Published: 2005-08-17 16:00:00 CEST
Elisa Oyj - Company Announcement


On 7 July 2005, Elisa announced a public tender offer for all shares issued by
Saunalahti Group Oyj. Elisa's tender offer for Saunalahti shares will commence
23 August 2005 at 9.30 a.m. Finnish time and terminate on 19 September 2005 at
4.00 p.m. Finnish time unless the tender offer period is extended.

The consideration offered by Elisa in the tender offer is 1 Elisa share for 5.6
Saunalahti shares. Elisa will also make an offer for Saunalahti option holders,
offering EUR 1.53 in cash for each share option of the 2002 option programme and
EUR 1.82 in cash for each share option of the 2003 option programme.

The Finnish Financial Supervision Authority has today, 17 August 2005, approved
the Finnish version of the tender offer document relating to Elisa's public
tender offer for Saunalahti shares. The printed Finnish version of the combined
tender offer document and listing particulars will be available as of 19 August
2005 at Elisa's head office, at the address Kutomotie 18, 00380 Helsinki. The
electronic version is available on the internet at The
offer document will also be available at OMX way, at the address Fabianinkatu
00130 Helsinki, and electronically on the internet at The
English translation of the tender offer document is available electronically on
the internet at and

The tender offer document contains the following information relating to the
increase in Elisa's share capital, preconditions for consummating the tender
offer, agreements concerning the Saunalahti shares and Elisa after the
consummation of the tender offer:

In order to pay out the share offer consideration pursuant to the terms and
conditions of the tender offer, Elisa's Board of Directors decided on 17 August
2005 to increase the share capital on the basis of the authorisation issued at
the Annual General Meeting on 14 March 2005. According to the decision, the
capital will be increased by not more than EUR 12,689,955.50 by issuing a
of 25,379,911 new Elisa shares. The new shares are offered for subscription to
Saunalahti shareholders so that 5.6 Saunalahti shares entitle to subscribe for
one new Elisa share. The new shares give right to a dividend and other rights in
Elisa, effective of the registration of the increase in the share capital.

The execution of Elisa's tender offer requires that Elisa's ownership exceeds
thirds (2/3) of Saunalahti. The consummation of the tender offer also requires
the approval of the competition authorities so that the conditions regarding the
mobile business are reasonably acceptable to Elisa. Furthermore, the
of the tender offer requires that no material adverse change has taken place in
Saunalahti's position, with a change in the mobile business outside of
Saunalahti's sphere of influence, however, not regarded as such, and that
Saunalahti has not taken actions that could lead to an increase in the share
capital, excluding subscriptions made on the basis of options. Elisa may waive
the 2/3 ownership precondition only on the consent of Novator Finland Oy.

On 7 July 2005, Elisa signed a combination agreement with major Saunalahti
shareholders, Novator Finland Oy, Burdaras hf, Keaton Industries Corp. and
Oy, according to which these Saunalahti shareholders are committed to
in Elisa's tender offer. According to the terms of the combination agreement,
shareholders are committed not to sell or otherwise assign, without the consent
of Elisa's Board of Directors, the new shares they receive as share offer
consideration within 12 months of gaining ownership of the new shares. The
mentioned restriction on assignment does not, however, apply to an assignment
which occurs on the basis of a public tender offer possibly made with respect to
Elisa's shares. Elisa is committed to redeem the approximately EUR 11 million
loan granted by Novator One L.P. to Saunalahti with a six per cent annual
interest until the end of September 2005. In addition, Elisa is also committed,
after the tender offer is consummated, to convene an extraordinary general
meeting in which a proposal will be made to increase the number of members in
Elisa's Board of Directors by two (2) members. Novator Finland Oy will propose
two (2) new members to Elisa's Board of Directors.

The purchase cost of Saunalahti shares will be computed for the shares exchanged
in the share exchange using the stock exchange price of the Elisa share on the
transaction day. The total purchase cost includes related fees and other direct
acquisition costs pertaining to the arrangement. Had the total purchase cost of
Saunalahti been computed using the closing price of the Elisa share on 30 June
2005, i.e. EUR 12.94, at an exchange ratio of 1:5.6, the total purchase cost
would have been approximately EUR 325 million.

Under IFRS, the purchase cost of Saunalahti shares is allocated to tangible and
intangible assets and to goodwill. The deferred tax liability is recognized on
that part of the purchase cost that is allocated to depreciable or amortizable
assets. Had Elisa's and Saunalahti's consolidated balance sheets been combined
of 30 June 2005 and had the tender offer been accepted by all Saunalahti
shareholders at that time, the total assets of Elisa would have increased from
approximately EUR 1.84 billion to approximately EUR 2.27 billion. The most
significant factors contributing to the increase in the balance sheet total are
the total acquisition cost and a deferred tax liability caused by the valuation
difference and approximately EUR 68 million liabilities included in Saunalahti's
consolidated balance sheet.

The part of the acquisition price allocated to tangible assets will be valued at
fair market value. According to preliminary estimates, this does not materially
differ from the book values in Saunalahti's consolidated financial statements
reported in the interim report of 30 June 2005. The part of the acquisition
allocated to intangible assets will be the value estimated at the time of
consummation of the tender offer. Intangible assets include, among others,
patents, trademarks and customer relationships. That part of the acquisition
price will be recognized as goodwill that is not allocated to tangible or
intangible assets.

In accordance with IFRS, the purchase cost of Saunalahti shares will be
to tangible and intangible assets and to goodwill. The part of the purchase cost
that is allocated to depreciable or amortizable assets will be expensed over the
expected useful life of such assets. Any intangible assets without a specified
useful life and goodwill generated in connection with the acquisition will be
tested annually for impairment in accordance with Elisa's testing principles.
Saunalahti's goodwill will be tested at the time of acquisition. The acquisition
of Saunalahti is also estimated to produce EUR 70 million in annual cost
of which a significant portion is dependent on the telephone communications of
Saunalahti's customers being transferred largely to Elisa's mobile network.
cost savings targets include purchases and data systems. The savings will be
achieved for the most part during 2006 and in full by the beginning of 2007.


Vesa Sahivirta
Director, IR and Financial Communication


Ms Tuija Soanjärvi, CFO, tel. +358 50 382 2606
Mr Jyrki Arjanne, Senior Legal Counsel, tel. +358 10 262 4627


Helsinki Stock Exchange
Major media

The tender offer document shall not be delivered or distributed in the 
United States, Canada, Australia, Japan, Great Britain or in
any country where the legislation requires any other
document, registration or other measure in addition to what
is required under Finnish laws and regulations.