Willy-Brandt-Platz 3, 81829 Munich, Germany

Mandatory publication
in accordance with § 27 para. 3 sentence 1 in conjunction with § 14 para. 3 sentence 1
of the German Securities Acquisition and Takeover Act (WpÜG)
Joint Statement
of the
Management Board and Supervisory Board
of
AUGUSTA Technologie Aktiengesellschaft
Willy-Brandt-Platz 3, 81829 Munich, Germany
under § 27 of the German Securities Acquisition and Takeover Act
on the Voluntary Public Takeover Offer
(Cash Offer)
made by TKH Technologie Deutschland AG
An der Kleinbahn 16, 41334 Nettetal, Germany
to the shareholders of
AUGUSTA Technologie Aktiengesellschaft
seeking to acquire their shares in the Company (ID numbers
ISIN DE000A0D6612 and WKN A0D661)
Page 1 of 63
Table of Contents
1.
1.1
1.2
1.3
1.4
2.
GENERAL INFORMATION ABOUT THIS STATEMENT ............................. 8
Legal basis of the Statement .............................................................................. 8
Factual basis for the Statement .......................................................................... 8
Publication of this Statement and any other Statements regarding
changes in the Offer .......................................................................................... 9
The AUGUSTA Shareholders’ own responsibility ............................................. 9
INFORMATION ON THE OFFEROR AND THE COMPANY ...................... 10
2.1
2.1.1
2.1.2
2.1.3
2.1.4
2.1.5
2.1.6
2.1.7
Information on the Offeror .............................................................................. 10
Legal basis ...................................................................................................... 10
Capital structure .............................................................................................. 10
Shareholding structure ..................................................................................... 10
The members of the Management and Supervisory Boards .............................. 13
Overview of the structure and business activities of the TKH Group ............... 13
Persons acting in concert with the Offeror ....................................................... 14
Equity interests in the Company held by the Offeror and by persons
acting in concert with the Offeror; attribution of voting rights ......................... 15
2.2
Information on the Company ........................................................................... 16
2.2.1 Legal basis ...................................................................................................... 16
2.2.2 The members of the Company’s Management and Supervisory Boards ............ 16
2.2.3 Capital structure .............................................................................................. 17
2.2.4 Authorized and conditional capital .................................................................. 17
2.2.5 Shareholding structure ..................................................................................... 18
2.2.6 Securities transactions between the Offeror and certain major
shareholders, Management Board members, and managing directors ............... 18
2.2.6.1 Previous acquisitions on the stock exchange .................................................... 18
2.2.6.2 Irrevocables with selected AUGUSTA Shareholders ....................................... 19
2.2.6.3 Stock Option Letters ........................................................................................ 20
2.2.7 Transaction Agreement .................................................................................... 22
2.2.8 Overview of the structure and business activities of the AUGUSTA
Group .............................................................................................................. 23
2.2.9 Business developments at the Company ........................................................... 25
3.
3.1
3.2
3.3
3.4
INFORMATION ON THE OFFER ................................................................... 26
The Offer Document is controlling .................................................................. 26
Subject matter of the Offer, Offer Price and Acceptance Period....................... 26
Background of the Offer .................................................................................. 27
Offer Conditions .............................................................................................. 28
Page 2 of 63
3.4.1
3.4.2
3.4.3
3.4.4
3.4.5
3.4.6
3.4.7
3.4.8
3.4.9
3.4.10
3.5
4.
4.1
4.2
4.3
4.3.1
4.3.2
4.3.3
5.
5.1
5.2
5.3
5.4
5.5
6.
6.1
6.2
6.3
6.4
Clearance under merger control law ................................................................ 29
Minimum acceptance level .............................................................................. 29
No Material Adverse Change ........................................................................... 29
No material adverse market change ................................................................. 30
No Compliance Violation ................................................................................ 30
No overindebtedness or insolvency .................................................................. 31
Non-performance of certain actions ................................................................. 32
Waiver of Offer Conditions ............................................................................. 34
Non-satisfaction of Offer Conditions ............................................................... 34
Announcement of the satisfaction or non-satisfaction of the Offer
Conditions ....................................................................................................... 34
Status of official permits and proceedings ....................................................... 35
TYPE AND AMOUNT OF CONSIDERATION (§ 27 PARA. 1
SENTENCE 2 NO. 1 OF THE WPÜG) ............................................................. 35
Type and amount of consideration offered ....................................................... 35
Legal requirements with respect to the amount of consideration ...................... 35
Evaluation of the consideration by the Company’s Management and
Supervisory Boards ......................................................................................... 36
Comparison with historical stock market prices ............................................... 36
Fairness Opinion ............................................................................................. 36
Assessment of the reasonableness of the consideration by the
Management and Supervisory Boards .............................................................. 38
FINANCING THE OFFER ................................................................................ 39
Maximum number of AUGUSTA Shares ......................................................... 39
Maximum amount of consideration .................................................................. 39
Financing the Offer ......................................................................................... 40
Availability of financial resources ................................................................... 41
Confirmation of financing ............................................................................... 41
THE LIKELY CONSEQUENCES OF IMPLEMENTING THE
OFFER FOR THE COMPANY, ITS EMPLOYEES, THEIR TERMS
OF EMPLOYMENT, AND THE COMPANY’S LOCATION (§ 27
PARA. 1 SENTENCE 2 NO. 2 OF THE WPÜG) .............................................. 41
Future business activities, assets, and obligations ............................................ 41
The Company’s Management Board and Supervisory Board ............................ 42
The employees of the Company and the AUGUSTA Group and their
terms of employment and employee representatives ........................................ 42
The Company’s registered office; the locations of important segments
of the Company ............................................................................................... 43
Page 3 of 63
7.
7.1
7.2
7.2.1
7.2.2
7.2.3
7.2.4
7.3
8.
8.1
8.2
9.
OBJECTIVES PURSUED BY THE OFFEROR IN MAKING THE
OFFER ............................................................................................................... 43
Transaction Agreement .................................................................................... 43
Other goals announced by the Offeror in the Offer Document ......................... 44
Domination and profit and loss transfer agreement .......................................... 44
Squeeze-out procedure..................................................................................... 45
Delisting .......................................................................................................... 46
Intentions with respect to the business activities of the Offeror and
TKH ................................................................................................................ 47
Assessment of the objectives of TKH and the Offeror and the likely
consequences of the Offer for the Company, its employees and their
terms of employment, and the Company’s locations ........................................ 47
EFFECTS OF THE OFFER ON THE COMPANY’S
SHAREHOLDERS ............................................................................................. 49
Possible disadvantages of accepting the Offer ................................................. 49
Possible disadvantages of rejecting the Offer ................................................... 51
THE INTERESTS OF THE MANAGEMENT AND SUPERVISORY
BOARDS OF AUGUSTA TECHNOLOGIE
AKTIENGESELLSCHAFT ............................................................................... 54
9.1
9.2
The interests of the AUGUSTA Management Board Members ........................ 54
The interests of the AUGUSTA Supervisory Board Members .......................... 55
10.
THE AUGUSTA MANAGEMENT BOARD MEMBERS’ INTENTION
TO ACCEPT THE OFFER (§ 27 PARA. 1 SENTENCE 2 NO. 4 OF
THE WPÜG) ...................................................................................................... 55
11.
CLOSING STATEMENT BY THE COMPANY’S MANAGEMENT
AND SUPERVISORY BOARDS WITH RESPECT TO THE OFFER ............ 55
ATTACHMENT 1 LIST OF THE PERSONS ACTING IN CONCERT
WITH THE OFFEROR WITHIN THE MEANING OF § 2 PARAS. 5
AND 6 OF THE WPÜG ..................................................................................... 59
ATTACHMENT 2 LIST OF COMPANIES AFFILIATED WITH THE
COMPANY......................................................................................................... 62
ATTACHMENT 3 KPMG’S OPINION LETTER .................................................... 63
Page 4 of 63
List of Definitions
2012 Business Plan .......................... 29
Independent Expert.......................... 30
Acceptance Period ........................... 27
InsO ................................................ 31
Additional Acceptance Period ......... 27
Irrevocables ..................................... 20
Affiliated Companies......................... 9
Key Subsidiaries .............................. 31
AktG ................................................. 9
Key Subsidiary ................................ 31
AUGUSTA Group ............................. 9
KPMG ............................................. 37
AUGUSTA Management Board
Members ......................................... 16
Loan Agreement .............................. 41
LV ................................................... 18
AUGUSTA Managing Directors ...... 20
Management Board............................ 7
AUGUSTA Shareholder .................... 7
Material Adverse Change ................ 30
AUGUSTA Shareholders ................... 7
N+1 ................................................. 18
AUGUSTA Shares ............................ 7
Non-Blocked Shares ........................ 21
AUGUSTA Stock Options ............... 20
Offer ................................................. 7
AUGUSTA Supervisory Board
Members ......................................... 16
Offer Conditions .............................. 29
BaFin ................................................ 7
Offer Document ................................. 7
Blocked Shares ................................ 21
Offer Price ...................................... 27
CEST .............................................. 27
Offeror .............................................. 7
Company ........................................... 7
Option Holders ................................ 20
Compliance Violation ...................... 30
Statement .......................................... 7
DAH ................................................ 18
Stock Option Letters ........................ 21
Fairness Opinion ............................. 37
Stock Option Shares ........................ 21
Hoornemann .................................... 18
Stockpaert ....................................... 20
Page 5 of 63
Supervisory Board ............................. 7
Value Partners ................................. 18
Tender Period .................................. 52
Vision ............................................. 24
TKH ................................................ 13
Vision Technologies ........................ 24
Total Costs of the Offer ................... 40
Voting Share Capital ....................... 15
Transaction Agreement .................... 23
WpHG ............................................. 11
Treasury Shares ............................... 17
WpÜG ............................................... 7
Page 6 of 63
On 3 April 2012, TKH Technologie Deutschland Aktiengesellschaft, a stock corporation organized under German law with its registered office in Nettetal, registered with
the commercial register at the local court of Krefeld under HRB 13868 (the “Offeror”), published its decision to make a voluntary public offer to acquire the no-parvalue bearer shares (common shares) of AUGUSTA Technologie Aktiengesellschaft
with its registered office in Munich, registered with the commercial register at the local court of Munich under HRB 169036 (the “Company”; the Company’s no-parvalue bearer shares (ISIN DE000A0D6612, WKN A0D661) the “AUGUSTA
Shares”) in accordance with § 10 para. 1 sentence 1 of the German Securities Acquisition and Takeover Act (“WpÜG”). Each AUGUSTA Share represents a proportional amount of the Company’s share capital of EUR 1.00.
After obtaining the approval of the German Federal Financial Services Supervisory
Authority [Bundesanstalt für Finanzdienstleistungsaufsicht (“BaFin”)], the Offeror
published the Offer Document within the meaning of § 11 of the WpÜG (hereinafter
referred to as the “Offer Document,” and the offer to acquire the AUGUSTA Shares
contained therein hereinafter referred to as the “Offer”) in accordance with § 14 para. 2 sentence 1 and para. 3 sentence 1 of the WpÜG on 11 May 2012. The Offer is
directed at all the Company’s shareholders (collectively the “AUGUSTA Shareholders” or individually an “AUGUSTA Shareholder”) and seeks to acquire the
AUGUSTA Shares in free float that are not already held by the Offeror at the time of
the processing of the Offer. The price offered by the Offeror in the Offer Document is
EUR 23.00 per AUGUSTA Share (cash offer). Immediately after the Offer was
transmitted by the Offeror in accordance with § 14 para. 4 sentence 1 of the WpÜG,
the Company’s Management Board (“Management Board”) forwarded the Offer
Document to the Company’s Supervisory Board (“Supervisory Board”), the employees of the companies in the AUGUSTA Group (see definition in Section 1.2) and the
works council of HE Systems Electronic GmbH & Co. KG, the only works council in
the AUGUSTA Group.
The Company’s Management Board and Supervisory Board hereby make the following joint statement within the meaning of § 27 of the WpÜG with respect to the Offer
(the “Statement”):
Page 7 of 63
1.
General information about this Statement
1.1
Legal basis of the Statement
Under § 27 para. 1 sentence 1 and para. 3 sentence 1 of the WpÜG, the Management Board and the Supervisory Board must make and publish a reasoned
Statement with respect to the Offer and changes thereto promptly after the
Offer Document has been transmitted in accordance with § 14 para. 4 sentence 1 of the WpÜG.
In accordance with § 27 para. 1 sentence 2 of the WpÜG, the Statement of
the Management Board and the Supervisory Board must, in particular, provide information about (i) the type and amount of consideration being offered, (ii) the likely consequences of a successful Offer for the Company, the
Company’s employees and their representatives and for the terms of employment and the Company’s locations, (iii) the Offeror’s objectives in making the Offer, and (iv) the intention of the members of the Management
Board and the Supervisory Board to accept the Offer, to the extent they hold
Company securities.
The employees of the companies of the AUGUSTA Group (see definition in
Section 1.2) and the works council of HE Systems Electronic GmbH & Co.
KG, the only works council in the AUGUSTA Group, have thus far not provided any Statement of their own with respect to the Offer in accordance with
§ 27 para. 2 of the WpÜG.
1.2
Factual basis for the Statement
All information, forecasts, assessments, valuations, forward-looking statements and declarations of intent contained herein are based on the information available to the Management Board and the Supervisory Board on the
publication date of this Statement, unless otherwise expressly stated herein.
The assessments and intentions of the Management Board and the Supervisory Board in this Statement also relate to this point in time. This information
and these assessments and intentions may change after the date of this Statement.
