Statement on Mandatory Offer by Axel Springer
07 10월 2009 - 10:55PM
UK Regulatory
TIDMSTPS
RNS Number : 4059A
StepStone ASA
07 October 2009
STATEMENT BY THE BOARD OF DIRECTORS OF STEPSTONE ASA IN CONNECTION WITH THE
MANDATORY OFFER MADE BY AXEL SPRINGER AG
INTRODUCTION
This statement is made by the Board of Directors ("Board") of StepStone ASA
("StepStone") pursuant to section 6-16 of the Norwegian Securities Trading Act
of 29 June 2007 (the "Securities Trading Act") in connection with the mandatory
offer made by Axel Springer AG ("Axel Springer") pursuant to the offer document
dated 11 September 2009 (the "Offer Document"), and as amended by a press
release by Axel Springer dated 5 October 2009, to acquire all outstanding shares
in StepStone as of the date of the Offer Document (the "Revised Offer").
According to the Securities Trading Act Section 6-16, the Board of StepStone is
required to issue a statement in relation to the Offer no later than one week
prior to the expiry of the offer period.
Board members Dr. Jens Müffelmann (director), Alexandra Rullen (director),
Julian Deutz (alternate director) and Donata Hopfen (alternate director) are
employees of Axel Springer and have not participated in discussions regarding
the Offer or the issue of this statement. References to the "Board of Directors"
or the "Board" in this statement shall therefore hereinafter only include a
quorum consisting of the directors of the board not employed by Axel Springer.
As previously announced, Morgan Stanley & Co. Limited and ABG Sundal Collier
Norge ASA have been appointed as financial advisers to StepStone in connection
with the Revised Offer. Advokatfirmaet Schjødt DA has acted as legal counsel to
StepStone.
The Board has issued this statement after having reviewed the Offer Document and
the financial opinion issued to the Board by Morgan Stanley & Co. Limited and
considered various alternatives in order to maximise shareholder value.
Background to the offer
The following information is presented by the Board of StepStone in the spirit
of relevant disclosure in order to allow shareholders to better understand the
Board's position, its efforts to maximise shareholder value and its
decision-making process in reaching the recommendation presented at the end of
this document.
On 2 September 2009, Axel Springer announced that it had secured a majority
interest in StepStone by acquisition of approx. 19.3 percent of the shares and
that it held 52.27 percent of StepStone's equity. Furthermore, Axel Springer
announced its intention to extend a public takeover offer to all shareholders
for a price of NOK 8.60 per share.
On 3 September 2009, the Board of StepStone noted that Axel Springer entered
into agreements on Wednesday, 2 September 2009, to acquire shares in StepStone
that increased their holding to an interest of about 52%. Furthermore, the Board
noted that Axel Springer would proceed with a mandatory offer for the remaining
shares in StepStone. The Board also announced that it would actively consider
and pursue all available options that could contribute to maximising shareholder
value and to ensuring equal treatment of shareholders. In addition, the Board
stated that the value of the individual parts exceeds the value of the Offer and
that StepStone had received an indication of interest in a part of StepStone's
business that supported this view.
On 10 September 2009, the Board of StepStone announced the appointment of Morgan
Stanley & Co. Limited and ABG Sundal Collier Norge ASA as joint financial
advisers in connection with the offer by Axel Springer. The purpose of these
appointments was to provide the Board with the necessary expertise, and
independent advice on the fair value of the business. In the limited time
available, also to enable it to fully and properly explore all reasonable
alternatives that could contribute to maximising value. Of prime importance was
to ensure equal treatment of shareholders. The Board reiterated that it believed
that the intended offer, indicated by Axel Springer to be for NOK 8.60 per
share, did not reflect the full value of the business.
On 11 September 2009, Axel Springer published the public takeover offer to the
shareholders of StepStone ASA that was announced on September 2, 2009. The Offer
comprised all 60,892,610 shares currently issued and outstanding in StepStone
not owned by Axel Springer. The offer period started on September 14, 2009, and
is set to close on October 12, 2009 (subject to extension). The offer price was
NOK 8.60 per share. The Offer excluded any shares authorised and issued after
the date of the offer, such as any shares issued as a result of exercise of
9,075,546 vested options held by employees.
Since the intended Offer was announced, the Board, with the assistance of senior
management, Morgan Stanley & Co. Limited, ABG Sundal Collier Norge ASA and its
legal advisers have vigorously been exploring all legally permissible options
including seeking interest from financial and strategic parties, potential
capital issuances and legal and technical alternatives. In addition, StepStone
and its advisers have been in dialogue with current public minority shareholders
and potential new shareholders.
