POLAR BIDCO S.À R.L. LAUNCHES A VOLUNTARY RECOMMENDED PUBLIC TENDER OFFER FOR ALL SHARES IN SPONDA PLC
THIS RELEASE MAY NOT BE RELEASED, PUBLISHED OR OTHERWISE DISTRIBUTED, IN WHOLE OR IN PART, IN OR INTO, DIRECTLY OR INDIRECTLY, CANADA, JAPAN, AUSTRALIA, SOUTH AFRICA OR HONG KONG OR IN ANY OTHER JURISDICTION IN WHICH THE TENDER OFFER WOULD BE PROHIBITED BY APPLICABLE LAW.
POLAR BIDCO S.À R.L. LAUNCHES A VOLUNTARY RECOMMENDED PUBLIC TENDER OFFER FOR ALL SHARES IN SPONDA PLC
Polar Bidco S.à r.l. (the “Offeror”), a corporation owned by funds advised by affiliates of The Blackstone Group L.P. (together with its consolidated subsidiaries, “Blackstone”), and Sponda Plc (“Sponda”) have on June 5, 2017 entered into a combination agreement (the “Combination Agreement”) pursuant to which the Offeror will make a voluntary recommended public tender offer to purchase all issued and outstanding shares in Sponda (the “Tender Offer”). In the Tender Offer, Sponda shareholders will be offered a cash consideration of EUR 5.19 for each share in Sponda representing an aggregate equity purchase price of approximately EUR 1,763 million for Sponda shares.
Summary of the Tender Offer
· The offer price is EUR 5.19 in cash for each share in Sponda (the “Offer Price”);
· Under the Combination Agreement, Sponda has the right to distribute a dividend of a maximum of EUR 0.12 per share before the completion of the Tender Offer. The Offer Price will be adjusted downwards on a euro-for-euro basis if any such dividend were to be distributed. Should the maximum dividend of EUR 0.12 per share permitted under the Combination Agreement be distributed, the Offer Price would be adjusted to EUR 5.07 in cash on the record date of the dividend payment.
· The Offer Price represents a premium of:
o 28.1 percent to the three-month volume-weighted average price of Sponda share on Nasdaq Helsinki Ltd (“Nasdaq Helsinki”) up to and including June 2, 2017;
o 20.7 percent to the closing price of Sponda share on Nasdaq Helsinki on June 2, 2017 (i.e., the last day of trading before the announcement of the Tender Offer); and
o 1.8 percent to the EPRA NNNAV (adjusted net asset value) based on the unaudited interim report as at and for the three months ended March 31, 2017;
· The Offer Price provides full value relative to Sponda’s IFRS net asset value based on the unaudited interim report as at and for the three months ended March 31, 2017;
· The Board of Directors of Sponda has unanimously decided to recommend to shareholders of Sponda to accept the Tender Offer;
· The largest shareholders of Sponda Mercator Invest Ab, HC Fastigheter Holding Oy Ab and Varma Mutual Pension Insurance Company as well as Sponda’s President and CEO Kari Inkinen, together representing approximately 46.9 percent of the shares have, subject to certain customary conditions, irrevocably undertaken to accept the Tender Offer;
· Certain funds advised by affiliates of Blackstone have executed an equity commitment letter addressed to the Offeror confirming the financing for the payment of the aggregate Offer Price for all of the shares in Sponda in connection with the Tender Offer and in the subsequent mandatory redemption procedure;
· The Tender Offer is subject to necessary regulatory approvals, permits and consents, including without limitation competition clearances, and the Offeror gaining control of more than 90 percent of the issued and outstanding shares and voting rights of Sponda;
· The Offeror will, on or about June 12, 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 June 13, 2017 and initially to expire on July 14, 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.
Commenting on the Tender Offer, Kaj-Gustaf Bergh, Chairman of the Board of Directors of Sponda said: “The Board of Directors of Sponda has carefully evaluated the tender offer and has unanimously decided to recommend the shareholders to accept it. The tender offer is an acknowledgement of Sponda being the prime real estate investment company in Finland with a clear focus on high-quality commercial properties in growth areas and the Helsinki Central Business District in particular. The Board of Directors of Sponda believes that the tender offer is in the best interest of all shareholders and that the offer price being equal to Sponda’s net asset value per share offers a favorable opportunity to Sponda’s shareholders.”
