Why is PPG making the Tender Offer for all of the shares in Tikkurila?
PPG sees significant value and potential in Tikkurila and accordingly expects to make substantial investments in Tikkurila’s infrastructure and people, as well as to provide Tikkurila with access to PPG’s global diversified paints, coatings and specialty materials offerings on which Tikkurila will be able to build and further deepen its customer relationships, develop lateral products and access additional markets.
Upon the completion of the Tender Offer, PPG expects to position Tikkurila as its platform to the Nordic and Baltic countries, Russia and potentially beyond.
PPG intends to promote and maintain Tikkurila’s identity, culture and Finnish values, including its commitment to creating sustainable value for all stakeholders and its various investments in local communities and people. PPG also expects to maintain Tikkurila’s corporate offices in Finland and various production, distribution and sales centres in the Nordic countries. Further, PPG intends to continue to invest in Tikkurila’s employees and potentially provide significant roles for many of Tikkurila’s key executives.
PPG sees Tikkurila’s strong distribution capability as a platform to significantly grow many of PPG’s legacy products in its Protective and Marine, Refinish, and Light Industrial Coatings businesses and expand Tikkurila’s and PPG’s combined presence in the countries where Tikkurila is active.
What is the Offer Price and premium offered per share?
The Offer Price in the Tender Offer is EUR 34.00 in cash for each share validly tendered in the Tender Offer, subject to possible adjustments due to dividend payments and certain other events, as set out in the terms and conditions of the Tender Offer.
The Offer Price represents a premium of:
approximately 126.1 percent compared to the closing price of Tikkurila shares on Nasdaq Helsinki on 17 December 2020, the last trading day prior to the announcement of the Tender Offer;
approximately 131.7 percent compared to the volume-weighted average trading price of Tikkurila shares on Nasdaq Helsinki during the three (3)-month period prior to and up to the date of the announcement of the Tender Offer; and
approximately 141.7 percent compared to the volume-weighted average trading price of Tikkurila shares on Nasdaq Helsinki during the twelve (12)-month period prior to and up to the date of the announcement of the Tender Offer.
What has the Board of Directors of Tikkurila stated about the Tender Offer?
The Board of Directors of Tikkurila recommends that the holders of Tikkurila’s shares accept the Tender Offer and tender their shares to PPG on the terms and conditions of the Tender Offer.
Heikki Westerlund, a member of the Board of Directors of Tikkurila and Chairman of the Committee representing the independent Members of the Board of Tikkurila said, “We have carefully considered PPG’s ability to become a good and strong owner of Tikkurila. Tikkurila may benefit from PPG’s long-term expertise in R&D, raw material sourcing and strong presence in industrial products. We have further taken into account the position and future possibilities of personnel as part of a larger entity, as well as PPG’s strategy in terms of following principles of sustainability. Consistent with this view and considering the fair price offered to the shareholders, the Board of Directors sees that the offer presents both a fair and reasonable alternative for Tikkurila and its shareholders.”
What have major shareholders stated about the Tender Offer?
In connection with the Tender Offer, certain major shareholders i.e. Kaleva Mutual Insurance Company, Varma Mutual Pension Insurance Company and Mandatum Life Insurance Company Limited, who collectively held approximately 9.32% of all the shares in Tikkurila, have sold their shares to PPG at the offer price of €34.00 per share. Tikkurila’s largest shareholder, Oras Invest Oy, which holds approximately 20.01% of the shares in Tikkurila, has unconditionally agreed to sell to PPG all of its shares in Tikkurila at the offer price of €34.00 per share, following receipt of the necessary regulatory approvals, and has also given an unconditional irrevocable undertaking in support of the Tender Offer.
Annika Paasikivi, CEO of Oras Invest Oy, said, “Tikkurila is a great company with strong brands and historical roots. Over the past weeks several industrial companies have shown interest to become Tikkurila’s new owner. We at Oras Invest have evaluated the situation carefully and made a decision to sell our Tikkurila shareholding directly to PPG. In our decision-making we considered three key aspects: increased overall deal security, the significantly higher price that will be offered to all shareholders and strong industrial logic and support for Tikkurila’s growth prospects. We are pleased to be a part of this solution that sets a clear path forward.”
Is the Tender Offer conditional on regulatory approvals?
Yes; the Tender Offer is subject to the receipt of certain regulatory approvals.
The European Commission, the Ministry of Economic Affairs and Employment of Finland and the Agency for Protection and Development of Competition of the Republic of Kazakhstan have granted approval of the Tender Offer.
The Tender Offer remains subject to the receipt of the approval of the Federal Antimonopoly Service of Russia (FAS). The review process for the transaction in Russia has been impacted by a recently announced work shutdown in Russia, from May 1 to May 10, 2021, due to COVID-19 restrictions and public holidays. As is the case with any foreign purchaser, the review process by the FAS includes an assessment of whether the transaction should be subject to foreign investment review. That assessment is ongoing, and it is difficult to predict when that assessment will be concluded. PPG is not aware of any foreign investment or competition issues or concerns related to the transaction, and remains committed to completing the Tender Offer as expeditiously as possible. Upon receipt of regulatory approval from the FAS, PPG would announce the approval and set an expiration date for the Tender Offer (approximately two weeks from announcement) in accordance with Finnish tender offer regulations.
What may happen after the Tender Offer?
After the completion of the Tender Offer, if PPG obtains more than ninety (90) percent of the shares and voting rights in Tikkurila, PPG or a member of its corporate group expects to initiate compulsory redemption proceedings in accordance with the Finnish Companies Act as soon as reasonably practicable to redeem the remaining shares of Tikkurila.
Pursuant to the Finnish Companies Act, a shareholder that holds more than half (1/2) of the shares and voting rights carried by the shares present in a company’s general meeting has sufficient voting rights to decide on the appointment of board members and distribution of dividends, and a shareholder that holds more than two-thirds (2/3) of the shares and voting rights carried by the shares present in a company’s general meeting has sufficient voting rights to decide upon the merger of a company into another company. Should PPG’s shareholding in Tikkurila be less than ninety (90) percent of the shares and voting rights in Tikkurila, it is possible that Tikkurila could be subject to certain corporate measures and transactions, including for example a merger into an unlisted company including against cash consideration, the issuance of shares in Tikkurila by way of derogation from the shareholders’ pre-emptive subscription rights, a change of domicile to a jurisdiction that allows more flexibility, or amendments to Tikkurila’s Articles of Association.
When and how will PPG announce the results of the Tender Offer?
PPG will announce the preliminary results of the Tender Offer by a release on or about the first (1st) Finnish banking day following the expiration of the Offer Period (including any extended and discontinued extended Offer Period). In that announcement of the preliminary results, PPG will also declare whether it will complete the Tender Offer, subject to the conditions to completion of the Tender Offer continuing to be fulfilled on the date of the final result announcement, and whether PPG will extend the Offer Period. PPG will announce the final result of the Tender Offer on or about the third (3rd) Finnish banking day following the expiration of the Offer Period (including any extended and discontinued extended Offer Period) and in that announcement, PPG will also confirm the percentage of shares in respect of which the Tender Offer has been validly accepted and not validly withdrawn.
PPG will announce the initial percentage of the shares validly tendered during a possible subsequent Offer Period on or about the first (1st) Finnish banking day following the expiry of the subsequent Offer Period and the final percentage on or about the third (3rd) Finnish banking day following the expiry of the subsequent Offer Period.