As a result of its actions, including preliminary discussions and due diligence,
StepStone is in receipt of a number of written, non-binding expressions of
interest supporting the Board's view that the open market value of StepStone's
Solutions business alone is in excess of EUR100 million. This means that the
Solutions business open market enterprise value alone represents approximately
80 percent of StepStone's enterprise valuation on the basis of the Revised Offer
Price.
The Chairman and CEO of StepStone also held discussions with senior executives
of Axel Springer with the objective to agree an improved offer that could be
recommended by the Board. However, these discussions did not result in a
recommendable improved offer.
On 2 October 2009 StepStone issued a notice for an Extraordinary General Meeting
of shareholders (EGM) to be held on 23 October 2009. This EGM to reconstitute
the Board had been requested by Axel Springer on 23 September 2009.
Subsequently on 2 October 2009 StepStone was approached by Axel Springer with a
revised offer of NOK 9.00, which was conditional on i) receiving a neutral Board
response statement, ii) stopping of all defence measures and iii) senior
management confirming its intention to remain in their currently held positions
with StepStone at least another three years subject to adequate incentivisation.
On 5 October 2009 a transaction agreement was entered into with Axel Springer
and announced.
consequences for StepStone's business
The Offer Document states that "By making the Offer, Axel Springer pursues its
goal to confirm its European-level presence in the attractive online job market
and further implements its strategy of digitization through gaining control over
one of the leading international providers of human capital management software
and services."
The Offer Document contains limited information regarding Axel Springer's
strategic plans and visions for StepStone's future business following a
potential acquisition by Axel Springer. The Board has, however, noted the
statements in the Offer Document that Axel Springer will continue and support
StepStone's business trajectory in cooperation with management and employees of
StepStone.
consequences for AND VIEWS BY the employees
The employees of StepStone have been informed of the Revised Offer. No statement
has been provided by or on behalf of the employees as of today's date.
Management has discussed the Revised Offer with staff and it is clear that the
employees expect the shareholders, of which Axel Springer will be the largest,
to be willing and able to continue to invest in both the staff and the business.
The Board has noted the statement by Axel Springer in the Offer Document that
completion of the offer will not have any legal, economic or other work-related
consequences for the employees of StepStone and that Axel Springer does not have
plans to make changes to StepStone's workforce following completion of the
Revised Offer.
The Board notes the statement by Axel Springer in its press release issued 5
October 2009 regarding the revised offer, that Axel Springer as a shareholder of
Stepstone Germany since October 2004 and now as majority shareholder of
StepStone knows the company and its business well and highly values the
management team and the employees of StepStone as well as the attractive
prospects for future growth.
The Revised Offer
The offer price is NOK 9.00 per share (the "Revised Offer Price"), valuing
StepStone's issued and outstanding share capital together with the vested
employee share options at approximately NOK 1.2 billion.
The Revised Offer Price will be paid in cash according to the terms set out in
the Offer Document.
The Revised Offer can be accepted from 5 October 2009 to and including 23
October 2009 at 17:30 CET (following extension of the original offer period
ending 12 October 2009) (the "Acceptance Period"). According to the Offer
Document, Axel Springer may in its sole discretion extend the Acceptance Period
to and including 26 October 2009. Any extension of the Acceptance Period will be
announced on or before the last day of the prevailing Acceptance Period. Axel
Springer will at the end of the Acceptance Period issue a notification informing
about the level of acceptance in the Revised Offer.
Axel Springer is not offering to acquire any Depositary Interests, and only the
underlying Shares to such Depositary Interests are subject to the Revised Offer.
Holders of Depositary Interests wishing to accept the Revised Offer, should
accordingly ensure re-registration of their holdings into Shares with the VPS in
time to accept the Revised Offer within the Acceptance Period or alternatively
make the necessary arrangements for Capita (as registered holder of the Shares
in the VPS) to accept the Revised Offer.
Axel Springer has indicated that for precautionary reasons if, as a result of
the Revised Offer, it acquires more than 90% of the shares of StepStone, it will
as a technical possibility evaluate making a compulsory acquisition of the
remaining shares. Also it has indicated that for precautionary reasons following
completion of the Revised Offer, dependent upon the number of Shares acquired,
it reserves its right to propose to the general meeting of StepStone to apply to
Oslo Børs for the delisting of the Shares in StepStone. Such proposal requires
the approval of a 2/3 majority to be adopted. Before this background any
de-listing is to be decided by Oslo Børs in accordance with the Stock Exchange
rules - Continuing Obligations of stock exchange listed companies. Axel Springer
has also noted that it may seek to procure that StepStone makes applications to
the UK Listing Authority for the cancellation of the listing of StepStone Shares
on the Official List of the London Stock Exchange and to the London Stock
Exchange for the cancellation of admission to trading in StepStone
ASSESSMENTS
The Revised Offer Price of NOK 9.00 per share gives an implied valuation of
StepStone's total equity of approximately NOK 1.2 billion.