Commenting on the Tender Offer, Kari Inkinen, President and CEO of Sponda said: “With the support of Blackstone we will further develop our business, our properties and our portfolio. We will continue to offer high-quality business premises and working environments to our customers.”
Commenting on the Tender Offer, James Seppälä, Head of European Real Estate Acquisitions at Blackstone, said: “Our proposed acquisition represents another step in Blackstone’s long-standing strategy of investing in high-quality real estate assets and businesses across the Nordic region. We are excited about this opportunity to invest in the commercial real estate market in Finland and are delighted with the strong support that our offer has received from Sponda's board, management and leading shareholders.”
Background and Strategic Plans
Blackstone has been a global leader in the real estate sector since 1991, and funds advised by affiliates of Blackstone have approximately USD 102 billion of real estate funds under management. Blackstone has considerable experience of investing in, and managing, real estate portfolios across the United States, Europe, Asia and Latin America and across all asset classes. Major holdings include Hilton Worldwide, Invitation Homes (single family homes), OfficeFirst (German office) and prime office buildings in the world’s major cities. Blackstone also has significant experience of investing in, and managing, real estate assets in the Nordic region, including in Finland. Since 2015, Blackstone has acquired control of over EUR 4 billion of properties in the Nordic region of which over EUR 1 billion is located in Finland.
The acquisition of Sponda represents a unique opportunity for Blackstone to increase its investment in the Nordic region and Finland, in line with its strategy to acquire and grow high-quality platforms globally. Given its track record, Blackstone looks forward to partnering with and supporting Sponda’s management team in realizing value across Sponda’s portfolio, including in its ongoing development and land assets. Blackstone can confirm that it intends to maintain Sponda as a going concern and would look to make further acquisitions over time in Finland managed by Sponda, where feasible.
Blackstone and the Offeror do not expect any immediate material effects on Sponda’s operations or the position of Sponda’s management or employees as a result of the Tender Offer. Blackstone and the Offeror also confirm that the existing rights of Sponda’s employees, including applicable incentive programs, social plans, collective labor agreements and pension rights will be respected.
It has been agreed with Areim AB, acting on behalf of Areim Fund III, that the fund will become a co-investor in the Tender Offer alongside Blackstone prior to, or in connection with, the completion of the Tender Offer.
Tender Offer
For the purpose of the combination, the Offeror and Sponda have on June 5, 2017 entered into the Combination Agreement, pursuant to which the Offeror will make a voluntary recommended public tender offer to purchase all issued and outstanding shares in Sponda. For a brief description of the Combination Agreement, please see Appendix “Summary of the Combination Agreement” below.
Pursuant to the Combination Agreement, the Offeror is to acquire all issued and outstanding shares amounting to 339,690,554 shares. Once the Offeror obtains more than 90 percent of all shares and voting rights in Sponda, the Offeror will then initiate a mandatory redemption procedure for the remaining shares and thereafter apply for delisting of the shares in Sponda from Nasdaq Helsinki.
On the date of the announcement of the Tender Offer, the Offeror and Blackstone do not hold any shares or voting rights in Sponda.
The Offeror and Sponda have undertaken to comply with the recommendation regarding the procedures to be complied with in Finnish tender offers (the “Helsinki Takeover Code”) issued by the Finnish Securities Market Association.
The Offeror reserves the right to buy shares of Sponda before, during and/or after the offer period in public trading on Nasdaq Helsinki or otherwise.
Recommendation by the Board of Directors of Sponda
The Board of Directors of Sponda has unanimously decided to recommend the shareholders of Sponda to accept the Tender Offer for their shares. The statement of the Board of Directors of Sponda containing the unanimous and unconditional recommendation prepared pursuant to the Finnish Securities Market Act and the Helsinki Takeover Code will be included as an appendix to the tender offer document. In order to support its assessment of the Tender Offer, the Board of Directors of Sponda has commissioned UBS Limited to provide a fairness opinion concerning the Tender Offer. The complete fairness opinion will be attached to the statement of the Board of Directors of Sponda.