To the extent this Statement contains forward-looking statements, such
statements are based on current plans, assessments, valuations and forecasts,
which have been made by the Management Board and Supervisory Board
with all due care. The Management Board and Supervisory Board wish to
Page 8 of 63
point out that they do not guarantee the occurrence of any future outcomes,
events, or developments and that their forward-looking statements are subject
to risks and uncertainties. The accuracy of these statements in the future cannot be guaranteed. The actual development of the Company and the companies affiliated with it (hereinafter referred to as the “Affiliated Companies”;
the Affiliated Companies together with the Company hereinafter referred to
as the “AUGUSTA Group”) within the meaning of §§ 15 et seq. of the German Stock Corporation Act (the “AktG”) can be influenced by numerous and
diverse factors and consequently can substantially differ from the assumptions and expectations expressed or used as a basis here. Such factors include
but are not limited to changes in the general or industry-specific economic
climate, developments in the financial markets, changes in the competitive
situation, changes in the law and/or the behavior of current or future
AUGUSTA Shareholders, and numerous additional factors that may influence the development of the Company and the Affiliated Companies. The
Management Board and the Supervisory Board assume no obligation to update this Statement, unless required to do so by the WpÜG.
1.3
Publication of this Statement and any other Statements regarding changes in the Offer
In accordance with § 27 para. 3 sentence 1 and 14 para. 3 sentence 1 of the
WpÜG, this Statement and any additional Statements regarding changes in
the Offer will be published on the Company’s website at
http://www.augusta-ag.de/de/investorrelations/veroeffentlichungen/uebernahmeangebot.php
and made available for distribution free of charge at the Company’s office at
Willy-Brandt-Platz 3, 81829 Munich. Moreover, copies of the Statement can
be requested by e-mail at investor-relations@augusta-ag.de, by telephone at
+49(0)89 4357 1550, or by fax at +49(0)89 4357 155 77. A copy of the
Statement will be sent free of charge. The website on which this Statement
and any additional Statement regarding changes to the Offer will be published, and the place where copies will be available for free distribution will
be publicized in a notice of availability in the Federal Gazette [Bundesanzeiger].
1.4
The AUGUSTA Shareholders’ own responsibility
Page 9 of 63
The Management Board and the Supervisory Board expressly note that the
description of the Offer in this Statement does not purport to fully and completely present or evaluate all the decision-making criteria important to any
or all of the AUGUSTA Shareholders. The provisions of the Offer Document
alone are legally binding and controlling with respect to its content, terminology, and conditions, and the processing of the Offer. Each individual
AUGUSTA Shareholder bears the responsibility to examine the information
contained in the Offer Document himself – utilizing all available sources of
information and taking his individual requirements into account – draw his
own conclusions, take the measures with respect to the Offer he finds necessary, and bear the consequences.
2.
Information on the Offeror and the Company
2.1
Information on the Offeror
2.1.1
Legal basis
The Offeror is a stock corporation [Aktiengesellschaft] organized under German law. It has its registered office in Nettetal (business address: An der
Kleinbahn 16, 41334 Nettetal, Germany), and is registered with the commercial register at the local court of Krefeld under HRB 13868.
The Offeror was formed on 27 March 2012 and registered with the commercial register at the local court of Krefeld on 2 April 2012. The corporate purpose of the Offeror, as set forth in its articles of association, is research, development, production and trading within the technology sector, particularly
in the area of information technology, sensor technology, and telecommunications. The Offeror may enter into all transactions and take all measures
which directly or indirectly serve the corporate purpose. To this end, the Offeror can also found, acquire, represent, and invest in other companies in
Germany and abroad.
The Offeror’s shares are not listed on any stock exchange.
2.1.2
Capital structure
The Offeror has share capital totaling EUR 100,000.00, divided into 100,000
no-par-value bearer shares, each with a proportional amount of the share capital of EUR 1.00 per share.
2.1.3
Shareholding structure
Page 10 of 63
The Offeror is a wholly owned indirect subsidiary of TKH Group NV, Spinnerstraat 15, 7480 AA Haaksbergen, Netherlands. The sole shareholder of the
Offeror is TKH Deutschland GmbH & Co. KG with its registered office in
Nettetal. The sole general partner of TKH Deutschland GmbH & Co. KG is
TKH Verwaltungs GmbH with its registered office in Nettetal, and the sole
limited partner of TKH Deutschland GmbH & Co. KG is TKH Duitsland
Holding BV with its registered office in Haaksbergen, Netherlands. All the
shares in TKH Deutschland Verwaltungs GmbH and TKH Duitsland Holding
B.V. are held by TKH Group NV.
Under the WpÜG and the German Securities Trading Act [Wertpapierhandelsgesetz (“WpHG”)], TKH Group NV is considered to be a subsidiary of
Stichting Administratiekantoor TKH Group with its registered office in
Haaksbergen (Netherlands). However, under Dutch law, Stichting Administratiekantoor TKH Group is not considered to be the parent company of
TKH Group NV, particularly for purposes of accounting and reporting obligations. The reason is that the ordinary shares of TKH Group NV have been
deposited with Stichting Administratiekantoor TKH Group. In return, Stichting Administratiekantoor TKH Group has issued certificates of deposit.
Page 11 of 63
The following chart shows the shareholding structure of the Offeror:
Stichting Administratiekantoor TKH Group
TKH Group NV
100%
100%
TKH Deutschland Verwaltungs GmbH
(general partner)
TKH Duitsland Holding BV
(limited partner)
(no capital
participation)
100%
TKH Deutschland GmbH & Co. KG
100%
TKH Technologie Deutschland AG
(Offeror)
Page 12 of 63
2.1.4
The members of the Management and Supervisory Boards
At the present time the sole member of the Offeror’s Management Board is
Mr. Arne Eike Dehn.
Under the articles of association, the Offeror’s Supervisory Board comprises
three members. At the present time they are Mr. Johannes Marius Alexander
van der Lof, Mr. Elling Dirk Hendrik de Lange, and Mr. Gerardus Arie
Sleeking.
2.1.5
Overview of the structure and business activities of the TKH Group
The Offeror holds no other equity interests in other companies.
TKH Group NV is the parent company of more than 100 regional and other
subsidiaries, which collectively form the TKH Group (“TKH”). TKH specializes in the development and delivery of innovative solutions in the areas
of telecommunications (Telecom Solutions), building management (Building
Solutions) and industrial applications (Industrial Solutions).
Stichting Administratiekantoor TKH Group with its registered office in
Haaksbergen (Netherlands), which is deemed to control the TKH Group NV
under the WpÜG and the WpHG (but not under Dutch law), has no operations.
In fiscal year 2011, TKH generated total consolidated revenues of EUR 1.061
million. TKH’s EBITDA (Earnings before Interest, Taxes, Depreciation and
Amortization) for fiscal year 2011 was EUR 105.4 million. Its after-tax earnings were EUR 54.1 million. TKH operates worldwide and had a total of
4,062 employees at the end of 2011.
TKH operates in the following main divisions:
Telecom Solutions
Telecom Solutions develops, produces and distributes systems ranging from
outdoor infrastructure for telecom and CATV networks to indoor homenetworking applications. TKH Telecom Solutions operates in three distinct
sub-segments: indoor communications systems, optical fiber cable networks,
and copper cable networks. The division focuses on systems that are com-
Page 13 of 63
pletely maintenance-free due to accompanying system guarantees. About
40% of the product portfolio consists of optical fiber and copper cables for
node-to-node connections. The remainder, such as components and systems
in the field of connectivity and peripheral equipment, is used mainly in the
network’s nodes.
Building Solutions
Building Solutions develops, produces and distributes solutions in the field of
efficient electro-technology: ranging from applications within buildings to
technical systems that, when combined with software, provide efficiency solutions for the care, traffic and security sectors, among others. Building Solutions operates in three distinct sub-segments: building technologies, security
systems, and connectivity systems. TKH’s know-how focuses on connectivity
systems in combination with efficiency solutions aimed at reducing the time
expended on installation work in buildings. In addition, the segment focuses
on intelligent video, intercom, and access management systems for a number
of specific sectors, including elderly care, parking, and security for buildings
and grounds.
Industrial Solutions
Industrial Solutions develops, produces, and distributes solutions: ranging
from specialty cable, to “plug and play” cable systems, to integrated systems
for the production of car and truck tires. Industrial Solutions operates in two
distinct sub-segments: connectivity systems and manufacturing systems.
TKH has distinctive know-how in the field of automation of production processes and improving the reliability of production systems. Such know-how
enables TKH to respond to the increasing need of a number of specialized industrial sectors – such as tire manufacturing, robot and machine manufacturing, and the medical industry – to outsource the construction of production
systems or modules.
2.1.6
Persons acting in concert with the Offeror
As of the date of publication of this Offer Document, TKH Group NV, as the
indirect parent company of the Offeror, as well as the other entities affiliated
with TKH Group NV listed in Attachment 1 – along with the Offeror – as
well as Stichting Administratiekantoor TKH Group, are “persons acting in
concert” with the Offeror within the meaning of § 2 para. 5 and 6 of the
WpÜG. According to the Offeror, there are no further persons acting in concert with the Offeror.
Page 14 of 63
2.1.7
Equity interests in the Company held by the Offeror and by persons acting in concert with the Offeror; attribution of voting rights
According to the information provided in the Offer Document, as of the date
of publication of the Offer Document, the Offeror directly holds 1,600
AUGUSTA Shares (corresponding to approx. 0.02% of the Company’s share
capital and voting rights and 0.02% of the Company’s Voting Share Capital
reduced in accordance with § 71b of the AktG (total number of AUGUSTA
Shares minus the AUGUSTA Shares held by the Company in accordance
with § 71b of the AktG (see Section 2.2.3); “Voting Share Capital”)). According to the information provided, the Offeror acquired the AUGUSTA
Shares on the stock exchange (see Section 2.2.6.1). The voting rights for these AUGUSTA Shares are attributed to Stichting Administratiekantoor TKH
Group, TKH Group NV, TKH Deutschland Verwaltungs GmbH, TKH
Duitsland Holding B.V., and TKH Deutschland GmbH & Co. KG under
§ 30 para. 1 sentence 1 no. 1 of the WpÜG.
TKH Group NV is party to the binding Irrevocables with selected
AUGUSTA Shareholders (as defined and further described in Section
2.2.6.2). In addition, the Offeror is party to the Stock Option Letters (as defined and further described in Section 2.2.6.3) with several eligible employees under the Company’s stock option program with respect to both (i) the
AUGUSTA Shares and (ii) the options to acquire AUGUSTA Shares held by
these employees, and will enter into additional Stock Option Letters with
other eligible employees under the Company’s stock option program. The Irrevocables and the Stock Option Letters that have already been concluded
have been reported to the Company and BaFin as (financial) instruments in
accordance with § 25a of the WpHG. Apart from the Irrevocables and the
Stock Option Letters, neither the TKH companies nor the Stichting Administratiekantoor TKH Group holds any additional (financial) instruments within the meaning of §§ 25 and 25a of the WpHG with respect to the AUGUSTA
Shares.
Collectively, the Offeror and the persons acting in concert with the Offeror
hold AUGUSTA Shares and (financial) instruments that authorize or enable
the acquisition of AUGUSTA Shares totaling 36.61% of the Company’s
share capital and voting rights and 40.6% of the Company’s Voting Share
Capital. Otherwise, according to the Offeror’s information, neither the Offeror nor the persons acting in concert with the Offeror (including their subsidiaries) hold AUGUSTA Shares or financial instruments or other instruments
within the meaning of §§ 25 and 25a of the WpHG that authorize or enable
Page 15 of 63
them to acquire AUGUSTA Shares nor are voting rights with respect to
AUGUSTA Shares attributed to them.
2.2
Information on the Company
2.2.1
Legal basis
The Company is a stock corporation organized under German law with its
registered office in Munich (business address: Willy-Brandt-Platz 3, 81829
Munich, Germany), registered with the commercial register at the local court
of Munich under HRB 169036. The Company was founded in 1991 and has
been listed on Deutsche Börse since 5 May 1998.
The AUGUSTA Shares (ticker symbol: ABE 1) are admitted to trading under
ISIN DE000A0D6612 on the regulated market of the Frankfurt Stock Exchange and the Prime Standard segment, which has additional admission requirements. The AUGUSTA Shares are also traded “over the counter” on the
Berlin-Bremen, Düsseldorf, Munich, and Stuttgart stock exchanges.
2.2.2
The members of the Company’s Management and Supervisory Boards
The Company’s Management Board currently consists of the following three
members (collectively the “AUGUSTA Management Board Members”):
Name
Current position
Amnon Harman
Chairman of the Management Board
Berth Hausmann
Management Board, Finance & Controlling
Arno Pätzold
Management Board, Corporate Development
The Company’s Supervisory Board consists of the following three members
(collectively the “AUGUSTA Supervisory Board Members”):
Page 16 of 63
2.2.3
Name
Current position
Adi Seffer
Chairman of the Supervisory Board
Dr. Hans Liebler
Deputy Chairman of the Supervisory Board
Götz Gollan
Member of the Supervisory Board
Capital structure
As of the date of publication of this Statement, the Company has a share capital of EUR 8,510,014.00, divided into 8,510,014 no-par-value bearer shares
(common shares). Every AUGUSTA Share represents a proportional amount
of the Company’s share capital of EUR 1.00. Other than common shares,
there are no other classifications of shares. Of the 8,510,014 AUGUSTA
Shares currently issued, 7,666,463 are in circulation. The rest, i.e. 843,551
AUGUSTA Shares (approx. 9.9% of the share capital), are held by the Company (“Treasury Shares”).
2.2.4
Authorized and conditional capital
§ 5 para. 6 of the Company’s articles of association provides for authorized
capital. It authorizes the Management Board to increase the Company’s share
capital by up to EUR 4,217,757.00 , on one or more occasions, against cash
or non-cash contributions during the period ending on 14 May 2014 – with
the consent of the Supervisory Board – by issuing new, no-par-value bearer
shares. In addition, the Management Board is authorized – with the consent
of the Supervisory Board – to exclude the shareholders’ preemptive rights in
certain cases enumerated in § 5 para. 6 sentence 4 (a) to (c) of the articles of
association. As of the date of publication of this Statement, the Management
Board had made no use of these authorizations.
In addition, the Company has conditional capital in accordance with § 5 para. 7 of the Company’s articles of association. The Company’s share capital
is conditionally increased by up to EUR 769,051.00 by the issuance of up to
769,051 new no-par-value bearer shares. The conditional capital increase can
only be implemented to the extent that subscription rights were issued in accordance with the Company’s 2008 stock option plan in conformity with the
resolutions adopted at the annual general shareholders’ meetings of 9 May
2008 and 12 May 2011, and the holders of the subscription rights have exer-
Page 17 of 63
cised them, and the Company does not satisfy the subscription rights from
Treasury Shares.