The Revised Offer Price represents a premium of 32.4 percent to the closing
share price of NOK 6.80 on 2 September 2009, the last closing price prior to
Axel Springer's announcement that it would make the mandatory offer.
StepStone shares traded in a band of NOK 6.80 to NOK 7.50 per share in the month
ending 2 September 2009.
The Revised Offer Price represents a premium of:
* 26.7 percent to the one month volume weighted average share price ending 2
September 2009 and
* 27.1 percent to the three month volume weighted average share price ending 2
September 2009.
The Revised Offer Price implies an enterprise value multiple of 1.1 times the
reported consolidated revenues for the twelve months ended June 30, 2009.
The Board is of the view that the value of StepStone exceeds the value of the
Revised Offer.
The Board has received a financial opinion dated 6 October 2009 from Morgan
Stanley & Co. Limited ("Opinion"). Morgan Stanley & Co. Limited's opinion
provides that, as of the date thereof and based upon and subject to the
assumptions, considerations, qualifications, factors and limitations set forth
therein, the Revised Offer Price to be paid to the holders of the shares of
StepStone (other than Axel Springer) is inadequate, from a financial point of
view, to such shareholders.
The financial opinion from Morgan Stanley & Co. Limited has been provided to the
Board solely for its benefit in connection with, and for the purposes of, its
consideration of the Revised Offer. The Opinion is not intended to be, and shall
not constitute, a recommendation to any shareholder of StepStone as to whether
or not such holder should tender shares in StepStone pursuant to the Revised
Offer or take any other action in relation to the Revised Offer, is not provided
on behalf of, nor shall it confer rights or remedies upon, any shareholder in
StepStone or any other person, other than the Board, and may not be relied upon
by any person other than the Board or used for any other purpose.
The Board also received legal advice that it will not be permissible to sell any
material assets during the offer period without the approval of an EGM, but that
it might be possible to do so after the expiry of the offer period under certain
conditions without the approval of an EGM. Given Axel Springer's 53% stake and
its intention to reconstitute the Board at the EGM on 23 October 2009, the
chances of legally selling any material assets have become very limited.
recommendation
Taking into consideration the current performance and future prospects of
StepStone as well as other factors that the Board has deemed relevant in
relation to the Revised Offer, the current stage of the economic cycle, the view
that StepStone is a late cyclical stock, the pricing of the StepStone shares in
the market and market conditions in general, the Board believes that the Revised
Offer is not a full reflection of the long-term potential identified by the
Board and management.
The Board finds it relevant to point out that Axel Springer
- already has a 53% ownership in StepStone and has no obligation to put forward
further offers once the current offer expires. As a result of this, shareholders
who do not accept the Revised Offer may become shareholders in a company with
one majority owner and consequently possibly lower liquidity in StepStone's
shares. It is therefore uncertain whether shareholders who do not accept the
Revised Offer, will in the future be able to monetise the long-term value of
StepStone.
- has indicated that, for precautionary reasons it reserves its right to propose
to the general meeting of StepStone to apply to Oslo Børs for the delisting of
the Shares in StepStone and that it may seek to procure that StepStone makes
applications to the UK Listing Authority for the cancellation of the listing of
StepStone Shares.
- stated on 5 October 2009 that it will be supportive of the StepStone
management team in the execution of its stated strategy and value enhancing
options for StepStone, and will be mindful of the protection of minority
shareholders' rights.
Finally the Board has also taken into consideration throughout this process the
needs and requirements of all stakeholders, including shareholders, StepStone's
employees, customers and business partners.
For the reasons set out herein the Board has concluded neither to recommend the
Revised Offer for acceptance, nor to recommend shareholders to reject the
Revised Offer. The Board refers shareholders to the above mentioned factors
which, in the view of the Board, may be of relevance when the shareholders
evaluate the Revised Offer and decide whether to accept it or not.
Jan Stenberg, Chairman of StepStone owns, directly and indirectly, 3,248 shares
in StepStone and options exercisable into nil shares.
Colin Tenwick, Board Member and CEO of StepStone owns, directly and indirectly,
292,308 shares in StepStone and options exercisable into 3,785,381 shares.
Morgan Stanley & Co. Limited is acting as financial adviser to StepStone and no
one else in connection with the matters described in this announcement. In
connection with such matters, Morgan Stanley & Co. Limited, its affiliates and
their directors, officers, employees and agents will not regard any other person
as their client nor will they be responsible to any other person for providing
the protections afforded to their clients.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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