Support by the Largest Shareholders and Management
The largest shareholders of Sponda Mercator Invest Ab, HC Fastigheter Holding Oy Ab and Varma Mutual Pension Insurance Company as well as Sponda’s President and CEO Kari Inkinen, together representing approximately 46.9 percent of the shares have, subject to certain customary conditions, irrevocably undertaken to accept the Tender Offer.
Conditions for the Completion of the Tender Offer
The completion of the Tender Offer is conditional on, among other things, the following conditions being met or the Offeror waiving the fulfilment thereof on or by the date on which the Offeror announces the final outcome of the Tender Offer:
(a) The Tender Offer has been validly accepted with respect to shares representing, together with any shares otherwise held by the Offeror prior to the result announcement date, more than ninety (90) percent of the issued and outstanding shares and voting rights of Sponda calculated in accordance with Chapter 18, Section 1 of the Finnish Companies Act governing the right and obligation to commence a mandatory redemption procedure;
(b) All necessary regulatory approvals, permits and consents, including without limitation competition clearances, have been received and any conditions set in such approvals, permits, consents or clearances are reasonably acceptable to the Offeror in that they are not materially adverse to the Offeror or Sponda in view of the Tender Offer or the benefits of the transactions contemplated thereby;
(c) No legislation or other regulation has been issued or decision by a competent court or regulatory authority, including the Finnish Financial Supervisory Authority, has been given that would wholly or partly prevent the completion of the Tender Offer or result in a Material Adverse Effect (as defined in “Appendix: Summary of the Combination Agreement” below) having a disproportionate effect on Sponda relative to other industry participants;
(d) No information made public by Sponda or disclosed by Sponda to the Offeror is materially inaccurate, incomplete, or misleading, and Sponda has not failed to make public any information that should have been made public by it under applicable laws and regulations, provided that such disclosure or failure to disclose information constitutes a Material Adverse Effect;
(e) No fact or circumstance has arisen after the announcement of the Tender Offer that constitutes or is reasonably likely to constitute a Material Adverse Effect;
(f) The Board of Directors of Sponda has issued the unanimous and unconditional recommendation to the shareholders to accept the Tender Offer for their shares and the recommendation remains in full force and effect and has not been modified, cancelled or changed in a manner deemed detrimental by the Offeror;
(g) The Combination Agreement has not been terminated and remains in full force and effect; and
(h) The undertakings by the major shareholders of Sponda Mercator Invest Ab, HC Fastigheter Holding Oy Ab and Varma Mutual Pension Insurance Company to accept the Tender Offer remain in full force and effect in accordance with their terms.
Offer Period
The offer period for the Tender Offer is expected to commence on or about June 13, 2017 and initially to expire on July 14, 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.
The detailed terms and conditions of the Tender Offer as well as instructions on how to accept the Tender Offer will be included in the tender offer document, which the Offeror expects to publish on or about June 12, 2017.
Offer Price
The Offer Price is EUR 5.19 in cash for each share in Sponda. Under the Combination Agreement, Sponda has the right to distribute a dividend of a maximum of EUR 0.12 per share before the completion of the Tender Offer. The Offer Price will be adjusted downwards on a euro-for-euro basis if any such dividend were to be distributed. Should the maximum dividend of EUR 0.12 per share permitted under the Combination Agreement be distributed, the Offer Price would be adjusted to EUR 5.07 in cash on the record date of the dividend payment.
The Offer Price represents a premium of:
· 28.1 percent to the three-month volume-weighted average price of Sponda share on Nasdaq Helsinki up to and including June 2, 2017;
· 20.7 percent to the closing price of Sponda share on Nasdaq Helsinki on June 2, 2017 (i.e., the last day of trading before the announcement of the Tender Offer); and
· 1.8 percent to the EPRA NNNAV (adjusted net asset value) based on the unaudited interim report as at and for the three months ended March 31, 2017.