As stated in the invitation to the Company’s annual general shareholders’
meeting on 16 May 2012, up to 324,100 subscription rights to up to 324,100
AUGUSTA Shares can still be exercised based on the 2008 stock option plan.
To the extent the existing conditional capital is no longer needed to cover the
2008 stock option plan, i.e. to the extent of up to 444,951 AUGUSTA Shares,
it will be used to service subscription rights under a new option plan.
The next window for exercising stock options opens four weeks after the annual general shareholders’ meeting, which will be held on 16 May 2012. The
remaining 1,100 options from the second tranche issued in 2009 and up to
184,050 options from the third tranche issued in 2010 can be exercised in that
window.
In addition, 133,900 options were issued in 2011 and 2,500 options in 2012.
2.2.5
Shareholding structure
The Company has the following six shareholders, which directly or indirectly
hold more than 3% of the Company’s share capital and voting rights: EQMC
Europe Development Capital Fund plc. and EQMC FIL (collectively “N+1”)
holds 10.48%, DAH Beteiligungs GmbH (“DAH”) holds 9.64%, Stichting
Effectenbewaarbedrijf Hof Hoorneman (“Hoornemann”) 6.16%, Mr. Paul E.
Singer (New York, USA) 5.30%, Lincoln Vale European Partners Master
Fund L.P. (“LV”) 5.19%, and Stichting Value Partners Family Office (“Value Partners”) holds 3.45% of the Company’s share capital and voting rights.
The Company itself holds approx. 9.9% of the AUGUSTA Shares (843,551
AUGUSTA Shares) as Treasury Shares. Under § 71b of the AktG, the Treasury Shares have no voting rights.
2.2.6
Securities transactions between the Offeror and certain major shareholders, Management Board members, and managing directors
2.2.6.1 Previous acquisitions on the stock exchange
From the publication of its decision to make an Offer on 3 April 2012 in accordance with § 10 para. 1 sentence 1 of the WpÜG until the publication of
the Offer Document on 11 May 2012, the Offeror acquired 1,600 AUGUSTA
Shares (corresponding to 0.02% of the Company’s share capital and voting
rights and 0.02% of the Company’s Voting Share Capital) on the stock ex-
Page 18 of 63
change (according to its own information). Also according to its own information, the highest purchase price paid by the Offeror for an AUGUSTA
Share was EUR 22.91. In addition, according to the information provided,
neither the Offeror nor the persons acting in concert with the Offeror within
the meaning of § 2 para. 5 of the WpÜG acquired AUGUSTA Shares within
the six months immediately prior to the publication of the decision to make
an Offer on 3 April 2012 in accordance with § 10 para. 1 sentence 1 of the
WpÜG or from 3 April 2012 until the publication of the Offer Document on
11 May 2012. However, in the Offer Document, the Offeror expressly reserved the right to acquire additional AUGUSTA Shares outside the takeover
offer either directly or through persons acting in concert with the Offeror or
their subsidiaries during the Acceptance Period and the Additional Acceptance Period (as defined in Section 3.2).
In addition, according to their own information, the Offeror and the persons
acting in concert with the Offeror within the meaning of § 2 para. 5 of the
WpÜG entered into tender agreements [Andienungsvereinbarungen] for the
acquisition of AUGUSTA Shares within the last six months prior to the publication of the decision to make an Offer on 3 April 2012 in accordance with
§ 10 para. 1 sentence 1 of the WpÜG and from 3 April 2012 until the publication of the Offer Document on 11 May 2012 (see Section 2.2.6.2, below).
2.2.6.2 Irrevocables with selected AUGUSTA Shareholders
According to the Offer Document (see section 6.5.2 thereof), TKH Group NV
entered into various binding tender agreements for AUGUSTA Shares with
the following selected AUGUSTA Shareholders prior to the publication of
the Offer Document on 11 May 2012:
•
N+1 as the owner of 892,215 AUGUSTA Shares (corresponding to
10.48% of the Company’s share capital and voting rights and 11.64% of
the Company’s Voting Share Capital);
•
DAH as the owner of 820,025 AUGUSTA Shares (corresponding to
9.64% of the Company’s share capital and voting rights and 10.7% of
the Voting Share Capital);
•
Hoorneman as the owner of 523,899 AUGUSTA Shares (corresponding
to 6.16% of the Company’s share capital and voting rights and 6.83% of
the Voting Share Capital);
Page 19 of 63
•
LV as the owner of 441,463 AUGUSTA Shares (corresponding to
5.19% of the Company’s share capital and voting rights and 5.76% of
the Voting Share Capital);
•
Value Partners as the owner of 293,445 AUGUSTA Shares (corresponding to 3.45% of the Company’s share capital and voting rights and
3.83% of the Voting Share Capital);
•
Vereniging Beleggingsclub ‘t Stockpaert (“Stockpaert”) as the owner
of 100,000 AUGUSTA Shares (corresponding to 1.18% of the Company’s share capital and voting rights and 1.3% of the Voting Share Capital);
(The aforementioned binding tender agreements are collectively referred to
as the “Irrevocables”).
The Irrevocables thus cover a total of 3,071,047 AUGUSTA Shares, corresponding to 36.09% of the Company’s share capital and voting rights and
40.06% of the Company’s Voting Share Capital.
In the Irrevocables, N+1, DAH, LV, Hoorneman, Value Partners, and Stockpaert each irrevocably promised TKH Group NV to accept the Offeror’s Offer for all the AUGUSTA Shares held by them at the Offer Price. In addition,
N+1, DAH, LV, Hoorneman, Value Partners, and Stockpaert agreed (i) not to
revoke, challenge, terminate, or rescind the agreements brought about by the
acceptance of the Offer, (ii) to transfer all the AUGUSTA Shares held by
them to the Offeror pursuant to the Offer Document, (iii) not to accept any
competing offer of a third party, regardless of the price offered in the competing offer, and (iv) not to exercise the right of rescission provided for in
§§ 21 and 22 of the WpÜG. The Offeror is a third-party beneficiary under the
Irrevocables.
2.2.6.3 Stock Option Letters
Certain Managers in the AUGUSTA Group (“Option Holders”), including
the AUGUSTA Management Board Members and two Managing Directors of
other companies in the AUGUSTA Group (Frank Grube and Terry Arden (the
“AUGUSTA Managing Directors”)), each hold AUGUSTA Shares and
stock options under the Company’s stock option plan (“AUGUSTA Stock
Options”). The Company’s stock option plan provides that the AUGUSTA
Stock Options can only be converted into AUGUSTA Shares if the respective
Option Holder holds at least 5% of the AUGUSTA Shares in its securities ac-
Page 20 of 63
count in relation to the options to be exercised (“Blocked Shares””). Otherwise, the AUGUSTA Stock Options will lapse. In addition, the conversion of
the AUGUSTA Stock Options into AUGUSTA Shares depends on additional
factors – some of which are performance-related.
On 3 April 2012, the AUGUSTA Management Board Members and the
AUGUSTA Managing Directors entered into individual agreements with the
Offeror with respect to the tender and acquisition of AUGUSTA Shares (the
“Stock Option Letters”). In the Stock Option Letters, the AUGUSTA Management Board Members and the AUGUSTA Managing Directors agreed to
accept the Offer for all the AUGUSTA Shares held by each of them, with the
exception of the Blocked Shares, at the Offer Price (the AUGUSTA Shares
minus the Blocked Shares are hereinafter referred to as the “Non-Blocked
Shares”). In addition, the AUGUSTA Management Board Members and the
AUGUSTA Managing Directors (i) agreed not to revoke, challenge, terminate, or rescind the agreements brought into being by the acceptance of the
Offer and (ii) waived the right of rescission provided for in §§ 21 and 22 of
the WpÜG. In accordance with the Stock Option Letters, these obligations
with respect to the Non-Blocked Shares shall lapse if the Company’s Management Board recommends that the AUGUSTA Shareholders reject the Offer in its Statement issued pursuant to § 27 of the WpÜG. In this Statement,
the Company’s Management Board recommends that the AUGUSTA Shareholders accept the Offer. Therefore, the AUGUSTA Management Board
Members and the AUGUSTA Managing Directors will accept the Offer for a
total of 34,750 AUGUSTA Shares (corresponding to 0.41% of the Company’s share capital and voting rights and 0.45% of the Voting Share Capital).
In addition, the AUGUSTA Management Board Members and the
AUGUSTA Managing Directors agreed to exercise their AUGUSTA Stock
Options and convert them into AUGUSTA Shares (“Stock Option Shares”)
if and to the extent the AUGUSTA Stock Options can be exercised, provided
that the AUGUSTA Stock Options are “in the money” (as of the date of publication of this Statement, it is assumed that this will be the case for the
AUGUSTA Stock Options exercisable in the next exercise window). The
AUGUSTA Management Board Members and the AUGUSTA Managing Directors also agreed to sell and transfer the Stock Option Shares together with
all available Blocked Shares – which the AUGUSTA Management Board
Members and the AUGUSTA Managing Directors will no longer need to hold
in their securities accounts after the exercise of the AUGUSTA Stock Options – to the Offeror at the Offer Price outside of the Offer and regardless of
whether the Offer Conditions (as defined in Section 3.2) have been met.
Page 21 of 63
As of the date of publication of this Statement, the AUGUSTA Management
Board Members and the AUGUSTA Managing Directors hold a total of
43,250 AUGUSTA Shares (corresponding to 0.51% of the Company’s share
capital and voting rights and 0.56% of the Voting Share Capital) and 170,000
AUGUSTA Stock Options, divided up as follows:
Option Holder
Non-Blocked
Shares
Blocked Shares
AUGUSTA
Stock Options
Mr. Amnon Harman
19,750
1,750
35,000
Mr. Berth Hausmann
13,500
1,750
35,000
Mr. Arno Pätzold
1,500
1,500
30,000
Mr. Frank Grube
–
2,000
40,000
Mr. Terry Arden
–
1,500
30,000
As of the date of publication of this Statement, other Option Holders hold
AUGUSTA Shares and AUGUSTA Stock Options in addition to the
AUGUSTA Management Board Members and the AUGUSTA Managing Directors. According to its own information, the Offeror intends to enter into
purchase agreements with these Option Holders prior to or during the Acceptance Period with respect to the Stock Option Shares issued to them after
the conversion of the AUGUSTA Stock Options – but not with respect to the
other AUGUSTA Shares held by them – on terms comparable to those in the
Stock Option Letters (including acquisition at the Offer Price of the Stock
Option Shares issued to the Option Holders after the conversion of the
AUGUSTA Stock Options).
In the Transaction Agreement (see Section 2.2.7), the Offeror also agreed to
pay the Offer Price for Stock Option Shares acquired through the exercise of
the AUGUSTA Stock Options. Therefore, the Offeror has agreed to pay all
Option Holders (including those other than the AUGUSTA Management
Board Members and the AUGUSTA Managing Directors) a price equivalent
to the Offer Price for the Stock Option Shares acquired through the exercise
of AUGUSTA Stock Options that are not exercisable at the present time but
will be exercisable in the future.
2.2.7
Transaction Agreement
On 3 April 2012, the Company, the Offeror, and TKH Group NV entered into
an agreement with respect to certain key elements of the Offer and the future
business relationship between TKH and the AUGUSTA Group. On 25 April
2012, this agreement was modified in an amendment agreement and the Offer
Page 22 of 63
Price of EUR 21.00 was increased to EUR 23.00 per AUGUSTA share (the
agreement of 3 April 2012, as amended on 25 April 2012, is hereinafter referred to as the “Transaction Agreement”). A key component of the Transaction Agreement is the future focus of the business model after the successful implementation of the Offer. It was agreed, in particular, that TKH Group
NV fully supports the Company’s strategy of focusing on Vision Technologies and that it generally supports the Company’s plans to expand into the 3D
optical measuring systems sector and that existing customer relationships and
sales structures will be continued where this is conducive to the amalgamated
business of TKH and the AUGUSTA Group. In the Transaction Agreement,
TKH Group NV also declares its intention to support the Company’s strategy
with respect to so-called “Other Divisions” to enable the continuation of these divisions and their development into the most suitable forms. In return, the
Company, the Management Board, and the Supervisory Board agree in the
Transaction Agreement to support the Offer, subject to their mandatory legal
obligations.
In addition, the Transaction Agreement contains other provisions customary
in comparable investor agreements, e.g. cooperation in proceedings conducted by the anti-trust authorities, continuation of business operations in accordance with the current practice until the completion of the Offer or its definitive failure, and the obligation to refrain from taking unusual measures. In
the Transaction Agreement, the Offeror agreed – by way of a third-partybeneficiary agreement (§ 328 of the German Civil Code [BGB]) – to make offers to the Option Holders to enter into purchase agreements with respect to
AUGUSTA Stock Options held by them at the Offer Price within six weeks
after publication of the decision to make the Offer in accordance with § 10
para. 1 sentence 1 of the WpÜG. Thus, as already described in Section 2.2.6.3, it has been assured that all Option Holders will receive a price
equivalent to the Offer Price for the Stock Option Shares acquired through
the exercise of AUGUSTA Stock Options that are not exercisable at the present time but will be exercisable in the future.
2.2.8
Overview of the structure and business activities of the AUGUSTA
Group
The Company is the parent company of 19 (direct and indirect) subsidiaries
(see Attachment 2), which collectively form the AUGUSTA Group. The
AUGUSTA Group is an integrated technology group focusing on the digital
imaging and optical sensor technology markets (“Vision Technologies” or
“Vision”), including research, development, production, and distribution.
Page 23 of 63
The AUGUSTA Group is active in the traditional areas of industrial inspection, quality control, and process automation as well as in medical technology, science, traffic control technology, security, and defense.
