022.

The Board of Directors of Semcon has, upon written request from Ratos, allowed Ratos, like previously Etteplan, to conduct a limited confirmatory due diligence investigation in connection with the preparations for the Offer. Ratos has been granted access to the same information that Etteplan had access to in connection with their due diligence investigation. In connection with this due diligence investigation, Ratos has also met Semcon's management. Neither Ratos nor Etteplan has received any inside information when conducting their due diligence investigations.

As mentioned above, Ratos has received a conditional commitment from JCE to accept the Offer. As a result of JCE's commitment, board member Carl Backman, due to a conflict of interest, did not participate in the Board of Directors' preparations and resolution regarding the recommendation of the Offer. All other board members in Semcon have participated in the evaluation of the Offer.

In connection with the initial offer from Etteplan, the Board of Directors engaged Danske Bank A/S, Danmark, Sverige Filial ("Danske Bank") as financial advisor and Advokatfirman Vinge KB ("Vinge") as legal advisor. Danske Bank and Vinge have had the same roles in the evaluation of the Offer from Ratos separately and in relation to the previous offer from Etteplan.

The Board of Directors' recommendation

The Board of Directors has evaluated the Offer in relation to the previous offer from Etteplan from 23 August 2022. The Offer from Ratos implies a higher offer price of SEK 157 per share compared to SEK 149 per share in Etteplan's bid, which is more attractive from a financial perspective. In addition to the Offer Price, the Board of Directors assess that the offers, in all essence, are comparable and that both bidders would be responsible owners of Semcon in the event of a completed takeover.

According to the Takeover Rules, the Board of Directors shall, based on what Ratos has stated in the announcement of the Offer, provide its understanding of the effect that the execution of the Offer will have on Semcon, particularly with regards to employment, and its understanding of Ratos' strategic plans for Semcon and the subsequent effects these could have on employment and the locations in which Semcon operates.

Ratos has expressed the following concerning the employees and management group in Semcon:

"As a member of Ratos' business group Semcon will retain its company name and remain an independent company with its headquarter in Gothenburg.

The Offer will not have an impact on Semcon's employees and management (including their terms of employment) or the organization in general. Ratos ownership of Semcon is not assessed to lead to a reduction in the number of employees. Cost synergies are estimated to arise due to the delisting. The operations of Semcon are intended to continue to be conducted at the same locations as today." 

The Board of Directors assumes that this description is correct and therefore does not see any reason to have a different perception in the relevant matters.

Against this background, the Board of Directors unanimously recommends the shareholders of Semcon to accept the Offer from Ratos of SEK 157 per share. The Board of Directors' previous recommendation to accept Etteplan's offer is thereby withdrawn.

This statement shall, in all respects, be subject to and interpreted in accordance with Swedish law. Disputes in connection with this statement shall exclusively be decided in a Swedish court of law.

Gothenburg, 26 September 2022

Semcon AB (publ)
The Board of Directors
 

[[1] Based on all 18,112,534 outstanding shares in Semcon.]

This is information that Semcon AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the below listed contact person, on 26 September 2022 at 07.05 CEST.