The Offer Price provides full value relative to Sponda’s IFRS net asset value based on the unaudited interim report as at and for the three months ended March 31, 2017.
Financing
According to the Combination Agreement, the Offeror has, and will have on the closing date of the Tender Offer, access to capital in sufficient amount, as evidenced in an equity commitment letter delivered to Sponda prior to the execution of the Combination Agreement, to finance the payment of the aggregate Offer Price for all of the shares in Sponda in connection with the Tender Offer (including any subsequent mandatory redemption procedure). The Offeror’s obligation to complete the Tender Offer is not conditional upon receipt of financing (assuming that all the conditions to completion of the Tender Offer are otherwise satisfied or waived by the Offeror) and no third party consent is required by the Offeror for the financing of the Tender Offer.
Authority Approvals
The Offeror will, promptly after the date of the Combination Agreement, make all submissions, notifications and filings necessary to obtain all consents, approvals or actions by any competition authorities and other regulatory authorities under any applicable competition and other regulatory laws in any jurisdiction and will use its reasonable best efforts to obtain all such consents, approvals or actions as soon as practically possible.
According to information currently available, it is not certain that all necessary authority approvals can be obtained by the end of the initial offer period. In case all necessary approvals have not been obtained by the end of the initial offer period, the Offeror will extend the offer period in order to receive the necessary approvals to be able to complete the Tender Offer. The Offeror currently estimates that the competition clearances may be obtained prior to the expiry of the initial offer period.
Advisers
The Offeror has appointed Goldman Sachs International and Nordea Bank AB (publ), Finnish Branch as financial advisers, Nordea Bank AB (publ), Finnish Branch as arranger in relation to the Tender Offer outside the United States, Goldman Sachs & Co. LLC as dealer manager in relation to the Tender Offer within the United States and White & Case LLP as legal adviser in connection with the Tender Offer. Sponda has appointed UBS Limited as financial adviser and Castrén & Snellman Attorneys Ltd. as legal adviser in connection with the Tender Offer.
Polar Bidco S.à r.l.
Further information
Andrew Dowler
Blackstone
andrew.dowler@blackstone.com
+44 (0)20 7451 4275
Matti Saarinen
Kreab Helsinki
matti.saarinen@kreab.com
+358 40 5050 667
Blackstone in brief:
Blackstone has been a global leader in the real estate sector since 1991, and funds advised by affiliates of Blackstone have approximately USD 102 billion of real estate funds under management. Blackstone has considerable experience of investing in, and managing, real estate portfolios across the United States, Europe, Asia and Latin America and across all asset classes. Major holdings include Hilton Worldwide, Invitation Homes (single family homes), OfficeFirst (German office) and prime office buildings in the world’s major cities. Blackstone also has significant experience of investing in, and managing, real estate assets in the Nordic region, including in Finland. Since 2015, Blackstone has acquired control of over EUR 4 billion of properties in the Nordic region of which over EUR 1 billion is located in Finland.
Further information is available at www.blackstone.com.
Sponda in brief:
Sponda is a property investment company specializing in commercial properties in the largest cities in Finland. Sponda’s business concept is to own, lease and develop retail and office properties and shopping centers into environments that promote the business success of its clients. As at March 31, 2017, the fair value of Sponda’s investment properties was approximately EUR 3.8 billion and the leasable area was approximately 1.2 million square meters.
www.sponda.fi/en
THIS RELEASE MAY NOT BE RELEASED, PUBLISHED OR OTHERWISE DISTRIBUTED, IN WHOLE OR IN PART, IN OR INTO, DIRECTLY OR INDIRECTLY, 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 ELECTRONIC TRANSMISSION BY WAY OF THE INTERNET OR OTHERWISE) 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. NO HOLDER AND ANY PERSON ACTING FOR THE ACCOUNT OR BENEFIT OF A HOLDER IN CANADA, JAPAN, AUSTRALIA, SOUTH AFRICA OR HONG KONG SHALL BE PERMITTED TO ACCEPT THE TENDER OFFER.