The Vision Technologies are the core segment of the AUGUSTA Group. In
this division, the AUGUSTA Group supplies digital camera systems and optical sensor solutions for a broad spectrum of applications in a range of industries, including manufacturing, medical technology, multimedia & entertainment, and traffic and security technology. Faster than the human eye, vision systems check the visible and invisible properties of an object in a fraction of a second, and are high-precision, fatigue-proof, and consistently reliable and therefore enhance the quality, safety and efficiency of automated
processes. Camera systems have a practical application in assembly processes
for industrial production, in optical controls in automatic placement, filling
and packaging systems, surface inspections as well as in medical devices for
ocular fundus analysis and plastic surgery. In the domain of smart traffic systems, cameras help to safely and efficiently control traffic flow. Standard
products and customer-specific systems are developed and produced for a
broad spectrum of applications in various branches of industry, such as manufacturing, medical technology, multimedia, traffic, and security. Today the
Company is one of the leading suppliers of high-quality camera systems in
the world with FireWire and Gigabit Ethernet (GigE) interfaces and other
high-performance interface technologies for special applications. Approximately 300 employees work in the Vision Segment, including Allied Vision
Technologies GmbH and LMI Technologies Inc. and their subsidiaries.
In addition to the Vision Segment, there is the “Other Divisions” segment –
which was called the “Sensors Segment” before the sale of the Sensortechnics Group in fiscal year 2011. This comprises HE System Electronic
GmbH & Co. KG and Dewetron Ges.m.b.H. and their subsidiaries. HE System Electronic GmbH & Co. KG provides solutions for microsystems engineering and power electronics. Its activities range from the development of
electronics, to electronic manufacturing services for equipment and systems,
to production-ready electronic components, such as temperature sensors,
mechatronics for use in the automotive industry, sensors for medical technology, and high-quality microelectronic components for aerospace purposes.
Dewetron Ges.m.b.H. is a leading supplier of mobile measuring systems for
sophisticated testing and measuring applications. The Company develops,
manufactures, and distributes high-precision, PC-based systems in sturdy
housings for mobile and stationary use in automotive measuring technology,
Page 24 of 63
energy and network analysis, the aerospace industry, transportation, and general testing and measuring technology.
The following overview shows the structure of the Company and the
AUGUSTA Group:
2.2.9
Business developments at the Company
In fiscal year 2011, the Company’s consolidated sales revenues were
EUR 101.3 million – a 31% increase compared to the previous year. Organic
growth – excluding VDS Vosskühler GmbH and LMI Technologies Inc.,
which were acquired in fiscal year 2011– was close to 12%.
Incoming orders in fiscal year 2011 rose by approx. 24% to EUR 107.3 million. The backlog of orders as of the end of fiscal year 2011 was almost 57%
above the previous year at a volume of EUR 39.3 million.
Page 25 of 63
The gross margin (46.3%) rose slightly in fiscal year 2011 as compared to
fiscal year 2010 due to the increased focus on Vision Technologies. The result of this focus was that earnings increased disproportionately to sales and
rose 67% to almost EUR 18 million as compared to the previous year (2011).
The EBITDA margin rose to 17.7%. Subtracting out the companies acquired
in 2011, organic growth of EBITDA was also disproportionate at about 32%.
The AUGUSTA Group is developing from a leading supplier of digital cameras and 3D measuring systems for industrial imaging into the leading company for Vision Technology worldwide (AUGUSTA Vision Company). The
Company’s goal is to become a preferred technology partner and supplier
based on innovative products, the highest standard of quality, and excellent
service.
3.
Information on the Offer
3.1
The Offer Document is controlling
Selected information from the Offer is provided below. For further information and details (particularly details with respect to the Offer Conditions,
the Acceptance Periods, the methods of acceptance, and rescission rights),
AUGUSTA Shareholders are referred to the Offer Document. The following
information merely summarizes the information in the Offer Document. The
Management Board and the Supervisory Board wish to point out that the description of the Offer in this Statement makes no claim to completeness and
that the Offer Document alone is controlling with respect to the content and
implementation of the Offer. It is the responsibility of every AUGUSTA
Shareholder to peruse the Offer Document and take the measures he deems
reasonable. The Offer Document has been published on the Internet at
www.tkhgroup.com, and a notice of availability has been published in the
Federal Gazette [Bundesanzeiger]. Free copies may be obtained from Commerzbank Aktiengesellschaft, ZCM-ECM Execution, Mainzer Landstraße 153, 60327 Frankfurt on Main. The details can be found in the Offer
Document.
3.2
Subject matter of the Offer, Offer Price and Acceptance Period
The Offeror offers to purchase and acquire all the AUGUSTA Shares held by
AUGUSTA Shareholders, including all ancillary rights in existence at the
time the Offer is processed (particularly, profit-participation rights for the
current fiscal year and every subsequent fiscal year) at a purchase price of
EUR 23.00 per AUGUSTA Share (the “Offer Price”) in accordance with the
Page 26 of 63
provisions of the Offer. The Offer relates to all AUGUSTA Shares not held
by the Offeror.
The period for acceptance of the Offer (including any extensions – see section 5.3 of the Offer Document, the “Acceptance Period”), began with the
publication of the Offer Document on 11 May 2012 and will end at midnight
Central European Summer Time (“CEST”) on 8 June 2012. For further information on the acceptance and implementation of the Offer, we make reference to section 13 of the Offer Document.
The Acceptance Period can be extended under certain circumstances, e.g. if
the Offer is modified or a competing offer is made (see section 5.3 of the Offer Document for further details).
Those AUGUSTA Shareholders that do not accept the Offer during the Acceptance Period can still accept the Offer within two weeks of publication of
the provisional results of the Offer by the Offeror in accordance with
§ 23 para. 1 sentence 1 no. 2 of the WpÜG (“Additional Acceptance Period”), unless one or more of the conditions precedent to the Offer under section 12.1 of the Offer Document (see Section 3.4 of this Statement) have not
been met when the Acceptance Period expires. According to its own information, the Offeror expects – subject to an extension of the Acceptance Period (as described in section 5.3 of the Offer Document) – that the Additional
Acceptance Period will commence on 14 June 2012 and will end at midnight
CEST on 27 June 2012. After the expiration of this Additional Acceptance
Period, the Offer cannot be accepted, unless the non-accepting shareholder
has a right of tender under § 39c of the WpÜG (see Section 7.2.2 (b) of this
Statement).
3.3
Background of the Offer
Section 8 of the Offer Document states the following regarding the economic
and strategic background of the Offer:
Through the takeover of the Company, the Offeror and TKH – together with
the AUGUSTA Group – intend to create a leading Vision Technology company with a focus on vertical markets, such as intelligent traffic technology,
medical technology, and industrial inspection procedures.
According to the Offeror, the other divisions of the AUGUSTA Group will
enhance TKH’s ability to offer individual electronic subsystems to its customers. TKH and the AUGUSTA Group will jointly analyze the development
Page 27 of 63
potential of these other activities of the AUGUSTA Group within the TKH
network.
According to TKH, the AUGUSTA Group and TKH may, through their combined businesses, be in a position to benefit from the positive effects of an
enhanced global reach and geographic complementarities, cross-utilisation of
R&D resources and standardisation of development platforms as well as increased purchasing power. TKH and the AUGUSTA Group complement one
another very well from a geographical standpoint; in addition to the presence
in Europe, better access to the important American and Asian markets will be
created. Currently, it is not possible for the Offeror to quantify the exact
amount of those positive effects. Following the combination of both groups
after the successful completion of the Offer, the scope of joint business opportunities and mutual synergy potentials will be jointly analysed and scrutinised. In particular, the Offeror cites the following examples of complementary business lines and operational combination potential:
3.4
•
A stronger position through combined know-how in the area of medical
technology.
•
Broadening the market access of the AUGUSTA Group in the field of
intelligent traffic solutions by making use of TKH’s current business in
the field of traffic solutions.
•
Using AUGUSTA Group’s 3D and Vision Technology competence in
the field of rubber & tire inspection to support inspection functionality
in TKH’s important tire manufacturing activities.
•
Based on a combined international presence, AUGUSTA Group and
TKH will have a stronger organic growth potential based on the existing sales organisations of the combined business especially in Asia and
North America, in addition to the European presence of both groups as
well as growth possibilities through acquisitions in the Vision Technology field as the case may be.
Offer Conditions
As described in further detail in section 12 of the Offer Document, the Offer and the contracts entered into with the AUGUSTA Shareholders through
its acceptance are subject to the following conditions precedent (“Offer
Conditions”):
Page 28 of 63
3.4.1
Clearance under merger control law
The German Federal Cartel Office [Bundeskartellamt] has cleared the intended acquisition of the AUGUSTA Shares pursuant to the Offer, or all the applicable prohibition periods have expired without the Federal Cartel Office
having prohibited the intended acquisition of the AUGUSTA Shares pursuant
to the Offer. This Offer Condition must have been satisfied by 31 October
2012 at the latest.
3.4.2
Minimum acceptance level
The sum of (i) all AUGUSTA Shares for which the acceptance of the takeover offer is validly declared and not revoked by the expiration of the Acceptance Period, (ii) the AUGUSTA Shares held by the Offeror or parties
acting in concert with the Offeror at the expiration of the Acceptance Period,
and (iii) all other AUGUSTA Shares the Offeror acquires or agrees to acquire
outside the takeover offer prior to the expiration of the Acceptance Period
equals at least 75% of all shares issued by Augusta AG as of the expiration of
the Acceptance Period minus all Treasury Shares.
3.4.3
No Material Adverse Change
From the time of the publication of the Offer Document until the expiration
of the Acceptance Period, (i) no circumstances are announced by the Company pursuant to § 15 of the WpHG or would have had to be announced pursuant to § 15 para. 1 of the WpHG, or (ii) no other circumstances arise, which,
according to the assessment of PricewaterhouseCoopers Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft as independent expert, lead or will lead,
alone or together with other circumstances named in (i) or (ii),
either:
(a)
to a reasonably foreseeable decrease of at least EUR 4 million in the
AUGUSTA Group’s consolidated EBITDA in the 2012 fiscal year, as
compared to the 2012 Business Plan (“2012 Business Plan”), to the extent the decrease is recurrent; or
(b)
to a reasonably foreseeable decrease of at least EUR 15 million in the
AUGUSTA Group’s consolidated equity, as of 31 December 2012 as
compared to the 2012 Business Plan;
(each individually and collectively referred to as a “Material Adverse
Change”).
Page 29 of 63
The non-occurrence of each of the above events under (a) and (b) in this Section 3.4.3 qualifies as one Offer Condition.
To determine whether a Material Adverse Change has occurred, only the
opinion
of
PricewaterhouseCoopers
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft (the “Independent Expert”) shall be binding. The conditions of this Section 3.4.3 shall only be deemed to have been
unsatisfied if (i) the Independent Expert comes to the conclusion that a Material Adverse Change has occurred, and (ii) the receipt and the result of the
opinion of the Independent Expert is publicized before the date of the publication in accordance with § 23 para. 1 sentence 1 no. 2 of the WpÜG or on
the same date at a time very near to this publication. If the receipt and the result of the opinion of the Independent Expert are not publicized on or before
the date of the publication in accordance with § 23 para. 1 sentence 1 no. 2 of
the WpÜG, the conditions set forth in this Section 3.4.3 shall be deemed to
have been satisfied.
3.4.4
No material adverse market change
From the time of the publication of the Offer Document until the close of the
markets in Frankfurt am Main one working day prior to the expiration of the
Acceptance Period, the DAX (as reported by Bloomberg) has not decreased
by more than 1,500 points from its level on 10 May 2012, which shall be calculated according to the daily closing price.
3.4.5
No Compliance Violation
From the publication of the Offer Document until the expiration of the Acceptance Period, no administrative or criminal offense, under the laws of
Germany or any other relevant jurisdiction, by any member of an executive
body, manager, employee, representative or authorized advisor of a company
in the AUGUSTA Group, acting in his business capacity and related to the
AUGUSTA Group, has become known, particularly bribery and corruption,
anti-trust violations, breach of trust and money laundering (the “Compliance
Violation”), if such an administrative or criminal offense would be insider
information for the Company within the meaning of § 13 of the WpHG or
would have been insider information had this information not been made
public.
In determining whether such a Compliance Violation has occurred, only the
opinion of the Independent Expert shall be binding. The condition of this
Section 3.4.5 shall be deemed not to have been satisfied only if (i) the Inde-
Page 30 of 63
pendent Expert comes to the conclusion that a Compliance Violation has occurred, and (ii) the receipt and the result of the opinion of the Independent
Expert are publicized before the date of the publication in accordance with
§ 23 para. 1 sentence 1 no. 2 of the WpÜG or on the same date at a time very
near to this publication. If the receipt and the result of the opinion of the Independent Expert are not publicized on or before the date of the publication
in accordance with § 23 para. 1 sentence 1 no. 2 of the WpÜG, the condition
set forth in this Section 3.4.5 shall be deemed to have been satisfied.
3.4.6
No overindebtedness or insolvency
From the publication of the Offer Document until the expiration of the
Acceptance Period:
(a)
no insolvency proceedings under German law or similar proceedings
under foreign law have been opened in respect of the assets of the
Company or its subsidiaries, Allied Vision Technologies GmbH,
Dewetron Elektronische Messgerate Ges.m.b.H., or LMI Technologies.
Inc (Canada) (each a “Key Subsidiary” and collectively the “Key Subsidiaries”); moreover the Company’s Management Board and/or the
Managing Directors of a Key Subsidiary have not petitioned for such
proceedings to be opened;
(b)
neither the Company nor any Key Subsidiary is insolvent, at risk of insolvency, or overindebted (§§ 17 to 19 of the German Insolvency Code
[Insolvenzordnung – “InsO”], or corresponding provisions of foreign
law) and according to the insolvency law applicable to the company
concerned, there are no grounds that would justify or necessitate a petition for the opening of insolvency or similar proceedings;
(c)
neither the Company nor any Key Subsidiary has suffered a loss of
more than half its share capital; or
(d)
neither the Company nor any Key Subsidiary has ceased its payments or
its business operations.
The non-occurrence of each of the events mentioned above in this Section
3.3.6 shall be deemed to be an Offer Condition.
In determining whether any event in this Section 3.4.6 has occurred, only the
opinion of the Independent Expert shall be binding. The condition of this
Section 3.4.6 shall be deemed not to have been satisfied only if (i) the Inde-
Page 31 of 63
pendent Expert comes to the conclusion that one of the events referred to in
this Section 3.4.6 has occurred, and (ii) the receipt and the result of the opinion of the Independent Expert are publicized before the date of the publication in accordance with § 23 para. 1 sentence 1 no. 2 of the WpÜG or on the
same date at a time very near to this publication. If the receipt and the result
of the opinion of the Independent Expert are not publicized on or before the
date of the publication in accordance with § 23 para. 1 sentence 1 no. 2 of the
WpÜG, the condition set forth in this Section 3.4.6 shall be deemed to have
been satisfied.
3.4.7
Non-performance of certain actions
At the expiration of the Acceptance Period none of the following events have
occurred since the publication of the Offer Document or, if such events have
occurred prior to the expiration of the Acceptance Period, such events have
been reversed:
(a)
(b)
The Company’s annual general shareholders’ meeting has adopted a
resolution authorizing any of the following measures:
(i)
capital increases or reductions other than in connection with the
conversion of Stock Options under the Company’s stock option
plan as disclosed in the invitation to the Company’s annual general shareholders’ meeting to be held on 16 May 2012;
(ii)
the distribution of a dividend of more than EUR 0.60 per
AUGUSTA Share;
(iii)
the release of reserves;
(iv)
consent to the sale, spin-off, or encumbrance of significant parts
of the Company or assets and equity holdings valued at more
than EUR 7.5 million;
(v)
consent to enter into inter-company agreements; or
(vi)
stock option plans other than those described in the invitation to
the Company’s annual general shareholders’ meeting to be held
on 16 May 2012.
One of the Key Subsidiaries has authorized or implemented capital
measures that benefit non-members of the AUGUSTA Group.
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(c)
The Company’s Management Board has increased the Company’s share
capital by more than EUR 50,000.00 through the use of the Company’s
authorized capital or has authorized such an increase.
(d)
The Company’s Management Board has issued more than 50,000 stock
options under an existing or future Company stock option plan.
(e)
The Company has bought or sold Treasury Shares or has agreed to do
so.
(f)
The Company or one of its Key Subsidiaries has
(i)
sold, spun off, or encumbered significant parts of the Company
or assets valued at more than EUR 7.5 million in an individual
case or as a total amount;
(ii)
acquired assets or equity interests or agreed to do so to the extent
the consideration to be paid exceeds EUR 7.5 million in an individual case or as a total amount;
(iii)
established, authorized, modified, or supplemented pension obligations or granted so-called phantom stocks or similar benefits
to employees or members of management outside the ordinary
course of business;
(iv)
entered into inter-company agreements within the meaning of §§
291 et seq. of the AktG or similar profit-sharing agreements;
(v)
granted loans to third parties exceeding the amount of EUR 5
million, with the exception of AUGUSTA Group companies; or
(vi)
agreed to or ordered one of the measures described in Section
3.4.7 (a) or (f).
The non-occurrence or the non-reversal of each of the above events in this Section
3.4.7 qualifies individually as one Offer Condition. The same is applicable to the
events listed under the small Roman numerals in Sections 3.4.7 (a) and (f) of this
Offer Document.
In determining whether an event referred to in Sections 3.4.7 (b) to 3.4.7 (f) has occurred, only the opinion of the Independent Expert shall be binding. A condition referred to in Sections 3.4.7 (b) to 3.4.7 (f) shall be deemed not to have been satisfied
Page 33 of 63
only if (i) the Independent Expert comes to the conclusion that one of the events referred to in Sections 3.4.7 (b) to 3.4.7 (f) has occurred, and (ii) the receipt and the
result of the opinion of the Independent Expert are publicized before the date of the
publication in accordance with § 23 para. 1 sentence 1 no. 2 of the WpÜG or on the
same date at a time very near to this publication. If the receipt and the result of the
opinion of the Independent Expert are not publicized on or before the date of the
publication in accordance with § 23 para. 1 sentence 1 no. 2 of the WpÜG, the
condition set forth in Sections 3.4.7 (b) to 3.4.7 (f) shall be deemed to have been
satisfied.
3.4.8
Waiver of Offer Conditions
Under § 21 para. 1 sentence 1 no. 4 of the WpÜG, the Offeror can, to the extent permissible, waive some or all of the Offer Conditions up to one business day before the expiration of the Acceptance Period. Waiver of an Offer
Condition shall be the equivalent of its satisfaction.
3.4.9
Non-satisfaction of Offer Conditions
If one of the Offer Conditions is not satisfied or has not previously been
waived if such is permitted, the takeover offer and the agreements that have
been entered into upon acceptance of the takeover offer shall not be valid.
For detailed information with regard to reversing the transaction in such cases, please see section 13.5 of the Offer Document.
3.4.10 Announcement of the satisfaction or non-satisfaction of the Offer
Conditions
In its publication immediately after the expiration of the Acceptance Period
in accordance with § 23 para. 1 no. 2 of the WpÜG, the Offeror will announce which Offer Conditions have been satisfied by that time. Furthermore, the Offeror will promptly announce when the Offer Condition of
“clearance under merger control law” has been satisfied. In addition, the Offeror will announce the waiver of any Offer Condition. Any such waiver must
be made no later than one business day before the expiration of the Acceptance Period as well as before the satisfaction or non-satisfaction of the
respective condition and must be published in accordance with
§ 21 para. 1 no. 4, para. 2 of the WpÜG. If one of the Offer Conditions can
no longer be satisfied, this fact must also be announced. The aforementioned
announcements will be published by the Offeror on the internet at
www.tkhgroup.com and in the German Federal Gazette [Bundesanzeiger].
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3.5
Status of official permits and proceedings
The planned acquisition of the AUGUSTA Shares by the Offeror still must be
cleared under merger control law by the Federal Cartel Office.
The Offeror reported the planned merger to the Federal Cartel Office on
27 April 2012. The clearance period ends one month after receipt of a complete report.
4.
Type and amount of consideration (§ 27 para. 1 sentence 2 no. 1 of the
WpÜG)
The Offer made by the Offeror constitutes a voluntary public takeover offer
(cash offer). Statutory minimum price rules apply to such an offer.
4.1
Type and amount of consideration offered
The Offer Price is EUR 23.00 per AUGUSTA Share and is to be paid in
euros in cash.
4.2
Legal requirements with respect to the amount of consideration
The statutory minimum offer price that may be offered to the AUGUSTA
Shareholders is to be determined in accordance with § 31 para. 1 of the
WpÜG in conjunction with §§ 4 and 5 of the WpÜG Offer Regulation
[WpÜG-Angebotsverordnung]. The minimum value offered to the
AUGUSTA Shareholders per AUGUSTA Share must at the minimum correspond to the higher of the two following values:
•
Under § 5 of the WpÜG Offer Regulation, the consideration must at
least correspond to the weighted average domestic stock exchange price
of the AUGUSTA Shares over the last three months prior to the publication of the decision to make the takeover offer on 3 April 2012. The
minimum price calculated on that basis by BaFin with respect to the
record date of 2 April 2012 is EUR 16.42 per AUGUSTA Share.
•
Under § 4 of the WpÜG Offer Regulation, the consideration must at
least correspond to the highest amount of consideration granted or
agreed upon by the Offeror, a person acting in concert with the Offeror
or its subsidiaries for the acquisition of AUGUSTA Shares within the
last six months prior to the publication of the Offer Document. During
the six-month period prior to 11 May 2012 (i.e. the publication date of
the Offer Document), according to the Offeror, no AUGUSTA Shares
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were acquired by the Offeror, a person acting in concert with the Offeror, or its subsidiaries at a price higher than EUR 23.00. In fact, according to the Offeror, the highest price paid for AUGUSTA Shares in the
course of previous acquisitions was EUR 22.91 (see Section 2.2.6.1).
Therefore, the Offer Price of EUR 23.00 per AUGUSTA Share meets the requirements of § 31 para. 1 of the WpÜG in conjunction with §§ 4 and 5 of
the WpÜG Offer Regulation.
4.3
Evaluation of the consideration by the Company’s Management and Supervisory Boards
4.3.1
Comparison with historical stock market prices
The following chart shows the development of the stock market price of
AUGUSTA Shares between 2 January 2012 and 2 April 2012 (weighted
XETRA price; source: Bloomberg).
4.3.2
Fairness Opinion
The Management Board and the Supervisory Board have examined the reasonableness of the amount of consideration being offered to the AUGUSTA
Shareholders in detail and have been assisted in this by KPMG AG
Wirtschaftsprüfungsgesellschaft, Munich (“KPMG”), an independent expert.
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KPMG undertook a valuation of the Company in light of the Offer made by
the Offeror and submitted a statement to the Management and Supervisory
Boards on 14 May 2012 as to whether, in the opinion of KPMG, the Offer
Price of EUR 23.00 per AUGUSTA Share is reasonable consideration for the
AUGUSTA Shareholders from a financial standpoint (“Fairness Opinion”).
The Fairness Opinion is based on the “IDW Standard: Principles for the
Preparation of Fairness Opinions (IDW S8).” In preparing the Fairness Opinion, KPMG examined, inter alia, the Offer Document and various business
and financial information about the Company and the business environment
in which the Company operates. In addition, KPMG analyzed the financial
terms of other public takeovers in Germany and worldwide and the prices offered for the shares of these companies as well as the Company’s key economic and financial data as compared to publicly available information on
other technology companies that KPMG considered to be relevant. The current and historical performances of AUGUSTA Shares were also taken into
account. In addition, KPMG collected and analyzed key valuation figures
from the Company’s peer group and examined various internal financial
analyses and plans with respect to the Company’s business activities prepared by the Company. Both company-specific and market-specific factors
were taken into account in the valuation. In the opinion of the Management
and Supervisory Boards, the methods described above were internationally
accepted and practiced procedures.
The full text of the Opinion Letter provided to the Management and Supervisory Boards by KPMG – which states the assumptions on which the Opinion
was based and the reservations with which it was issued – is attached to this
Statement as Attachment 3.
We expressly note that KPMG issued the Fairness Opinion solely to inform
and assist the Management and Supervisory Boards in their review of the Offer. The Fairness Opinion is not addressed to third parties and does not establish any rights on the part of third parties. By consenting to the attachment of
the Fairness Opinion to the Statement of the Management Board and the Supervisory Board issued in accordance with § 27 of the WpÜG, KPMG has not
expanded the group of persons that may rely on the Opinion beyond the
AUGUSTA Management Board Members and the AUGUSTA Supervisory
Board Members. In particular, the Fairness Opinion is not addressed to the
AUGUSTA Shareholders and is not a recommendation from KPMG to the
AUGUSTA Shareholders as to whether or not they should accept the Offer.
Moreover, KPMG has assumed no obligation to update the Fairness Opinion.
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Apart from changes in the Offer Conditions, this also applies to changes
in the relevant circumstances occurring after the issuance of the Fairness
Opinion.
Subject to the assumptions made therein, the Fairness Opinion comes to the
conclusion that the Offer Price of EUR 23.00 per AUGUSTA Share constitutes reasonable consideration from a financial standpoint as of the date of
the Fairness Opinion.
4.3.3
Assessment of the reasonableness of the consideration by the Management and Supervisory Boards
The Management Board and the Supervisory Board have established a corridor within which a valuation of AUGUSTA Shares will be considered “reasonable” on the basis of their own continuing market observations and analyses, based on a calculation of intrinsic value through application of the capitalized earnings value method (DCF method), and an evaluation of capital
market factors (sales revenues and EBITDA) for a relevant Company peer
group (multiplier method). Based on their own experience, the Management
Board and the Supervisory Board respectively became convinced of the reasonableness of KPMG’s procedure. The Management Board and the Supervisory Board independently came to the following conclusion with respect to
the reasonableness of the consideration for die AUGUSTA Shares offered by
the Offeror:
The Management Board and the Supervisory Board consider the amount of
the Offer Price to be attractive and reasonable within the meaning of § 31 para. 1 of the WpÜG. The Offer Price meets the statutory requirements and reasonably reflects the value of the Company, in the opinion of the Management
Board and the Supervisory Board. These independent assessments by the
Management Board and the Supervisory Board are confirmed by the Fairness
Opinion.
Moreover, the attractiveness and reasonableness of the Offer Price is supported by the historical development of the stock market price of the
AUGUSTA Shares. A comparison of the historical development of the stock
market price of the AUGUSTA Shares – not only in the last three months
prior to the publication of the decision to make of the Offer by the Offeror in
accordance with § 10 para. 1 sentence 1 of the WpÜG on 3 April 2012 (see
Section 4.3.1, above) but also with respect to the weighted average prices
(XETRA, source: Bloomberg) for the period from 3 April 2007 to 2 April
2012 (EUR 12.81) and the period from 3 April 2009 to 2 April 2012
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(EUR 12.56), shows that the amount of the Offer Price includes a significant
premium over the average prices during the last three to five years prior to
the Offeror’s publication of its decision to make an Offer. The Management
Board and the Supervisory Board also took into account the fact that the Offeror declared its readiness to increase the Offer Price from EUR 21.00 (as
cited in the publication of the decision to make an Offer on 3 April 2012) to
EUR 23.00 on 25 April 2012.
The high proportion of major AUGUSTA Shareholders that agreed to accept
the Offer and sell their AUGUSTA Shares at the Offer Price in the Irrevocables (see Section 2.2.6.2) is proof that many shareholders share the assessment of the Management Board and the Supervisory Board as to the attractiveness and reasonableness of the Offer Price.
The Management Board and the Supervisory Board wish to point out that the
Offeror repeatedly mentions the positive effects that can result from the merger in the Offer Document. These positive effects can provide cost advantages for the Company. In section 8 of the Offer Document, the Offeror
states that it is not yet possible to precisely quantify the positive effects of
the merger. The Management Board and the Supervisory Board also cannot
quantify the positive effects at the present time. Moreover, the Management
Board and the Supervisory Board cannot currently judge when and to what
extent potential synergies will reduce the Company’s costs and appreciate its
value since any such positive effects may be reduced by the costs associated
with integrating the two companies.
5.