Notice to Shareholders in the United States
U.S. shareholders are advised that Sponda’s shares are not listed on a U.S. securities exchange and that Sponda is not subject to the periodic reporting requirements of the U.S. Securities Exchange Act of 1934, as amended (the “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 made to Sponda’s shareholders resident in the United States on the same terms and conditions as those made to all other shareholders of Sponda to whom an offer is made. Any information documents, including the tender offer document, are being disseminated to U.S. shareholders on a basis comparable to the method that such documents are provided to Sponda’s other shareholders.
The Tender Offer is made for the shares in Sponda, a Finnish company. Information distributed in connection with the Tender Offer and the combination is subject to disclosure requirements of Finland, which are different from those of the United States. The financial information included in this release has been prepared in accordance with accounting standards in Finland, which may not be comparable to the financial statements or financial information of United States companies.
It may be difficult for Sponda’s shareholders to enforce their rights and any claim they may have arising under the federal securities laws, since the Offeror and Sponda are located in non-U.S. jurisdictions, and some or all of their respective officers and directors may be residents of non-U.S. jurisdictions. Sponda’s shareholders may not be able to sue the Offeror or Sponda or their respective officers or directors in a non-U.S. court for violations of the U.S. securities laws. It may be difficult to compel the Offeror and Sponda and their respective affiliates to subject themselves to a U.S. court’s judgment.
The Tender Offer is expected to be made in the United States pursuant to Section 14(e) and Regulation 14E under the 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, 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, the Offeror and its affiliates or brokers (acting as agents for the Offeror or its affiliates, as applicable) may from time to time after the date hereof, and other than pursuant to the Tender Offer, directly or indirectly purchase or arrange to purchase, shares of Sponda, that are the subject of the Tender Offer or any securities that are convertible into, exchangeable for or exercisable for such shares. 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 Sponda of such information. In addition, the financial advisors to the Offeror may also engage in ordinary course trading activities in securities of Sponda, 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 the tender offer document. Any representation to the contrary is a criminal offence in the United States.
Disclaimers
Goldman Sachs International, which is authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting as financial adviser to the Offeror and no one else in connection with the Tender Offer and the other matters referred to in this announcement, and will not regard any other person as its client in relation to the Tender Offer and the other matters referred to in this announcement and will not be responsible to anyone other than the Offeror for providing the protections afforded to clients of Goldman Sachs International, nor for providing advice in relation to the Tender Offer or the other matters referred to in this announcement.
Goldman Sachs & Co. LLC is acting as dealer manager for the Tender Offer within the United States on behalf of the Offeror and no one else in connection with the Tender Offer and the other matters referred to in this announcement, and will not regard any other person as its client in relation to the Tender Offer and the other matters referred to in this announcement and will not be responsible to anyone other than the Offeror for providing the protections afforded to clients of Goldman Sachs & Co. LLC, and will not be responsible to any person for providing advice in relation to the Tender Offer or the other matters referred to in this announcement.
Nordea Bank AB (publ), Finnish Branch is under the supervision of the Swedish Financial Supervisory Authority (Finansinspektionen) in cooperation with the Finnish Financial Supervisory Authority (Finanssivalvonta). Nordea Bank AB (publ), Finnish Branch is acting as financial adviser to the Offeror and arranger in relation to the Tender Offer outside the United States and no one else for the purpose of the consideration of the Tender Offer and will not be responsible to anyone other than the Offeror for providing the protections offered to clients of Nordea Bank AB (publ), Finnish Branch nor for providing advice in relation to the Tender Offer.
UBS Limited is authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom. UBS Limited is acting as financial adviser to Sponda and no one else for the purpose of the consideration of the Tender Offer and will not be responsible to anyone other than Sponda for providing the protections offered to clients of UBS Limited nor for providing advice in relation to the Tender Offer.
Appendix: Summary of the Combination Agreement
General
The Offeror and Sponda have on June 5, 2017 entered into the Combination Agreement pursuant to which the Offeror will make a voluntary recommended public tender offer to purchase all issued and outstanding shares in Sponda.