Financing the Offer
5.1
Maximum number of AUGUSTA Shares
As of the date of publication of this Statement, the total number of
AUGUSTA Shares is 8,510,014. During the acceptance period, a maximum
of up to 185,150 Stock Options held by the managers and employees of the
AUGUSTA Group could be exercised and converted into additional
AUGUSTA Shares.
5.2
Maximum amount of consideration
The total amount that would be needed to acquire all the AUGUSTA Shares,
if all AUGUSTA Shareholders were to accept the takeover offer, would be
approximately EUR 199.95 million (i.e. the Offer Price of EUR 23.00 per
AUGUSTA Share multiplied by all 8,510,014 AUGUSTA Shares already is-
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sued plus 185,150 Stock Options held by the managers and employees of the
AUGUSTA Group, which can be exercised and converted into AUGUSTA
Shares during the next option exercise window, which opens during the acceptance period (four weeks after the Company’s annual general shareholders' meeting to be held on 16 May 2012) less the 1,600 AUGUSTA Shares directly held by the Offeror at the present time). This calculation also includes
the Treasury Shares currently held by the Company, even though the Company agreed not to sell and transfer the Treasury Shares in the Transaction
Agreement. In addition to this, the Offeror will incur transaction costs of no
more than EUR 5 million in connection with the takeover offer and the execution thereof. The total cost of the acquisition of all the AUGUSTA Shares
currently not held by the Offeror would therefore be a maximum of
EUR 204.95 million (the “Total Costs of the Offer”).
Taking the 843,551 Treasury Shares held by the Company into account reduces the Total Costs of the Offer. The Offeror assumes that the Treasury
Shares need not be acquired separately. This would result in Total Costs of
the Offer of EUR 185.55 million (Total Costs of the Offer of EUR 204.95
million – 843,551 x EUR 23).
5.3
Financing the Offer
Prior to publication of the Offer, the Offeror took the necessary steps to ensure that it would have the necessary financial resources available in time to
fully execute the Offer.
Under a Loan Agreement dated 23 December 2011 between TKH Group NV
as borrower and ABN AMRO Bank N.V., The Royal Bank of Scotland N.V.,
and certain other financial institutions as lenders (the “Loan Agreement”),
as amended and supplemented on 25 April 2012, TKH Group NV has access
to a credit facility under which it may draw funds of up to EUR 350 million.
TKH Group NV may use the monies under the Loan Agreement for the purposes of the takeover offer to fund the Offeror (directly or indirectly) in order
to meet the financial obligations of the Offeror at the completion of the Offer
(including payment of the Total Costs of the Offer). To finance the takeover
offer, TKH Group NV has reserved an amount under the Loan Agreement
equal to the Total Costs of the Offer so as to cover the takeover offer and the
transaction costs.
The Offeror itself is not a borrower under the Loan Agreement. However, the
Offeror and TKH Group NV entered into an intra-Group financing agreement
on 26 April 2012, pursuant to which TKH Group NV irrevocably agreed to
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provide the Offeror with the financial resources needed for the Offeror to fully implement the Offer in due time, i.e. to pay the Total Costs of the Offer.
This is to be done indirectly through subsidiaries. These financial resources
are to be paid into the Offeror’s free capital reserves.
5.4
Availability of financial resources
According to the Offeror, under the provisions of the Loan Agreement funds
can be drawn down by TKH Group NV as soon as certain customary conditions are satisfied and documentation is provided and as long as certain guarantees and representations have been adhered to at the time of the request for
disbursement. According to its own information, the Offeror has no cause to
believe that the conditions for disbursement will not be met. To the best of
the Offeror’s knowledge, the Loan Agreement has not been terminated nor
does any ground for termination exist as of the publication date of the Offer
Document. The financial resources available to TKH Group NV under the
Loan Agreement exceed the Total Costs of the Offer.
5.5
Confirmation of financing
The Royal Bank of Scotland N.V., Amsterdam, a securities services provider
independent of the Offeror, has issued the requisite confirmation of financing
under § 13 para. 1 sentence 2 of the WpÜG, which is attached to the Offer
Document as Attachment 3.
6.
The likely consequences of implementing the Offer for the Company, its
employees, their terms of employment, and the Company’s location (§ 27
para. 1 sentence 2 no. 2 of the WpÜG)
According to the Offeror, whenever the intentions of TKH are described in
this Section 6, they are to be understood as the intentions of both TKH and
the Offeror. According to the Offeror, Stichting Administratiekantoor TKH
Group, which is seen as controlling TKH Group NV under the WpÜG and the
WpHG (but not under Dutch law), has no intentions that differ from those described in this Section 6.
6.1
Future business activities, assets, and obligations
According to the Offer Document, TKH intends to combine its activities in
the area of Vision Technology and the Company’s existing business into a
“vision cluster” in order to create a technology leader in the area of Vision
Technology. TKH will focus the combined corporate group on selected ap-
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plications and solutions wherever Vision Technology can be a key driver in
improving efficiency, quality of products, security and safety. TKH expects
that the combined vision cluster will closely cooperate with its Building Solutions and the Industrial Solutions divisions through technology and knowhow transfers as well as joint market positioning activities.
As to the non-vision activities of the AUGUSTA Group, TKH currently intends to support the Company’s strategy to allow such businesses to continue
and further develop in the most appropriate environment. TKH has confirmed
that it has no intention to change the current use of the Company’s assets or
to establish any future obligations for the Company outside the ordinary
course of business.
6.2
The Company’s Management Board and Supervisory Board
The Company’s Supervisory Board consists of three members elected by the
annual general shareholders’ meeting. The Transaction Agreement provides
that TKH Group NV shall be represented on the Company’s Supervisory
Board by two members appointed by TKH Group NV, so that the composition of the Supervisory Board reflects the new shareholding structure.
The staffing of the Company’s Management Board is within the exclusive jurisdiction of the Supervisory Board. As of the publication date of this Statement, the Company’s Management Board consists of three members. Subject
to statutory requirements, TKH intends to appoint one or more TKH managers as members of the Company’s Management Board at the proper time in
the future, provided that the Supervisory Board is convinced that these persons have the necessary qualifications, experience, and character required by
the office of Company Management Board member. The Offeror will review
the details after the implementation of the Offer, especially in terms of proposals and time frames.
6.3
The employees of the Company and the AUGUSTA Group and their
terms of employment and employee representatives
The implementation of the Offer will have no direct effect on the employees
of the AUGUSTA Group and their employment relationships. According to
its own information, TKH does not intend to make any change to the operating companies of the AUGUSTA Group that will have an adverse effect on
the terms of employment of the employees of the AUGUSTA Group. After
the implementation of the Offer, the possibility of pooling non-operational
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functions will be jointly discussed by TKH and the AUGUSTA Group and
reviewed in detail.
Moreover, TKH has announced that it has no intention to make any changes
with respect to employee representatives in the AUGUSTA Group.
6.4
The Company’s registered office; the locations of important segments of
the Company
According to its own information, TKH does not intend to move the Company’s registered office from Munich. TKH also has no intention of moving the
locations of important segments of the AUGUSTA Group or closing any locations.
7.
Objectives pursued by the Offeror in making the Offer
7.1
Transaction Agreement
In the Transaction Agreement, TKH Group NV expressed its intention to
combine its activities in the area of Vision Technology in order to form a
leading Vision Technology group focused on creating a broad spectrum of
products. To this end, TKH will concentrate on selected applications and solutions wherever Vision Technology can play a key role in improving efficiency, product quality, security and safety. The Vision segment will closely
cooperate with the security and safety segment and the industrial solutions
segment to enable technology and know-how transfers and joint market positioning activities.
According to the Transaction Agreement, TKH Group NV fully supports the
Company’s strategy of concentrating on Vision Technologies. The consolidation of the activities of TKH with those of the AUGUSTA Group should accelerate and strengthen the Company’s strategy in the Vision Technology
segment. In particular, support will be provided for the Company’s plan to
further expand in the area of optical 3D measuring systems through organic
growth and the examination of attractive buy-and-build opportunities for the
Company.
TKH Group NV intends to support the Company’s strategy with respect to
so-called “Other Divisions” of the AUGUSTA Group to enable the continuation of these divisions and their development into the most suitable forms.
It was announced that the Company’s function as a holding company would
change as a natural consequence of the integration of the AUGUSTA Group
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into the TKH Group. However, holding functions will continue to be used in
many ways during the integration phase.
TKH and the Offeror have stated that they consider the existing customer and
distribution partner structures to be value-added factors and wish to continue
building on them.
7.2
Other goals announced by the Offeror in the Offer Document
In addition, the Offeror discussed possible structural measures in Section 9.5
of the Offer Document:
7.2.1
Domination and profit and loss transfer agreement
If, at a given point in time, the Offeror holds at least 75% of the share capital
represented at the annual general shareholders' meeting and if it appears economically and financially reasonable to the Offeror at the time, the Offeror
intends to enter into a domination and profit and loss transfer agreement in
accordance with § 291 of the AktG with the Company as the dominated company. If a domination and profit and loss transfer agreement is signed, the
Offeror will be entitled to issue binding instructions to the Management
Board with respect to the management of the Company (§ 308 of the AktG).
Furthermore, the Company would be obliged to transfer its entire annual net
profit (i.e. the profit that would have been generated but for the profit transfer) to the Offeror, reduced by any loss carried forward from the previous
year, mandatory transfers to the statutory reserves, and any amount that may
not be distributed under § 268 para. 8 of the German Commercial Code
[HGB] (see § 301 of the AktG). In return, the Offeror would be obliged to
compensate the Company for any net annual losses that would have arisen
during the term of the Agreement but for the assumption of losses, as long as
these losses are not made up by withdrawing sums from other earnings reserves that were transferred to said reserves during the term of the Agreement
(§ 302 of the AktG).
Such a domination and profit and loss transfer agreement would, inter alia,
obligate the Offeror (i) to acquire the AUGUSTA Shares of the minority
AUGUSTA Shareholders, upon their request, in exchange for an appropriate,
contractually stipulated cash settlement (§ 305 of the AktG) and (ii) to pay
reasonable compensation to the minority AUGUSTA Shareholders through
recurring payments (compensation payments, § 304 of the AktG). The appropriateness of the amount of the cash settlement and the compensation payments could be reviewed in an expedited shareholder proceeding before a
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court. The amount of the reasonable cash settlement could be equal to, but
could also be higher or lower than, the Offer Price.
7.2.2
Squeeze-out procedure
If, after implementation of the Offer or at a later point in time, the Offeror
holds the requisite proportion of the share capital or voting rights of the
Company to demand the transfer of the AUGUSTA Shares of the remaining
AUGUSTA Shareholders in exchange for a reasonable cash settlement
(squeeze-out), the Offeror intends to take any actions necessary to squeeze
out the minority shareholders if it appears economically and financially reasonable to the Offeror at the time. Under applicable law, there are currently
three ways of achieving this:
(a)
Under §§ 327a et seq. of the AktG, as the principal shareholder, the Offeror or a company that controls the Offeror could demand that the
Company’s annual general shareholders' meeting adopt a resolution
transferring the AUGUSTA Shares held by minority shareholders in exchange for payment of a reasonable cash settlement if at least 95% of
the share capital of AUGUSTA AG belongs to the principal shareholder
or a company controlled by it. The amount of the cash settlement would
depend on the Company’s circumstances at the time the resolution is
adopted by the annual general shareholders' meeting. The reasonableness of the amount of the cash settlement could be reviewed in an expedited shareholder proceeding before a court. The amount of the reasonable cash settlement could be equal to, but could also be higher or lower than, the Offer Price.
(b)
Alternatively, the Offeror could file a petition under § 39a of the
WpÜG seeking to squeeze out the remaining minority shareholders if,
following completion of the takeover offer, the Offeror or an enterprise
controlled by the Offeror holds at least 95% of the Company’s share
capital (so-called squeeze-out under takeover law). Based on such a petition under § 39a para. 1 of the WpÜG, the remaining AUGUSTA
Shares would be transferred to the Offeror by court order in exchange
for payment of a reasonable cash settlement. The consideration paid
under this Offer will be deemed to constitute a reasonable cash settlement if, as a result of the Offer, the Offeror has acquired AUGUSTA
Shares comprising at least 90% of the share capital covered by the Offer. The petition for a squeeze-out under takeover law would have to be
filed within three months of the end of the acceptance period. The
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amount of the reasonable cash settlement could be equal to, but could
also be higher or lower than, the Offer Price.
In the event the Offeror is entitled to file a petition under § 39a of the
WpÜG, any AUGUSTA Shareholders who had not accepted the Offer
would be entitled under § 39c of the WpÜG to accept the Offer within
three months of the end of the acceptance period. The details of the
technical execution of this tender right would be published by the Offeror in due time together with the publication under § 23 para. 1 sentence 1 no. 4 of the WpÜG.
(c)
7.2.3
Furthermore, under § 62 para. 5 of the German Law Regulating the
Transformation of Companies [Umwandlungsgesetz, UmwG], it is possible for the annual general shareholders’ meeting to adopt a resolution
pursuant to § 327a para. 1 sentence 1 of the AktG with respect to a socalled group merger, if the receiving stock corporation holds 90% of the
share capital of the transferring stock corporation. Accordingly, the Offeror could merge the Company into the Offeror and, within three
months of the date of the merger agreement, demand to have all the
AUGUSTA Shares of the minority shareholders transferred to itself in
exchange for payment of a reasonable cash settlement by resolution of
the annual general shareholders' meeting. A prerequisite is that the Offeror must hold at least 90% of the Company’s share capital in the form
of AUGUSTA Shares. The amount of the reasonable cash settlement
could be equal to, but could also be higher or lower than, the Offer
Price.
Delisting
According to the Offeror’s own information, it intends – to the extent legally
permissible and subject to further analysis after the implementation of the
takeover offer – to cause the Company to apply for revocation of the admission of the AUGUSTA Shares to trading on the segment of the regulated
market of the Frankfurt Stock Exchange with the additional admission requirements (Prime Standard) after the implementation of the takeover offer
or at a later point in time when the necessary prerequisites have been met. In
this case, the AUGUSTA Shareholders would no longer benefit from the increased reporting obligations of the Prime Standard segment. In addition, after completion of the takeover offer, the Offeror will review whether all existing admissions of AUGUSTA Shares to trading on various stock exchanges should be maintained in the future.
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Apart from the domination and profit and loss transfer agreement, a possible
squeeze-out, and a possible delisting (if the prerequisites have been met in
each case), the Offeror has currently announced no plans to carry out additional structural measures. However, the Offeror reserves the right to effectuate any or all of the measures described in sections 9.1, 9.5 and 16 of the Offer Document or other measures permitted under applicable laws, subject to,
and in accordance with, the relevant legal requirements.
7.2.4
Intentions with respect to the business activities of the Offeror and TKH
With the exception of the intentions described in sections 9.1 to 9.5 of the
Offer Document, TKH and the Offeror have not, as of the publication date of
the Offer Document, announced any intentions in connection with the Offer
that might affect the registered office or the locations of significant segments
of the Offeror company and other TKH companies, the use of assets, the employees and their representatives, or the members of executive bodies, or that
might significantly change the terms of employment at the Offeror company
or other TKH companies.
The intentions of the Offeror described in sections 9.1 to 9.5 of the Offer
Document, including those with respect to the integration of the operating activities of TKH and the AUGUSTA Group and the implementation of a
squeeze-out and other measures described in sections 9.5 and 16 of the Offer
Document, which the Offeror may choose to effectuate, may affect the business activities of the Offeror and the other TKH companies, the use of their
assets, and their future obligations. For further details, please refer to sections 9.5 and 16 of the Offer Document.
In addition, with the exception of the effects of the implementation of the Offer on the net worth, results of operations, and financial situation of the Offeror and TKH described in section 15 of the Offer Document, the Offeror and
TKH – and the Stichting Administratiekantoor TKH Group, which is deemed
to control TKH Group NV under the WpÜG and the WpHG (but not under
Dutch law) – have no intentions that could affect the use of assets or the future obligations of TKH and the Offeror.
7.3
Assessment of the objectives of TKH and the Offeror and the likely consequences of the Offer for the Company, its employees and their terms of
employment, and the Company’s locations
The Management Board and the Supervisory Board have made the following
assessment of the likely consequences of the Offer:
Page 47 of 63
•
The Company’s strategy and position; the objectives of TKH and the
Offeror: TKH intends to make a strategic acquisition with the objective
of becoming a leading supplier in the Vision Technologies market. According to its own information, TKH currently intends to support the
Company’s strategy with respect to the so-called “Other Divisions” of
the AUGUSTA Group to enable the continuation of these divisions and
their development into the most suitable forms. In this regard, the strategies followed by the Company’s Management Board and Supervisory
Board and those of TKH are congruent. The Company’s Management
and Supervisory Boards are convinced that the joint goal of TKH and
the Company to become a leader in the Vision Technologies market
will be realized more quickly through the merger. TKH’s business
model, which includes growth through acquisition in addition to organic growth, confirms and continues the Company’s own buy-and-build
strategy in the opinion of the Management and Supervisory Boards. The
Company and TKH have the necessary and sufficient resources available for this purpose. The Management and Supervisory Boards are convinced that the Company provides a good complement to TKH’s existing business activities in the area of vision and security systems. The
Company’s Management and Supervisory Boards are persuaded that the
merger of TKH and the Company can accelerate the implementation of
their common strategies in the area of Vision Technology.
•
Customers and partners: The merger will double the sales volume for
Vision Technologies. In the opinion of the Company’s Management and
Supervisory Boards, this can result in potential synergies in the near
term with respect to procurement volume, manufacturing capacity, and
the internationalization of the business models. The merger can expand
the range of products offered to the Company’s customers in important
areas. Moreover, TKH and the AUGUSTA Group complement each
other very well from a geographical standpoint, in the opinion of the
Company’s Management and Supervisory Boards. In addition to their
presence in Europe, both companies will gain better access to the key
American and Asian markets. The AUGUSTA Group is stronger in the
American markets and TKH is stronger in the Asian markets. The
Company’s Management and Supervisory Boards are convinced that
this will open up the customer bases of both corporate groups to a
broader range of products in all regional markets.
•
Locations, employees, and terms of employment: The TKH management board has stated that it considers maintaining the identities and
Page 48 of 63
brand names of the Company’s Vision subsidiaries to be advantageous.
In the opinion of the Company’s Management and Supervisory Boards,
TKH’s successful business practices with respect to acquisitions confirm this intention. In particular, TKH does not plan to change the current structure of the physical plant, particularly with respect to the locations in Ahrensburg/Hamburg, Osnabrück, Stadtroda or Vancouver or to
lay off employees at these locations. Instead, TKH will endeavor to expand this business together with its own Vision activities. Moreover,
TKH has announced that it currently has no intention to change any
employee representative bodies in the AUGUSTA Group. Based on
TKH’s assurances that it will maintain all the important locations of the
Company’s Vision Division and will jointly work on developing the
Company’s “Other Divisions,” the Management and Supervisory
Boards see no negative consequences for the Company, its employees,
their terms of employment, or the Company’s locations in the
foreseeable future.
•
The Company’s future role as a holding company: Due to the planned
domination and profit and loss transfer agreement, the Company would
lose its role as a holding company in the course of the process and, even
if no specific changes are envisioned at the present time, the Company’s business functions may be taken over by other TKH companies
and become superfluous in the medium to long term. When weighing
the anticipated advantages associated with the merger with TKH for the
subsidiaries against the possible negative effects for the Company, the
Management and Supervisory Boards believe that the advantages predominate.
8.
Effects of the Offer on the Company’s shareholders
8.1
Possible disadvantages of accepting the Offer
AUGUSTA Shareholders that wish to accept the Offer should consider the
following factors, inter alia:
•
AUGUSTA Shareholders will not profit from any positive business performance of the Company or any positive price performance of the
AUGUSTA shares with respect to the AUGUSTA Shares they have
sold.
•
With the transfer of ownership of the AUGUSTA Shares, all rights associated with them (including all rights to dividends) pass to the Offe-
Page 49 of 63
ror at the time of execution. However, even if AUGUSTA Shareholders
accept the Offer, they will receive the proposed dividend of EUR 0.60
per AUGUSTA Share for fiscal year 2011, provided that the annual
general shareholders’ meeting authorizes such a dividend on 16 May
2012.
•
Acceptance of the Offer may be revoked only under the narrow conditions described in the Offer Document and, even then, only until the acceptance period expires. Otherwise, the ability of the affected
AUGUSTA Shareholders to dispose of the AUGUSTA Shares for
which the Offer has been accepted is limited.
•
After the successful completion of the Offer, the Offeror may have the
necessary qualified majority to push through certain structural measures
at the Company’s annual general shareholders’ meeting. Such measures
may (to the extent legally permissible) include consent to a domination
and/or profit and loss transfer agreement and measures that could result
in the delisting of the Company’s shares. As a consequence of such
measures, the Offeror may have an obligation to make an offer to the
minority shareholders to purchase their shares for a reasonable settlement or pay them compensation – in each case based on a valuation of
the Company. The amount of any such settlement is generally measured
by the total value of the Company and is subject to judicial control in
an expedited shareholder action. The focus is generally on the Company’s net worth and its results of operations at the time of the measure,
as established by law based on the type of measure taken. The amount
of a reasonable settlement may be above or below the Offer Price.
AUGUSTA Shareholders may not participate in these statutorily prescribed settlements with respect to their AUGUSTA Shares for which
the Offer has been accepted and executed.
•
After the Offer has been completed and the one-year period – during
which the over-the-counter acquisition of additional shares by the Offeror triggers a duty of rectification (§ 31 para. 5 of the WpÜG) – has expired, the Offeror will be able to acquire additional shares at lower – or
possibly higher – prices without having to improve the Offer Price for
those AUGUSTA Shareholders that accepted the Offer. During the
aforementioned one-year period, the Offeror could purchase
AUGUSTA Shares on the stock exchange at higher prices without having to improve the Offer Price for the AUGUSTA Shareholders that accepted the Offer.
Page 50 of 63
8.2
Possible disadvantages of rejecting the Offer
AUGUSTA Shareholders that do not intend to accept the takeover offer
should keep the following in mind:
(a)
Under § 39с of the WpÜG, shareholders that have not accepted the Offer can still accept the Offer within three months of the expiration of
the acceptance period or, if the Offeror fails to meet its obligations under § 23 para. 1 sentence 1 no. 4 or sentence 2 of the WpÜG, after publication of notice that the Offeror holds 95% of the Voting Share Capital (all AUGUSTA Shares minus Treasury Shares) (the “Tender Period”), as long as the Offeror is entitled under § 39а of the WpÜG to file
a petition with the competent court seeking the transfer of the shares of
the remaining shareholders to itself by order of the court in exchange
for providing a reasonable settlement.
The Offeror must provide additional information regarding the Tender
Period and the cash settlement for the shares tendered during the Tender Period together with the publication required by § 23 para. 1 sentence 1 no. 4 of the WpÜG.
(b)
The AUGUSTA Shares for which the takeover offer was not accepted
will continue to be traded on the stock exchange. It should be kept in
mind that the current price of the AUGUSTA Shares reflects the fact
that the Offeror published its decision to make of the takeover offer on
3 April 2012 in accordance with § 10 para. 1 of the WpÜG. Therefore,
it is uncertain whether the price of AUGUSTA Shares will remain at the
same level after the expiration of the additional acceptance period or if
it will rise or fall. Recently, it has been observed that, after takeover offers have been completed, the price of the target company’s shares falls
below the Offer Price. It cannot be ruled out that the AUGUSTA Shares
will perform similarly.
(c)
It is likely that the successful implementation of the Offer will reduce
the number of AUGUSTA Shares in free float. The number of shares in
free float could be reduced to such an extent that proper stock exchange
trading in AUGUSTA Shares cannot be guaranteed, or such trading may
cease altogether. This could mean that sell orders cannot be executed in
a timely manner or at all. Moreover, the reduction in the liquidity of the
AUGUSTA Shares could result in greater price fluctuations for the
AUGUSTA Shares than in the past.
Page 51 of 63
(d)
The AUGUSTA Shares are currently included in the CDAX, Prime All
Share, and Technology All Share Indexes. This means that institutional
funds and investors that invest in the stocks on which indexes, such as
the CDAX, are based, must hold AUGUSTA Shares in order to reflect
the performance of the index. It cannot be ruled out that AUGUSTA
Shares will be excluded from the CDAX after the completion of the
takeover offer. The index investors that still hold AUGUSTA Shares after the completion of the Offer will probably sell them on the market.
As a result, there may be an oversupply of AUGUSTA Shares on a
comparatively illiquid market, and this could make the price of
AUGUSTA Shares fall.
(e)
If the relevant prerequisites have been met after completion of the Offer, the Offeror could decide to enter into a domination and/or profit
and loss transfer agreement – with the Offeror as the controlling company and AUGUSTA AG as the controlled company. Any such agreement requires, inter alia, the consent of at least 75% of the share capital
represented at the Company’s annual general shareholders’ meeting.
With a domination agreement, the controlled company places itself under the management of the controlling company. With a profit and loss
transfer agreement, the controlled company agrees to transfer all its
profits to the controlling company. In return, the controlling company is
obliged under the domination and profit and loss transfer agreement to
compensate the controlled company for any net annual loss generated
during the term of the agreement.
A domination and/or profit and loss transfer agreement must provide
for recurring cash payments (compensation payments) to the minority
AUGUSTA Shareholders as reasonable compensation (§ 304 of the
AktG). Moreover, the signing of a domination and/or profit and loss
transfer agreement would obligate the Offeror to offer to acquire the
shares of all minority AUGUSTA Shareholders in exchange for a reasonable settlement (§ 305 of the AktG). The amount of any such reasonable cash settlement could correspond to the Offer Price, but could
also be above or below that price. For further details, please see Section
7.2.1.
(f)
If, after the implementation of the takeover offer or at a later time, the
Offeror holds at least 95% of the Company’s share capital, the Offeror
will be entitled under §§ 327a et seq. of the AktG to propose that the
Company’s annual general shareholders’ meeting adopt a resolution re-
Page 52 of 63
quiring the minority shareholders to transfer their shares to the Offeror
in exchange for a reasonable cash settlement (“squeeze-out”), which
may correspond to the Offer Price, but may also be higher or lower.
Any such squeeze-out of the minority shareholders would result in the
delisting of the Company. For further details, please see Section 7.2.2.
(g)
If, after the implementation of the takeover offer, the Offeror holds at
least 95% of the Company’s share capital, the Offeror will also be entitled, within three months of the expiration of the Acceptance Period, to
petition the court for an order transferring the AUGUSTA Shares held
by the minority shareholders to the Offeror in exchange for the payment
of a reasonable cash settlement in accordance with §§ 39a et seq. of the
WpÜG. Under the prerequisites of § 39a para. 3 sentence 3 of the
WpÜG, the reasonable cash settlement must correspond to the Offer
Price. Otherwise, it could be higher or lower. For further details, please
see Section 7.2.2.
(h)
If, after the implementation of the takeover offer, the Offeror holds at
least 90% of the Company’s share capital, the Company’s annual general shareholders’ meeting could adopt a resolution transferring the remaining AUGUSTA Shares to the Offeror in exchange for payment of a
reasonable cash settlement under § 62 para. 5 of the UmwG in conjunction with §§ 327a et seq. of the AktG, at the request of the Offeror, following the signing of a merger agreement between the Company and
the Offeror. The reasonable cash settlement could correspond to the Offer Price, but could also be higher or lower. This would result in the
delisting of the Company’s shares. For further details, please see Section 7.2.2.
(i)
Irrespective of the acceptance quotient of the takeover offer, the Offeror
could – after the successful completion of the takeover offer – consider
causing the Company to seek revocation of the admission of the
AUGUSTA Shares to trading on the regulated market of the Frankfurt
Stock Exchange and the market segment with additional admission requirements (Prime Standard). If the admission of the AUGUSTA Shares
to trading on German stock exchanges is revoked, an offer would have
to be made to all minority AUGUSTA Shareholders within a certain period of time to acquire their AUGUSTA Shares in exchange for a reasonable cash settlement. The reasonable cash settlement could correspond to the Offer Price, but could also be higher or lower. For further
details, please see Section 7.2.3.