Recommendation of the Board of Directors of Sponda
(a) The stock exchange release announcing the Tender Offer for the first time must include the unanimous recommendation of the Board of Directors of Sponda to the shareholders in Sponda to accept the Tender Offer for their shares in Sponda. Further, the tender offer document must include the unanimous and unconditional (subject to this Section) recommendation of the Board of Directors of Sponda to the shareholders in Sponda to accept the Tender Offer for their shares. In addition, the recommendation of the Board of Directors of Sponda must in a positive manner address the strategic plans of the Offeror presented in the tender offer document and their likely effects on the operations and employment of Sponda as provided under the Finnish Securities Market Act. The statement of the Board of Directors of Sponda containing the recommendation prepared pursuant to the Finnish Securities Market Act and the Helsinki Takeover Code will be included as an appendix to the tender offer document and Sponda must submit such statement (together with its appendices) to the Offeror no later than two (2) days after the receipt of the draft tender offer document filed with the Finnish Financial Supervisory Authority for inclusion in the tender offer document. The parties acknowledge that the Board of Directors of Sponda has obtained a fairness opinion from UBS Limited in respect of the fairness from a financial point of view of the Tender Offer for the shareholders of Sponda.
(b) The Board of Directors of Sponda may, at any time prior to the completion of the Tender Offer, withdraw, modify, amend, include conditions to or decide not to issue its recommendation or take actions contradictory to its earlier recommendation, if:
(i) the Board of Directors of Sponda, on the basis of its fiduciary duties, considers that, due to materially changed circumstances, the acceptance of the Tender Offer would no longer be in the best interest of the shareholders; and
(ii) the Board of Directors of Sponda has taken advice from an independent reputable legal advisor; and
(iii) the Board of Directors of Sponda has provided the Offeror with a reasonable opportunity, during not less than four (4) business days after having informed the Offeror on the actions discussed in this paragraph, to negotiate with the Board of Directors of Sponda on such actions; and
(iv) if an action allowed by this Section (b) is connected to a Superior Offer (as defined below) or to a Competing Offer (as defined below) which the Board of Directors of Sponda has determined in good faith to constitute a Superior Offer, if made public, (A) the Board of Directors of Sponda has given the Offeror a reasonable opportunity, during not less than four (4) business days after having received the information relating to such Superior Offer or Competing Offer, to agree with the Board of Directors of Sponda on improving its Tender Offer provided pursuant to the Combination Agreement and, as applicable, (B) Sponda has informed the Offeror that the Board of Directors of Sponda has determined that such Competing Offer constitutes a Superior Offer or would, if announced, constitute a Superior Offer, and, as applicable, (C) such Competing Offer has been publicly announced such that it becomes a Superior Offer.
(c) Sponda must not, directly or indirectly, solicit any inquiries or facilitate or solicit any proposal or offer (including, without limitation, any proposal or offer to shareholders) that constitutes, or may reasonably be expected to lead to, any competing transaction or that could otherwise harm or hinder the completion of the combination or have any discussions or negotiations with anyone in furtherance of any actions covered by this Section (c).
(d) If Sponda receives from any person an unsolicited bona fide written offer for a competing transaction (a “Competing Offer”), Sponda must within two (2) business days after having received such Competing Offer inform the Offeror of the Competing Offer in reasonable detail (including, to the extent available to Sponda, the identity of the third party making the Competing Offer, the value offered to the shareholders and other material terms and conditions of the Competing Offer).
(e) A “Superior Offer” means a bona fide binding written offer publicly announced in accordance with the Finnish Securities Market Act and not solicited by or on behalf of Sponda made by a third party to acquire all of the shares pursuant to a tender offer or a merger, or to acquire all of the operations of Sponda pursuant to a sale of all or substantially all of the assets of Sponda, on terms which the Board of Directors of Sponda reasonably determines in good faith to be more beneficial for the shareholders than the Tender Offer, as the same may be modified by the Offeror in accordance with the Section (b) above. In determining whether an offer is more beneficial for the shareholders, the Board of Directors of Sponda must also take into account whether the potential Superior Offer is reasonably capable of being consummated (taking into account, among other things, all legal, financial, regulatory and other aspects of such proposal and the identity of the person making such proposal) and the availability of financing.
Representations, Warranties, Covenants and Undertakings
The Combination Agreement contains certain customary representations, warranties, covenants and undertakings, such as (a) Sponda conducting its business in all material respects in the ordinary course of business consistent with past practice before the completion of the Tender Offer, including but not limited to refraining from any decision or proposal concerning or constituting distribution of dividends or other funds from Sponda (other than the distribution of a maximum of EUR 0.12 dividend per share pursuant to an authorization of the annual general meeting of shareholders of Sponda on March 20, 2017) and (b) cooperation between the Offeror and Sponda in doing all things necessary or advisable to consummate, in the most expeditious manner practicable, the Tender Offer and the combination, including: (i) the obtaining of all necessary waivers, consents and approvals from governmental or supranational entities or authorities and stock exchanges and the making of all necessary registrations and filings and the taking of all reasonable steps as may be necessary to obtain an approval or waiver from, or to avoid an action or proceeding by, any such entity, authority or stock exchange, provided that the Offeror and its affiliates will have no obligation to offer or agree to any structural (such as divestment of assets, companies or businesses or the granting of any licenses) and/or behavioral commitments as may be required to remove any concerns that any governmental or supranational authorities may have for an expedient approval of the transactions contemplated by the Combination Agreement; (ii) the obtaining of all material consents, approvals or waivers from third parties necessary to consummate the Tender Offer and the combination and (iii) executing and delivering any additional instruments necessary to consummate the Tender Offer and the combination, and to fully carry out the purposes of the Combination Agreement. In addition, as soon as the Offeror has publicly announced that it will complete the Tender Offer, the Board of Directors of Sponda has undertaken to, at the written request of the Offeror, resolve to convene an extraordinary general meeting of shareholders of Sponda no later than three (3) banking days after such request for the purpose of electing new members of the Board of Directors of Sponda.
Conditions to Completion
The obligation of the Offeror to consummate the Tender Offer is subject to the satisfaction or waiver by the Offeror of the conditions to completion described above under “Conditions for the Completion of the Tender Offer” on or prior to the date of announcement of the final results of the Tender Offer.
Termination
The Combination Agreement may be terminated and the combination may be abandoned at any time prior to the closing date of the Tender Offer, as follows:
(a) by a mutual written agreement of the parties;
(b) by either party, if the closing date has not occurred on or before December 5, 2017 other than due to pending authority approvals as set out in Schedule 4.7 (Authority Approvals) of the Combination Agreement; provided, however, that this right to terminate will not be available to the party whose failure to fulfil any obligation under the Combination Agreement will have resulted in the failure of the closing date to occur on or before such date;
(c) by either party, if any order preventing the consummation of the combination or a material part of it will be issued by any court or other authority of competent jurisdiction and will become final and non-appealable;
(d) by Sponda, if (i) the Board of Directors of Sponda has, in accordance with Section (b) under “Recommendation of the Board of Directors of Sponda” above, withdrawn, modified, amended, included conditions to or decided not to issue its recommendation or (ii) the Offeror has not commenced the Tender Offer on or prior to June 23, 2017 or a later date agreed by the parties;
(e) by the Offeror, if the Board of Directors of Sponda has
(i) withdrawn, modified, amended, included conditions to or decided not to issue its recommendation or proposed to withdraw, modify, amend, include conditions to or decided not to issue its recommendation excluding, for the avoidance of doubt, any technical modification or change of the recommendation required under applicable laws or the Helsinki Takeover Code as a result of a Competing Offer so long as the recommendation to accept the Offeror’s Tender Offer is upheld;
(ii) approved or recommended, or proposed to approve or recommend, any Competing Offer;
(iii) announced a neutral position with respect to any Competing Offer, and failed to reject or recommend such Competing Offer within three (3) days of the announcement of such neutral position; or
(iv) taken any other action contradictory to its earlier recommendation and has not rectified such contradictory action within three (3) days from the Offeror’s written notice thereof;
(f) by the Offeror, upon
(i) an occurrence of an event that has resulted in or constituted, or would reasonably be expected to result in, or constitute, a Material Adverse Effect (as defined below); or
(ii) the Offeror, after the execution of the Combination Agreement, receiving new information undisclosed to it prior to the execution of the Combination Agreement which has a Material Adverse Effect; and
(g) by the Offeror, upon a material breach of any company warranty given by Sponda in Section 3 (Representations and Warranties of the Company) of the Combination Agreement; or by Sponda, upon a material breach of any offeror warranty given by the Offeror in Section 4 (Representations and Warranties of the Offeror) of the Combination Agreement; or by either Sponda or the Offeror, upon a material breach of any covenant or agreement included in Section 2 (Combination) or Section 5 (Covenants and Undertakings) or Section 8.3(a) of the Combination Agreement, as the case may be, by the other party, unless, in each case, such breach has been rectified by the breaching party no later than three (3) business days prior to the expiration date of the Tender Offer.