Page 53 of 63
(j)
After the successful completion of the Offer, the Offeror may have the
necessary qualified majority to push through all other important structural measures at a Company annual general shareholders’ meeting,
such as amendments to the articles of association, capital increases, exclusion of preemptive rights during capital measures, transformation of
the company, merger, or dissolution of the Company (including a saleof-asset squeeze-out). To the extent a valuation of the Company is necessary for such measures so as to determine the reasonableness of contributions or conversion or subscription ratios, any such valuation
would have to be based on the conditions in existence at the time the
resolution on the measure was adopted by the Company’s annual general shareholders’ meeting. Thus the valuation of the Company and the
AUGUSTA Shares could diverge from the current valuation or the valuation of the Company or the AUGUSTA Shares based on the Offer
Price.
9.
The interests of the Management and Supervisory Boards of AUGUSTA
Technologie Aktiengesellschaft
9.1
The interests of the AUGUSTA Management Board Members
The current Management Board consists of the persons identified in Section
2.2.2. The AUGUSTA Management Board Members currently hold
AUGUSTA Shares and AUGUSTA Stock Options in the proportions indicated in Section 2.2.6.3.
As stated in Section 2.2.6.3, the AUGUSTA Management Board Members
entered into the Stock Option Letters with the Offeror.
Apart from the consideration for the AUGUSTA Shares held by the
AUGUSTA Management Board Members agreed upon in the Stock Option
Letters, the AUGUSTA Management Board Members have not been given,
promised, or otherwise offered any cash or non-cash benefits by the Offeror
or persons acting in concert with the Offeror.
Page 54 of 63
9.2
The interests of the AUGUSTA Supervisory Board Members
Details about the current composition of the Supervisory Board can be found
in Section 2.2.2.
No AUGUSTA Supervisory Board member holds any AUGUSTA Shares or
participates in the Company’s stock option plan.
The Transaction Agreement provides that, after the successful implementation of the Offer, TKH Group NV will be represented on the Company’s Supervisory Board by two of the three Supervisory Board members. In this way,
the new shareholding structure will be reflected in the composition of the Supervisory Board. As of the date of publication of this Statement, there is no
contractual or other binding agreement with respect to the continued service
of any AUGUSTA Supervisory Board Members. The AUGUSTA Supervisory Board Members have not been given, promised, or otherwise offered any
cash or non-cash benefits by the Offeror or persons acting in concert with the
Offeror.
10.
The AUGUSTA Management Board Members’ intention to accept the
Offer (§ 27 para. 1 sentence 2 no. 4 of the WpÜG)
As already stated in Section 2.2.6.3, the AUGUSTA Management Board
Members have entered into the Stock Option Letters. The Management Board
members thereby expressed their wish to accept the Offer with respect to
both their AUGUSTA Shares and their AUGUSTA Stock Options. In accordance with the Stock Option Letters – and as described in Section 2.2.6.3 – the
Non-Blocked Shares are excluded only if the Company’s Management Board
recommends that the AUGUSTA Shareholders do not accept the Offer in its
Statement in accordance with § 27 of the WpÜG.
After a detailed examination and evaluation of the Offer, the Management
Board has a positive opinion of the Offer and will therefore accept the Offer
for the AUGUSTA Shares and AUGUSTA Stock Options it holds.
11.
Closing Statement by the Company’s Management and Supervisory
Boards with respect to the Offer
As stated in Section 4.3.3 and Section 7.3, the Management Board and the
Supervisory Board, independently of each other, came to the conclusion that
TKH’s strategic goals for the Company and its subsidiaries as set forth in the
Offer Document are very positive overall. The Management Board and the
Page 55 of 63
Supervisory Board are each of the opinion that TKH’s strategic goals are in
the interests of the Company and the subsidiaries. The Management Board
and the Supervisory Board unanimously share TKH’s opinion that the amalgamation of the business activities of the Company and TKH offers attractive
possibilities, particularly the possibility of the Vision Technology Division
becoming a world leader. The Management Board and the Supervisory Board
welcome the fact that TKH also wishes to continue the “Other Divisions” and
expand them – to the extent the environment permits – and to examine
whether the amalgamation of the business activities of the “Other Divisions”
with comparable divisions within TKH can generate additional growth potential. It is also of particular importance to the Company’s Management Board
and Supervisory Board that TKH currently has no plans to diverge from the
current business strategy and relocate or close the existing Vision Technologies Division and that the development and production locations in Stadtroda,
Vancouver, Osnabrück, and Ahrensburg/Hamburg are of strategic interest to
TKH.
After their individual reviews, the Management Board and the Supervisory
Board consider the Offer Price to be attractive and reasonable within the
meaning of § 31 para. 1 of the WpÜG. The Management Board and the Supervisory Board utilized the Fairness Opinion prepared by KPMG to review
the reasonableness of the Offer Price. The Offer Price fulfills the statutory
requirements and reasonably reflects the value of the Company in the opinion
of the Management Board and the Supervisory Board.
For the above reasons and based on the text of this Statement, the Management Board and the Supervisory Board support the Offer and recommend that
the AUGUSTA Shareholders accept the Offer.
The Management and Supervisory Boards wish to expressly point out to the
Company’s shareholders that each AUGUSTA Shareholder must make his or
her own decision on whether or not to accept the Offer at the Offer Price and,
in so doing, should take into account the overall circumstances and his or her
own individual circumstances (particularly his or her personal tax situation),
including his or her personal assessment of the possibility of further appreciation in the value and stock market price of the AUGUSTA Shares. Notwithstanding the applicable mandatory provisions of law, the Management Board
and the Supervisory Board assume no responsibility in the event that the decision to accept or reject the Offer at the Offer Price turns out, in retrospect,
to be unwise from an economic or other perspective or has adverse effects on
one or more AUGUSTA Shareholders.
Page 56 of 63
As a precautionary measure, the Management Board and the Supervisory
Board wish to point out that they have not examined the legal and statutory
provisions that must be taken into account with respect to this Statement and
the Offer Document in countries other than the Federal Republic of Germany.
Page 57 of 63
Munich, 15 May 2012
AUGUSTA Technologie Aktiengesellschaft
Management Board and Supervisory Board
Amnon Harman
Chairman of the Management Board
Adi Seffer
Chairman of the Supervisory Board
Page 58 of 63
Attachment 1
List of the persons acting in concert with the Offeror within the meaning of
§ 2 paras. 5 and 6 of the WpÜG
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
Name
Alphatronics B.V.
Adec Nederland B.V.
Bekker & Business Holding B.V.
B.V. Twentsche Kabelfabriek
B.V.Elspec
Capable B.V.
Capassy B.V.
Commend Benelux B.V.
Cross Hardware B.V.
C&C Partners Im- en Export B.V.
EKB groep B.V.
EKB Noord B.V.
EKB Zuid B.V.
Electro-Draad B.V.
Eminent Europe B.V.
Funea Broadband Services B.V.
Flexposure B.V.
IC Intracom Nederland B.V.
Intronics Barneveld B.V.
Isolectra Holding B.V.
Isolectra B.V.
Jobarco B.V.
Keyprocessor B.V.
KLS Netherlands B.V.
KLS Software B.V.
Mextal B.V.
Pantaflex B.V.
Planet Lighting Solutions B.V.
SecurityWorks B.V.
Siqura B.V.
Siqura Holdings B.V.
Stichting Administratiekantoor TKH Group
Texim Europe B.V.
TKH Care Solutions B.V.
TKH Duitsland Holding B.V.
TKH Group N.V.
TKH Logistics B.V.
TKH Nordics B.V.
TKH Software Solutions B.V.
Registered office
Nijkerk
Barneveld
Doetinchem
Haaksbergen
De Kwakel
Breda
Etten-Leur
Prinsenbeek
Barneveld
Haaksbergen
Beverwijk
Drachten
Someren
Ittervoort
Beek
Oosterhout
Tiel
Barneveld
Barneveld
Capelle aan den IJssel
Capelle aan den IJssel
Benthuizen
Amsterdam
Hoogeveen
Almere
Nuenen
Bergschenhoek
Drachten
Nijkerk
Gouda
Gouda
Haaksbergen
Haaksbergen
Haaksbergen
Haaksbergen
Haaksbergen
Haaksbergen
Haaksbergen
Haaksbergen
Country
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Page 59 of 63
No.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
61.
62.
63.
64.
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
78.
79.
80.
81.
82.
83.
Name
Twenkar B.V.
Twenkma B.V.
USE System Engineering B.V.
VDG Security B.V.
VDG Software B.V.
VMI Holland B.V.
Inec N.V.
Techno Specials N.V.
Texim Europe BVBA
VMC A/S
Aasset Germany GmbH
ASP AG
EEB Kabeltechnik GmbH
EFB Elektronik GmbH
EFB Real Estate B.V. & Co. KG
Ernst & Engbring GmbH
IV-Tec GmbH
New Electronic Technology GmbH
Schneider Intercom GmbH
Schrade Kabel- und Elektrotechnik GmbH
Schreinermacher Kabelconfektionen GmbH
Texim Europe GmbH
TKD Immobilien GmbH
TKD Kabel GmbH
TKD Kabel Real Estate B.V. & Co. KG
TKF GmbH
TKH Deutschland GmbH &Co. KG
TKH Deutschland Verwaltungs GmbH
TKH Technologie Deutschland AG
TKH Security Solutions Germany GmbH
TKH Finland Oy
Aasset Security International SA
Aasset France SA
Axilogic SA
CAE Data SAS
ECCTV SA
ID Cable SAS
HPM Cables Sarl.
TKH Securite France SA
AASSET Security Italia SpA
KC industry Sarl
TKH Norge A/S
C&C Partners Sp. z o.o.
C&C Technology Sp. z o.o.
Registered office
Haaksbergen
Haaksbergen
Haaksbergen
Zoetermeer
Zoetermeer
Epe
Sint-Antonius Zoersel
Gent
Brussel
Ballerup
Erkrath
Erkrath
Forst
Bielefeld
Bielefeld
Oer-Erkenschwick
Freiburg
Finning
Erkrath
Allmendingen
Kaarst-Büttgen
Quickborn
Nettetal
Nettetal
Nettetal
Nettetal
Nettetal
Nettetal
Nettetal
Erkrath
Helsinski
Argenteuil
Argenteuil
Ville la Grand
Wissous
Argenteuil
Wissous
Chaon
Wissous
Conegliano
Villanova sull’ Arda
Oslo
Leszno
Leszno
Country
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Belgium
Belgium
Belgium
Denmark
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Finland
France
France
France
France
France
France
France
France
Italy
Italy
Norway
Poland
Poland
Page 60 of 63
No.
84.
85.
86.
87.
88.
89.
90.
91.
92.
93.
94.
95.
96.
97.
Name
TKD Polska Sp. z o.o.
TKH Kabeltechniek Polska Sp. z o.o.
Intronics Espana SA
Siqura S.L.
EFB Elektronik Ltd
AASSET Security (UK) Ltd
Siqura Ltd (UK)
Intronics Sweden AB
VMC Elteknik AB
VMI South America Ltda.
Isolectra Malaysia Sdn Bhd
Ithaca SA
NET Japan Co. Ltd.
Advanced Network Services Hong Kong Ltd.
Registered office
Warsaw
Leszno
Malaga
Madrid
Istanbul
Milton Keynes
Rotherham
Tierp
Strängnäs
Sao Paulo
Shah Alam
Casablanca
Yokohama
Hong Kong
98.
TKH Building Solutions Shanghai Co. Ltd.
Shanghai
99.
Twentsche (Nanjing) Fibre Optics Co. Ltd.
Nanjing
100. VMI (Yantai) Machinery Co. Ltd.
Yantai
101. VMI Ltd.
Yantai
102. Zhangjiagang Twentsche Cable Co. Ltd.
Zhangjiagang
103.
104.
105.
106.
107.
108.
109.
Taipei
Singapore
Singapore
Cincinnati
Highland
Germantown
Stow
CMF Ltd
Isolectra Far East Pte Ltd.
TKH Asia Holding Pte Ltd.
Kaweflex Wire and Cable Inc.
NET USA Inc.
TKH Security Solutions USA Inc.
VMI Americas Inc.
Country
Poland
Poland
Spain
Spain
Turkey
United Kingdom
United Kingdom
Sweden
Sweden
Brazil
Malaysia
Marokko
Japan
People’s Republic
China
People’s Republic
China
People’s Republic
China
People’s Republic
China
People’s Republic
China
People’s Republic
China
Taiwan
Singapore
Singapore
USA
USA
USA
USA
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of
of
of
of
of
of
Attachment 2
List of companies affiliated with the Company
No.
Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
Allied Vision Technologies GmbH
Allied Vision Technologies Inc
Allied Vision Technologies Inc.
Allied Vision Technologies Asia Pte. Ltd.
AUGUSTA Venture GmbH
AUGUSTA Verwaltung and Beteiligungs GmbH
AUGUSTA Vision Beteiligungs GmbH
Dewetron America Inc
Dewetron China Ltd.
Registered
office
Stadtroda
Boston
Burnaby
D’Lithium
Munich
Munich
Munich
Wakefield
Hongkong
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
Dewetron Elektroniosche Messgeräte Ges.m.b.H.
Dewetron Elektronische Messgeräte GmbH
HE Hybrid-Electronic Beteiligungs GmbH
HE System Electronic GmbH & Co. KG
LMI Technologies, Inc
LMI Technologies, Inc
LMI Holdings BV
LMI Technologies BV
LMI Technologies Ltd.
R.i.s.o. Haushaltswaren GmbH
Graz
Wernau
Frankfurt
Veitsbronn
Vancouver
Detroit
Heerlen
Heerlen
Dublin
Munich
Country
Germany
USA
Canada
Singapore
Germany
Germany
Germany
USA
People’s Republic
of China
Austria
Germany
Germany
Germany
Canada
USA
Netherlands
Netherlands
Ireland
Germany
Page 62 of 63
Attachment 3
KPMG’s Opinion Letter
Page 63 of 63