In the event of termination of the Combination Agreement pursuant to the above, the Combination Agreement will forthwith become void and there will be no liability under the Combination Agreement for either party or any of its directors and officers and all rights and obligations of the parties will cease, save for any obligations relating to public announcements under Section 5.7 (Publicity) of the Combination Agreement and reimbursement of expenses under Section 8.3 of the Combination Agreement; provided, however, that nothing herein will relieve either party from liability for fraud or willful misconduct.
“Material Adverse Effect” means any event, circumstance, development, state of facts, occurrence, change or effect, whether individually or in the aggregate, that is or would reasonably be expected to be materially adverse to the business, assets, financial condition or results of operations of Sponda and its subsidiaries, taken as a whole; provided, that none of the following shall in and of itself constitute, and no event, circumstance, development, state of facts, occurrence, change or effect to the extent resulting from any of the following shall constitute, a Material Adverse Effect:
(i) any change in political, financial, industry, economic or regulatory conditions generally, so long as such change does not have a disproportionate effect on Sponda relative to other industry participants;
(ii) any effect resulting from or caused by natural disasters, outbreak of major hostilities or any act of war or terrorism so long as such effect does not have a disproportionate effect on Sponda relative to other industry participants;
(iii) any effect resulting from any actions taken by Sponda at the express request or direction of the Offeror; or
(iv) any effect with respect to Sponda arising out of the announcement of, or performance of obligations under, the Combination Agreement or the identity of the parties to the Combination Agreement;
provided that, if any event, circumstance, development, state of facts, occurrence, change or effect results in part from any of (i) to (iv) in conjunction with any other event, circumstance, development, state of facts, occurrence, change or effect, only the incremental impact will be taken into account in determining whether there has been a Material Adverse Effect.
For the sake of clarity, under no circumstances will any Material Adverse Effect be deemed to exist to the extent such Material Adverse Effect has been publicly disclosed by Sponda (including any publicly disclosed annual or interim reports), is otherwise generally in the public domain or is actually known to the Offeror or Blackstone, or has been fairly disclosed in the due diligence information by or on behalf of Sponda, in each case, prior to the date of the Combination Agreement.
Governing Law
The Combination Agreement is governed by and construed in accordance with the laws of Finland.
Any claim, controversy or dispute arising out of or relating to the Combination Agreement, or the breach, invalidity or termination thereof, will be finally settled by arbitration in accordance with the Arbitration Rules of the Finland Chamber of Commerce (the “Arbitration Institute”). The arbitral tribunal will consist of three members, one member to be appointed by the Offeror, one member to be appointed by Sponda and one member, serving as the chairman, to be jointly appointed by the two members so appointed. In the absence of any such appointment and where the parties are unable to agree on a method for the constitution of the arbitral tribunal, the Arbitration Institute will appoint each missing member of the arbitral tribunal and will designate one of them to serve as the chairman. The arbitration will be held in Helsinki, Finland, and the arbitration proceedings will be conducted in the Finnish language. Each party may apply to a court of competent jurisdiction for a precautionary measure, temporary procedural remedy, temporary restraining order or preliminary injunction where such relief is necessary to protect its interests pending completion of arbitration proceedings.
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